CLOSING CERTIFICATE AND AGREEMENT BETWEEN NETWORK APPLIANCE, INC. (“NAI”) AND BNP PARIBAS LEASING CORPORATION (“BNPPLC”) December 14, 2006
Exhibit
10.46
CLOSING CERTIFICATE
AND AGREEMENT BETWEEN
NETWORK APPLIANCE, INC.
(“NAI”) AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”) December 14, 2006
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TABLE OF CONTENTS
Page | ||||||||
1 | Representations, Covenants and Acknowledgments of NAI Concerning the Property | 2 | ||||||
(A) | Prior Inspections and Investigations Concerning the Property | 2 | ||||||
(B) | Title | 2 | ||||||
(C) | Compliance with Covenants and Laws | 2 | ||||||
2 | Representations and Covenants by NAI | 2 | ||||||
(A) | Concerning NAI and the Operative Documents | 2 | ||||||
(1) | Entity Status | 2 | ||||||
(2) | Authority | 2 | ||||||
(3) | Solvency | 3 | ||||||
(4) | Financial Reports | 3 | ||||||
(5) | Pending Legal Proceedings | 3 | ||||||
(6) | No Default or Violation | 3 | ||||||
(7) | Use of Proceeds | 4 | ||||||
(8) | Enforceability | 4 | ||||||
(9) | Pari Passu | 4 | ||||||
(10) | Conduct of Business and Maintenance of Existence | 4 | ||||||
(11) | Investment Company Act, etc | 4 | ||||||
(12) | Not a Foreign Person | 4 | ||||||
(13) | ERISA | 5 | ||||||
(14) | Compliance With Laws | 5 | ||||||
(15) | Payment of Taxes Generally | 5 | ||||||
(16) | Maintenance of Insurance Generally | 5 | ||||||
(17) | Franchises, Licenses, etc | 6 | ||||||
(18) | Patents, Trademarks, etc | 6 | ||||||
(19) | Labor | 6 | ||||||
(20) | Title to Properties Generally | 6 | ||||||
(21) | Books and Records | 7 | ||||||
(B) | Further Assurances | 7 | ||||||
(C) | Syndication | 7 | ||||||
(D) | Financial Statements; Required Notices; Certificates | 7 | ||||||
3 | Financial Covenants and Negative Covenants of NAI | 10 | ||||||
(B) | Financial Covenants | 11 | ||||||
(1) | Minimum Unencumbered Cash and Short Term Investments | 11 | ||||||
(2) | Maximum Leverage Ratio | 12 | ||||||
(C) | Negative Covenants | 12 | ||||||
(1) | Negative Pledge | 12 | ||||||
(2) | Transactions with Affiliates | 14 | ||||||
(3) | Capital Expenditures | 14 | ||||||
(4) | Merger, Consolidation, Transfer of Assets | 14 |
TABLE OF CONTENTS
(Continued)
(Continued)
Page | ||||||||
(5) | Change in Nature of Business | 14 | ||||||
(6) | Multiemployer ERISA Plans | 14 | ||||||
(7) | Prohibited ERISA Transaction | 14 | ||||||
4 | Limited Representations and Covenants of BNPPLC | 15 | ||||||
(A) | Concerning Accounting Matters | 15 | ||||||
(B) | Other Limited Representations | 17 | ||||||
(1) | Entity Status | 17 | ||||||
(2) | Authority | 17 | ||||||
(3) | Solvency | 17 | ||||||
(4) | Pending Legal Proceedings | 18 | ||||||
(5) | No Default or Violation | 18 | ||||||
(6) | Enforceability | 18 | ||||||
(7) | Conduct of Business and Maintenance of Existence | 18 | ||||||
(8) | Not a Foreign Person | 18 | ||||||
(C) | Further Assurances | 19 | ||||||
(D) | Actions Permitted by NAI Without BNPPLC’s Consent | 22 | ||||||
(E) | Waiver of Landlord’s Liens | 23 | ||||||
(F) | Estoppel Letters | 23 | ||||||
(G) | No Implied Representations or Promises by BNPPLC | 24 | ||||||
5 | Usury Savings Provision | 24 | ||||||
6 | Obligations of NAI Under Other Operative Documents Not Limited by this Certificate | 25 | ||||||
7 | Obligations of NAI Hereunder Not Limited by Other Operative Documents | 25 | ||||||
8 | Waiver of Jury Trial | 25 |
(ii)
TABLE OF CONTENTS
(Continued)
(Continued)
Exhibits and Schedules
Exhibit A
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Legal Description | |
Exhibit B
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Permitted Encumbrances | |
Exhibit C
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Quarterly Certificate | |
Exhibit D
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Certificate to be Provided by BNPPLC Re: Accounting |
(iii)
This CLOSING CERTIFICATE AND AGREEMENT (this “Certificate”), dated as of December 14,
2006 (the “Effective Date”), is made by and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”), a
Delaware corporation, and NETWORK APPLIANCE, INC. (“NAI”), a Delaware corporation.
RECITALS
Contemporaneously with the execution of this Certificate, BNPPLC and NAI are executing a
Common Definitions and Provisions Agreement dated as of the Effective Date (the “Common Definitions
and Provisions Agreement”), which by this reference is incorporated into and made a part of this
Certificate for all purposes. As used in this Certificate, capitalized terms defined in the Common
Definitions and Provisions Agreement and not otherwise defined in this Certificate are intended to
have the respective meanings assigned to them in the Common Definitions and Provisions Agreement.
Also contemporaneously with this Certificate, BNPPLC is executing and accepting a Ground Lease
from NAI (the “Ground Lease”), pursuant to which BNPPLC is acquiring a leasehold estate in the Land
described in Exhibit A and any existing Improvements on the Land.
Also contemporaneously with this Certificate, BNPPLC and NAI are executing a Construction
Management Agreement (the“Construction Management Agreement”) and a Lease Agreement (the “Lease”).
Pursuant to the Construction Management Agreement, BNPPLC is agreeing to provide funding for the
construction of new Improvements. When the term of the Lease commences, the Lease will cover all
Improvements on the Land described in Exhibit A.
Also contemporaneously with this Certificate, BNPPLC and NAI are executing a Purchase
Agreement (the “Purchase Agreement”), pursuant to which NAI may purchase or arrange for the
purchase of the Property and BNPPLC may collect a Supplemental Payment from NAI sufficient to cover
all or a substantial portion of the Lease Balance not otherwise repaid to BNPPLC from the proceeds
of any sale of the Property.
As a condition to BNPPLC’s execution of the other Operative Documents, BNPPLC requires the
representations and covenants of NAI set out below.
AGREEMENTS
In consideration of the premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1 Representations, Covenants and Acknowledgments
of NAI Concerning the Property. To induce BNPPLC to enter into the Ground Lease, and to
enter into this Certificate and the other Operative Documents, NAI represents, covenants and
acknowledges as follows:
(A) Prior Inspections and Investigations Concerning the Property. NAI has thoroughly
inspected, investigated and evaluated the condition of and title to the Property and Applicable
Laws which will govern the construction, use and operation of the Property required or permitted by
the Operative Documents, as necessary to make the representations concerning the Property set forth
in this Certificate and other Operative Documents.
(B) Title. Good and indefeasible title to the Land and any existing Improvements
thereon is currently vested in NAI, subject only to the rights of BNPPLC under the Ground Lease,
the Permitted Encumbrances and any Liens Removable by BNPPLC. So long as NAI has any rights under
the Construction Management Agreement, the Lease or the Purchase Agreement, NAI will not permit any
Person to acquire rights of the landlord under the Ground Lease other than NAI itself or a
corporation that controls, is controlled by or under common control with NAI.
(C) Compliance with Covenants and Laws. The construction contemplated by the
Construction Management Agreement and use of the Property permitted by the Lease complies, or will
comply after NAI obtains readily available permits (either as the construction manager under the
Construction Management Agreement or as the tenant under the Lease), in all material respects with
all Applicable Laws. NAI has obtained or can and will promptly obtain all utility, building,
health and operating permits required by any governmental authority or municipality having
jurisdiction over the Property for the construction contemplated in the Construction Management
Agreement and the use of the Property permitted by the Lease.
2 Representations and Covenants by NAI. NAI also represents and covenants to BNPPLC as
follows:
(A) Concerning NAI and the Operative Documents.
(1) Entity Status. NAI is a corporation duly incorporated and validly existing in the
State of Delaware and is authorized to do business in and is in good standing under the laws
of California.
(2) Authority. The Constituent Documents of NAI permit the execution, delivery
and performance of the Operative Documents by NAI, and all actions and approvals necessary
to bind NAI under the Operative Documents have been taken and
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obtained. Without limiting the foregoing, the Operative Documents will be binding upon
NAI when signed on behalf of NAI by Ingemar Lanevi, Vice President and Corporate Treasurer
of NAI. NAI has all requisite power and all governmental certificates of authority,
licenses, permits and qualifications to carry on its business as now conducted and
contemplated to be conducted and to perform the Operative Documents.
(3) Solvency. NAI is not “insolvent” on the Effective Date (that is, the sum of NAI’s
absolute and contingent liabilities — including the obligations of NAI under the Operative
Documents — does not exceed the fair market value of NAI’s assets), and NAI has no
outstanding liens, suits, garnishments or court actions which could render NAI insolvent or
bankrupt. NAI’s capital is adequate for the businesses in which NAI is engaged and intends
to be engaged. NAI has not incurred (whether by the Operative Documents or otherwise), nor
does NAI intend to incur or believe that it will incur, debts which will be beyond its
ability to pay as such debts mature. No petition or answer has been filed by or, to NAI’s
knowledge, against NAI in bankruptcy or other legal proceedings that seeks an assignment for
the benefit of creditors, the appointment of a receiver, trustee, custodian or liquidator
with respect to NAI or any significant portion of NAI’s property, a reorganization,
arrangement, rearrangement, composition, extension, liquidation or dissolution of NAI or
similar relief under the federal Bankruptcy Code or any state law.
(4) Financial Reports. All reports, financial statements and other data furnished by
NAI to BNPPLC in connection with the agreements set forth in the Operative Documents are
true and correct in all material respects and do not omit to state any fact or circumstance
necessary to make the statements contained therein not misleading. No material adverse
change has occurred since the dates of such reports, statements and other data in the
financial condition of NAI.
(5) Pending Legal Proceedings. No judicial or administrative investigations, actions,
suits or proceedings are pending or, to the knowledge of NAI, threatened against or
affecting NAI by or before any court or other Governmental Authority that have or could
reasonably be expected to have a Material Adverse Effect. NAI is not in default with
respect to any order, writ, injunction, decree or demand of any court or other Governmental
Authority in a manner that has or could reasonably be expected to have a Material Adverse
Effect.
(6) No Default or Violation. The execution and performance by NAI of the
Operative Documents do not and will not contravene or result in a breach of or default under
any other agreement to which NAI is a party or by which NAI is bound or which affects any
assets of NAI. Such execution and performance by NAI do not contravene any law, order,
decree, rule or regulation to which NAI is subject. Further, such
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execution and performance by NAI will not result in the creation or imposition of (or
the obligation to create or impose) any lien, charge or encumbrance on, or security interest
in, any property of NAI pursuant to the provisions of any such other agreement.
(7) Use of Proceeds. In no event will the funds from any Funding Advance be used
directly or indirectly for personal, family, household or agricultural purposes or for the
purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or carrying any
“margin stock” or any “margin securities” (as such terms are defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any such margin
stock or margin securities. NAI represents that NAI is not engaged principally, or as one of
NAI’s important activities, in the business of extending credit to others for the purpose of
purchasing or carrying such margin stock or margin securities.
(8) Enforceability. The Operative Documents constitute the legal, valid and binding
obligations of NAI enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the
rights of creditors generally.
(9) Pari Passu. The claims of BNPPLC against NAI under the Operative Documents rank at
least pari passu with the claims of all its other unsecured creditors, except those whose
claims are preferred solely by any laws of general application having effect in relation to
bankruptcy, insolvency, liquidation or other similar events.
(10) Conduct of Business and Maintenance of Existence. So long as any obligations of
NAI under the Operative Documents remain outstanding, NAI will continue to engage in
business of the same general type as now conducted by it and will preserve, renew and keep
in full force and effect its corporate existence and its rights, privileges and franchises
necessary or desirable in the normal conduct of business.
(11) Investment Company Act, etc. NAI is not and will not become, by reason of the
Operative Documents or any business or transactions in which it participates voluntarily,
(a) an “investment company” or a company “controlled” by an “investment company” (as each
of the quoted terms is defined or used in the Investment Company Act of 1940, as amended),
or (b) subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any foreign, federal or local statute or regulation limiting NAI’s
ability to incur or guarantee indebtedness or obligations, or to pledge its assets to secure
indebtedness or obligations, as contemplated by any of the Operative Documents.
(12) Not a Foreign Person. NAI is not a “foreign person” within the meaning
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of Sections 1445 and 7701 of the Code (i.e. NAI is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign estate as those terms are defined
in the Code and regulations promulgated thereunder).
(13) ERISA. NAI is not and will not become an “employee benefit plan” (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA. The assets of NAI do not and
will not in the future constitute “plan assets” of one or more such plans within the meaning
of 29 C.F.R. Section 2510.3-101. NAI is not and will not become a “governmental plan” within
the meaning of Section 3(32) of ERISA. Transactions by or with NAI are not subject to state
statutes regulating investments of and fiduciary obligations with respect to governmental
plans. No ERISA Termination Event has occurred with respect to any Plan, and NAI and its
Subsidiaries are in compliance with ERISA. Neither NAI nor any of its Subsidiaries is
required to contribute to, or has any other absolute or contingent liability in respect of,
any Multiemployer Plan. As of the Effective Date no “accumulated funding deficiency” (as
defined in Section 412(a) of the Code) exists with respect to any Plan, whether or not
waived by the Secretary of the Treasury or his delegate, and there are no Unfunded Benefit
Liabilities with respect to any Plan.
(14) Compliance With Laws. NAI and its Subsidiaries comply and will comply with all
Applicable Laws (including environmental laws and ERISA and the rules and regulations
thereunder), except when the necessity of compliance is contested in good faith by
appropriate proceedings which do not have and could not reasonably be expected to have a
Material Adverse Effect. Neither NAI nor its Subsidiaries have received any notice
asserting or describing a material failure on the part of NAI or any Subsidiary to comply
with Applicable Laws, other than failures that have been fully rectified by NAI or the
Subsidiary, as the case may be, in a manner approved or accepted by Governmental Authorities
responsible for the enforcement of the Applicable Laws.
(15) Payment of Taxes Generally. Except when the failure to do so does not have and
could not reasonably be expected to have a Material Adverse Effect (taking into account any
appropriate contest of taxes), NAI and its Subsidiaries have filed and will file all tax
declarations, reports and returns which are required by (and in the form required by)
Applicable Laws and have paid and will pay all taxes or other charges shown to be due and
payable on such declarations, reports and returns and all assessments made against it or its
assets by any Governmental Authority; and no liens have been filed or established by any
Governmental Authority against NAI or its assets or against any Subsidiary or its assets to
secure the payment of taxes or assessments that are past due or claimed to be past due.
(16) Maintenance of Insurance Generally. Except when the failure to do so
Closing Certificate and Agreement — Page 5
does not have and could not reasonably be expected to have a Material Adverse Effect,
NAI and its Subsidiaries have maintained and will maintain insurance with respect to its
properties and businesses, with financially sound and reputable insurers, having coverages
against losses or damages of the kinds customarily insured against by reputable companies in
the same or similar businesses, such insurance being the types, and in amounts no less than
the amounts, which are customary for such companies under similar circumstances.
(17) Franchises, Licenses, etc. Except when the failure to do so does not have and
could not reasonably be expected to have a Material Adverse Effect, NAI and its Subsidiaries
have and comply with, and will have and will comply with, all franchises, certificates,
licenses, permits and other authorizations from Governmental Authorities that are necessary
for the ownership, maintenance and operation of its properties and assets.
(18) Patents, Trademarks, etc. Except when the failure to do so does not have and
could not reasonably be expected to have a Material Adverse Effect, NAI and its Subsidiaries
have and will have and maintain in full force and effect all patents, trademarks, service
marks, trade names, copyrights, licenses and other such rights, free from burdensome
restrictions, which are necessary for the operation of its businesses. Without limiting the
foregoing, to the knowledge of NAI, no product, process, method, service or other item
presently sold by or employed by NAI or any Subsidiary in connection with its business as
presently conducted infringes any patents, trademark, service xxxx, trade name, copyright,
license or other right owned by any other Person. No claim or litigation is presently
pending, or to the knowledge of NAI, threatened against or affecting NAI or any Subsidiary
that contests its right to sell or use any such product, process, method, substance or other
item and that has or could reasonably be expected to have a Material Adverse Effect.
(19) Labor. Neither NAI nor any of its Subsidiaries has experienced strikes, labor
disputes, slow downs or work stoppages due to labor disagreements that currently have or
could reasonably be expected to have a Material Adverse Effect, and to the knowledge of NAI
there are no such strikes, disputes, slow downs or work stoppages threatened against it or
against any Subsidiary. The hours worked and payment made to employees of NAI and its
Subsidiaries have not been in violation in any material respect of the Fair Labor Standards
Act or any other Applicable Laws dealing with such matters. All material payments due on
account of wages or employee health and welfare insurance and other benefits from NAI or
from any Subsidiary have been paid or accrued as liabilities on its books.
(20) Title to Properties Generally. Except when the failure to do so does not
Closing Certificate and Agreement — Page 6
have and could not reasonably be expected to have a Material Adverse Effect, NAI and its
Subsidiaries have and will have and maintain good and indefeasible fee simple title to or
valid leasehold interests in all of its real property and good title to or a valid
leasehold interest in all of its other material assets, as such properties and assets are
reflected in the most recent financial statements delivered to BNPPLC, other than properties
or assets disposed of in the ordinary course of business since such date; subject, however,
in the case of the Property to Permitted Encumbrances and Liens created by the Operative
Documents. NAI enjoys peaceful and undisturbed possession under all of its leases.
(21) Books and Records. NAI will keep proper books of record and account, containing
complete and accurate entries of all its financial and business transactions.
(B) Further Assurances. NAI will, upon the reasonable request of BNPPLC, (i) execute,
acknowledge, deliver and record or file such further instruments and do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of the Operative
Documents and to subject to any of the Operative Documents any property intended by the terms
thereof to be covered thereby, including specifically, but without limitation, any renewals,
additions, substitutions, replacements or appurtenances to the Property; (ii) execute, acknowledge,
deliver, procure and record or file any document or instrument deemed advisable by BNPPLC to
protect its rights in and to the Property against the rights or interests of third persons; and
(iii) provide such certificates, documents, reports, information, affidavits and other instruments
and do such further acts as may be necessary, desirable or proper in the reasonable determination
of BNPPLC to enable BNPPLC to comply with the requirements or requests of any agency or authority
having jurisdiction over it.
(C) Syndication. Without limiting the foregoing, NAI will cooperate with BNPPLC as
reasonably required to allow BNPPLC to induce banks not affiliated with BNPPLC to become
Participants. Such cooperation will include the execution of any modification proposed by BNPPLC to
any of the Operative Documents at the request of a prospective Participant; subject, however, to
the conditions that (i) in no event will NAI be required to approve or accept an increase in the
Spread or other modifications that change the economics of the transactions contemplated by the
Operative Documents to NAI, and (ii) in other respects the form and substance of any such
modification agreement must not reasonably objectionable to NAI.
(D) Financial Statements; Required Notices; Certificates. Prior to the Completion
Date and throughout the Term of the Lease, NAI will deliver to BNPPLC and to each Participant of
which NAI has been notified:
(1) as soon as available and in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of NAI, the unaudited consolidated
balance sheet of NAI and its Subsidiaries as of the end of such quarter and consolidated
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unaudited statements of income, stockholders’ equity and cash flow of NAI and its
Subsidiaries for the period commencing at the end of the previous fiscal year and ending
with the end of
such quarter, setting forth in comparative form figures for the corresponding period in
the preceding fiscal year, in the case of such statements of income, stockholders’ equity
and cash flow, and figures for the preceding fiscal year in the case of such balance sheet,
all in reasonable detail, in accordance with GAAP, and certified in a manner acceptable to
BNPPLC by a Responsible Financial Officer of NAI (subject to normal year-end adjustments);
provided, that so long as NAI is a company subject to the periodic reporting requirements of
Section 12 of the Securities Exchange Act of 1934, as amended, NAI will be deemed to have
satisfied its obligations under this clause (1) if NAI delivers to BNPPLC the same quarterly
reports, certified by a Responsible Financial Officer of NAI (subject to year-end
adjustments), that NAI delivers to its shareholders;
(2) as soon as available and in any event within ninety days after the end of each
fiscal year of NAI, the consolidated balance sheet of NAI and its Subsidiaries as of the end
of such fiscal year and consolidated statements of income, stockholders’ equity and cash
flow of NAI and its Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such fiscal year, setting forth in comparative form figures
for the preceding fiscal year, all in reasonable detail, in accordance with GAAP, and
certified in a manner acceptable to BNPPLC by independent public accountants of recognized
national standing reasonably acceptable to BNPPLC; provided, that so long as NAI is a
company subject to the periodic reporting requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, NAI will be deemed to have satisfied its obligations under
this clause (ii) if NAI delivers to BNPPLC the same annual report and report and opinion of
accountants that NAI delivers to its shareholders;
(3) in each case if requested in writing by BNPPLC, together with the financial
statements furnished in accordance with subparagraph 2(D)(1) and 2(D)(2), a certificate of a
Responsible Financial Officer of NAI in the form of certificate attached hereto as
Exhibit C (a) representing that no Event of Default or material Default by NAI has
occurred (or, if an Event of Default or material Default by NAI has occurred, stating the
nature thereof and the action which NAI has taken or proposes to take to rectify it), (b)
stating that the representations and warranties by NAI contained herein are true and
complete in all material respects on and as of the date of such certificate as though made
on and as of such date, and (c) setting forth calculations which show whether NAI is
complying with financial covenants set forth in subparagraph 3(B);
(4) as soon as possible and in any event within five days after the occurrence of each
Event of Default or material Default known to a Responsible Financial Officer of NAI, a
statement of NAI setting forth details of such Event of Default or material Default
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and the action which NAI has taken and proposes to take with respect thereto;
(5) promptly after the sending or filing thereof, copies of all such financial
statements, proxy statements, notices and reports which NAI or any Subsidiary sends to
its public stockholders, and copies of all reports and registration statements (without
exhibits) which NAI or any Subsidiary files with the Securities and Exchange Commission (or
any governmental body or agency succeeding to the functions of the Securities and Exchange
Commission) or any national securities exchange;
(6) as soon as practicable and in any event within thirty days after a Responsible
Financial Officer of NAI knows or has reason to know that any ERISA Termination Event with
respect to any Plan has occurred, a statement of a Responsible Financial Officer of NAI
describing such ERISA Termination Event and the action, if any, which NAI proposes to take
with respect thereto;
(7) upon request by BNPPLC, a statement in writing certifying that the Operative
Documents are unmodified and in full effect (or, if there have been modifications, that the
Operative Documents are in full effect as modified, and setting forth such modifications)
and either stating that no default exists under the Operative Documents or specifying each
such default; it being intended that any such statement by NAI may be relied upon by any
prospective purchaser or mortgagee of the Property or any prospective Participant; and
(8) such other information respecting the condition or operations, financial or
otherwise, of NAI, of its Subsidiaries or of the Property as BNPPLC or BNPPLC’s Parent or
any Participant through BNPPLC may from time to time reasonably request.
Reports and financial statements required to be delivered pursuant to paragraphs (1), (2) and (5)
of this subparagraph 2(D) shall be deemed to have been delivered on the date on which such reports,
or reports containing such financial statements, are posted for downloading (in a “PDF” or other
readily available format) on one of NAI’s internet websites at xxx.xxxxxx.xxx or
xxx.xxxxxxxxx.xxxxxx.xxx or on the SEC’s internet website at xxx.xxx.xxx; provided, however, that
after being posted they remain available for downloading at the applicable website for at least 90
days.
BNPPLC is hereby authorized to deliver a copy of any information or certificate delivered to it
pursuant to this subparagraph 2(D) to any Participant and to any regulatory body having
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jurisdiction over BNPPLC, BNPPLC’s Parent or any Participant that requires or requests it.
(E) Omissions. None of NAI’s representations in the Operative Documents or in any
other document, certificate or written statement furnished to BNPPLC by or on behalf of NAI
contains any untrue statement of a material fact or omits a material fact necessary in order to
make the statements contained herein or therein (when taken in their entireties) not misleading.
3 Financial Covenants and Negative Covenants of NAI. NAI represents and covenants as
follows:
(A) Definitions. As used in this Certificate:
“Adjusted EBITDA” means, for any accounting period, the net income (or net loss) of NAI
and its Subsidiaries (determined on a consolidated basis), plus without duplication
and to the extent reflected as a charge in the statement of such consolidated net income for
such period, the sum of (a) income tax expense, (b) interest expense, (c) depreciation and
amortization expense, (d) amortization of intangibles and organization costs, (e) non-cash
amortization of deferred stock compensation, (f) non-cash expenses related to stock-based
compensation, (g) non-cash in-process research and development expense and (h) any
extraordinary or non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such consolidated net income for
such period, non-cash losses on sales of assets outside the ordinary course of business),
minus (x) to the extent included in the statement of such consolidated net income
for such period, (i) interest income, (ii) any extraordinary or non-recurring non-cash
income or gains (including, whether or not otherwise includable as a separate item in the
statement of such consolidated net income for such period, gains on sales of assets outside
the ordinary course of business), (iii) income tax credits (to the extent not netted from
income tax expense) and (iv) any other non-cash income, and (y) any cash payments made
during such period in respect of items described in clause (e) above subsequent to the
fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge
in the statement of consolidated net income, all as determined on a consolidated basis.
“NAI/Company” means NAI or any of its Subsidiaries.
“Rolling Four Quarter Period” means a period of four consecutive fiscal quarters of
NAI.
“Total Debt” means, without duplication, the following (each, unless otherwise noted,
determined in accordance with GAAP):
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(a) all obligations of any NAI/Company evidenced by notes, bonds, debentures or
other similar instruments and all other obligations of any NAI/Company for borrowed
money (including obligations to repurchase receivables or other assets sold with
recourse);
(b) all obligations of any NAI/Company for the deferred purchase price
of property or services (including obligations under letters of credit or other
credit facilities which secure or finance such purchase price, and the capitalized
amount reported for income tax purposes with respect to obligations under
“synthetic” leases, but excluding accounts payable for property or services or the
deferred purchase price of property to the extent due within one year of the
applicable determination of Total Debt);
(c) all obligations of any NAI/Company under conditional sale or other title
retention agreements with respect to property (other than inventory) acquired by the
NAI/Company (but limited in amount to the value of such property if the rights and
remedies of the seller or lender under such agreement in the event of default are
limited solely to the repossession or sale of such property);
(d) all obligations of any NAI/Company as lessee under or with respect to
capital leases;
(e) all guaranty obligations of any NAI/Company with respect to the
indebtedness of any other person, and all other contingent obligations of any
NAI/Company; and
(f) all obligations of other persons of the types described in clauses (a)
through (e) preceding to the extent secured by (or for which any holder of such
obligations has an existing right, contingent or otherwise, to be secured by) any
Lien on any property (including accounts and contract rights) of any NAI/Company,
even though the NAI/Company has not assumed or become liable for the payment of such
obligations.
(B) Financial Covenants. NAI covenants that it shall not, at any time prior to the
Completion Date and so long thereafter as the Lease continues in effect, suffer or permit:
(1) Minimum Unencumbered Cash and Short Term Investments. The sum (without duplication
of any item) of the unrestricted cash, 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 $300,000,000.
Closing Certificate and Agreement — Page 11
(2) Maximum Leverage Ratio. The ratio of (a) Total Debt as of the end of any Rolling
Four Quarter Period, to (b) Adjusted EBITDA for such Rolling Four Quarter Period, to be more
than 2.00 to 1.00.
(C) Negative Covenants. NAI will not, without the prior consent of BNPPLC in
each
case, do or permit any of its Subsidiaries to do any of the following: 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 BNPPLC in each case:
(1) Negative Pledge. 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:
(a) 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;
(b) 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;
(c) Liens under workmen’s compensation, unemployment insurance, social security
or similar laws (other than ERISA);
(d) 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;
(e) judgment and other similar Liens against assets other than the Property or
any part thereof in an aggregate amount not in excess of $25,000,000 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;
(f) easements, rights-of-way, restrictions and other similar
Closing Certificate and Agreement — Page 12
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;
(g) Liens securing obligations of such a Consolidated Subsidiary to NAI or to
another such Consolidated Subsidiary;
(h) Liens not otherwise permitted by this subparagraph 3(C)(1) (and not
encumbering the Property) incurred in connection with the incurrence of additional
Indebtedness 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 ten percent
(10%) of NAI consolidated net worth (determined in accordance with GAAP); 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
(i) Permitted Encumbrances;
(j) Liens created by the Operative Documents or other documents being executed
or accepted by BNPPLC in connection with the Operative Documents; and
(k) Liens on property existing at the time of acquisition of such property or
to secure the payment of all or any part of the purchase price of such property or
any addition thereto or to secure any indebtedness incurred at the time of, or
within 120 days after the acquisition of such property or any addition thereto for
the purpose of financing all or any part of the purchase price thereof (provided
such liens are limited to such property or additions thereto)
(l) in the event a corporation is merged into NAI or a Subsidiary of NAI or
becomes a Subsidiary of NAI after the Effective Date, Liens on the property or
shares of capital stock of such corporation existing at the time of such merger or
at the time the corporation became a Subsidiary of NAI as the case may be;
Closing Certificate and Agreement — Page 13
(m) Liens incurred in connection with any renewals, extensions or
refundings of any Debt secured by Liens described in the preceding clauses of this
subparagraph (1), 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;
and
(n) Liens incurred to secure Indebtedness incurred no later than June 30, 2006
to fund expenditures by NAI made to comply with or generate tax savings under the
American Job Creations Act of 2004.
(2) 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.
(3) 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.
(4) 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.
(5) Change in Nature of Business. Make or do anything that would result in a material
change in the nature of the business NAI and its Subsidiaries, taken as whole, as carried on
at the Effective Date.
(6) Multiemployer ERISA Plans. Incur any obligation to contribute to any
“multiemployer plan” as defined in Section 4001 of ERISA.
(7) Prohibited ERISA Transaction. Enter into any transaction which would cause any of
the Operative Documents or any related documents executed or accepted by BNPPLC (or any
exercise of BNPPLC’s rights hereunder or thereunder) to constitute a non-exempt prohibited
transaction under ERISA.
Closing Certificate and Agreement — Page 14
4 Limited Representations and Covenants of BNPPLC
(A) Concerning
Accounting Matters.
(1) To permit NAI to determine the appropriate accounting for NAI’s relationship with
BNPPLC under FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN
46”), BNPPLC represents that to the knowledge of BNPPLC the fair value of the Property and
of other properties, if any, leased to NAI by BNPPLC (collectively, whether one or more, the
“Properties Leased to NAI”) are, as of the Effective Date, less than half of the total of
the fair values of all assets of BNPPLC, excluding any assets of BNPPLC held within a silo.
Further, none of the Properties Leased to NAI are, as of the Effective Date, held within a
silo. Consistent with the directions of NAI (based upon the current interpretation of FIN
46 by NAI and its auditors), and for purposes of this representation only:
• | “held within a silo” means, with respect to any asset or group of assets leased by BNPPLC to a single lessee or group of affiliated lessees, that BNPPLC has obtained funds equal to or in excess of 95% of the fair value of the leased asset or group of assets to acquire or maintain its investment in such asset or group of assets through non-recourse financing or other contractual arrangements (such as targeted equity or bank participations), the effect of which is to leave such asset or group of assets (or proceeds thereof) as the only significant asset or assets of BNPPLC at risk for the repayment of such funds; | ||
• | “fair value” means, with respect to any asset, the amount for which the asset could be bought or sold in a current transaction negotiated at arms length between willing parties (that is, other than in a forced or liquidation sale); | ||
• | with respect to the Properties Leased to NAI (regardless of how BNPPLC accounts for the leases of the Properties Leased to NAI), and with respect to other assets that are subject to leases accounted for by BNPPLC as operating leases pursuant to Financial Accounting Standards Board Statement 13 (“FAS 13”), fair value is determined without regard to residual value guarantees, remarketing agreements, non-recourse financings, purchase options or other contractual arrangements, whether made by BNPPLC with NAI or with other parties, that might otherwise impact the fair |
Closing Certificate and Agreement — Page 15
value of such assets; | |||
• | with respect to assets, other than Properties Leased to NAI, that are subject to leases accounted for by BNPPLC as leveraged leases pursuant to FAS 13, fair value is determined on a gross basis prior to the application of leveraged lease accounting, recognizing that equity investments made by BNPPLC in its assets subject to leveraged lease accounting should be grossed up in applying this test (however, equity investments made by BNPPLC through another legal entity should not be so grossed up in applying this test); | ||
• | with respect to assets, other than Properties Leased to NAI, that are subject to leases accounted for by BNPPLC as direct financing leases pursuant to FAS 13, fair value is determined as the sum of the fair values (considering current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities) of the corresponding finance lease receivables and related unguaranteed residual values. |
(2) BNPPLC also represents that BNPPLC’s Parent is, as of the Effective Date, including
BNPPLC as a consolidated subsidiary in the audited financial statements issued by BNPPLC’s
Parent.
(3) BNPPLC covenants that, as reasonably requested by NAI from time to time with
respect to any accounting period during which the Lease is or was in effect, BNPPLC will
provide to NAI confirmation of facts concerning BNPPLC and its assets as necessary to permit
NAI to determine the proper accounting for the Lease (including updates of the facts set
forth in clauses (1) and (2) above); except that BNPPLC will not be required by this
provision to (w) provide any information that is not in the possession or control of BNPPLC
or its Affiliates, (x) disclose the specific terms and conditions of its leases or other
transactions with other parties or the names of such parties, (y) make disclosures
prohibited by any law applicable to BNPPLC or BNPPLC’s Parent, or (z) disclose any other
information that is protected from disclosure by confidentiality provisions in favor of such
other parties or would be protected if their agreements with BNPPLC contained
confidentiality provisions similar in scope and substance to any confidentiality provisions
set forth in the Operative Documents for the benefit of NAI or its Affiliates. BNPPLC will
represent that information provided by it pursuant to this clause is true and complete in
all material respects, but only to the knowledge of BNPPLC as of the date it is provided,
utilizing the form of the certificate attached hereto as Exhibit D (signed by an
officer of BNPPLC), which certificate will be provided
Closing Certificate and Agreement — Page 16
periodically by BNPPLC within five
business days of reasonable written request therefor by NAI as provided above, or such
longer period of time as may be reasonably necessary under the circumstances in order for
BNPPLC to confirm such information.
(4) Although the representations required of BNPPLC by this subparagraph
are intended to cover facts, it is understood and agreed (consistent with
subparagraph 4(C) of the Lease) that BNPPLC has not made and will not make any
representation or warranty as to the proper accounting by NAI or its Affiliates of the Lease
or as to other accounting conclusions.
(B) Other Limited Representations. BNPPLC represents that:
(1) Entity Status. BNPPLC is a corporation duly incorporated , validly existing and in
good standing under the laws of Delaware.
(2) Authority. The Constituent Documents of BNPPLC permit the execution, delivery and
performance of the Operative Documents by BNPPLC, and all actions and approvals necessary to
bind BNPPLC under the Operative Documents have been taken and obtained. Without limiting
the foregoing, the Operative Documents will be binding upon BNPPLC when signed on behalf of
BNPPLC by Xxxxx X. Xxx, Managing Director of BNPPLC. BNPPLC has all requisite power and all
governmental certificates of authority, licenses, permits and qualifications to carry on its
business as now conducted and contemplated to be conducted and to perform the Operative
Documents, except that BNPPLC makes no representation as to whether it has obtained
governmental certificates of authority, licenses, permits, qualifications or other
documentation required by state or local Applicable Laws. With regard to any such state or
local requirements, NAI may require that BNPPLC obtain a specific governmental certificates
of authority, licenses, permits, qualifications or other documentation pursuant to
subparagraph 4(C), subject to the conditions set forth in that subparagraph.
(3) Solvency. BNPPLC is not “insolvent” on the Effective Date (that is, the sum
of BNPPLC’s absolute and contingent liabilities — including the obligations of BNPPLC under
the Operative Documents — does not exceed the fair market value of BNPPLC’s assets), and
BNPPLC has no outstanding liens, suits, garnishments or court actions which could render
BNPPLC insolvent or bankrupt. BNPPLC’s capital is adequate for the businesses in which
BNPPLC is engaged and intends to be engaged. BNPPLC has not incurred (whether by the
Operative Documents or otherwise), nor does BNPPLC intend to incur or believe that it will
incur, debts which will be beyond its ability to pay as such debts mature. No petition or
answer has been filed by or, to BNPPLC’s knowledge, against BNPPLC in bankruptcy or other
legal proceedings that seeks an assignment for the benefit of creditors, the appointment of
a receiver, trustee,
Closing Certificate and Agreement — Page 17
custodian or liquidator with respect to BNPPLC or any significant
portion of BNPPLC’s property, a reorganization, arrangement, rearrangement, composition,
extension, liquidation or dissolution of BNPPLC or similar relief under the federal
Bankruptcy Code or any state law. (As used in the Operative Documents, “BNPPLC’s knowledge”
and words of like effect mean the present actual knowledge of Xxxxx X. Xxx and Xxxxx
Xxxxxxxxxx, the current officers of
BNPPLC having primary responsibility for the negotiation of the Operative Documents.)
(4) Pending Legal Proceedings. No judicial or administrative investigations, actions,
suits or proceedings are pending or, to the knowledge of BNPPLC, threatened against or
affecting BNPPLC by or before any court or other Governmental Authority. BNPPLC is not in
default with respect to any order, writ, injunction, decree or demand of any court or other
Governmental Authority in a manner that has or could reasonably be expected to have a a
material adverse effect on BNPPLC or its ability to perform its obligations under the
Operative Documents.
(5) No Default or Violation. The execution and performance by BNPPLC of the Operative
Documents do not and will not contravene or result in a breach of or default under any other
agreement to which BNPPLC is a party or by which BNPPLC is bound or which affects any assets
of BNPPLC. Such execution and performance by BNPPLC do not contravene any law, order,
decree, rule or regulation to which BNPPLC is subject. Further, such execution and
performance by BNPPLC will not result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or security interest in, any property
of BNPPLC pursuant to the provisions of any such other agreement.
(6) Enforceability. The Operative Documents constitute the legal, valid and binding
obligations of BNPPLC enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the
rights of creditors generally.
(7) Conduct of Business and Maintenance of Existence. So long as any of the Operative
Documents remains in force, BNPPLC will continue to engage in business of the same general
type as now conducted by it and will preserve, renew and keep in full force and effect its
corporate existence and its rights, privileges and franchises necessary or desirable in the
normal conduct of business.
(8) Not a Foreign Person. BNPPLC is not a “foreign person” within the meaning of
Sections 1445 and 7701 of the Code (i.e. BNPPLC is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign estate as those terms are defined
in the Code and regulations promulgated thereunder).
Closing Certificate and Agreement — Page 18
Notwithstanding the foregoing, however or any other provision herein or in other Operative
Documents to the contrary, it is understood that NAI is not relying upon BNPPLC for any evaluation
of California or local Applicable Laws upon the transactions contemplated in the Operative
Documents, and BNPPLC makes no representation and will not make any representation that conditions
imposed by zoning ordinances or other state or local Applicable
Laws to the purchase, ownership, lease or operation of the Property have been satisfied.
(C) Further Assurances. Prior to the Completion Date and during the Term of the
Lease BNPPLC will take any action reasonably requested by NAI to facilitate the construction
contemplated by the Construction Management Agreement or the use of the Property permitted by the
Lease or the establishment of a commercial condominium regime that includes the Property (a
“Condominium Regime”) or replatting of the Land and other adjacent land owned by NAI (a
“Replatting”); subject, however, to the following terms and conditions:
(1) This subparagraph 4(C) will not impose upon BNPPLC the obligation to take any
action that can be taken by NAI, NAI’s Affiliates or anyone else other than BNPPLC as the
lessee under the Ground Lease or the owner of the Property.
(2) BNPPLC will not be required by this subparagraph 4(C) to incur any expense or make
any payment to another Person unless (a) BNPPLC has received funds from NAI, in excess of
any other amounts due from NAI under any of the Operative Documents, sufficient to cover the
expense or make the payment or (b) the request by NAI which will result in such expense or
payment is made before the Completion Date and BNPPLC can include such expense or payment in
the Outstanding Construction Allowance for purposes of the Construction Management
Agreement.
(3) BNPPLC will have no obligations whatsoever under this subparagraph 4(C) at any time
after a 97-10/Event or when a Default or an Event of Default has occurred and is continuing.
(4) NAI must request any action to be taken by BNPPLC pursuant to this subparagraph
4(C), and such request must be specific and in writing, if required by BNPPLC at the time
the request is made.
(5) No action may be required of BNPPLC pursuant to this subparagraph 4(C) that could
constitute a violation of any Applicable Laws or compromise or constitute a waiver of
BNPPLC’s rights under other provisions of this Certificate or any of the other Operative
Documents or that for any other reason is reasonably objectionable to BNPPLC.
The actions BNPPLC will take pursuant to this subparagraph 4(C) if reasonably requested
Closing Certificate and Agreement — Page 19
by NAI will include, subject to the conditions listed in the proviso above, executing or consenting
to, or exercising or assisting NAI to exercise rights under any: (I) grant of easements, licenses,
rights of way, and other rights in the nature of easements encumbering the Land or the
Improvements, (II) release, relocation or termination of easements, licenses, rights of way or
other rights in the nature of easements which are for the benefit of the Land or Improvements or
any portion thereof, (III) dedication or transfer of portions of the Land not improved with a
building, for road, highway or other public purposes, (IV) agreements (which will, in the case of
agreements made with NAI or its Affiliates, remain subject to subparagraphs (J), (K) and (L) of the
Ground Lease or comparable provisions included in amendments to the Operative Documents) for the
use and maintenance of common areas, for reciprocal rights of parking, ingress and egress and
amendments to any covenants and restrictions affecting the Land or any portion thereof, (V)
documents required to create or administer a governmental special benefit district or assessment
district for public improvements and collection of special assessments, (VI) instruments necessary
or desirable for the exercise or enforcement of rights or performance of obligations under any
Permitted Encumbrance or any contract, permit, license, franchise or other right included within
the term “Property”, (VII) modifications of Permitted Encumbrances, (VIII) permit applications or
other documents required to accommodate the Construction Project or any Replatting, (IX)
confirmations of NAI’s rights under any particular provisions of the Operative Documents which NAI
may wish to provide to a third party, (X) tract or parcel map subdividing the Land into lots or
parcels as part of a Replatting, or (XI) condominium documents (e.g., a condominium declaration or
map) meeting the requirements of Applicable Laws to establish a Condominium Regime. However, the
determination of whether any such action is reasonably requested or reasonably objectionable to
BNPPLC may depend in whole or in part upon the extent to which the requested action may result in a
lien to secure payment or performance obligations against BNPPLC’s interest in the Property, may
cause the value of the Property to be less than the Lease Balance after any Qualified Prepayments
that may result from such action are taken into account, or may impose upon BNPPLC any present or
future obligations greater than the obligations BNPPLC is willing to accept, taking into
consideration the indemnifications provided by NAI under the Construction Management Agreement or
the Lease, as applicable.
In addition, with respect to any request made by NAI to facilitate a relocation of any
easements or a substitution of new easements for those described in Exhibit A, the
following will be relevant to the determination of whether the request is reasonable:
(i) whether material encroachments will result from the relocation or replacement, and
whether title to the land over or under which any such easement is to be relocated or
replaced is encumbered by Liens other than those which are Fully Subordinated or Removable
or which otherwise constitute Permitted Encumbrances;
(ii) whether the relocation or replacement will result in any interruption of
Closing Certificate and Agreement — Page 20
access or
services provided to the Property which is likely to extend beyond the Designated Sale Date
(it being understood, however, that any such interruption which is not likely to extend
beyond the Designated Sale Date will not be a reason for BNPPLC to decline the request); and
(iii) whether the relocation or replacement is to be accomplished in a manner that will
not, when the relocation or replacement is complete, result in a material adverse change in
the access to or services provided to the Improvements or the Land.
With respect to any request made by NAI to facilitate the establishment of a Condominium
Regime or Replatting, the following will be relevant to the determination of whether the request is
reasonable:
(1) whether the Condominium Regime or Replatting will create one or more distinct
condominium units or parcels of land that include all significant Improvements constructed
or to be constructed by NAI for BNPPLC pursuant to the Construction Management Agreement and
only such Improvements (whether one or more, the “Applicable Units”);
(2) whether NAI is willing to amend the Operative Documents by amendments in form and
substance acceptable to BNPPLC (the “Anticipated Amendments”) as necessary to ensure that:
(A) the Property will include of the Applicable Units, together with all
access, parking or other property rights (whether exclusive or nonexclusive) that
will be created as appurtenances to the Applicable Units by the Condominium Regime
(“Appurtenant Condo Rights”) or by a recorded declaration of covenants, conditions
and rights executed in connection with a Replatting (“CCRs”);
(B) the land leased to BNPPLC pursuant to the Ground Lease will include and be
limited to the land (if any) over which exclusive possession and control must
reasonably be vested in the owner of the Applicable Units to preserve the value and
utility of the Applicable Units to such owner, taking into account Appurtenant Condo
Rights or CCRs; and
(C) if the event discretionary approvals or consents are required from any
“declarant” or “operator” by the Condominium Regime or CCRs over the design,
construction or alteration of Improvements or over the sale, use, leasing or
financing of the Property, then (i) the “declarant” or “operator” will be NAI or
another party acceptable to BNPPLC and will be bound by and remain bound by
Closing Certificate and Agreement — Page 21
subparagraphs (J), (K) and (L) of the Ground Lease or comparable provisions in the
Anticipated Amendments with respect to such discretionary approvals or consents;
(3) whether the request itself (if granted) or the proposed Condominium
Regime or Replatting is likely to have any material adverse impact on the value or
utility of the Property, taken as a whole, after giving effect to the Anticipated Amendments
and taking into account Appurtenant Condo Rights and CCRs; and
(4) whether the request itself (if granted) or the Condominium Regime or CCRs will
materially limit, or give NAI or its Affiliates discretionary control over, the rights of
BNPPLC and its successors and assigns to use or lease, sell or otherwise transfer the
Applicable Units in the event NAI declines for any reason to purchase the Property on the
Designated Sale Date pursuant to the Purchase Agreement, but taking into account any
superior rights BNPPLC has or may reserve under or by reference to subparagraphs (J), (K)
and (L) of the Ground Lease or comparable provisions in the Anticipated Amendments.
Any and all Losses incurred by BNPPLC because of any action taken after the Completion Date
pursuant to this subparagraph 4(C) will be covered by the indemnifications of BNPPLC set forth in
Construction Management Agreement or in the Lease. Further, for purposes of such indemnification,
any such action taken by BNPPLC will be deemed to have been made at the request of NAI if made
pursuant to any request of counsel to or any officer of NAI (or with their knowledge, and without
their objection) in connection with the execution or administration of the Lease or the other
Operative Documents.
(D) Actions Permitted by NAI Without BNPPLC’s Consent. No refusal by BNPPLC to
execute or join in the execution of any agreement, application or other document requested by NAI
pursuant to the preceding subparagraph 4(C) will prevent NAI from itself executing such agreement,
application or other document, so long as NAI is not purporting to act for BNPPLC and does not
thereby create or expand any obligations or restrictions that encumber BNPPLC’s title to the
Property. Further, subject to the other terms and conditions of the Lease and other Operative
Documents, NAI may do any of the following in NAI’s own name and to the exclusion of BNPPLC before
and during the Term of the Lease, so long as no 97-10/Event has occurred and no Default or Event of
Default has occurred and is continuing, and provided NAI is not purporting to act for BNPPLC and
does not thereby create or expand any obligations or restrictions that encumber BNPPLC’s title to
the Property:
(1) perform obligations arising under and exercise and enforce the rights of NAI or the
owner of the Property under the Permitted Encumbrances;
Closing Certificate and Agreement — Page 22
(2) perform obligations arising under and exercise and enforce the rights of NAI or the
owner of the Property with respect to any other contracts or documents (such as building
permits) included within the Personal Property; and
(3) recover and retain any monetary damages or other benefit inuring to NAI
or the owner of the Property through the enforcement of any rights, contracts or other
documents included within the Personal Property (including the Permitted Encumbrances);
provided, that to the extent any such monetary damages may become payable as compensation
for an adverse impact on value of the Property, the rights of BNPPLC and NAI under the other
Operative Documents with respect to the collection and application of such monetary damages
will be the same as for condemnation proceeds payable because of a taking of all or any part
of the Property.
(E) Waiver of Landlord’s Liens. BNPPLC waives any security interest, statutory
landlord’s lien or other interest BNPPLC may have in or against computer equipment and other
tangible personal property placed on the Land from time to time that NAI or its Affiliates own or
lease from other lessors; however, BNPPLC does not waive its interest in or rights with respect to
equipment or other property included within the “Property” as described in Paragraph 7 of
the Lease. Although computer equipment or other tangible personal property may be “bolted down” or
otherwise firmly affixed to Improvements, it will not by reason thereof become part of the
Improvements if it can be removed without causing structural or other material damage to the
Improvements and without rendering HVAC or other major building systems inoperative and if it does
not otherwise constitute “Property” as provided in Paragraph 7 of the Lease.
Without limiting the foregoing, BNPPLC acknowledges that NAI may obtain financing from other
parties for inventory, furnishings, equipment, machinery and other personal property that is
located in or about the Improvements, but that is not included in or integral to the Property, and
to secure such financing NAI may grant a security interest under the California Uniform Commercial
Code in such inventory, furnishings, equipment, machinery and other personal property. Further,
BNPPLC acknowledges that the lenders providing such financing may require confirmation from BNPPLC
of its agreements concerning landlord’s liens and other matters set forth in this subparagraph
4(E), and NAI may obtain such confirmation in any statement required of BNPPLC by the next
subparagraph.
(F) Estoppel Letters. Upon thirty days written request by NAI at any time and from
time to time prior to the Designated Sale Date, BNPPLC must provide a statement in writing
certifying that the Operative Documents are unmodified and in full effect (or, if there have been
modifications, that the Operative Documents are in full effect as modified, and setting forth such
modifications), certifying the dates to which the Base Rent payable by NAI under the Lease has been
paid, stating whether BNPPLC is aware of any default by NAI that may exist under the Operative
Documents and confirming BNPPLC’s agreements concerning landlord’s liens and
Closing Certificate and Agreement — Page 23
other matters set
forth in subparagraph 4(E). Any such statement by BNPPLC may be relied upon by anyone with whom NAI
may intend to enter into an agreement for construction of the Improvements or other significant
agreements concerning the Property.
(G) No Implied Representations or Promises by BNPPLC. NAI acknowledges and
agrees that neither BNPPLC nor its representatives or agents have made any representations
or promises with respect to the Property or the transactions contemplated in the Operative
Documents except as expressly set forth in the Operative Documents, and no rights, easements or
licenses are being acquired by NAI from BNPPLC by implication or otherwise, except as expressly set
forth in the other Operative Documents.
5 Usury Savings Provision. Notwithstanding anything to the contrary in any of the
Operative Documents, BNPPLC does not intend to contract for, charge or collect any amount of money
from NAI that constitutes interest in excess of the maximum nonusurious rate of interest, if any,
allowed by applicable usury laws (the “Maximum Rate”). BNPPLC and NAI agree that it is their intent
in the execution of the Lease, the Purchase Agreement and other Operative Documents to contract in
strict compliance with applicable usury laws, if any. In furtherance thereof, BNPPLC and NAI
stipulate and agree that none of the provisions of the Lease, the Purchase Agreement or the other
Operative Documents shall ever be construed to create a contract requiring compensation for the
use, forbearance or detention of money at a rate in excess of the Maximum Rate, and the provisions
of this paragraph shall control over all other provisions of this Certificate or other Operative
Documents which may be in apparent conflict herewith. All interest paid or agreed to be paid by
NAI to BNPPLC shall, to the extent permitted by applicable usury laws, be amortized, prorated,
allocated, and spread throughout the period that any principal upon which such interest accrues is
expected to be outstanding (including without limitation any renewal or extension of the term of
the Lease) so that the amount of interest included in such payments does not exceed the maximum
nonusurious amount permitted by applicable usury laws. If the Designated Sale Date is accelerated
and as a result thereof amounts paid by NAI to BNPPLC as interest are determined to exceed the
interest that would have accrued at the Maximum Rate for the period prior to the Designated Sale
Date, then BNPPLC shall, at its option, either refund to NAI the amount of such excess or credit
such excess as a Qualified Prepayment (and thus reduce the Lease Balance and other amounts, the
determination of which depend upon Qualified Prepayments credited to NAI) and thereby shall render
inapplicable any and all penalties of any kind provided by applicable usury laws as a result of
such excess interest. If BNPPLC receives money (or anything else) that is determined to constitute
interest and that would, but for this provision, increase the effective interest rate received by
BNPPLC under or in connection with the Operative Documents to a rate in excess of the Maximum Rate,
then the amount determined to constitute interest in excess of the maximum nonusurious interest
shall, immediately following such determination, be returned to NAI or be credited as a Qualified
Prepayment, in which event any and all penalties of any kind under applicable usury law shall be
Closing Certificate and Agreement — Page 24
inapplicable. If BNPPLC does not actually receive, but shall contract for, request or demand, a
payment of money (or anything else) which is determined to constitute interest and to increase the
effective interest rate contracted for or charged to a rate in excess of the Maximum Rate, BNPPLC
shall be entitled, following such determination, to waive or rescind the contractual claim, request
or demand for the amount determined to exceed the Maximum Rate, in which
event any and all penalties of any kind under applicable usury law shall be inapplicable. If at
any time NAI should have reason to believe that the transactions evidenced by the Operative
Documents are in fact usurious, NAI shall promptly give BNPPLC notice of such condition, after
which BNPPLC shall have ninety days in which to make appropriate refund or other adjustment in
order to correct such condition if it in fact exists.
6 Obligations of NAI Under Other Operative Documents Not Limited by this Certificate.
Except as provided above in Paragraph 5, nothing contained in this Certificate will limit, modify
or otherwise affect any of NAI’s obligations under the other Operative Documents. Subject to
Paragraph 5, those obligations are intended to be separate, independent and in addition to, and not
in lieu of, those established by this Certificate.
7 Obligations of NAI Hereunder Not Limited by Other Operative Documents. Recognizing that
but for this Certificate (including the representations of NAI set forth in Paragraph 1) BNPPLC
would not acquire the Property or enter into the other Operative Documents, NAI agrees that
BNPPLC’s rights for any breach of this Certificate (including a breach of such representations)
will not be limited by any provision of the other Operative Documents that would limit NAI’s
liability thereunder.
8 Waiver of Jury Trial. By its execution of this Certificate, each of NAI and BNPPLC
hereby waives its respective rights to a jury trial of any claim or cause of action based upon or
arising out of the Operative Documents or any of them or any other document or dealings between
them relating to the Property. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims, and all other common
law and statutory claims. This waiver is a material inducement to each of BNPPLC and NAI as they
enter into a business relationship; each has already relied on the waiver in entering into the
Operative Documents; and each will continue to rely on the waiver in their related future dealings.
NAI and BNPPLC, each having reviewed this waiver with its legal counsel, knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. This waiver is
irrevocable, meaning that it may not be modified either orally or in writing, and the waiver will
apply to any subsequent amendments, renewals, supplements or modifications to each of the Operative
Documents or to any other documents or agreements relating to the Property. In the event of
litigation, this Certificate may be filed as a written consent to a
trial by the court.
Closing Certificate and Agreement — Page 25
[The signature
pages Follow.]
Closing Certificate
and Agreement — Page 26
IN WITNESS WHEREOF, this Closing Certificate and Agreement is executed to be effective as
of December 14, 2006.
BNP PARIBAS LEASING CORPORATION, a | ||||||
Delaware corporation | ||||||
By: | /s/ Xxxxx X. Xxx | |||||
Xxxxx X. Xxx, Managing Director |
Closing Certificate
and Agreement — Signature Page
[Continuation
of signature pages for Closing Certificate and Agreement dated as of December 14,
2006]
NETWORK APPLIANCE, INC., a Delaware | ||||||
corporation | ||||||
By: | /s/ Ingemar Lanevi | |||||
Ingemar Lanevi, Vice President and Corporate Treasurer |
Closing Certificate
and Agreement — Signature Page
Exhibit A
Legal Description
Proposed Parcel 8, and (except to the extent within a different platted Parcel as currently shown
in the Map Records of the County of Santa Clara, California) proposed Parcel 12, and the Additional
Leased Premises as defined below, (collectively, the “2006 Ground Lease Premises”) as shown on that
certain Vesting Tentative Parcel Map provided to BNP Paribas Leasing Corporation (“BNPPLC”) by
Network Appliance, Inc. (“NAI”) attached hereto and made a part hereof (the “Tentative Map”), which
has received preliminary approval from the City of Sunnyvale, California, but not yet been filed
for record in the office of the recorder of the County of Santa Xxxxx, State of California. As
used herein, “Additional Leased Premises” means the parking lots, driveways and other areas shaded
in xxxx on the Tentative Map attached hereto within the larger area designated as Common Lot A
(consisting of 30.46 Acres, more or less) on the Tentative Map. The southern boundary of the
Additional Leased Premises is a line that runs North 75 degrees, 07 minutes, 58 seconds equidistant
from the southern boundary of Parcel 8 and the northern boundary of Parcel 7, both as shown on the
Tentative Map. The eastern boundary of the Additional Leased Premises runs along the same line as
the eastern boundary of Common Lot A, as shown on the Tentative Map. The western boundary of the
Additional Leased Premises runs along the same line as the western boundary of Parcel 8 and Parcel
7, as shown on the Tentative Map. The northern boundary of the Additional Leased Premises runs
along the center of an existing or proposed driveway which is situated between Parcel 8 and Parcel
9, as shown on the Tentative Map.
TOGETHER WITH, easements appurtenant to the 2006 Ground Lease Premises as described in Exhibit
A attached to the Ground Lease.
Exhibit A to Closing Certificate and Agreement — Page 2
Exhibit B
Permitted Encumbrances
1. TAXES for the fiscal year 2006-2007, a lien not yet due or payable.
2. THE LIEN of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section
75 of the California Revenue and Taxation Code, resulting from changes of ownership or completion
of construction on or after the date hereof.
3. EASEMENT for the purposes stated herein and incidents thereto
Purpose
|
: Slope Easement | |
In favor of
|
: City of Sunnyvale | |
Recorded
|
: October 9, 1964 in Book 6695, page 430, Official Records | |
Affects
|
: Easterly 18 feet, as shown on a survey plat entitled ALTA/ACSM Land Title Survey for: Network Appliance, 0000 Xxxxxxxx Xxxxxx, dated December 2, 1999, prepared by Xxxx & Xxxxxx, Job No. 97208-16. |
4. EASEMENT for the purposes stated herein and incidents thereto
Purpose
|
: Public utilities easement | |
In favor of
|
: City of Sunnyvale | |
Recorded
|
: October 9, 1964 in Book 6695, page 450, Official Records | |
Affects
|
: Easterly 7 feet, as shown on a survey plat entitled ALTA/ACSM Land Title Survey for: Network Appliance, 0000 Xxxxxxxx Xxxxxx, dated December 2, 1999, prepared by Xxxx & Xxxxxx, Job No. 97208-16. |
5. Covenants, Conditions and Restrictions in the Declaration of Protective Covenants — Xxxxxxx
Industrial Park No. 2) recorded December 23, 1971 in Book 9640, page 443, Official Records; which
provide that a violation thereof shall not defeat or render invalid the lien of any Mortgage or
Deed of Trust made in good faith and for value. Said Covenants, Conditions and Restrictions do not
provide for reversion of title in the event of a breach thereof. Restrictions, if any, based upon
race, color, religion, sex, handicap, familial status, or national origin are deleted, unless and
only to the extent that said covenant (a) is exempt under Chapter 42, Section 3607, of the United
States Code, or (b) related to handicap but does not discriminate against handicapped persons.
ASSIGNMENT AND ASSUMPTION of the rights, powers, duties, obligations, and reservations of
Xxxxxxx Park Associates, in favor of The Prudential Insurance Company of America, recorded February
8, 1977 in Book C583, page 685, Official Records.
6. EASEMENT for the purposes stated herein and incidents thereto
Purpose
|
: Public utilities | |
Granted to
|
: City of Sunnyvale | |
Recorded
|
: November 16, 1976 in Book C414, page 105, Official Records | |
Affects
|
: Southerly 10 feet, as shown on a survey plat entitled ALTA/ACSM Land Title Survey for: Network Appliance, 0000 Xxxxxxxx Xxxxxx, dated December 2, 1999, prepared by Xxxx & Xxxxxx, Job No. 97208-16. |
7. LIMITATIONS, covenants, restrictions, reservations, exceptions or terms, but deleting any
covenant, condition or restriction indicating a preference, limitation or discrimination based on
race, color, religion, sex, handicap, familial status, or national origin to the extent such
covenants, conditions or restrictions violate 42 USC 3604(c), contained in the document recorded
February 5, 1980 in Book F122, page 460, Official Records.
Exhibit B to Closing Certificate and Agreement — Page 2
Exhibit C
Quarterly Certificate
BNP Paribas Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx, Managing Director
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx, Managing Director
Gentlemen:
This
Certificate is furnished pursuant to subparagraph 2(D)(3) of the Closing Certificate and
Agreement dated as of December 14, 2006 between Network Appliance, Inc. and BNP Paribas Leasing
Corporation(as amended, the “Closing Certificate”). Terms defined in the Closing Certificate and
used but not otherwise defined in this Certificate are intended to have the respective meanings
ascribed to them in the Closing Certificate.
The undersigned, being a Responsible Financial Officer of Network Appliance, Inc., represents
and certifies the following to BNP Paribas Leasing Corporation:
(a) No Event of Default or material Default by NAI has occurred except as follows:
[If an Event of Default or material Default by NAI has occurred,
insert a description of the nature thereof and the action which NAI
has taken or proposes to take to rectify it; otherwise, insert the word
“none”.]
insert a description of the nature thereof and the action which NAI
has taken or proposes to take to rectify it; otherwise, insert the word
“none”.]
(b) The representations and warranties by NAI in the Closing Certificate are true and
complete in all material respects on and as of the date of this Certificate as though made
on and as of such date.
(c) the calculations set forth in the attachment to this Certificate, which show whether NAI
is complying with financial covenants set forth in subparagraph 3(B)of the Closing Certificate
based upon the most recent information available, are true and complete.
Executed
this
day of , 20 .
[INSERT SIGNATURE BLOCK FOR A
RESPONSIBLE FINANCIAL OFFICER]
RESPONSIBLE FINANCIAL OFFICER]
Exhibit D
Certificate of BNPPLC Re: Accounting
Network Appliance, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Attention: Ingemar Lanevi
0000 Xxx Xxxxx Xxxx
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Attention: Ingemar Lanevi
Gentlemen:
This
certificate is furnished pursuant to subparagraph 4(A) of the Closing Certificate and
Agreement dated as of December 14, 2006 between BNP Paribas Leasing Corporation and Network
Appliances, Inc. (as amended, the “Closing Certificate”). Terms defined in the Closing Certificate
and used but not otherwise defined in this certificate are intended to have the respective meanings
ascribed to them in the Closing Certificate.
BNP Paribas Leasing Corporation (“ BNPPLC”) certifies that the following are true and complete
in all material respects, but only to the knowledge of BNPPLC as of the date hereof:
(A) The facts disclosed in any financial statements or other documents listed in the
Annex attached to this certificate were (as of their respective dates) true and complete in
all material respects. Copies of such statements or other documents were provided by or behalf of
BNPPLC to NAI prior to the date hereof to permit NAI to determine the appropriate accounting for
NAI’s relationship with BNPPLC under FASB Interpretation No. 46, Consolidation of Variable Interest
Entities (“FIN 46”).
(B The fair value of the Property and of other properties, if any, leased to NAI by BNPPLC
(collectively, whether one or more, the “Properties Leased to NAI”) are, as of the date hereof,
less than half of the total of the fair values of all assets of BNPPLC, excluding any assets of
BNPPLC which are held within a silo. Further, none of the Properties Leased to NAI are, as of the
date hereof, held within a silo.
Although the representations required of BNPPLC by this certificate are intended to cover
facts, it is understood and agreed (consistent with subparagraph 4(C) of the Lease) that
BNPPLC has not made and will not make any representation or warranty as to the proper accounting by
NAI or its Affiliates of the Lease or other Operative Documents or as to other accounting
conclusions.
Executed this
day of , 20 .
BNP PARIBAS LEASING CORPORATION, a | ||||||
Delaware corporation | ||||||
By: | ||||||
Xxxxx X. Xxx, Managing Director |
Exhibit D to Closing Certificate and Agreement — Page 2