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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------
FORM 10-Q
---------------

(MARK ONE)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JULY 30, 1999

OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .

COMMISSION FILE NUMBER 0-27130

NETWORK APPLIANCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CALIFORNIA                                     77-0307520
(STATE OR OTHER JURISDICTION OF                (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

495 EAST JAVA DRIVE,
SUNNYVALE, CALIFORNIA 94089
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 822-6000

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X]     No [ ]

Number of shares outstanding of the registrant's class of common stock, as
of the latest practicable date.

OUTSTANDING AT
CLASS                                 JULY 30, 1999
-----                                 --------------
Common Stock.......................         73,571,159

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TABLE OF CONTENTS

PAGE NO.
--------

PART I -- FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of July 30, 1999 and April 30, 1999                           2

Condensed Consolidated Statements of Income for the three-month periods
ended July 30, 1999 and July 31, 1998                                                               3

Condensed Consolidated Statements of Cash Flows for the three-month periods ended
July 30, 1999 and July 31, 1998                                                                     4

Notes to Condensed Consolidated Financial Statements                                                   5

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations                      8

Item 3.    Quantitative and Qualitative Disclosures About Market Risk                                                14

PART II -- OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                         15

Item 2.    Changes in Securities                                                                                     15

Item 3.    Defaults Upon Senior Securities                                                                           15

Item 4.    Submission of Matters to Vote of Securityholders                                                          15

Item 5.    Other Information                                                                                         15

Item 6.    Exhibits and Reports on Form 8-K                                                                          16

SIGNATURE                                                                                                            17

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NETWORK APPLIANCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

July 30,       April 30,
1999           1999
---------       ---------
(UNAUDITED)

ASSETS

CURRENT ASSETS:
Cash and cash equivalents                      $ 230,025       $ 221,284
Short-term investments                            15,869           5,800
Accounts receivable, net                          68,910          57,163
Inventories                                       15,019          13,581
Prepaid expenses and other assets                  4,689           7,384
Deferred taxes                                    13,534          10,134
---------       ---------
Total current assets                       348,046         315,346
PROPERTY AND EQUIPMENT, NET                              25,016          19,271
DEPOSITS                                                  4,500           7,000
OTHER ASSETS                                              4,772           4,730
---------       ---------
$ 382,334       $ 346,347
=========       =========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                               $  22,405       $  15,126
Income taxes payable                               3,928           1,108
Accrued compensation and related benefits         10,213          15,189
Other accrued liabilities                          8,890           7,633
Deferred revenue                                  12,959          11,474
---------       ---------
Total current liabilities                   58,395          50,530
LONG-TERM OBLIGATIONS                                        68              93
---------       ---------
58,463          50,623
---------       ---------

SHAREHOLDERS' EQUITY:
Common stock                                     254,508         240,093
Retained earnings                                 69,422          55,954
Cumulative other comprehensive loss                  (59)           (323)
---------       ---------
Total shareholders' equity                 323,871         295,724
---------       ---------
$ 382,334       $ 346,347
=========       =========

See accompanying notes to condensed consolidated financial statements.

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NETWORK APPLIANCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

THREE MONTHS ENDED
------------------------
JULY 30,        JULY 31,
1999           1998
--------        --------

NET SALES                                               $103,279        $ 57,375
COST OF SALES                                             42,539          23,239
--------        --------
Gross Margin                                     60,740          34,136
--------        --------

OPERATING EXPENSES:
Sales and marketing                              26,884          14,935
Research and development                         11,220           6,081
General and administrative                        3,818           1,885
--------        --------
Total operating expenses                    41,922          22,901
--------        --------

INCOME FROM OPERATIONS                                    18,818          11,235

OTHER INCOME, NET                                          2,063             121
--------        --------
INCOME BEFORE INCOME TAXES                                20,881          11,356
PROVISION FOR INCOME TAXES                                 7,413           4,259
--------        --------
NET INCOME                                              $ 13,468        $  7,097
========        ========

NET INCOME PER SHARE:
Basic                                          $   0.18        $   0.11
========        ========
Diluted                                        $   0.16        $   0.10
========        ========

SHARES USED IN PER SHARE CALCULATIONS:
Basic                                            73,094          67,096
========        ========
Diluted                                          83,399          74,542
========        ========

See accompanying notes to condensed consolidated financial statements.

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NETWORK APPLIANCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

THREE MONTHS ENDED
-------------------------
JULY 30,        JULY 31,
1999           1998
---------       ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                 $  13,468       $   7,097
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization                            2,837           2,122
Provision for doubtful accounts                            304             100
Deferred income taxes                                   (3,400)           (217)
Deferred rent                                              (25)             (6)
Changes in assets and liabilities:
Accounts receivable                                  (12,005)         (1,734)
Inventories                                           (1,219)         (1,021)
Prepaid expenses and other assets                      2,595             716
Accounts payable                                       7,279          (2,500)
Income taxes payable                                   9,720           3,937
Accrued compensation and related benefits             (4,976)         (3,226)
Other accrued liabilities                              1,257             126
Deferred revenue                                       1,485             989
---------       ---------
Net cash provided by operating activities         17,320           6,383
---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments                          (12,419)         (7,080)
Redemptions of short-term investments                          2,350           2,950
Purchases of property and equipment                           (8,306)         (2,340)
Payment/refund of deposits, net                                2,500          (9,500)
---------       ---------
Net cash used in investing activities            (15,875)        (15,970)
---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term obligations                               --              (3)
Proceeds from sale of common stock, net                        7,296           3,751
---------       ---------
Net cash provided by financing activities          7,296           3,748
---------       ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               8,741          (5,839)

CASH AND CASH EQUIVALENTS:
Beginning of period                                          221,284          37,315
---------       ---------
End of period                                              $ 230,025       $  31,476
=========       =========

NONCASH INVESTING AND FINANCING ACTIVITIES:
Income tax benefit from employee stock transactions        $   6,900       $   2,234
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid                                          $      34       $     453

See accompanying notes to condensed consolidated financial statements.

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NETWORK APPLIANCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements have
been prepared by Network Appliance, Inc. without audit and reflect all
adjustments, which are, in the opinion of management, necessary for a fair
presentation of our financial position and results of operations for the interim
periods. The statements have been prepared in accordance with the regulations of
the Securities and Exchange Commission (SEC). Accordingly, they do not include
all information and footnotes required by generally accepted accounting
principles. The results of operations for the three-month period ended July 30,
1999 are not necessarily indicative of the operating results to be expected for
the full fiscal year or future operating periods. The information included in
this report should be read in conjunction with the audited consolidated
financial statements and notes thereto for the fiscal year ended April 30, 1999
and the risk factors as set forth in our Annual Report on Form 10-K, including,
without limitation, risks relating to fluctuating operating results, customer
and market acceptance of new products, dependence on new products, rapid
technological change, litigation, dependence on growth in the network file
server market, expansion of international operations, product concentration,
changing product mix, competition, management of expanding operations,
dependence on high-quality components, dependence on proprietary technology,
intellectual property rights, dependence on key personnel, volatility of stock
price, shares eligible for future sale, effect of certain anti-takeover
provisions, dilution and the Year 2000 Issue. Any party interested in reviewing
these publicly available documents should contact the SEC or our Chief Financial
Officer.

2.  SIGNIFICANT ACCOUNTING POLICIES

Fiscal Periods - We operate on a 52-week or 53-week year ending on
the last Friday in April. Fiscal 2000 is a 52-week year. Fiscal 1999 was a
53-week year. The quarter ended July 30, 1999 includes 13 weeks of operating
activity, compared to 14 weeks of activity for the corresponding period of the
prior fiscal year.

Foreign Currency Translation - In the first quarter of fiscal 2000,
we determined that the functional currencies of certain of our foreign
subsidiaries had changed from the local currencies to the Euro. Accordingly,
assets and liabilities of our foreign subsidiaries are translated into Euro at
the exchange rates in effect as of the balance sheet date, and results of
operations for each subsidiary are translated using average rates in effect for
the period presented. Translation adjustments have been included within
shareholders' equity as a cumulative other comprehensive loss. The effect of the
change in functional currencies did not have a material impact on our
consolidated financial position, results of operations or cash flows.

3.  INVENTORIES

Inventories consist of the following:

JULY 30,      APRIL 30,
1999          1999
-------       -------
(IN THOUSANDS)

Purchased components             $ 3,552       $ 5,316
Work in process                    2,186         1,727
Finished goods                     9,281         6,538
-------       -------
$15,019       $13,581
=======       =======

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NETWORK APPLIANCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

4.  COMMON STOCK AND NET INCOME PER SHARE

The following is a reconciliation of the numerators and denominators
of the basic and diluted net income per share computations for the periods
presented:

THREE MONTHS ENDED
-----------------------
JULY 30,       JULY 31,
1999           1998
--------       --------

(In thousands, except per share amounts)

NET INCOME (NUMERATOR):
Net income, basic and diluted                      $ 13,468       $  7,097
========       ========

SHARES (DENOMINATOR):
Weighted average common shares outstanding           73,155         67,582
Weighted average common shares outstanding
subject to repurchase                                 (61)          (486)
--------       --------
Shares used in basic computation                     73,094         67,096
Weighted average common shares outstanding
subject to repurchase                                  61            486
Common shares issuable upon exercise of stock
options                                            10,244          6,960
--------       --------
Shares used in diluted computation                   83,399         74,542
========       ========

NET INCOME PER SHARE:

Basic                                              $   0.18       $   0.11
========       ========
Diluted                                            $   0.16       $   0.10
========       ========

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NETWORK APPLIANCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

5.  COMPREHENSIVE INCOME

The components of comprehensive income, net of tax, are as follows:

THREE MONTHS ENDED
--------------------
JULY 30,     JULY 31,
1999         1998
-------      -------
(IN THOUSANDS)

Net income                                          $13,468      $ 7,097
Change in cumulative translation adjustment             264           17
-------      -------
Comprehensive income                                $13,732      $ 7,114
=======      =======

6.  NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which defines derivatives,
requires that all derivatives be carried at fair value, and provides for hedging
accounting when certain conditions are met. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. On a
forward-looking basis, although we have not fully assessed the implications of
this new statement, we do not believe adoption of this statement will have a
material impact on our consolidated financial position, results of operations or
cash flows.

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This Form 10-Q contains forward-looking statements about future
results, which are subject to risks and uncertainties, including those discussed
below. Our actual results may differ significantly from the results discussed in
the forward-looking statements. We are subject to a variety of other additional
risk factors, more fully described in our Annual Report on Form 10-K filed with
the Securities and Exchange Commission.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth certain consolidated statements of
income data as a percentage of net sales for the periods indicated:

THREE MONTHS ENDED
-----------------------
JULY 30,       JULY 31,
1999           1998
--------       --------

Net sales                                                    100.0%         100.0%
Cost of sales                                                 41.2           40.5
------         ------
Gross margin                                  58.8           59.5
------         ------
Operating expenses:
Sales and marketing                                    26.0           26.0
Research and development                               10.9           10.6
General and administrative                              3.7            3.3
------         ------
Total operating expenses                      40.6           39.9
------         ------
Income from operations                                        18.2           19.6
Other income, net                                              2.0            0.2
------         ------
Income before income taxes                                    20.2           19.8
Provision for income taxes                                     7.2            7.4
------         ------
Net income                                    13.0%          12.4%
======         ======

Net Sales -- Net sales increased by 80.0% to $103.3 million for the
three months ended July 30, 1999, from $57.4 million for the three months ended
July 31, 1998. This increase was primarily attributable to a higher volume of
units shipped, as compared to the corresponding period of the prior fiscal year.
Factors impacting unit growth include:

o  growth in the network attached storage market, increased market
acceptance of the appliance concept and the growing enterprise
market driven by the need for reliable internet infrastructure;

o  acceleration in deployment of our products among Internet and
enterprise related customers, particularly for E-business and new
E-commerce applications;

o  strong demand for our F700 filer product family utilizing
primarily fibre-channel connectivity;

o  increased worldwide shipment of NetApp(R) Cluster Failover;

o  increased worldwide demand for our NetCache(TM) solutions;

o  additional filer demand created by SnapMirror(TM) to store the
remote replicated data for disaster recovery;

o  expansion of our direct sales force and

o  initial sales to our two new OEM partners.

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Net sales growth was also positively impacted by:

o  a higher average selling price of our F700 filer product family
due primarily to the increase in storage content;

o  the introduction of new software features with SnapMirror,
SnapRestore(TM) and Cluster Failover and;

o  increased add on software licenses from multi-protocol, software
subscription and service revenues due to a growing installed base.

Factors which partially offset overall net sales growth include
declining unit sales of our older product family and decreases in base prices of
our current product line due to competitive forces from the recent disk
repricing.

International net sales (including United States exports) grew by
124.0% for the three-month period ended July 30, 1999, as compared to the
comparable period of the prior fiscal year. International net sales were $28.4
million, or 27.5% of total net sales, for the three-month period ended July 30,
1999. The increase in international sales for the three-month period ended July
30, 1999, was primarily a result of European sales growth, due to increased
headcount in the direct sales force, increased indirect channel sales through
resellers, increased shipments of filers, Cluster Failover solutions, NetCache
appliances and increased sales of add-on software licenses. Asia Pacific net
sales growth for the three-month period ended July 30, 1999, was also driven by
increased headcount in the direct sales force, increased shipments of filers,
NetCache appliances and increased sales of add-on software licenses, as compared
to the corresponding period of the prior fiscal year.

We cannot assure you that our net sales will continue to increase in
absolute dollars or at the rate at which they have grown in recent fiscal
periods.

Gross Margin -- Gross margin decreased slightly to 58.8% for the
three months July 30, 1999 from 59.5% for the three months ended July 31, 1998.
Primary factors negatively impacting gross margin were:

o  the increase in the sales volume of the F700 product family
carrying additional costs associated with greater disk drive and
memory content;

o  recent price reductions on disk drives due to competitive pricing
pressure from other storage vendors.

Factors negatively impacting gross margin were partially offset by:

o  the increase in product volume;

o  lower costs of key components and

o  increased manufacturing efficiencies.

Gross margin was also favorably impacted by the licensing of add on
software from multi-protocol, Cluster Failover, SnapMirror and SnapRestore and
support contracts, and by growth in software subscription and service revenues
due to a larger installed base.

Our gross margin has been and will continue to be affected by a
variety of factors, including:

o  competition;

o  product configuration;

o  direct versus indirect sales;

o  the mix and average selling prices of products, including software
licensing;

o  new product introductions and enhancements; and

o  the cost of components and manufacturing labor.

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Our gross margin may also vary based upon the configuration of
systems that are sold and whether they are sold directly or through indirect
channels. Highly configured systems have historically generated lower overall
gross margin percentages due to greater disk drive and memory content.

Sales and Marketing -- Sales and marketing expenses consist primarily
of salaries, commissions, advertising and certain promotional expenses and
customer service and support costs. Sales and marketing expenses increased 80.0%
to $26.9 million for the three months ended July 30, 1999 from $14.9 million for
the three months ended July 31, 1998. These expenses were 26.0% of net sales for
both the three months ended July 30, 1999 and July 31, 1998, respectively. The
increase in absolute dollars was primarily related to the continued expansion of
our sales and marketing organization, including growth in the domestic and
international direct sales forces and increased commission expenses. We expect
to continue to increase our sales and marketing expenses in an effort to expand
domestic and international markets, introduce new products, establish and expand
new distribution channels and increase product and company awareness. We believe
that our continued growth and profitability is dependent in part on the
successful expansion of our international operations, and therefore, have
committed significant resources to increase international sales.

Research and Development -- Research and development expenses consist
primarily of salaries and benefits, prototype expenses, and fees paid to outside
consultants. Research and development expenses increased 84.5% to $11.2 million
for the three months ended July 30, 1999 from $6.1 million for the three months
ended July 31, 1998. These expenses represented 10.9% and 10.6% of net sales,
respectively, for the three months ended July 30, 1999 and July 31, 1998.
Research and development expenses increased in absolute dollars, primarily as a
result of increased headcount, ongoing support of current and future product
development and enhancement efforts and prototyping expenses associated with the
development of new products. These new products included the F700 series filers,
the Cluster Failover solutions, the C700 family and Netcache software release,
as well as new enterprise software offerings and data management tools with
SnapMirror, SnapRestore and SecureAdmin(TM). We believe that our future
performance will depend in large part on our ability to maintain and enhance our
current product line, develop new products that achieve market acceptance,
maintain technological competitiveness and meet an expanding range of customer
requirements. We intend to continuously expand our existing product offerings
and to introduce new products and expect that such expenditures will continue to
increase in absolute dollars. For the three months ended July 30, 1999 and July
31, 1998, no software development costs were capitalized.

General and Administrative -- General and administrative expenses
were $3.8 million for the three months ended July 30, 1999, as compared to $1.9
million for the three months ended July 31, 1998. These expenses represented
3.7% and 3.3% of net sales for the three months ended for such periods.
Increases in absolute dollars were primarily due to increased headcount,
expenses associated with initiatives to implement enterprise-wide management
information systems, increases to the allowance for doubtful accounts and
outside service fees. We believe that our general and administrative expenses
will increase in absolute dollars as we continue to build our infrastructure.

Other Income, net -- Other income, net, was $2.1 million and $0.1
million for the three months ended July 30, 1999 and July 31, 1998,
respectively. The increase was due primarily to interest income earned on the
net proceeds from the March 1999 follow-on public offering, cash generated from
operations and net proceeds from stock option exercises. The first quarter of
fiscal 1999 included losses from foreign currency transactions compared to
minimal foreign currency losses recorded in the current quarter, primarily the
result of the implementation of our new hedging program.

Provision for Income Taxes -- Our effective tax rate was 35.5% for
the three-months period ended July 30, 1999 compared to 37.5% for the
three-months period ended July 31, 1998. The effective tax rates differed from
the U.S. statutory rate of 35% primarily due to state taxes partially offset by
earnings of foreign subsidiaries being taxed at lower rates.

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CERTAIN RISK FACTORS

Although we have experienced significant revenue growth in recent
periods, this growth may not be indicative of our future operating results. As a
result, we believe that period-to-period comparisons of our results of operation
are not necessarily meaningful and should not be relied upon as indicators of
future performance. Many of the factors that could cause our quarterly operating
results to fluctuate significantly in the future are beyond our control and
include the following: the level of competition in our target product markets;
the size and timing and cancellation of significant orders; product
configuration and mix; market acceptance of new products and product
enhancements; new product announcements or introductions by us or our
competitors; deferrals of customer orders in anticipation of new products or
product enhancements; changes in pricing by us or our competitors; our ability
to timely develop, introduce and market new products and enhancements; supply
constraints; technological changes in our target product markets; the levels of
expenditure on research and development and expansion of our sales and marketing
programs; seasonality; and general economic trends.

In addition, sales for any future quarter may vary and accordingly be
inconsistent with our plans. We generally operate with limited order backlog
because our products are typically shipped shortly after orders are received. As
a result, product sales in any quarter are generally dependent on orders booked
and shipped in that quarter. Product sales are difficult to forecast because the
network file server market is rapidly evolving and our sales cycle varies
substantially from customer to customer.

We conduct business internationally. For the three months ended July
30, 1999, approximately 27.5% of our net sales were to international customers
(including United States exports). Accordingly, our future operating results
could be materially adversely affected by a variety of factors, some of which
are beyond our control, including regulatory, political or economic conditions
in a specific country or region, trade protection measures and other regulatory
requirements and government spending patterns.

Our international sales are denominated in U.S. dollars and in
foreign currencies. An increase in the value of the U.S. dollar relative to
foreign currencies could make our products more expensive and, therefore,
potentially less competitive in foreign markets. For international sales and
expenditures denominated in foreign currencies, we are subject to risks
associated with currency fluctuations. We hedge risks associated with foreign
currency transactions in order to minimize the impact of changes in foreign
currency exchange rates on earnings. We utilize forward contracts to hedge trade
and intercompany receivables and payables. All hedge contracts are marked to
market through earnings every period. We believe that these forward contracts do
not subject us to undue risk due to foreign exchange movements because gains and
losses on these contracts are offset by losses and gains on the underlying
assets and liabilities.

Additional risks inherent in our international business activities
generally include, among others, longer accounts receivable payment cycles,
difficulties in managing international operations and potentially adverse tax
consequences. We cannot assure you that such factors will not materially
adversely affect our future international sales and, consequently, our operating
results.

Although operating results have not been materially and adversely
affected by seasonality in the past, because of the significant seasonal effects
experienced within the industry, particularly in Europe, we cannot assure you
that our future operating results will not be adversely affected by seasonality.

We believe that continued growth and profitability will require
successful expansion of our international operations and sales and therefore we
have committed significant resources to such expansion. In order to successfully
expand international sales in fiscal 2000 and subsequent periods, we must
strengthen foreign operations, hire additional personnel and recruit additional
international distributors and resellers. This will require significant
management attention and financial resources and could materially adversely
affect our operating results. To the extent that we are unable to effect these
additions in a timely manner, our growth, if any, in international sales will be
limited, and our operating results could be materially adversely affected. In
addition, we cannot assure you that we will be able to maintain or increase
international market demand for our products.

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LIQUIDITY AND CAPITAL RESOURCES

As of July 30, 1999, as compared to the April 30, 1999 balances, our
cash, cash equivalents and short-term investments increased by $18.8 million to
$245.9 million. Working capital increased by $24.8 million to $289.7 million. We
generated cash from operating activities totaling $17.3 million and $6.4 million
for the three-month periods ended July 30, 1999 and July 31, 1998, respectively.
Net cash provided by operating activities for the three-month period ended July
30, 1999 principally related to net income of $13.5 million, increases in
accounts payable, income taxes payable, deferred revenue and other accrued
liabilities and decreases in prepaid expenses and other assets, coupled with
depreciation and amortization which are non-cash expenses, partially offset by
increases in accounts receivable, inventories, deferred income taxes and
decreases in accrued compensation and related benefits.

We used $8.3 million and $2.3 million of cash during the three-month
periods ended July 30, 1999 and July 31, 1998, respectively, to purchase
property and equipment. The increases were primarily attributed to our
relocation in June 1999 to the Sunnyvale headquarters facility. During the
current quarter, we received back our $2.5 million deposit in connection with
the $36.0 million operating lease. We have used $10.1 million and $4.1 million
during the three-month periods ended July 30, 1999 and July 31, 1998,
respectively, for net short-term investment purchases. Financing activities
provided $7.3 million and $3.7 million during the three-month periods ended July
30, 1999 and July 31, 1998, respectively. The increase in cash provided by
financing activities for the three months ended July 30, 1999, compared to the
corresponding period of the prior fiscal year, was due to an increased quantity
of stock options exercised at a higher average exercise price and a greater
number of employees participating in the employee stock purchase plan.

In fiscal 1999, we executed agreements to acquire approximately 18
acres of land in Sunnyvale, California and to develop 393,000 square feet of
buildings. We subsequently assigned our rights and obligations under all the
agreements for the Sunnyvale facilities to a third-party entity and entered into
three operating leases. The leases require monthly payments which vary based on
the London Interbank Offered Rate (LIBOR) plus a spread (6.7% at July 30, 1999).
The aggregate annual minimum rent commitments under the $44.0 million lease is
approximately $2.9 million which began in August 1999. The lease payments under
the $48.0 million and $36.0 million operating leases are expected to commence in
June 2000 and will also vary based on LIBOR plus a spread.

The operating leases mentioned above require us to maintain specified
financial covenants with which we were in compliance as of July 30, 1999.

Excluding the commitments related to the aforementioned properties,
which we have assigned to third parties and accounted for as operating leases,
we currently have no significant commitments other than commitments under
operating leases. We believe that our existing liquidity and capital resources,
including the available amounts under the $5.0 million line of credit, are
sufficient to fund our operations for at least the next twelve months.

YEAR 2000

The Year 2000 issue refers to computer programs which use two digits
rather than four to define a given year and which therefore might read a date
using "00" as the year 1900 rather than the year 2000. As a result, many
companies' systems and software may need to be upgraded or replaced in order to
function correctly after December 31, 1999.

We are currently conducting a general software upgrade and
replacement program to enhance our computer systems and applications, in
particular those systems and applications related to our manufacturing,
distribution and financial operations. As part of this larger program we are
addressing the critical areas of our internal computer systems, products and
relationships with external organizations for Year 2000 compliance. We are
addressing Year 2000 compliance for both our IT and non-IT systems, which
typically include embedded technology such as microcontrollers.

12

14

As part of our general systems upgrade we have evaluated and selected
various significant computer software applications which are represented by
vendors as Year 2000 compliant. We have substantially completed installation of
such software in our domestic operations by the end of the first quarter of
fiscal 2000 which will be followed by installation in our international
operations throughout fiscal 2000. Most of our existing business applications
are already supported by Year 2000 compliant software. With the system changes
implemented to date and other planned changes, we anticipate that our internal
computer software applications will be Year 2000 compliant prior to December 31,
1999. We believe that our current products are Year 2000 compliant, and our new
products are being designed to be Year 2000 compliant.

We rely on numerous third party vendors for certain products and
services. We are communicating with our principal service providers and
suppliers to assess their Year 2000 readiness. Responses indicate that our
significant service providers currently have compliant versions of their systems
available or are well into the renovation and testing phases with completion
scheduled prior to December 31, 1999. We are still assessing the effect Year
2000 issues will have on our service providers and suppliers, however, our
principal service providers and suppliers have represented to us that they are
Year 2000 compliant. We can give you no guarantee that the systems and products
of these service providers and suppliers on which we rely are, or will be, Year
2000 compliant.

Our contingency planning for Year 2000 issues relates primarily to
the efforts of our third-party vendors. In the event of any Year 2000
disruptions related to third-party software, we expect to follow the individual
vendor's contingency directives. With respect to suppliers, we will consider
alternative sources as a contingency plan, if necessary. Contingency planning
will continue throughout 1999 and our plans will be modified based upon the
progress of our remediation efforts, system updates and installations and based
upon our communications with selected suppliers. We have determined that our
"worst case" scenario relates to Year 2000 compliance problems of our third
party vendors and suppliers and other external organizations which if not
remedied could materially adversely affect our operating results.

The costs we expect to incur in connection with our overall general
systems upgrade program, including both internal and third party costs, are
primarily external costs for software licenses, and implementation and
consulting services. These systems and applications were selected primarily for
features and functionality in addition to Year 2000 compliance. Accordingly, we
do not itemize costs of Year 2000 compliance separately.

Our expectations regarding the impact of Year 2000 issues are forward
looking statements and actual results could vary due to the factors discussed in
this section. While we believe that the estimated cost of becoming Year 2000
compliant will not be significant to our operating results, failure to complete
all the work in a timely manner could materially adversely affect our operating
results. While we expect all planned work to be completed, we can not guarantee
that all systems will be in compliance by the Year 2000, the systems of
suppliers and other companies and government agencies on which we rely will be
Year 2000 compliant, or that our contingency planning will be able to fully
address all potential interruptions. Therefore, Year 2000 issues could cause
delays in our ability to produce or ship our products, process transactions or
otherwise conduct business in any of our markets. Year 2000 issues could lower
demand for our products while increasing our costs. The occurrence of one or
more of these factors could materially adversely affect our operating results.

NEW ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which defines derivatives,
requires that all derivatives be carried at fair value, and provides for hedging
accounting when certain conditions are met. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. On a
forward-looking basis, although we have not fully assessed the implications of
this new statement, we do not believe adoption of this statement will have a
material impact on our consolidated financial position, results of operations or
cash flows.

13

15

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk related to fluctuations in interest
rates and in foreign currency exchange rates. We use certain derivative
financial instruments to manage these risks. We do not use derivative financial
instruments for speculative or trading purposes. All financial instruments are
used in accordance with management-approved policies.

Market Interest Risk

Short-term Investments - As of July 30, 1999, we had short-term
investments of $15.9 million. These short-term investments consist of highly
liquid investments with original maturities at the date of purchase between
three and twelve months. These investments are subject to interest rate risk and
will decrease in value if market interest rates increase. A hypothetical 10
percent increase in market interest rates from levels at July 30, 1999, would
cause the fair value of these short-term investments to decline by an immaterial
amount. Because we have the ability to hold these investments until maturity we
would not expect any significant decline in value of our investments caused by
market interest rate changes. Declines in interest rates over time will,
however, reduce our interest income.

Operating Lease Commitments - As of July 30, 1999, we have
outstanding lease commitments to a third-party entity under operating lease
agreements, which vary based on a monthly LIBOR rate plus a spread. However, a
hypothetical 10 percent decrease in interest rates would not have a material
impact on us. Increases in interest rates could, however, increase our rent
expenses associated with future lease payments. We do not currently hedge
against interest rate increases.

The hypothetical changes and assumptions discussed above will be
different from what actually occurs in the future. Furthermore, such
computations do not anticipate actions that may be taken by management, should
the hypothetical market changes actually occur over time. As a result, the
effect on actual earnings in the future will differ from those described above.

Foreign Currency Exchange Rate Risk - We hedge risks associated with
foreign currency transactions in order to minimize the impact of changes in
foreign currency exchange rates on earnings. We utilize forward contracts to
hedge against the short-term impact of foreign currency fluctuations on certain
assets and liabilities denominated in foreign currencies. All hedge instruments
are marked to market through earnings every period. We believe that these
forward contracts do not subject us to undue risk due to foreign exchange
movements because gains and losses on these contracts are offset by losses and
gains on the underlying assets and liabilities.

All contracts have a maturity of less than one year and we do not
defer any gains and losses, as they are all accounted for through earnings every
period.

The following table provides information about our foreign exchange
forward contracts outstanding on July 30, 1999, (in thousands):

BUY/            FOREIGN            CONTRACT VALUE     FAIR VALUE
CURRENCY         SELL        CURRENCY AMOUNT             USD             IN USD
--------------------------------------------------------------------------------------

EUR              Buy                5,026                5,256            5,391
EUR              Sell              16,273               16,548           17,455
GBP              Buy                1,000                1,639            1,619
GBP              Sell               3,752                6,162            6,073
CHF              Sell               1,891                1,265            1,271

14

16

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

15

17

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

10.27      Construction Management Agreement (Phase II - Improvements),
dated May 3, 1999, by and between BNP Leasing Corporation and
the Registrant

10.28      Lease Agreement (Phase II - Improvements), dated May 3, 1999, by
and between BNP Leasing Corporation and the Registrant

10.29      Lease Agreement (Phase II - Land), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.30      Pledge Agreement (Phase II - Land), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.31      Pledge Agreement (Phase II - Improvements), dated May 3, 1999,
by and between BNP Leasing Corporation and the Registrant

10.32      Purchase Agreement (Phase II - Land), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.33      Purchase Agreement (Phase II - Improvements), dated May 3, 1999,
by and between BNP Leasing Corporation and the Registrant

10.34      Construction Management Agreement (Phase III - Improvements),
dated June 16, 1999, by and between BNP Leasing Corporation and
the Registrant

10.35      Lease Agreement (Phase III - Improvements), dated June 16, 1999,
by and between BNP Leasing Corporation and the Registrant

10.36      Lease Agreement (Phase III - Land), dated June 16, 1999, by and
between BNP Leasing Corporation and the Registrant

10.37      Pledge Agreement (Phase III - Land), dated June 16, 1999, by and
between BNP Leasing Corporation and the Registrant

10.38      Pledge Agreement (Phase III - Improvements), dated June 16,
1999, by and between BNP Leasing Corporation and the Registrant

10.39      Purchase Agreement (Phase III - Land), dated June 16, 1999, by
and between BNP Leasing Corporation and the Registrant

10.40      Purchase Agreement (Phase III - Improvements), dated June 16,
1999, by and between BNP Leasing Corporation and the Registrant

27.1       Financial Data Schedule

(b) REPORTS ON FORM 8-K

None

16

18

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the registrant duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

NETWORK APPLIANCE, INC.
(Registrant)

/s/ JEFFRY  R. ALLEN
----------------------------------------
Jeffry R. Allen
Senior Vice President Finance and Operations,
Chief Financial Officer and Secretary

Date: August 31, 1999

17

19

EXHIBIT INDEX

EXHIBIT
NUMBER                                     DESCRIPTION
-------                                    -----------

10.27      Construction Management Agreement (Phase II - Improvements), dated
May 3, 1999, by and between BNP Leasing Corporation and the
Registrant

10.28      Lease Agreement (Phase II - Improvements), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.29      Lease Agreement (Phase II - Land), dated May 3, 1999, by and between
BNP Leasing Corporation and the Registrant

10.30      Pledge Agreement (Phase II - Land), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.31      Pledge Agreement (Phase II - Improvements), dated May 3, 1999, by
and between BNP Leasing Corporation and the Registrant

10.32      Purchase Agreement (Phase II - Land), dated May 3, 1999, by and
between BNP Leasing Corporation and the Registrant

10.33      Purchase Agreement (Phase II - Improvements), dated May 3, 1999, by
and between BNP Leasing Corporation and the Registrant

10.34      Construction Management Agreement (Phase III - Improvements), dated
June 16, 1999, by and between BNP Leasing Corporation and the
Registrant

10.35      Lease Agreement (Phase III - Improvements), dated June 16, 1999, by
and between BNP Leasing Corporation and the Registrant

10.36      Lease Agreement (Phase III - Land), dated June 16, 1999, by and
between BNP Leasing Corporation and the Registrant

10.37      Pledge Agreement (Phase III - Land), dated June 16, 1999, by and
between BNP Leasing Corporation and the Registrant

10.38      Pledge Agreement (Phase III - Improvements), dated June 16, 1999, by
and between BNP Leasing Corporation and the Registrant

10.39      Purchase Agreement (Phase III - Land), dated June 16, 1999, by and
between BNP Leasing Corporation and the Registrant

10.40      Purchase Agreement (Phase III - Improvements), dated June 16, 1999,
by and between BNP Leasing Corporation and the Registrant

27.1       Financial Data Schedule

18

1
Exhibit 10.27

================================================================================

CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE II - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

MAY 3, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2

TABLE OF CONTENTS

Page
----

RECITALS                                                                               1

CONSENT AND AUTHORIZATION                                                              1

GENERAL TERMS AND CONDITIONS                                                           1

1.      CONSTRUCTION BY NAI                                                            1

(A)    The Construction Project                                                1

(1)    Construction Approvals by BNPLC                                  1

(a)   Preconstruction Approvals by BNPLC                         1

(b)   Definition of Scope Change                                 2

(c)   Approval of Scope Changes                                  2

(2)    NAI's Right to Control and Responsibility for Construction       2

(a)   Performance of the Work                                    2

(b)   Third Party Contracts                                      3

(c)   Third Party Estoppels                                      4

(d)   Adequacy of Drawings, Specifications and Budgets           4

(e)   Existing Condition of the Land and Improvements            4

(f)   Correction of Defective Work                               4

(g)   Clean Up.                                                  4

(h)   No Damage for Delays                                       5

(i)   No Fee For Construction Management                         5

(3)    Quality of Work                                                  5

(B)    Completion Notice                                                       5

2.      CONSTRUCTION ADVANCES                                                          5

(A)    Costs Subject to Reimbursement Through Construction Advances            5

(B)    Exclusions From Reimbursable Construction-Period Costs                  6

(C)    Conditions to NAI's Right to Receive Construction Advances              7

(1)    Construction Advance Requests                                    7

(2)    Amount of the Advances                                           7

(a) Limit Dependent Upon the Maximum Construction
Allowance

7 

(b) Limit Dependent Upon Costs Previously
Incurred by NAI                                              7

(c) Limit During CMA Suspension Period                           8

(d) Restrictions Imposed for Administrative Convenience          9

(3)    No Advances After Certain Dates                                  9

(D)    Breakage Costs for Construction Advances Requested But Not Taken        9

(E)    No Third Party Beneficiaries                                            9

(F)    No Waiver                                                               9 

(G) Funding by Participants                                                    9

3.      NORMAL TENANT IMPROVEMENTS                                                    11

(A)    Definition of Normal Tenant Improvements                               11

(B)    Advances for Normal Tenant Improvements                                11

3

Page
----

(C)    Tenant's Obligation to Construct Normal Tenant Improvements            11

4.      COST OVERRUNS                                                                 11

(A)    Definition of Projected Cost Overruns                                  11

(B)    Notice of Projected Cost Overruns                                      12

(C)    Election to Make a Voluntary NAI Construction Contribution             12

5.      SUSPENSION AND TERMINATION                                                    12

(A)    CMA Suspension Events                                                  12

(1)    Projection of Cost Overruns                                     12

(2)    Interruption of Construction                                    12

(3)    Failure of NAI to Correct Defective Work                        13

(4)    Failure of NAI to Provide Evidence of Costs and Expenses        13

(B)    FOCB Notices, Preemptive Notices and CMA Termination Events            13

(C)    Rights and Obligations of NAI During a CMA Suspension Period           14

(D)    Election by NAI to Terminate                                           14

(E)    BNPLC's Right to Terminate                                             14

(F)    Rights and Obligations Surviving Termination                           14

(G)    Cooperation by NAI Following any Termination                           15

EXHIBITS

Exhibit A             Legal Description

Exhibit B             Description of the Construction Project (With Site Plan 
Attached)

Exhibit C             Form of Contractor Estoppel

Exhibit D             Form of Design Professional Estoppel

Exhibit E             Notice Requesting Advance to Cover Insurance Deductible

Exhibit F             Construction Advance Request Form

Exhibit G             Notice of Voluntary NAI Funding Commitment

Exhibit H             Preemptive Notice by NAI

Exhibit I             Notice of Termination by NAI

(2)

4

CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE II - IMPROVEMENTS)

This CONSTRUCTION MANAGEMENT AGREEMENT (PHASE II - IMPROVEMENTS) (this
"AGREEMENT"), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
made and dated as of May 3, 1999, the Effective Date. ("EFFECTIVE DATE" and
other capitalized terms used and not otherwise defined in this Agreement are
intended to have the meanings assigned to them in the Common Definitions and
Provisions Agreement (Phase II - Improvements) executed by BNPLC and NAI
contemporaneously with this Agreement. By this reference, the Common Definitions
and Provisions Agreement (Phase II - Improvements) is incorporated into and made
a part of this Agreement for all purposes.)

RECITALS

Pursuant to the Lease Agreement (Phase II - Improvements) executed by
BNPLC and NAI contemporaneously the this Agreement (the "IMPROVEMENTS LEASE"),
which covers the Improvements on the Land described in Exhibit A, BNPLC is
leasing the Improvements and any appurtenances thereto and all Improvements to
NAI.

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

CONSENT AND AUTHORIZATION

Subject to the terms and conditions set forth in this Agreement and in
the Improvements Lease, BNPLC does hereby grant its consent and authorization to
NAI for the construction by NAI of the Construction Project on the Land and for
the management by NAI of such construction; provided, however, all rights of NAI
against BNPLC hereunder are expressly made subject and subordinate to the
Permitted Encumbrances and to any other claims or encumbrances affecting the
Land or the Property that may be asserted by third parties and that do not
constitute Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

(3)

5

1       CONSTRUCTION BY NAI.

(A)     The Construction Project.

(1)     Construction Approvals by BNPLC.

(a)     Preconstruction Approvals by BNPLC. NAI submitted and
obtained BNPLC's approval of the site plan and descriptions of
the Construction Project referenced in Exhibit B. Also set forth
in Exhibit B is a general description of the Construction
Project. The Construction Project, as constructed by NAI
pursuant to this Agreement, and all construction contracts and
other agreements executed or adopted by NAI in connection
therewith, shall be not materially inconsistent with the plans
or other items referenced in Exhibit B, except to the extent
otherwise provided by any Scope Change (as defined below)
approved by BNPLC and except as otherwise provided in
subparagraph 6(d) of the Improvements Lease if BNPLC should make
a Landlord's Election to Continue Construction after any
termination of this Agreement.

(b)     Definition of Scope Change. As used herein, "SCOPE
CHANGE" means a change to the Construction Project that, if
implemented, will make the quality, function or capacity of the
Improvements "materially different" (as defined below in this
subparagraph) than as described or inferred by site plan, plans
and renderings referenced in Exhibit B. The term "SCOPE CHANGE"
is not intended to include the mere refinement, correction or
detailing of the site plan, plans or renderings submitted to
BNPLC by NAI. As used in this subparagraph, a "material
difference" means a difference that could reasonably be expected
to (a) after completion of the Construction Project and the
funding of all Construction Advances required in connection
therewith, significantly reduce any excess of the market value
of the Property over Stipulated Loss Value or significantly
increase any excess of Stipulated Loss Value over the market
value of the Property, (b) change the general character of the
Improvements from that needed to accommodate the uses permitted
by subparagraph 2(a) of the Improvements Lease, or (c) result in
Projected Cost Overruns (as defined below).

(c)     Approval of Scope Changes. Before making a Scope
Change, NAI shall provide to BNPLC a reasonably detailed written
description of the Scope Change, a revised construction budget
for the Construction Project and a copy of any changes to the
drawings, plans and specifications for the Improvements required
in connection therewith, all of which must be approved in
writing by BNPLC (or by any inspecting architect appointed by
BNPLC from time to time) before the Scope Change is implemented.
BNPLC's approval shall not in any event constitute a waiver of
subparagraph 1(A)(3)or of any other provision of this Agreement
or the Improvements Lease.

(2)     NAI's Right to Control and Responsibility for Construction.
Subject to the terms and conditions set forth in this Agreement and in
the Improvements Lease, and prior to any termination of this Agreement
as provided in subparagraphs 5(D) and 5(E), NAI shall have the sole
right to control and the sole responsibility for the design and
construction of the Construction Project, including the means, methods,
sequences and procedures implemented to accomplish such design and
construction. Although title to all Improvements will pass directly to
BNPLC (as more particularly provided in Paragraph 7 of the Improvements
Lease), BNPLC's obligation with respect to the Construction Project
shall be limited to the making of advances under and subject to the
conditions set forth in this Agreement and in Paragraph 6 of the
Improvements Lease. Without limiting the foregoing, NAI acknowledges and
agrees that:

(a)     Performance of the Work. Except as provided in
subparagraphs 5(C) and 5(F), NAI must, using its best skill and
judgment and in an expeditious and economical manner not
inconsistent with the interests of BNPLC, perform or cause to be
performed all work required, and will provide or cause to be
provided all supplies and materials 

2

6

required, to design and complete construction of the
Construction Project (collectively "WORK"). The Work will
include obtaining all necessary building permits and other
governmental approvals required in connection with the design
and construction of the Construction Project, including the
design and construction of Normal Tenant Improvements (as
defined below), or required in connection with the use and
occupancy thereof (e.g., final certificates of occupancy). The
Work will also include any repairs or restoration required
because of damage to Improvements by fire or other casualty
prior to the Base Rent Commencement Date (a "PRE-COMMENCEMENT
CASUALTY"); however, the cost of any such repairs or restoration
will be subject to reimbursement not only through Construction
Advances made on and subject to the terms and conditions of this
Agreement, but also through the application of Escrowed Proceeds
as provided in the Improvements Lease. NAI will carefully
schedule and supervise all Work, will check all materials and
services used in connection with all Work and will keep full and
detailed accounts as may be necessary to document expenditures
made or expenses incurred for the Work. Subject to delays beyond
the reasonable control of NAI, NAI shall cause all Work to be
completed on or before July 1, 2000.

(b)     Third Party Contracts.

1)      NAI shall not enter into any construction contract or
other agreement with a third party concerning the Work or the
Construction Project (a "THIRD PARTY CONTRACT") in the name of
BNPLC or otherwise purport to bind BNPLC to any obligation to
any third party.

2)      In any Third Party Contract between NAI and any of its
Affiliates (an "AFFILIATE'S CONTRACT") NAI shall reserve the
right to terminate the contract at any time, without cause, and
without subjecting NAI to liability for any Termination Fee (as
defined below). Further, NAI shall not enter into any
Affiliate's Contract that obligates NAI to pay more than would
be required under an arms-length contract or that would require
NAI to pay its Affiliate any amount in excess of the sum of
actual, out-of-pocket direct costs and internal labor costs
incurred by the Affiliate to perform such contract.

3)      As necessary to limit the total Reimbursable Third Party
Contract Termination Fees (as defined below) for which BNPLC may
be required to provide Construction Advances to no more than
$7,000,000 (the "MAXIMUM PERMITTED TERMINATION FEES"), NAI shall
reserve in every significant Third Party Contract an absolute
express right to terminate such contract at any time, without
cause. Although any Third Party Contract (other than an
Affiliate's Contract) may require NAI to pay a specified
Termination Fee in the event of such a termination, the
specified Termination Fee must not exceed the difference
computed by subtracting (I) the aggregate of all Termination
Fees that have been paid or would become payable by NAI if NAI
terminated all other Third Party Contracts, from (II) the
Maximum Permitted Termination Fees. Without limiting the
foregoing, NAI will manage and administer all Third Party
Contracts as necessary to ensure that, at any point in time, NAI
can terminate all such contracts without becoming liable for
Termination Fees in excess of the Maximum Permitted Termination
Fees.

4)      As used in this Agreement, "TERMINATION FEE" means any
amount, however denominated, for which NAI will be obligated
under a Third Party Contract as a result of any election or
decision by NAI to terminate such Third Party Contract,
including demobilization costs; provided, however, amounts
payable for Prior Work [as defined below] as of the date any
such termination are not intended to be characterized as
Termination Fees for purposes of this Agreement. If, as
described in the preceding paragraph, NAI reserves an absolute
express right in a Third Party Contract to terminate such
contract at any time, without cause, for a specified dollar
amount, such dollar amount will constitute a Termination Fee. If
no such right is reserved in a Third Party Contract, the
Termination Fee applicable 

3

7

to such contract for purposes of this Agreement will be the
amount of damages that NAI could be required to pay (in addition
to payments required for Prior Work) upon an anticipatory
repudiation of the Third Party Contract by NAI.

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

(d)     Adequacy of Drawings, Specifications and Budgets. BNPLC has
made and will make no representations as to the adequacy of any budgets,
site plans, renderings, plans, drawings or specifications for the
Construction Project, and no modification of any such budgets, site
plans, renderings, plans, drawings or specifications that may be
required from time to time will entitle NAI to any adjustment in the
Construction Allowance.

(e)     Existing Condition of the Land and Improvements. NAI is
familiar with the conditions of the Land and any existing Improvements
on the Land. NAI shall have no claim for damages against BNPLC or for an
increase in the Construction Allowance by reason of any condition
(concealed or otherwise) of or affecting the Land or Improvements.

(f)     Correction of Defective Work. NAI will promptly correct all
Work performed prior to any termination of this Agreement that does not
comply with the requirements of this Agreement or that is otherwise
defective (in either case, "DEFECTIVE WORK") at NAI's sole expense. If
NAI fails to correct any Defective Work or fails to carry out Work in
accordance with this Agreement, BNPLC may (but will not be required to)
order NAI to stop all Work until the cause for such failure has been
eliminated.

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

(h)     No Damage for Delays. NAI shall have no claim for damages
against BNPLC or for an increase in the Construction Allowance by reason
of any delay in the performance of any Work.

(i)     No Fee For Construction Management. NAI shall have no claim for
any fee or other compensation or for any reimbursement of internal
administrative or overhead expenses of NAI under this Agreement, it
being understood that NAI is executing this Agreement in consideration
of the rights expressly granted to it herein and in the Improvements
Lease.

(3)     Quality of Work. NAI shall cause the Work undertaken and administered
by it pursuant to this Agreement to be performed (a) in a safe and good and
workmanlike manner, (b) in accordance with Applicable Laws, (c) in compliance
with (i) the provisions of this Agreement and the Improvements Lease, (ii) the
material provisions of the Permitted Encumbrances and (iii) the material
provisions of the Development Documents, and (d) in a manner that, taken as a
whole, enhances the value of the Property commensurate with any Construction
Advances and Carrying Costs added to the Outstanding Construction Allowance in
connection therewith.

4

8

(B)     Completion Notice . NAI shall provide a notice (a "COMPLETION NOTICE")
to BNPLC promptly after construction of the Construction Project is
substantially complete, advising BNPLC of the substantial completion.

2       CONSTRUCTION ADVANCES.

(A)     Costs Subject to Reimbursement Through Construction Advances . Subject
to the terms and conditions set forth herein, NAI shall be entitled to a
Construction Allowance, from which BNPLC will make Construction Advances on
Advance Dates from time to time to pay or reimburse NAI for the following costs
("REIMBURSABLE CONSTRUCTION-PERIOD COSTS") to the extent the following costs are
not already included in Transaction Expenses paid by BNPLC from the Initial
Funding Advance:

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

(2)     the cost of title insurance or other out of pocket expenses
described in subparagraph 5(c)(iii) of the Improvements Lease or of the
Other Lease Agreement to the extent paid by NAI prior to the Base Rent
Commencement Date;

(3)     Commitment Fees;

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

-       soft costs, such as architectural fees, engineering fees
and fees and costs paid in connection with obtaining
project permits and approvals required by governmental
authorities or the Development Documents,

-       site preparation costs, and

-       costs of offsite and other public improvements required
as conditions of governmental approvals for the
Construction Project;

(5)     the cost of maintaining insurance required by (and consistent
with the requirements of) the Improvements Lease and the Other Lease
Agreement prior to the Base Rent Commencement Date, and costs of
repairing any damage to the Improvements caused by a Pre-commencement
Casualty to the extent such costs are not covered by Escrowed Proceeds
made available to NAI as provided in the Improvements Lease and the
Other Lease Agreement prior to the Base Rent Commencement Date
("REIMBURSABLE RESTORATION COSTS");

(6)     Impositions that accrue or become due under the Improvements
Lease or the Other Lease Agreement prior to the Base Rent Commencement
Date; and

(7)     except as otherwise provided in subparagraph below, Termination
Fees payable by NAI in connection with any Third Party Contract between
NAI and a Person not an Affiliate of NAI because of any election by NAI
to cancel or terminate such contract during a CMA Suspension Period (as
defined below).

In addition to other Construction Advances required by this subparagraph 2A, but
subject to the other terms and conditions hereof, a Construction Advance will be
provided by BNPLC on the Base Rent Commencement Date in the form of additional
Escrowed Proceeds (to be held and applied like other Escrowed Proceeds pursuant
to the Improvements Lease) equal to any 

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reduction in property insurance proceeds paid or payable with respect to the
Property because of a property insurance deductible permitted by Exhibit B
attached to the Improvements Lease, if:

(I) damage to the Improvements has been caused by a
Pre-commencement Casualty and, despite the exercise of reasonable
diligence by NAI, NAI has been unable to complete the repair of such
damage sufficiently in advance of the Base Rent Commencement Date to
allow the reimbursement to NAI hereunder of all Reimbursable Restoration
Costs attributable to such property insurance deductible; and

(II) at least five Business Days before the Base Rent
Commencement Date, NAI has requested such additional Construction
Advance by a notice in the form attached hereto as Exhibit E.

(B)     Exclusions From Reimbursable Construction-Period Costs . Notwithstanding
anything herein to the contrary, BNPLC shall not be required to make any
Construction Advance to pay or to reimburse or compensate NAI for any of the
following or any Absolute NAI Construction Obligations required because of or in
connection with or arising out of any of the following: 

(1)     Environmental Losses;

(2)     Losses that would not have been incurred but for any act or
omission of NAI or of any NAI's contractors or subcontractors, which act
or omission is contrary in any material respect to the other terms and
conditions of this Agreement or to the terms and conditions of the other
Operative Documents, during the period that this Agreement remains in
force or during any other period that NAI remains in possession or
control of the Construction Project pursuant to the Improvements Lease
or otherwise;

(3)     Losses that would not have been incurred but for any fraud,
misapplication of Construction Advances or other funds, illegal acts, or
willful misconduct on the part of the NAI or its employees or agents or
any other party for whom NAI is responsible;

(4)     Losses that would not have been incurred but for any bankruptcy
proceeding involving NAI; and

(5)     costs of Normal Tenant Improvements (as defined below), except
to the extent that BNPLC agrees to allow the reimbursement of such costs
from the Construction Allowance as provided in subparagraph 3(B).

For purposes of this subparagraph, "acts and omissions" described in clause (2)
preceding shall include (i) any decision by NAI to make any Scope Change without
the prior approval of BNPLC, (ii) any failure of NAI to maintain insurance
required by the Improvements Lease, the Other Lease Agreement or this Agreement,
(iii) any decision of NAI not to continue or complete Work because of a change
in NAI's facility needs or in NAI's plans to meet its facility needs (such as,
for example, a decision by NAI to lease or acquire another less expensive
facility as an alternative to the Improvements), (iv) any failure by NAI to
reserve termination rights in Third Party Contracts as required by subparagraph
1(A)(2)(b), and (v) any other material breach by NAI of this Agreement.

(C)     Conditions to NAI's Right to Receive Construction Advances . BNPLC's
obligation to provide Construction Advances to NAI from time to time under this
Agreement shall be subject to the following terms and conditions, all of which
terms and conditions are intended for the sole benefit of BNPLC, and none of
which terms and conditions shall limit in any way the right of BNPLC to treat
costs or expenditures incurred or paid by or on behalf of it as Construction
Advances pursuant to subparagraph 6(d) of the Improvements Lease: 

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

(2)     Amount of the Advances.

(a)     Limit Dependent Upon the Maximum Construction Allowance. NAI
shall not be entitled to require any Construction Advance that would
cause the Funded Construction Allowance to exceed the Maximum
Construction Allowance.

(b)     Limit Dependent Upon Costs Previously Incurred by NAI. NAI
shall not be entitled to require any Construction Advance - other than a
final additional Construction Advance required on the Base Rent
Commencement Date because of a permitted property insurance deductible
related to a Pre-commencement Casualty as described in subparagraph
above - that would cause the aggregate of all Construction Advances to
exceed the sum of:

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

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

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

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(c) Limit During CMA Suspension Period. Without limiting the
other terms and conditions imposed by this Agreement for the
benefit of BNPLC with respect all Construction Advances, BNPLC
shall have no obligation to make any Construction Advance during
any CMA Suspension Period (as defined below) that would cause
the aggregate of all Construction Advances to exceed the sum of:

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

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

For purposes of computing the limits described in this
subparagraph 2(c)(2)(c), Reimbursable Construction-Period Costs
"other than for Work" shall include Termination Fees that
qualify as Reimbursable Construction-Period Costs pursuant to
subparagraph 2(A)(7) ("REIMBURSABLE THIRD PARTY CONTRACT
TERMINATION FEES"). NAI acknowledges, however, that Termination
Fees will not exceed the Maximum Permitted Termination Fees, so
long as NAI complies with the requirements of subparagraph
1(A)(2)(b). That is, but for an "act or omission of NAI" as such
phrase is used in subparagraph 2(B)(2), the aggregate of all
Termination Fees shall not exceed the Maximum Permitted
Termination Fees. Accordingly, if the aggregate of any
Termination Fees do exceed the Maximum Permitted Termination
Fees, the excess shall not qualify as Reimbursable Third Party
Contract Termination Fees.

(d) Restrictions Imposed for Administrative Convenience. NAI
shall not request any Construction Advance (other than the final
Construction Advance NAI intends to request) for an amount less
than $500,000.

(3) No Advances After Certain Dates. BNPLC shall have no obligation to
make any Construction Advance (x) after the Base Rent Commencement Date,
(y) on or after the Designated Sale Date, or (z) on or after the date of
any termination of this Agreement pursuant to subparagraph 5(D) or
subparagraph 5(E).

(D) Breakage Costs for Construction Advances Requested But Not Taken. If NAI
requests but thereafter declines to accept any Construction Advance, or if NAI
requests a Construction Advance that it is not permitted to take because of its
failure to satisfy any of the conditions specified in subparagraph 2(C), NAI
shall pay upon demand any resulting Breakage Costs.

(E) No Third Party Beneficiaries. No contractor or other third party shall be
entitled to require BNPLC to make advances as a third party beneficiary of this
Agreement or of the Improvements Lease or otherwise.

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

(G) Funding by Participants. NAI acknowledges that, as provided in the
Participation Agreement, each Participant has agreed to pay to BNPLC a
Percentage (under and as defined in the Participation Agreement) of the
Construction Advances required by this Agreement. NAI also acknowledges that
BNPLC will not be responsible to NAI for any failure of any Participant to
provide advances required by the Participation Agreement. So long as any
Participant fails to provide its Percentage of any requested Construction
Advance, then the amount of the Construction Advance for which BNPLC shall be
obligated hereunder shall be reduced by the amount that the Participant should
have provided, but failed to provide, in accordance with the Participation
Agreement. No such reduction, however, of BNPLC's obligation hereunder shall
release or impair the obligation of the Participant directly to NAI, created by
NAI's status as a third party beneficiary of the Participant's commitment under
the Participation Agreement to provide the Participant's Percentage of
Construction Advances. Further, any such failure shall excuse BNPLC's obligation
to provide the requested Construction Advance only to the extent of the funds
that the applicable Participant or Participants should have advanced (but did
not advance) to BNPLC, and in the event of any such failure:

(1) BNPLC will immediately notify NAI, but BNPLC will not in any event be
liable to NAI for BNPLC's failure to do so.

(2) BNPLC will to the extent possible postpone reductions of Construction
Advances because of the failure by any one or more Participants ("DEFAULTING
PARTICIPANTS") to make required advances under the Participation Agreement
(a "PARTICIPANT DEFAULT") by adjusting (and readjusting from time to time,
as required) the funding "Percentages" of other Participants, and by
requesting the other Participants to make advances to BNPLC on the basis of
such adjusted Percentages, in each case as provided in the Participation
Agreement; however, so long as a Participant Default continues, no
Construction Advance shall be required that would cause the Outstanding
Construction Allowance to exceed (1) the Maximum Construction Allowance
available under this Agreement, less (2) all amounts that should have been,
but because of a continuing Participant Default have not been, advanced by
any one or more of the Participants to BNPLC under the Participation
Agreement with respect to Construction Advances.

(3) Further, after a Participant Default, and so long as no CMA Termination
Event (as defined below) has occurred and no Event of Default has occurred
and is continuing, BNPLC shall do the following as reasonably requested by
NAI, provided that nothing in this provision shall require BNPLC to take any
action that would violate Applicable Laws, that would constitute a breach of
BNPLC's obligations under the Participation Agreement, or that would require
BNPLC to waive any rights or remedies it has under this Agreement or other
Operative Documents:

(a) BNPLC shall promptly make a written demand upon the Defaulting
Participants for the cure of the Participant Default, and

(b) BNPLC shall not unreasonably withhold its approval for the
substitution of any new participant proposed by NAI for Defaulting
Participants, if (A) the proposed substitution does not require BNPLC
to waive rights against the Defaulting Participants, (B) the new
participant will agree (by executing supplement to the Participation
Agreement as provided in the Participation Agreement) to provide funds
to replace the payments that would otherwise be required of the
Defaulting Participants with respect to future Construction Advances,
(C) the new participant (or NAI) provides the funds (if any) needed to
terminate the Defaulting Participants' rights to receive payments of
"Net Cash Flow" (as defined in the Participation Agreement) that BNPLC
will be required to pay the new participant under the terms of the
substitution reasonably proposed by NAI, (D) the new participant (or
NAI) provides and agrees in writing to provide funds needed to
reimburse BNPLC for any and all Losses incurred by BNPLC in connection
with or because of the substitution of the new participant for the
Defaulting Participants, including any cost of defending and paying
any claim asserted by Defaulting Participants because of the

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substitution (but not including any liability of BNPLC to the
Defaulting Participants for damages caused by BNPLC's bad faith or
gross negligence in the performance of BNPLC's obligations to the
Defaulting Participants), (E) the obligations of BNPLC to the new
participant per dollar of the new participant's "investment" (it being
understood that such investment will be computed in a manner
consistent with the examples set forth in Exhibit A to the
Participation Agreement, but net of reimbursements to BNPLC under
clause (D) preceding) shall not exceed the obligations per dollar of
investment by the Defaulting Participants that BNPLC would have had to
the Defaulting Participants if there had been no Participant Default,
and (F) 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).

3 NORMAL TENANT IMPROVEMENTS.

(A) Definition of Normal Tenant Improvements. As used herein, "NORMAL TENANT
IMPROVEMENTS" shall mean any "below-ceiling" interior finishes and special
fixtures or equipment to be constructed for NAI within the Improvements as part
of the Construction Project, BUT WILL NOT INCLUDE (1) costs of structural
elements of the Construction Project, or (2) equipment that would be necessary
for the use of the Improvements by any lessee (e.g., HVAC equipment, elevators,
standard electrical wiring).

(B) Advances for Normal Tenant Improvements. Nothing herein shall be construed
as a commitment or an agreement by BNPLC to pay for Normal Tenant Improvements,
other than Normal Tenant Improvements contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto. BNPLC
does, however, acknowledge that incorporated into the total Construction
Allowance is an amount for contingencies (e.g., cost overruns related to
structural components of Improvements, HVAC equipment, elevators, etc.), for
which BNPLC shall be obligated to provide Construction Advances on and subject
to the terms and conditions set forth in Paragraph 2. To the extent, if any,
that NAI does not exhaust the Construction Allowance by using Construction
Advances for other costs (e.g., the actual costs incurred for structural
components of Improvements, HVAC equipment, elevators, etc.), BNPLC will allow
NAI to reimburse itself through Construction Advances funded on and subject to
the terms and conditions of Paragraph for the costs of any Normal Tenant
Improvements in addition to those contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto.
Otherwise, any such additional Normal Tenant Improvements will be paid for by
NAI.

(C) Tenant's Obligation to Construct Normal Tenant Improvements. NAI shall
construct all Normal Tenant Improvements in a good and workmanlike manner and in
accordance with the same standards and requirements imposed by this Agreement
for other Work.

4 COST OVERRUNS.

(A) Definition of Projected Cost Overruns . As used in this Agreement,
"PROJECTED COST OVERRUNS" shall mean the excess (if any), calculated as of the
date of each Construction Advance Request, of (1) the total of projected
Reimbursable Construction-Period Costs yet to be incurred or for which NAI has
yet to be reimbursed hereunder (including projected Reimbursable
Construction-Period Costs for Future Work), over (2) the sum of a) any Voluntary
Construction Contribution NAI has committed to pay as provided in subparagraph
4(C), but has yet to pay, plus b) the balance of the remaining Construction
Allowance then projected to be available to cover such costs. The balance of the
remaining Construction Allowance then projected to be available will equal (i)
the amount (if any) by which the Maximum Construction Allowance exceeds the
Funded Construction Allowance, less (ii) the sum of (a) projected future
Carrying Costs, plus (b) any funds that should have been but were not advanced
to BNPLC by any Defaulting Participants under (and as defined in) the
Participation Agreement.

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(B) Notice of Projected Cost Overruns . If for any reason (including any damage
to the Property by fire or other casualty or any taking of any part of the
Property by condemnation) NAI believes (after taking into account any Voluntary
NAI Construction Contributions NAI has made or committed to make as provided in
subparagraph 4(C)) that Projected Cost Overruns are more likely than not at the
time NAI submits any Construction Advance Request, NAI shall state such belief
in the Construction Advance Request and, if NAI can reasonably do so, NAI will
estimate the approximate amount of such Projected Cost Overruns.

(C) Election to Make a Voluntary NAI Construction Contribution . As used in this
Agreement, "VOLUNTARY NAI CONSTRUCTION CONTRIBUTION" shall mean a voluntary,
nonrefundable payment made to BNPLC by NAI prior to the Base Rent Commencement
Date and delivered with or pursuant to a notice in the form of Exhibit G,
confirming that a Voluntary NAI Construction Contribution is being paid or will
be paid pursuant to this subparagraph. To prevent the occurrence of or to cure
any CMA Suspension Event described in subparagraph 5(A)(1), NAI shall be
entitled (but not obligated) to make or commit to make a Voluntary NAI
Construction Contribution in addition to (and, except as provided in the
definition of Issue 97-10 Prepayment in the Common Definitions and Provisions
Agreement (Phase II - Improvements), without reducing or excusing) any other
amounts then due from NAI to BNPLC pursuant to the Operative Documents. Like
other Qualified Prepayments, any Voluntary NAI Construction Contribution will
reduce the Outstanding Construction Allowance as described in the definition
thereof in the Common Definitions and Provisions Agreement (Phase II -
Improvements). In contrast, however, to other Qualified Prepayments, Voluntary
NAI Construction Contributions will be subtracted for purposes of calculating
the Funded Construction Allowance and, thus, will effectively increase the
subsequent Construction Advances available under the limit established by
subparagraph 2(C)(2)(a).

5 SUSPENSION AND TERMINATION.

(A) CMA Suspension Events . Each of the following events shall be a "CMA
SUSPENSION EVENT" under this Agreement:

(1) Projection of Cost Overruns . Either (a) BNPLC shall receive any
Construction Advance Request stating that NAI believes Projected Cost
Overruns are more likely than not, as provided in subparagraph 4(B), or (b)
(i) BNPLC shall otherwise determine in good faith that significant Projected
Cost Overruns are likely (taking into account any failure of a Defaulting
Participant to provide funds to BNPLC as required by the Participation
Agreement and any prior Voluntary NAI Construction Contributions NAI has
made or committed to make as provided in subparagraph 4(C)), (ii) BNPLC
shall notify NAI of such determination and the basis therefor, and (iii) NAI
shall fail to give any notice pursuant to subparagraph 4(C) that, by 
committing NAI to make or increase Voluntary NAI Construction Contributions,
effectively eliminates the likelihood of the Projected Cost Overruns on or
before five Business Days after BNPLC's notice to NAI of such determination.

(2) Interruption of Construction . The Construction Project shall, for any
reason after Work commences (including any damage to the Property by fire or
other casualty or any taking of any part of the Property by condemnation),
no longer be substantially progressing (and shall not have progressed in any
substantial way during the preceding forty-five days), in a good and
workmanlike manner and substantially in accordance with Applicable Laws,
with Permitted Encumbrances, with Development Documents and with the
requirements of this Agreement.

(3) Failure of NAI to Correct Defective Work . NAI shall fail to diligently
pursue the correction of any Defective Work of which NAI has received
notice.

(4) Failure of NAI to Provide Evidence of Costs and Expenses . BNPLC shall
have requested, and NAI shall have failed to provide within ten Business
Days after receipt of the request, with respect to any Construction Advance:
(1) invoices, requests for payment from contractors and other evidence
reasonably establishing that the costs and expenses for which NAI has
requested or is requesting reimbursement constitute actual Reimbursable
Construction-Period Costs, and (2)

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canceled checks, lien waivers and other evidence reasonably establishing
that all prior Construction Advances have been used by NAI to pay, and only
to pay, the Reimbursable Construction-Period Costs for which the prior
advances were requested and made.

(B) FOCB Notices, Preemptive Notices and CMA Termination Events .

(1) As used herein, "FOCB NOTICE" means a notice from BNPLC to NAI that
BNPLC is considering a termination of this Agreement pursuant to
subparagraph below, provided that the notice is given prior to BNPLC's
receipt from NAI of a Completion Notice and is given when:

(a)     any Event of Default has occurred and is continuing; or

(b)     any CMA Suspension Event shall have occurred, NAI shall have received
notice of such CMA Suspension Event (a "CMA SUSPENSION NOTICE") and the
CMA Suspension Event shall have continued for thirty days after NAI's
receipt of such notice; or

(c)     NAI shall have failed to maintain the following insurance, or to provide
insurance certificates to BNPLC as required by the Improvements Lease
with respect to the following insurance, and such failure shall have
continued for a period of five Business Days after any notice to NAI
thereof:

1)      property insurance as required by the Improvements Lease,
including builder's completed value risk insurance as BNPLC may
require to protect BNPLC's and NAI's interests in the
Improvements under construction against risks of physical loss,
such insurance to be maintained by NAI at all times until
completion of the Construction Project; and

2)      commercial general liability insurance as required by the
Improvements Lease.

(2) As used herein, "PREEMPTIVE NOTICE" means a notice from NAI to BNPLC in
the form attached hereto as Exhibit H, given after BNPLC has given any FOCB
Notice, but before NAI has made any Issue 97-10 Election, that is sufficient
and effective under clause (2) of the definition of Designated Sale Date in
the Common Definitions and Provisions Agreement (Phase II - Improvements) to
accelerate the Designated Sale Date to a date that is less than ninety days
after the date of BNPLC's FOCB Notice.

(3) For purposes of this Agreement and the other Operative Documents, "CMA
TERMINATION EVENT" shall mean:

(a)     BNPLC's receipt of a Notice of NAI's Intent to Terminate (as
defined below); or

(b)     A failure of NAI for any reason whatsoever to deliver a duly
executed, effective Preemptive Notice within thirty days after
NAI's receipt of an FOCB Notice.

(C) Rights and Obligations of NAI During a CMA Suspension Period . As used
herein, "CMA SUSPENSION PERIOD" shall mean any period (1) beginning with the
date of any CMA Suspension Notice, FOCB Notice or Notice of NAI's Intent to
Terminate, and (2) ending on the earlier of (a) the first date upon which (i) no
CMA Suspension Events shall be continuing, and (ii) no CMA Termination Events
shall have occurred, or (b) the effective date of any termination of this
Agreement as described in subparagraph 5(D) or subparagraph 5(E). During any CMA
Suspension Period, NAI shall have the right to suspend the 

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Work; provided, however, the obligations of NAI which are to survive any
termination of this Agreement shall also continue and survive during any such
suspension of the Work.

(D) Election by NAI to Terminate. NAI may elect to terminate this Agreement at
any time prior to the Base Rent Commencement Date when NAI has determined that
(1) the Construction Advances to be provided to it hereunder will not be
sufficient to cover all Reimbursable Construction-Period Costs, whether because
the cost of the Work exceeds budgeted expectations (resulting in Projected Cost
Overruns), because of damage to the Property by fire or other casualty (other
than damage that would not have occurred, or been uninsured or under-insured,
but for an act or omission of NAI), because of a taking of any part of the
Property by condemnation, or because NAI can no longer satisfy conditions to
BNPLC's obligation to provide Construction Advances herein, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of this Agreement. To
be effective, however, any such election to terminate this Agreement must be
made by giving BNPLC and the Participants a notice thereof prior to the Base
Rent Commencement Date in the form of Exhibit I (a "NOTICE OF NAI'S INTENT TO
TERMINATE"), stating that NAI intends to terminate this Agreement pursuant to
this subparagraph on a date specified therein, which date is not less than
thirty days after the date of such notice. Unless terminated sooner pursuant to
subparagraph 5(E), this Agreement will automatically terminate on the effective
date so specified in any Notice of NAI's Intent to Terminate.

(E) BNPLC's Right to Terminate. BNPLC shall be entitled to terminate this
Agreement at any time (x) more than ninety days after BNPLC has given an FOCB
Notice as described in subparagraph 5(B)(1) (regardless of whether at the time
of such termination by BNPLC an Event of Default or other event or circumstance
described in subparagraph 5(B)(1) is continuing), provided that BNPLC shall not
have received an effective Preemptive Notice within thirty days after its
delivery of the FOCB Notice to NAI, (y) after the Designated Sale Date, or (z)
after BNPLC's receipt of a Notice of NAI's Intent to Terminate.

(F) Rights and Obligations Surviving Termination. Following any termination of
this Agreement as provided in subparagraph 5(D) or in 5(E), NAI shall have no
obligation to continue or complete any Work; provided, however, no termination
of this Agreement shall reduce or excuse the following rights and obligations of
the parties, it being intended that all such rights and obligations shall
survive and continue after any such termination:

(1) the rights and obligations of NAI and BNPLC under the other
Operative Documents, including Absolute NAI Construction Obligations
imposed upon NAI by the Improvements Lease; and

(2) NAI's obligations described in the next subparagraph 5(G).

(G) Cooperation by NAI Following any Termination. After any termination of this
Agreement as provided in subparagraph or subparagraph , NAI shall comply with
the following terms and conditions, all of which shall survive any such
termination:

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

(2) Promptly after any request from BNPLC made with respect to any Third
Party Contract, NAI shall deliver a letter confirming: (i) that NAI has not
performed any act or executed any other instrument which invalidates or
modifies such contract in whole or in part (or, if so, the nature of such
modification); (ii) the extent to which such contract is valid and

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subsisting and in full force and effect; (iii) that there are no defaults or
events of default then existing under such contract and, to NAI's knowledge,
no event has occurred which with the passage of time or the giving of
notice, or both, would constitute such a default or event of default (or, if
there is a default, the nature of such default in detail); (iv) that the
services and construction contemplated by such contract is proceeding in a
satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of the services or
construction); (v) in reasonable detail the then critical dates projected by
NAI for work and deliveries required by such contract; (vi) the total amount
received by the other party to such contract for work or services provided
by the other party through the date of the letter; (vii) the estimated total
cost of completing the services and work contemplated under such contract as
of the date of the letter, together with any current draw or payment
schedule for the contract; and (viii) any other information BNPLC may
reasonably request to allow it to decide what steps it should take
concerning the contract within BNPLC's rights under this Agreement and the
other Operative Documents.

(3) NAI will make every reasonable effort, as and to the extent requested by
BNPLC, to secure the cancellation of any then existing Third Party Contract
upon terms satisfactory to BNPLC. NAI shall bear any cancellation fees or
other Losses resulting from any cancellation of a Third Party Contract after
the effective date of a termination of this Agreement.

(4) NAI will make every reasonable effort, as and to the extent requested by
BNPLC, to secure any required consents or approvals for an assignment of any
then existing Third Party Contract to BNPLC or its designee, upon terms
satisfactory to BNPLC. To the extent assignable, any Third Party Contract
will be assigned by NAI to BNPLC upon request.

(5) If NAI has canceled any Third Party Contract before and in anticipation
of a termination of this Agreement, NAI shall make every reasonable effort,
as and to the extent requested by BNPLC, to secure a reinstatement of such
Third Party Contract in favor of BNPLC and upon terms satisfactory to BNPLC.

(6) For a period not to exceed ten days after the termination, NAI shall
take such steps as are reasonably necessary to preserve and protect Work
completed and in progress and to protect materials, equipment, and supplies
at the Property or in transit.

14

18

IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be executed as
of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:         
------------------
Name:     
-------------
Title:
---------   

15

19

[Continuation of signature pages to Construction Management Agreement (Phase II
- Improvements) dated to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:         
------------------

Lloyd G. Cox, Vice President

16

20

Exhibit A

LEGAL DESCRIPTION

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

Exhibit - Page 1

21

Exhibit B

DESCRIPTION OF THE CONSTRUCTION PROJECT

Subject to future Scope Changes, the Construction Project will be
substantially consistent with the following general description and with the
Site Plan attached to this Exhibit.

In addition to the site plan, the following excerpts are taken from an
appraisal prepared for BNPLC which summarizes information about the
Improvements:

The improvements will consist of one, proposed, three-story, office/research and
development building to be occupied by NAI. It will be located along the west
side of Crossman Avenue, just north of Java Drive and, in the City of Sunnyvale,
Santa Clara County, California. It is Phase II of the NAI corporate
headquarters. Phase I is currently under construction adjacent to the subject
property. The subject property is currently improved with as 25-year old,
one-story industrial building containing 78,818 square feet. It is currently
leased to TRW. The lease will terminate, the building will be vacated and then
razed for the construction of the proposed improvements. Upon completion, the
proposed building will contain 130,680 square feet of gross building area. The
proposed improvements will be sited on a total of 5.99 acres.

Exhibit - Page 1

22

Exhibit C
ESTOPPEL FROM CONTRACTOR

_________, 199__

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Assignment of Construction Contract

Ladies and Gentlemen:

The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:

1 The undersigned has entered into that certain [Construction Contract] (the
"CONSTRUCTION CONTRACT") by and between the undersigned and Network Appliance,
Inc. ("NAI") dated ___________ __, ____ for the construction of the improvements
to be constructed as part of NAI's Sunnyvale campus leased by NAI (the
"IMPROVEMENTS") on the land described in the Improvements Lease Documents
described below (the "LAND" and, together with the Improvements and any other
improvements now on or constructed in the future on the Land, the "PROJECT").

2 The undersigned has been advised that, by a Lease Agreement (Phase II -
Improvements) and a Construction Management Agreement (Phase II - Improvements),
both dated as of May 3, 1999 (collectively, the "IMPROVEMENTS LEASE DOCUMENTS"),
BNPLC is leasing the Project to NAI and has agreed, subject to the terms and
conditions of the Improvements Lease Documents, to provide a construction
allowance for the design and construction of the Improvements. The undersigned
has also been advised that the Improvements Lease Documents expressly provide
that third parties (including the undersigned) are not intended as beneficiaries
of the Improvements Lease Documents and, thus, will have no standing to enforce
any obligations of NAI or BNPLC under the Improvements Lease Documents,
including any such obligation that BNPLC may have to provide the construction
allowance. The undersigned understands that the Improvements Lease Documents
expressly provide that NAI is not authorized to enter into any construction
contract or other agreement with any third party in the name of BNPLC or to
otherwise bind BNPLC to any contract with a third party.

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

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

Exhibit - Page 1

23

BNP Leasing Corporation
______________, 199____
Page 2

The undersigned acknowledges and agrees that:

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

b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Construction Contract, cure any defaults by NAI thereunder
and enforce the Construction Contract and all rights of NAI thereunder. Within
ten days of receiving notice from BNPLC that NAI's right to possession has been
terminated, the undersigned shall send to BNPLC a written estoppel letter
stating: (i) that the undersigned has not performed any act or executed any
other instrument which invalidates or modifies the Construction Contract in
whole or in part (or, if so, the nature of such modification); (ii) that the
Construction Contract is valid and subsisting and in full force and effect;
(iii) that there are no defaults or events of default then existing under the
Construction Contract and no event has occurred which with the passage of time
or the giving of notice, or both, would constitute such a default or event of
default (or, if there is a default, the nature of such default in detail); (iv)
that the construction contemplated by the Construction Contract is proceeding in
a satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of construction); (v)
a reasonably detailed report of the then critical dates projected by the
undersigned for work and deliveries required to complete the Project; (vi) the
total amount received by the undersigned for construction through the date of
the letter; (vii) the estimated total cost of completing the undersigned's work
as of the date of the letter, together with a current draw schedule; and (viii)
any other information BNPLC may request to allow it to decide whether to assume
the Construction Contract. BNPLC shall have seven days from receipt of such
written certificate containing all such requested information to decide whether
to assume the Construction Contract. If BNPLC fails to assume the Construction
Contract within such time, the undersigned agrees that BNPLC shall not be liable
(and the undersigned shall not assert or bring any action against BNPLC, except
to enforce statutory lien rights, if any, of the undersigned against the Land or
improvements on the Land) for any damages or other amounts resulting from the
breach or termination of the Construction Contract or under any other theory of
liability of any kind or nature, but rather the undersigned shall look solely to
NAI (and statutory lien rights, if any, of the undersigned against the Land and
any improvements thereon) for the recovery of any such damages or other amounts.

c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Construction Contract pursuant to the preceding paragraph following the
termination of NAI's right to possession of the Project under the Improvements
Lease Documents, the undersigned shall immediately discontinue the work under
the Construction Contract and remove its personnel from the Project, and BNPLC
shall be entitled to take exclusive possession of the Project. The undersigned
shall also, upon request by BNPLC, deliver and assign to BNPLC all plans and
specifications and other contract documents previously delivered to the
undersigned (except that the undersigned may keep an original set of the
Construction Contract and other contract documents executed by NAI), all other
material relating to the work which belongs to BNPLC or NAI, and all 

Exhibit-Page 2

24
BNP Leasing Corporation
______________, 199____
Page 3

papers and documents relating to governmental permits, orders placed, bills and
invoices, lien releases and financial management under the Construction
Contract. Notwithstanding the undersigned's receipt of any notice from BNPLC
that BNPLC declines to assume the Construction Contract, the undersigned shall
for a period not to exceed fifteen days after receipt of such notice take such
steps, at BNPLC's expense, as are reasonably necessary to preserve and protect
work completed and in progress and to protect materials, equipment and supplies
at the site or in transit.

d) If the Construction Contract is terminated by NAI before BNPLC is given
the opportunity to elect whether or not to assume the Construction Contract as
provided herein, BNPLC shall nonetheless have the right hereunder to assume the
Construction Contract, as if it had not been terminated, upon any termination of
NAI's right to possession of the Project under the Improvements Lease Documents;
provided, however, that if the work of the undersigned under the Construction
Contract has been disrupted because of NAI's termination of the Construction
Contract, the undersigned shall be entitled to an equitable adjustment to the
price of the Construction Contract, following any assumption thereof by BNPLC,
for the additional costs incurred by the undersigned attributable to the
disruption; and, provided further, that if BNPLC does assume the Construction
Contract, BNPLC shall receive a credit against the price of the Construction
Contract for any consideration paid to the undersigned by NAI because of NAI's
prior termination of the Construction Contract (whether such consideration is
designated a termination fee, settlement payment or otherwise).

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

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

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

To the undersigned:              ______________________

______________________

______________________

Telecopy: (___) ___-_____

Exhibit-Page 3

25

BNP Leasing Corporation
______________, 199____
Page 4

To BNPLC:              BNP Leasing Corporation

12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

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

Network Appliance, Inc.
Attn: Corporate Secretary
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (___) ___-____

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

Very truly yours,

-------------------------------------

By:
----------------------------------
Name: 
-----------------------------
Title:
----------------------------

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

Network Appliance, Inc.

By:
----------------------------------
Name: 
-----------------------------
Title:
----------------------------

Exhibit-Page 4

26

BNP Leasing Corporation
_______________, 199___

Page 1

Exhibit D

ESTOPPEL FROM DESIGN PROFESSIONALS

_________, 199__

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

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

Ladies and Gentlemen:

The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:

1 The undersigned has entered into that certain [Architect's
Agreement/Engineering Contract] (the "AGREEMENT") by and between the undersigned
and Network Appliance, Inc. ("NAI") dated ___________ __, ____ for the [design/
engineering] of the improvements to be constructed as part of NAI's Sunnyvale
campus leased by NAI (the "IMPROVEMENTS") on the land described in the
Improvements Lease Documents described below (the "LAND" and, together with the
Improvements and any other improvements now on or constructed in the future on
the Land, the "PROJECT").

2 The undersigned has been advised that, by a Lease Agreement (Phase II
Improvements) and a Construction Management Agreement (Phase II - Improvements),
both dated as of May 3, 1999 (collectively, the "IMPROVEMENTS LEASE DOCUMENTS"),
BNPLC is leasing the Project to NAI and has agreed, subject to the terms and
conditions of the Improvements Lease Documents, to provide a construction
allowance for the design and construction of the Improvements. The undersigned
has also been advised that the Improvements Lease Documents expressly provide
that third parties (including the undersigned) are not intended as beneficiaries
of the Improvements Lease Documents and, thus, will have no standing to enforce
any obligations of NAI or BNPLC under the Improvements Lease Documents,
including any such obligation that BNPLC may have to provide the construction
allowance. The undersigned understands that the Improvements Lease Documents
expressly provide that NAI is not authorized to enter into any Agreement or
other agreement with any third party in the name of BNPLC or to otherwise bind
BNPLC to any contract with a third party.

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

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

Exhibit-Page 1

27

BNP Leasing Corporation
______________, 199____
Page 2

The undersigned acknowledges and agrees that:

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

b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Agreement, cure any defaults by NAI thereunder and enforce
the Agreement and all rights of NAI thereunder. Within ten days of receiving
notice from BNPLC that NAI's right to possession has been terminated, the
undersigned shall send to BNPLC a written estoppel letter stating: (i) that the
undersigned has not performed any act or executed any other instrument which
invalidates or modifies the Agreement in whole or in part (or, if so, the nature
of such modification); (ii) that the Agreement is valid and subsisting and in
full force and effect; (iii) that there are no defaults or events of default
then existing under the Agreement and no event has occurred which with the
passage of time or the giving of notice, or both, would constitute such a
default or event of default (or, if there is a default, the nature of such
default in detail); (iv) that the services contemplated by the Agreement are
proceeding in a satisfactory manner in all material respects (or if not, a
detailed description of all significant problems with the progress of services);
(v) a reasonably detailed report of the then critical dates projected by the
undersigned for services required to complete the Project; (vi) the total amount
received by the undersigned for services through the date of the letter; (vii)
the estimated total cost of completing such services as of the date of the
letter, together with a current payment schedule; and (viii) any other
information BNPLC may request to allow it to decide whether to assume the
Agreement. BNPLC shall have seven days from receipt of such written certificate
containing all such requested information to decide whether to assume the
Agreement. If BNPLC fails to assume the Agreement within such time, the
undersigned agrees that BNPLC shall not be liable (and the undersigned shall not
assert or bring any action against BNPLC or, except to enforce statutory lien
rights, if any, of the undersigned against the Land or improvements on the Land)
for any damages or other amounts resulting from the breach or termination of the
Agreement or under any other theory of liability of any kind or nature, but
rather the undersigned shall look solely to NAI (and statutory lien rights, if
any, of the undersigned against the Land and any improvements thereon) for the
recovery of any such damages or other amounts.

c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Agreement pursuant to the preceding paragraph following the termination of NAI's
right to possession of the Project under the Improvements Lease Documents, the
undersigned shall immediately deliver and assign to BNPLC the following: (1)
copies of all plans and specifications for the Project or any component thereof
previously generated by or delivered to the undersigned, (2) any other contract
documents previously delivered to the undersigned (except that the undersigned
may keep an original set of the Agreement and other contract documents executed
by NAI), (3) any other material relating to the services provided under the
Agreement, and (4) to the extent available to the undersigned all papers and
documents relating to governmental permits, orders placed, bills and invoices,
lien releases and financial management under the Agreement. Notwithstanding the
undersigned's receipt of any notice from BNPLC that BNPLC declines to assume the
Agreement, the undersigned shall for a period not to exceed thirty 

Exhibit-Page 2

28
BNP Leasing Corporation
______________, 199____
Page 3

days after receipt of such notice take such steps, at BNPLC's expense, as are
reasonably necessary to preserve the utility and value of services completed and
in progress and to protect plans and specifications and other materials
described in the preceding sentence.

d) If the Agreement is terminated by NAI before BNPLC is given the
opportunity to elect whether or not to assume the Agreement as provided herein,
BNPLC shall nonetheless have the right hereunder to assume the Agreement, as if
it had not been terminated, upon any termination of NAI's right to possession of
the Project under the Improvements Lease Documents; provided, however, that if
the services of the undersigned under the Agreement has been disrupted because
of NAI's termination of the Agreement, the undersigned shall be entitled to an
equitable adjustment to the price of the Agreement, following any assumption
thereof by BNPLC, for the additional costs incurred by the undersigned
attributable to the disruption; and, provided further, that if BNPLC does assume
the Agreement, BNPLC shall receive a credit against the price of the Agreement
for any consideration paid to the undersigned by NAI because of NAI's prior
termination of the Agreement (whether such consideration is designated a
termination fee, settlement payment or otherwise).

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

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

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

To the undersigned:              ______________________

______________________

______________________

Telecopy: (___) ___-_____

Exhibit-Page 3

29
BNP Leasing Corporation
______________, 199__
Page 4

To BNPLC:            BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

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

Network Appliance, Inc.
Attn: Corporate Secretary
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (___) ___-____

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

Very truly yours,

-------------------------------------

By:
----------------------------------
Name: 
-----------------------------
Title:
----------------------------

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

Network Appliance, Inc.

By:
----------------------------------
Name: 
-----------------------------
Title:
----------------------------

Exhibit-Page 4

30

Exhibit E

NOTICE REQUESTING ADVANCE TO COVER PROPERTY INSURANCE DEDUCTIBLE

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase II - Improvements) dated as of
May 3, 1999 (the "CONSTRUCTION MANAGEMENT AGREEMENT"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase II - Improvements) referenced in the
Construction Management Agreement. This letter shall constitute a request made
pursuant to subparagraph of the Construction Management Agreement for a final
additional Construction Advance in the form of an addition to Escrowed Proceeds
equal to:

$______________________,

on the Base Rent Commencement Date, which will occur on:

_______________, 199  .

To induce BNPLC to make such Construction Advance, NAI represents and
warrants as follows: (x) the dollar amount specified above equals the property
insurance deductible permitted under the insurance requirements set forth in the
Lease, (y) a Pre-commencement Casualty has resulted in damage to the
Improvements, for which the cost of repairs will because of such deductible -
exceed the Escrowed Proceeds paid or payable in connection with such damage
under the property insurance maintained by NAI in accordance with the insurance
requirements in the Improvements Lease, and (z) NAI has not and will not
otherwise receive a Construction Advance to reimburse such excess costs prior to
the expiration of BNPLC's obligation to make further Construction Advances as
provided in subparagraph of the Construction Management Agreement.

NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:  
--------------
Title: 
-------------
[cc all Participants]

Exhibit-Page 1

31

Exhibit F

CONSTRUCTION ADVANCE REQUEST FORM

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase II - Improvements) dated as of
May 3, 1999 (the "CONSTRUCTION MANAGEMENT AGREEMENT"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase II - Improvements) referenced in the
Construction Management Agreement. This letter shall constitute a Construction
Advance Request, requesting a Construction Advance of:

$____________________,

on the Advance Date that will occur on:

______________, 199  .

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

I.  CALCULATION OF LIMIT IMPOSED BY SUBPARAGRAPH  OF THE CONSTRUCTION MANAGEMENT
AGREEMENT:

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

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

(3) NAI has received prior Construction Advances of no more than
$________________

LIMIT (1 + 2 - 3) $________________

Exhibit-Page 1

32

II. PROJECTED COST OVERRUNS:

NAI [CHECK ONE: _ DOES / _ DOES NOT ] believe that Projected Construction
Overruns are more likely than not. [If NAI does believe that Projected Cost
Overruns are more likely than not, and if NAI believes that the amount of such
Projected Construction Overruns can be reasonably estimated, NAI estimates the
same at $___________.]

NOTE: The Construction Management Agreement defines Projected Construction
Overruns as the excess, if any, of (1) the total of projected Reimbursable
Construction-Period Costs yet to be incurred or for which NAI has yet to be
reimbursed hereunder (including projected Reimbursable Construction-Period Costs
for Future Work), over (2) the balance of the remaining Construction Allowance
projected to be available to cover such costs.

III. ABSENCE OF CERTAIN CMA SUSPENSION EVENTS:

A. The Construction Project is progressing without significant interruption
in a good and workmanlike manner and substantially in accordance with Applicable
Laws, with Permitted Encumbrances, with Development Documents and with the
requirements of the Construction Management Agreement, except as follows: (IF
THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")

-------
-------
-------
-------

B. If NAI has received notice of any Defective Work, NAI has promptly
corrected or is diligently pursuing the correction of such Defective Work,
except as follows: (IF THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")

-------
-------
-------
-------

NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name: 
------------
Title: 
------------
[cc all Participants]

Exhibit-Page 2

33

Exhibit G

NOTICE OF VOLUNTARY NAI CONSTRUCTION CONTRIBUTION

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase II - Improvements) dated as of
May 3, 1999 (the "CONSTRUCTION MANAGEMENT AGREEMENT"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase II - Improvements) referenced in the
Construction Management Agreement. This letter shall constitute notice, given as
described in subparagraph of the Construction Management Agreement, that NAI is
paying with this letter, or unconditionally and irrevocably committing to pay as
described below, a Voluntary NAI Construction Contribution in the amount of
$_____________________.

Such payment by NAI will be in addition to any Voluntary NAI Construction
Contributions required by other notices given by NAI as described in
subparagraph of the Construction Management Agreement.

Further, if the Voluntary NAI Construction Contribution required by this
letter is not being delivered to BNPLC by NAI contemporaneously with this
letter, then at such time as BNPLC's obligation to fund additional Construction
Advances is excused by any of the terms and conditions set forth in the
Construction Management Agreement, NAI shall be obligated to deliver such
Voluntary NAI Construction Contribution as required to eliminate (or reduce to
the maximum extent possible) Projected Cost Overruns, including any Projected
Cost Overruns caused by the accrual of Carrying Costs under and as described in
the Improvements Lease referenced in the Construction Management Agreement.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:  
----------------
Title: 
---------------
[cc all Participants]

Exhibit Page 1

34

Exhibit H

PREEMPTIVE NOTICE BY NAI

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase II - Improvements) dated as of
May 3, 1999 (the "CONSTRUCTION MANAGEMENT AGREEMENT"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase II - Improvements) referenced in the
Construction Management Agreement. This letter is intended to constitute a
Preemptive Notice, given as described in subparagraph of the Construction
Management Agreement. As provided in clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase II -
Improvements), this letter shall constitute notice, given in accordance with
clause (2) of the definition of Common Definitions and Provisions Agreement
(Phase II - Improvements), that NAI designates the following date as the
Designated Sale Date:

----------------, ----.

NAI acknowledges, however, that this notice will not be effective as a
Preemptive Notice if (1) such date is sooner than thirty days after the date of
this notice or later than ninety days after the date of any FOCB Notice
previously given by BNPLC under the Construction Management Agreement, or (2)
NAI has previously made any Issue 97-10 Election.

NAI hereby unconditionally, unequivocally and irrevocably: (1) waives any
right to make any Issue 97-10 Election under any of the Operative Documents, and
(2) acknowledges and agrees that for purposes of calculating the Supplemental
Payment required by the Purchase Agreement, the Maximum Remarketing Obligation
will equal the Break Even Price under the Purchase Agreement.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name: 
------------
Title: 
------------

[cc all Participants]

Exhibit-Page 1

35

Exhibit I

NOTICE OF TERMINATION BY NAI

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase II - Improvements) dated as of
May 3, 1999 (the "CONSTRUCTION MANAGEMENT AGREEMENT"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement referenced above or in
the Common Definitions and Provisions Agreement (Phase II - Improvements)
referenced in the Construction Management Agreement.

NAI has determined that (1) the Construction Advances to be provided to it
under the Construction Management Agreement will not be sufficient to cover all
Construction-Period Reimbursable Costs, whether because the cost of the Work
exceeds budgeted expectations (resulting in Projected Cost Overruns) or because
NAI can no longer satisfy conditions to BNPLC's obligation to provide
Construction Advances in the Construction Management Agreement, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of the Construction
Management Agreement. Accordingly, this letter shall constitute a Notice of
NAI's Election to Terminate the Construction Management Agreement, given as
provided in subparagraph of the Construction Management Agreement.

NAI irrevocably and unconditionally elects to terminate the Construction
Management Agreement effective as of the following date (which), as required by
subparagraph thereof is a date not less than thirty days after the date this
notice is given):

______________, 19___

NAI ACKNOWLEDGES THAT THE ELECTION MADE BY NAI DESCRIBED ABOVE CONSTITUTES
AN ISSUE 97-10 ELECTION UNDER AND AS DEFINED IN THE OPERATIVE DOCUMENTS.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name: 
------------
Title: 
------------

[cc all Participants]

Exhibit - Page 1

1
Exhibit 10.28

================================================================================

LEASE AGREEMENT
(PHASE II - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

MAY 3, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2

[Phase II - Improvements]

3
TABLE OF CONTENTS

Page
----

1.      TERM                                                                                 2
(a)    Scheduled Term                                                                2
(b)    Automatic Termination as of the Base Rent Commencement Date Resulting 
From an Election by NAI to Terminate the Purchase Option and NAI's 
Initial Remarketing Rights and Obligations                                  2
(c)   Election by BNPLC to Terminate After an Issue 97-10 Election                   2
(d)   Election by NAI to Terminate After Accelerating the Designated Sale Date       3
(e)   Extension of the Term                                                          3

2.      USE AND CONDITION OF THE PROPERTY                                                    4
(a)    Use                                                                           4
(b)    Condition of the Property                                                     4
(c)    Consideration for and Scope of Waiver                                         4

3.      RENT                                                                                 5
(a)    Base Rent Generally                                                           5
(b)    Impact of Collateral Upon Formulas                                            5
(c)    Calculation of and Due Dates for Base Rent                                    5
(i)    Amount Payable On the Base Rent Commencement Date                      5
(ii)   Determination of Payment Due Dates, After the Base Rent Commencement
Date, Generally                                                        5
(iii)  Special Adjustments to Base Rent Payment Dates and Periods             6
(iv)   Base Rent Formula for Periods During Which The Collateral Percentage
is 100%                                                                6
(v)    Base Rent Formula for Periods During Which The Collateral Percentage 
is Greater

Than Zero and Less Than 100%                                7
(vi)   Base Rent Formula for Periods During Which The Collateral Percentage
is Zero                                                                8
(d)    Additional Rent                                                               8
(e)    Arrangement Fee                                                               8
(f)    Commitment Fees                                                               8
(g)    Administrative Agency Fees                                                    9
(h)    Issue 97-10 Prepayments                                                       9
(i)    No Demand or Setoff                                                           9
(j)    Default Interest and Order of Application                                     9

4.      NATURE OF THIS AGREEMENT                                                             9
(a)    "Net" Lease Generally                                                         9
(b)    No Termination                                                               10
(c)    Tax Reporting                                                                11
(d)    Characterization of this Improvements Lease                                  11

4

Page
----

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY                       12
(a)    Impositions                                                                  12
(b)    Increased Costs; Capital Adequacy Charges                                    12
(c)    NAI's Payment of Other Losses; General Indemnification                       13
(d)    Exceptions and Qualifications to Indemnities                                 14

6.      CONSTRUCTION                                                                        16
(a)    Construction Advances; Outstanding Construction Allowance                    16
(b)    Calculation of Carrying Costs                                                16
(c)    Limits on the Amount of Carrying Costs                                       17
(d)    NAI's Right to Control the Construction Project                              17
(e)    Landlord's Election to Continue Construction                                 17
(i)    Take Control of the Property                                          17
(ii)   Continuation of Construction                                          18
(iii)  Arrange for Turnkey Construction                                      18
(iv)   Suspension or Termination of Construction                             18
(f)    Powers Coupled With an Interest                                              19
(g)    Completion Notice                                                            19

7.      STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC                            19

8.      ENVIRONMENTAL                                                                       20
(a)    Environmental Covenants by NAI                                               20
(b)    Right of BNPLC to do Remedial Work Not Performed by NAI                      20
(c)    Environmental Inspections and Reviews                                        21
(d)    Communications Regarding Environmental Matters                               21

9.      INSURANCE REQUIRED AND CONDEMNATION                                                 22
(a)    Liability Insurance                                                          22
(b)    Property Insurance                                                           22
(c)    Failure to Obtain Insurance                                                  22
(d)    Condemnation                                                                 22
(e)    Waiver of Subrogation                                                        23

10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS                                  23
(a)    Collection and Application of Insurance and Condemnation 
Proceeds Generally                                                         23
(b)    Advances of Escrowed Proceeds to NAI                                         24
(c)    Application of Escrowed Proceeds as a Qualified Prepayment                   24
(d)    Special Provisions Applicable After a CMA Termination Event or 
Event of Default                                                           24
(e)    NAI's Obligation to Restore                                                  24
(f)    Takings of All or Substantially All of the Property on or after the 
Base Rent Commencement Date                                               25

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING 
THE PROPERTY                                                                 25

(a)    Compliance with Covenants and Laws                                           25
(b)    Operation of the Property                                                    25
(c)    Debts for Construction, Maintenance, Operation or Development                26
(d)    Repair, Maintenance, Alterations and Additions                               27

2

5

Page
----

(e)    Permitted Encumbrances and Development Documents                             27
(f)    Books and Records Concerning the Property                                    27

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO SCHEDULE 1     28

13.     FINANCIAL STATEMENTS AND OTHER REPORTS                                              28
(a)    Financial Statements; Required Notices; Certificates                         28

14.     ASSIGNMENT AND SUBLETTING BY NAI                                                    29
(a)    BNPLC's Consent Required                                                     29
(b)    Standard for BNPLC's Consent to Assignments and Certain Other Matters        30
(c)    Consent Not a Waiver                                                         30

15.     ASSIGNMENT BY BNPLC                                                                 30
(a)    Restrictions on Transfers                                                    30
(b)    Effect of Permitted Transfer or other Assignment by BNPLC                    30

16.     BNPLC's RIGHT OF ACCESS                                                             31

17.     EVENTS OF DEFAULT                                                                   32

18.     REMEDIES                                                                            33
(a)    Basic Remedies                                                               33
(b)    Notice Required So Long As the Purchase Option and NAI's Initial 
Remarketing Rights and Obligations Continue Under the Purchase 
Agreement                                                                    35
(c)    Enforceability                                                               35
(d)    Remedies Cumulative                                                          35

19.     DEFAULT BY BNPLC                                                                    35

20.     QUIET ENJOYMENT                                                                     36

21.     SURRENDER UPON TERMINATION                                                          36

22.     HOLDING OVER BY NAI                                                                 36

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS                  36

EXHIBITS AND SCHEDULES

3

6

Exhibit A  Legal Description

Exhibit B  Insurance Requirements

Exhibit C  Libor Period Election Form

Schedule 1  Financial Covenants and Other Requirements

4

7

LEASE AGREEMENT

(PHASE II - IMPROVEMENTS)

This LEASE AGREEMENT (PHASE II- IMPROVEMENTS) (this "IMPROVEMENTS
LEASE"), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
made and dated as of May 3, 1999, the Effective Date. ("EFFECTIVE DATE" and
other capitalized terms used and not otherwise defined in this Improvements
Lease are intended to have the meanings assigned to them in the Common
Definitions and Provisions Agreement (Phase II - Improvements) executed by BNPLC
and NAI contemporaneously with this Improvements Lease. By this reference, the
Common Definitions and Provisions Agreement (Phase II - Improvements) is
incorporated into and made a part of this Improvements Lease for all purposes.)

RECITALS

Pursuant to the Existing Contract, which covers the Land described in
Exhibit A, BNPLC is acquiring the Land and any appurtenances thereto and all
existing Improvements thereon from Seller contemporaneously with the execution
of this Improvements Lease.

In anticipation of BNPLC's acquisition of the Land and the existing
Improvements thereon under the Existing Contract, BNPLC and NAI have reached
agreement as to the terms and conditions upon which BNPLC is willing to lease
the existing Improvements and the Improvements to be constructed on the Land as
hereinafter provided, and by this Improvements Lease BNPLC and NAI desire to
evidence such agreement.

GRANTING CLAUSES

BNPLC does hereby LEASE, DEMISE and LET unto NAI for the term
hereinafter set forth all right, title and interest of BNPLC, now owned or
hereafter acquired, in and to:

(1) any and all Improvements; and

(2) all easements and other rights appurtenant to the Improvements, whether
now owned or hereafter acquired by BNPLC.

BNPLC's interest in all property described in clauses (1) and (2) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include the Land itself, it being understood that the Other Lease
Agreement constitutes a separate lease of the Land and the appurtenances
thereto, and only the Land and the appurtenances thereto, from BNPLC to NAI.

To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contract or acquired by BNPLC pursuant to Paragraph 7 below,
BNPLC also hereby grants and assigns to NAI for the term of this Improvements
Lease the right to use and enjoy (and, in the case of contract rights, to
enforce) such rights or interests of BNPLC:

(a) any goods, equipment, furnishings, furniture and other tangible
personal property of whatever nature that are located on the Land and all
renewals or replacements of or substitutions for any of the foregoing;

5

8

(b) the benefits, if any, conferred upon the owner of the Real Property
by the Permitted Encumbrances (including Existing Space Leases) and
Development Documents; and

(c) any permits, licenses, franchises, certificates, and other rights
and privileges against third parties (including the lessees under the
Existing Space Leases) related to the Real Property.

Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."

However, the leasehold estate conveyed hereby and NAI's rights
hereunder are expressly made subject and subordinate to the terms and conditions
of this Improvements Lease, to the Permitted Encumbrances (including the
Existing Space Leases), and to any other claims or encumbrances not constituting
Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

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

1. TERM.

(a) Scheduled Term.  The term of this Improvements Lease (the "TERM") shall
commence on and include the Effective Date, and end on the first Business Day of
February, 2004, unless sooner terminated as expressly herein provided.

(b) Automatic Termination as of the Base Rent Commencement Date Resulting From
an Election by NAI to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.  If NAI terminates the Purchase Option and
NAI's Initial Remarketing Rights and Obligations prior to the Base Rent
Commencement Date pursuant to subparagraph 4(B) of the Purchase Agreement, then
this Improvements Lease shall terminate automatically on the Base Rent
Commencement Date. Just as any such termination of the Purchase Option and NAI's
Initial Remarketing Rights and Obligations shall be subject to the condition
(set forth in subparagraph 4(B) of the Purchase Agreement) that NAI pay an Issue
97-10 Prepayment to BNPLC, so too will the termination of this Improvements
Lease pursuant to this subparagraph be subject the condition that NAI make the
Issue 97-10 Prepayment to BNPLC.

(c) Election by BNPLC to Terminate After an Issue 97-10 Election.  By notice to
NcI BNPLC shall be entitled to terminate this Improvements Lease, as BNPLC deems
appropriate in its sole and absolute discretion, at any time after receiving a
notice given by NAI to make any Issue 97-10 Election. Upon any termination of
this Improvements Lease by BNPLC pursuant to this subparagraph, NAI shall become
obligated to pay to BNPLC an Issue 97-10 Prepayment, which obligation will
survive the termination of this Improvements Lease.

(d) Election by NAI to Terminate After Accelerating the Designated Sale Date. 
Provided NAI has not made any Issue 97-10 Election, NAI shall be entitled to
accelerate the Designated Sale Date (and thus accelerate the purchase of BNPLC's
interest in the Property by NAI or by an Applicable Purchaser pursuant to the
Purchase Agreement) by sending a notice to BNPLC as provided in clause (2) of
the definition of "Designated Sale Date" in the Common Definitions and
Provisions Agreement (Phase II - Improvements). In the event, because of NAI's
election to so accelerate the Designated Sale Date or for any other reason, the
Designated Sale Date occurs before the end of the scheduled Term, NAI may
terminate this Improvements Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI must have
done the following prior to the termination:

2

9

(i) purchased or caused an Applicable Purchaser to purchase the Property
pursuant to the Purchase Agreement and satisfied all of NAI's other
obligations under the Purchase Agreement;

(ii) paid to BNPLC all Base Rent, all Commitment Fees and all other Rent due
on or before or accrued through the Designated Sale Date; and

(iii) paid any Breakage Costs caused by BNPLC's sale of the Property 
pursuant to the Purchase Agreement.

(e) Extension of the Term.  The Term may be extended at the option of NAI for
two successive periods of five years each; provided, however, that prior to any
such extension the following conditions must have been satisfied: (A) at least
ninety days prior to the commencement of any such extension, BNPLC and NAI must
have agreed in writing upon, and received the consent and approval of BNPLC's
Parent and all other Participants to (1) a corresponding extension not only to
the date for the expiration of the Term specified above in this Section, but
also to the date specified in clause (1) of the definition of Designated Sale
Date in the Common Definitions and Provisions Agreement (Phase II -
Improvements), and (2) an adjustment to the Rent that NAI will be required to
pay for the extension, it being expected that the Rent for the extension may be
different than the Rent required for the original Term, and it being understood
that the Rent for any extension must in all events be satisfactory to both BNPLC
and NAI, each in its sole and absolute discretion; (B) no Event of Default shall
have occurred and be continuing at the time of NAI's exercise of its option to
extend; (C) prior to any such extension, NAI must have completed the
Construction Project in accordance with the Construction Management Agreement
and must not have made any Issue 97-10 Election; and (D) immediately prior to
any such extension, this Improvements Lease must remain in effect. With respect
to the condition that BNPLC and NAI must have agreed upon the Rent required for
any extension of the Term, neither NAI nor BNPLC is willing to submit itself to
a risk of liability or loss of rights hereunder for being judged unreasonable.
Accordingly, both NAI and BNPLC hereby disclaim any obligation express or
implied to be reasonable in negotiating the Rent for any such extension. Subject
to the changes to the Rent payable during any extension of the Term as provided
in this Paragraph, if NAI exercises its option to extend the Term as provided in
this Paragraph, this Improvements Lease shall continue in full force and effect,
and the leasehold estate hereby granted to NAI shall continue without
interruption and without any loss of priority over other interests in or claims
against the Property that may be created or arise after the date hereof and
before the extension.

2. USE AND CONDITION OF THE PROPERTY.

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

(i) construction and development of the Construction Project;

(ii) administrative and office space;

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

(iv) cafeteria, library and other support facilities that NAI may provide to
its employees; and

(v) other lawful purposes (including NAI's research and development or
production of products that are not of substantially the same type and
character as those regularly sold by NAI in the ordinary course of its
business as of the Effective Date) approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion of
the Construction Project (but NAI acknowledges that BNPLC's withholding of
such approval shall be reasonable if BNPLC determines in good faith that (1)
giving the approval may materially increase BNPLC's risk of liability 

3

10

for any existing or future environmental problem, or (2) giving the approval
is likely to substantially increase BNPLC's administrative burden of
complying with or monitoring NAI's compliance with the requirements of this
Improvements Lease or other Operative Documents).

(b) Condition of the Property. NAI ACKNOWLEDGES THAT IT HAS CAREFULLY AND FULLY 
INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY IN ITS PRESENT STATE, AS IS, AND
WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION
OF SUCH PROPERTY OR AS TO THE USE WHICH MAY BE MADE THEREOF. NAI ALSO ACCEPTS
THE PROPERTY WITHOUT ANY COVENANT, REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, BY BNPLC OR ITS AFFILIATES REGARDING THE TITLE THERETO OR THE RIGHTS OF
ANY PARTIES IN POSSESSION OF ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN
PARAGRAPH 20. BNPLC SHALL NOT BE RESPONSIBLE FOR ANY LATENT OR OTHER DEFECT OR
CHANGE OF CONDITION IN THE LAND OR IN IMPROVEMENTS, FIXTURES AND PERSONAL
PROPERTY FORMING A PART OF THE PROPERTY OR FOR ANY VIOLATIONS WITH RESPECT
THERETO OF APPLICABLE LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES
ANY FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT
AND LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE 2 OF THIS IMPROVEMENTS LEASE,
BNPLC SHALL NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY
KIND, INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER. 

(c) Consideration for and Scope of Waiver.  The provisions of subparagraph 2.(b)
above have been negotiated by BNPLC and NAI after due consideration for the Rent
payable hereunder and are intended to be a complete exclusion and negation of
any representations or warranties of BNPLC or its Affiliates, express or
implied, with respect to the Property that may arise pursuant to any law now or
hereafter in effect or otherwise, except as expressly set forth herein.

However, such exclusion of representations and warranties by BNPLC is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to NAI during the Term because of the definition of
Personal Property and Property above.

3. RENT.

(a) Base Rent Generally. On the Base Rent Commencement Date and on each Base
Rent Date through the end of the Term, NAI shall pay BNPLC rent ("BASE RENT").
Each payment of Base Rent must be received by BNPLC no later than 10:00 a.m.
(Pacific time) on the date it becomes due; if received after 10:00 a.m. (Pacific
time) it will be considered for purposes of this Improvements Lease as received
on the next following Business Day. At least five days prior to any Base Rent
Commencement Date or Base Rent Date upon which an installment of Base Rent shall
become due, BNPLC shall notify NAI in writing of the amount of each installment,
calculated as provided below. Any failure by BNPLC to so notify NAI, however,
shall not constitute a waiver of BNPLC's right to payment, but absent such
notice NAI shall not be in default hereunder for any underpayment resulting
therefrom if NAI, in good faith, reasonably estimates the payment required,
makes a timely payment of the amount so estimated and corrects any underpayment
within three Business Days after being notified by BNPLC of the underpayment.

(b) Impact of Collateral Upon Formulas.  To ease the administrative burden of
this Improvements Lease and the Pledge Agreement, the formulas for calculating
Base Rent set out below in subparagraph 3.(c) reflect a reduction in the Base
Rent equal to the interest that would accrue on any Collateral provided in
accordance with the requirements of the Pledge Agreement from time to time if
the Accounts (as defined in the Pledge Agreement) bore interest at the Effective
Rate. BNPLC has agreed to such reduction to provide NAI with the economic
equivalent of interest on such Collateral, and in return NAI has agreed to the
provisions of the Pledge Agreement that excuse the actual payment of interest on
the Accounts. By incorporating such reduction of Base Rent into the formulas
below, and by providing for noninterest bearing Accounts in the Pledge
Agreement, the parties will avoid an unnecessary and cumbersome periodic
exchange of equal payments. It is not, however, the intent of BNPLC or NAI to
understate Base Rent or interest for financial reporting purposes. Accordingly,
for

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purposes of any financial reports that this Improvements Lease requires of NAI
from time to time, NAI may report Base Rent as if there had been no such
reduction and as if the Collateral from time to time provided in accordance with
the requirements of the Pledge Agreement had been maintained in Accounts bearing
interest at the Effective Rate.

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

(i) Amount Payable On the Base Rent Commencement Date.  The Base Rent
payable on the Base Rent Commencement Date shall equal the difference (if
any) between (a) the total amount that would have been added to the
Outstanding Construction Allowance as Carrying Costs on such date if not for
the limit set forth in subparagraph 6.(c), and (b) the Carrying Costs 
actually added on such date to the Outstanding Construction Allowance.

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

(iii) Special Adjustments to Base Rent Payment Dates and Periods. 
Notwithstanding the foregoing:

a) Any Base Rent Period that begins before, and does not otherwise
end before, a Failed Collateral Test Date shall end upon but not
include such Failed Collateral Test Date, and such Failed Collateral
Test Date shall constitute a Base Rent Date, upon which NAI must pay
all accrued, unpaid Base Rent for the Base Rent Period just ended.

b) Consistent with clause (3) of the definition of LIBOR Period
Election in the Common Definitions and Provisions Agreement (Phase II
- Improvements), each successive Base Rent Date after any such Failed
Collateral Test Date shall be the first Business Day of the first
calendar month following the calendar month which includes the
preceding Base Rent Date, so long as any Mandatory Collateral Period
shall continue.

c) In addition to Base Rent due on a Failed Collateral Test Date, NAI
must pay the Breakage Costs, if any, resulting from any early ending
of a Base Rent Period on the Failed Collateral Test Date pursuant to
the preceding clause 3.(c)(iii)(a). 

d) If NAI or any Applicable Purchaser purchases BNPLC's interest in
the Property pursuant to the Purchase Agreement, any accrued unpaid
Base Rent and all outstanding Additional Rent shall be due on the
date of purchase in addition to the purchase price and other sums due
BNPLC under the Purchase Agreement.

(iv) Base Rent Formula for Periods During Which The Collateral Percentage is
100%. Each installment of Base Rent payable for any Base Rent Period during
which the Collateral Percentage is one hundred percent (100%) shall equal:

-   Stipulated Loss Value on the first day of such Base Rent Period,
times

-   the Secured Spread for the period from and including the
preceding Base Rent Date to but not including the Base Rent Date
upon which the installment is due, times

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-   the number of days in the period from and including the
preceding Base Rent Date to but not including the Base Rent Date
upon which the installment is due, divided by

-   three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent
(100%); that prior to the first day of such Base Rent Period the
Construction Allowance has been fully funded, but a total of $4,250,000 of
Qualified Prepayments have been received by BNPLC, leaving a Stipulated Loss
Value of $15,000,000; that the Secured Spread is thirty basis points (30/100
of 1%); and that such Base Rent Period contains exactly thirty days. Under
such assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:

$15,000,000 x .30% x 30/360 = $3,750

(i) Base Rent Formula for Periods During Which The Collateral Percentage is
Greater Than Zero and Less Than 100% . Each installment of Base Rent payable
for any Base Rent Period during which the Collateral Percentage is greater
than zero and less than one hundred percent (100%) shall equal:

-   Stipulated Loss Value on the first day of such Base Rent Period,
times

-   the sum of:

(A) the product of:

(1) the Collateral Percentage for such Base Rent 
Period, times

(2) the Secured Spread for the period from and
including the preceding Base Rent Date to but not
including the Base Rent Date upon which the
installment is due, plus

(B) the product of:

(1) one minus the Collateral Percentage for such Base
Rent Period, times

(2) the sum of (a) the Effective Rate with respect to
such Base Rent Period, plus (b) the Unsecured
Spread for the period from and including the
preceding Base Rent Date to but not including the
Base Rent Date upon which the installment is due,
times

-   the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by

-   three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is forty percent (40%); that
prior to the first day of such Base Rent Period the Construction Allowance
has been fully funded, but a total of $4,250,000 of Qualified Prepayments
have been received by BNPLC, leaving a Stipulated Loss Value of

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$15,000,000; that the Effective Rate for the Base Rent Period is 6%; that
the Secured Spread is thirty basis points (30/100 of 1%); that upon the
commencement of such Base Rent Period the Unsecured Spread is one hundred
fifty basis points (150/100 of 1%); and that such Base Rent Period contains
exactly thirty days. Under such assumptions, the Base Rent for the
hypothetical Base Rent Period will equal:

$15,000,000 x {(40% x .30%) + ([1 - 40%] x [6% + 1.50%])} x 30/360 = $57,750

(i) Base Rent Formula for Periods During Which The Collateral Percentage is
Zero. Each installment of Base Rent payable for any Base Rent Period during
which the Collateral Percentage is zero shall equal:

-   Stipulated Loss Value on the first day of such Base Rent Period,
times

-   the sum of (a) the Effective Rate with respect to such Base Rent
Period, plus (b) the Unsecured Spread for the period from and
including the preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, times

-   the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by

-   three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is zero percent (0%); that
prior to the first day of such Base Rent Period the Construction Allowance
has been fully funded, but a total of $4,250,000 of Qualified Prepayments
have been received by BNPLC, leaving a Stipulated Loss Value of $15,000,000;
that the Effective Rate for the Base Rent Period is 6%; that the Unsecured
Spread is one hundred fifty basis points (150/100 of 1%) upon the
commencement of such Base Rent Period; and that such Base Rent Period
contains exactly thirty days. Under such assumptions, the Base Rent for the
hypothetical Base Rent Period will equal:

$15,000,000 x (6% + 1.50%) x 30/360 = $93,750

(d) Additional Rent.  All amounts which NAI is required to pay to or on behalf
of BNPLC pursuant to this Improvements Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "ADDITIONAL RENT", and together Base Rent and Additional
Rent are herein sometimes called "RENT").

(e) Arrangement Fee.  Upon execution and delivery of this Improvements Lease by
BNPLC, an Arrangement Fee (the "ARRANGEMENT FEE") will be paid to BNPLC from the
Initial Funding Advance (and thus be included in Stipulated Loss Value) in the
amount provided in the letter dated as of March 3, 1999 from BNPLC to NAI.

(f) Commitment Fees. For each Construction Period NAI shall pay BNPLC a fee (a
"COMMITMENT FEE") from Construction Advances made pursuant to the Construction
Management Agreement equal to:

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

(i) the Maximum Construction Allowance, less

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

-   the number of days in such Construction Period; divided by

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-   three hundred sixty.

NAI shall pay Commitment Fees in arrears on the first Business Day of May,
August, November and February of each calendar year, beginning with the first
Business Day of August, 1999 and continuing regularly throughout the Term so
long as Commitment Fees have accrued and remain unpaid. However, if any
Commitment Fees shall have accrued and remain unpaid on the Designated Sale
Date, such accrued unpaid Commitment Fees shall be due on the Designated Sale
Date.

(g) Administrative Agency Fees.  Upon execution and delivery of this
Improvements Lease by BNPLC, an administrative agency fee (an "ADMINISTRATIVE
AGENCY FEE") will be paid to BNPLC from the Initial Funding Advance (and thus be
included in Stipulated Loss Value) in the amount provided in the letter dated as
of March 3, 1999 from BNPLC to NAI. Also, on each anniversary of the date
hereof, NAI shall pay to BNPLC an administrative agency fee (also, an
"ADMINISTRATIVE AGENCY FEE") in the amount set forth in the letter agreement
dated as of March 3, 1999 from BNPLC to NAI.

(h) Issue 97-10 Prepayments.  Following any Issue 97-10 Election or any CMA
Termination Event under (and as defined in) the Construction Management
Agreement, NAI shall make an Issue 97-10 Prepayment to BNPLC within three
Business Days after receipt of any demand for such a payment. BNPLC may demand
an Issue 97-10 Prepayment pursuant to this subparagraph at any time and from
time to time (as Project Costs increase) after any Issue 97-10 Election or CMA
Termination Event.

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

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

4. NATURE OF THIS AGREEMENT.

(a) "Net" Lease Generally.  Subject only to the exceptions listed in
subparagraph 5.(d) below, it is the intention of BNPLC and NAI that Base Rent,
the Arrangement Fees, any Upfront Syndication Fees, Administrative Agency Fees,
Commitment Fees and other payments herein specified shall be absolutely net to
BNPLC and that NAI shall pay all costs, expenses and obligations of every kind
relating to the Property or this Improvements Lease which may arise or become
due, including: (i) any taxes payable by virtue of BNPLC's receipt of amounts
paid to or on behalf of BNPLC in accordance with Paragraph ; (ii) any amount for
which BNPLC is or becomes liable with respect to the Permitted Encumbrances or
the Development Documents; and (iii) any costs incurred by BNPLC (including
Attorneys' Fees) because of BNPLC's acquisition or ownership of any interest in
the Property or because of this Improvements Lease or the transactions
contemplated herein.

However, neither this subparagraph 4.(a) nor the indemnity in this subparagraph
5.(c)(i) shall be construed to make NAI liable for (I) an allocation of general
overhead or internal administrative expenses of BNPLC or any other Interested
Party or (II) any duplicate payment of the same Loss to both BNPLC and another
Interested Party. (If, for example, BNPLC were required to make a $10 fine
because of a failure of the Property to comply with Applicable Laws, and a
Participant were required by the Participation Agreement to reimburse BNPLC for
20% of the $10, NAI would not be required by this subparagraph 4.(a) or by
subparagraph 5.(c)(i) to pay both $10 to BNPLC and $2 to the Participant on
account of the fine.)

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

However, nothing in this subparagraph 4.(b) shall be construed as a
waiver by NAI of any right NAI may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Improvements Lease that
continues beyond the period for cure provided in Paragraph 19: (i) the recovery
of monetary damages, (ii) injunctive relief in case of the violation, or
attempted or threatened violation, by BNPLC of any of the express covenants,
agreements, conditions or provisions of this Improvements Lease which are
binding upon BNPLC (including the confidentiality provisions set forth in
subparagraph 16.(c) below), or (iii) a decree compelling performance by BNPLC of
any of the express covenants, agreements, conditions or provisions of this
Improvements Lease which are binding upon BNPLC.

(c) Tax Reporting.  BNPLC and NAI shall report this Improvements Lease and the
Purchase Agreement for federal income tax purposes as a conditional sale unless
prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Improvements
Lease and the Purchase Agreement as a conditional sale for federal income tax
reporting purposes, BNPLC shall notify NAI in writing of such challenge and
consider in good faith any reasonable suggestions by NAI about an appropriate
response. In any event, NAI shall (subject only to the limitations set forth in
this subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice to NAI shall not
excuse NAI from its obligations under this Paragraph; provided, that if none of
the officers of NAI and none of the employees of NAI responsible for tax matters
are aware of the challenge described in the notice and such failure by BNPLC
renders unavailable defenses that NAI might otherwise assert, or precludes
actions that NAI might otherwise take, to minimize its obligations hereunder,
then NAI shall be excused from its obligation to indemnify BNPLC against
liabilities, costs, additional taxes and other expenses, if any, which would not
have been incurred but for such failure. For example, if BNPLC

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16
fails to provide NAI with a copy of a notice of a challenge by the Internal
Revenue Service covered by the indemnities set out in this Improvements Lease
and NAI is not otherwise already aware of such challenge, and if as a result of
such failure BNPLC becomes liable for penalties and interest covered by the
indemnities in excess of the penalties and interest that would have accrued if
NAI had been promptly provided with a copy of the notice, then NAI will be
excused from any obligation to BNPLC to pay the excess.

(d) Characterization of this Improvements Lease.  For purposes of determining
the appropriate financial accounting for this Improvements Lease and for
purposes of determining their respective rights and remedies under state law,
BNPLC and NAI believe and intend that (i) this Improvements Lease constitutes a
true lease, not a mere financing arrangement, enforceable in accordance with its
express terms, and the preceding subparagraph is not intended to affect the
enforcement of any other provisions of this Improvements Lease or the Purchase
Agreement, and (ii) the Purchase Agreement shall constitute a separate and
independent contract, enforceable in accordance with the express terms and
conditions set forth therein. In this regard, NAI acknowledges that NAI asked
BNPLC to participate in the transactions evidenced by this Improvements Lease
and the Purchase Agreement as a landlord and owner of the Property, not as a
lender. Although other transactions might have been used to accomplish similar
results, NAI expects to receive certain material accounting and other advantages
through the use of a lease transaction. Accordingly, and notwithstanding the
reporting for income tax purposes described in the preceding subparagraph, NAI
cannot equitably deny that this Improvements Lease and the Purchase Agreement
should be construed and enforced in accordance with their respective terms,
rather than as a mortgage or other security device, in any action brought by
BNPLC to enforce this Improvements Lease or the Purchase Agreement.

5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.

(a) Impositions.  Subject only to the exceptions listed in subparagraph 5.(d)
below, NAI shall pay or cause to be paid prior to delinquency all ad valorem
taxes assessed against the Property and other Impositions. If requested by BNPLC
from time to time, NAI shall furnish BNPLC with receipts showing payment of all
Impositions prior to the applicable delinquency date therefor.

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

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

(i) If after the Effective Date there shall be any increase in the cost to
BNPLC's Parent or any other Participant agreeing to make or making, funding
or maintaining advances to BNPLC in connection with the Property because of
any Banking Rules Change, then NAI shall from time to time, pay to BNPLC for
the account of BNPLC's Parent or such other

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Participant, as the case may be, additional amounts sufficient to compensate
BNPLC's Parent or the Participant for such increased cost. An increase in
costs resulting from any imposition or increase of reserve requirements
applicable to Collateral held from time to time by BNPLC's Parent or other
Participants pursuant to the Pledge Agreement would be an increase covered
by the preceding sentence. A certificate as to the amount of such increased
cost, submitted to BNPLC and NAI by BNPLC's Parent or the other Participant,
shall be conclusive and binding upon NAI, absent clear and demonstrable
error.

(ii) BNPLC's Parent or any other Participant may demand additional payments
("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other Participant
determines that any Banking Rules Change affects the amount of capital to be
maintained by it and that the amount of such capital is increased by or
based upon the existence of advances made or to be made to BNPLC to permit
BNPLC to maintain BNPLC's investment in the Property or to make Construction
Advances. To the extent that BNPLC's Parent or another Participant demands
Capital Adequacy Charges as compensation for the additional capital
requirements reasonably allocable to such investment or advances, NAI shall
pay to BNPLC for the account of BNPLC's Parent or the other Participant, as
the case may be, the amount so demanded. Without limiting the foregoing,
BNPLC and NAI hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
Pledge Agreement will cause a zero percent (0%) risk weight to be assigned
to a percentage (equal to the Collateral Percentage) of the collective
investment of BNPLC and the Participants in the Property pursuant to 12 Code
of Federal Regulations, part 225, as from time to time supplemented or
amended, or pursuant to any other similar or successor statute or regulation
applicable to BNPLC and the Participants. If and so long as such risk weight
is increased the assumed amount of zero percent (0%) because of a Banking
Rules Change, Capital Adequacy Charges may be collected to yield the same
rate of return to BNPLC, BNPLC's Parent and any other Participants (net of
their costs of maintaining required capital) that they would have enjoyed
from this Improvements Lease absent such increase.

(iii) Any amount required to be paid by NAI under this subparagraph 5.(b)
shall be due ten days after a demand for such payment is received by NAI.

(c) NAI's Payment of Other Losses; General Indemnification. Subject only to the
exceptions listed in subparagraph 5.(d) below:

(i)  All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time and
from time to time by reason of, in connection with or arising out of (A)
their ownership or alleged ownership of any interest in the Property or the
Rents, (B) the use and operation of the Property, (C) the negotiation,
administration or enforcement of the Operative Documents, (D) the making of
Funding Advances, (E) the Construction Project, (F) the breach by NAI of
this Improvements Lease or any other document executed by NAI in connection
herewith, (G) any failure of the Property or NAI itself to comply with
Applicable Laws, (H) Permitted Encumbrances (including the Existing Space
Leases), (I) Hazardous Substance Activities, including those occurring prior
to Effective Date, (J) any obligations under the Existing Contract that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever, shall be paid by NAI, and NAI shall
indemnify and defend BNPLC and other Interested Parties from and against all
such Losses.

(ii) THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF BNPLC
AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN THE
PRECEDING SUBPARAGRAPH 5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE SUBJECT
MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED PARTY.
FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF INSURANCE OBTAINED
BY NAI OR REQUIRED OF NAI BY THIS IMPROVEMENTS LEASE OR OTHER OPERATIVE
DOCUMENTS IS NOT ADEQUATE

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TO COVER LOSSES AGAINST OR FOR WHICH THE INDEMNITIES AND RELEASES ARE
PROVIDED. NAI'S LIABILITY, HOWEVER, FOR ANY FAILURE TO OBTAIN INSURANCE
REQUIRED BY THIS IMPROVEMENTS LEASE OR OTHER OPERATIVE DOCUMENTS WILL NOT BE
LIMITED TO LOSSES AGAINST WHICH INDEMNITIES ARE PROVIDED HEREIN, IT BEING
UNDERSTOOD THAT SUCH INSURANCE IS INTENDED TO DO MORE THAN PROVIDE A SOURCE
OF PAYMENT FOR LOSSES AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE
ENTITLED TO INDEMNIFICATION BY THIS IMPROVEMENTS LEASE.

(iii) Costs and expenses for which NAI shall be responsible pursuant to this
subparagraph 5.(c) will include appraisal fees, filing and recording fees,
inspection fees, survey fees, taxes, brokerage fees and commissions,
abstract fees, title policy fees, Uniform Commercial Code search fees,
escrow fees and Attorneys' Fees incurred by BNPLC with respect to the
Property, whether such costs and expenses are incurred at the time of
execution of this Improvements Lease or at any time during the Term. Such
costs and expenses will also include Attorneys' Fees or other costs incurred
to evaluate lien releases and other information submitted by NAI with
requests for Construction Advances.

(iv) NAI's obligations under this subparagraph 5.(c) shall survive the
termination or expiration of this Improvements Lease. Any amount to be paid
by NAI under this subparagraph 5.(c) shall be due ten days after a demand
for such payment is received by NAI.

(v) If an Interested Party notifies NAI of any claim or proceeding included
in, or any investigation or allegation concerning, Losses for which NAI is
responsible pursuant to this subparagraph 5.(c), NAI shall assume on behalf
of the Interested Party and conduct with due diligence and in good faith the
investigation and defense thereof and the response thereto with counsel
selected by NAI, but satisfactory to the Interested Party; provided, that
the Interested Party shall have the right to be represented by advisory
counsel of its own selection and at its own expense; and provided further,
that if any such claim, proceeding, investigation or allegation involves
both NAI and the Interested Party and the Interested Party shall have
reasonably concluded that there are legal defenses available to it which are
inconsistent with or in addition to those available to NAI, then the
Interested Party shall have the right to select separate counsel to
participate in the investigation and defense of and response to such claim,
proceeding, investigation or allegation on its own behalf, and NAI shall pay
or reimburse the Interested Party for all Attorney's Fees incurred by the
Interested Party because of the selection of such separate counsel. If NAI
fails to assume promptly (and in any event within fifteen days after being
notified of the applicable claim, proceeding, investigation or allegation)
the defense of the Interested Party, then the Interested Party may contest
(or settle, with the prior consent of NAI, which consent will not be
unreasonably withheld) the claim, proceeding, investigation or allegation at
NAI's expense using counsel selected by the Interested Party. Moreover, if
any such failure by NAI continues for forty-five days or more after NAI is
notified of any such claim, proceeding, investigation or allegation, the
Interested Party may elect not to contest or continue contesting the same
and instead, in accordance with the written advice of counsel, settle (or
pay in full) all claims related thereto without NAI's consent and without
releasing NAI from any obligations to the Interested Party under this
subparagraph 5.(c). 

(d) Exceptions and Qualifications to Indemnities.

(i) BNPLC acknowledges and agrees that nothing in subparagraph 4.(a) or the
preceding subparagraphs of this Paragraph 5 shall be construed to require
NAI to pay or reimburse an Interested Party for (w) any costs or expenses
incurred by BNPLC or any transferee to accomplish any Permitted Transfers
described in clauses (2), (3), (4), (6) or (7) of the definition thereof in
the Common Definitions and Provisions Agreement (Phase II - Improvements),
(x) Excluded Taxes, (y) Losses incurred or suffered by such Interested Party
that are proximately caused by (and attributed by any applicable principles
of comparative fault to) the Established Misconduct of that Interested
Party, or (z) Losses incurred or suffered by Participants in connection with
their negotiation or execution of the Participation Agreement or Pledge
Agreement (or supplements making them parties thereto) or in connection with
any due diligence they may undertake before entering into the Participation
Agreement or Pledge Agreement. Further, without limiting BNPLC's rights (as
provided in other

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provisions of this Improvements Lease and other Operative Documents) to
include the following in the calculation of the Outstanding Construction
Allowance, Stipulated Loss Value, the Break Even Price and the Maximum
Permitted Prepayment (as applicable) or to collect Base Rent, Issue 97-10
Prepayments, a Supplemental Payment and other amounts, the calculation of
which depends upon the Outstanding Construction Allowance, Stipulated Loss
Value, the Break Even Price and the Maximum Permitted Prepayment, BNPLC
acknowledges and agrees that nothing in subparagraph 4.(a) or the preceding
subparagraphs of this Paragraph 5 shall be construed to require NAI to pay
or reimburse an Interested Party for:

a)  costs paid by BNPLC with the proceeds of the Initial Funding Advance
as part of the Transaction Expenses; or

b) Construction Advances, including costs and expenditures incurred or
paid by or on behalf of BNPLC after any Landlord's Election to Continue
Construction, to the extent that such costs and expenditures are
considered to be Construction Advances pursuant to subparagraph 6.(e).

Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in subparagraph
5.(c)(i), then such Interested Party will be expected to promptly furnish a
copy of such notice to NAI. The failure to so provide a copy of the notice
to NAI shall not excuse NAI from its obligations under subparagraph
5.(c)(i); provided, that if NAI is unaware of the matters described in the
notice and such failure renders unavailable defenses that NAI might
otherwise assert, or precludes actions that NAI might otherwise take, to
minimize its obligations, then NAI shall be excused from its obligation to
indemnify such Interested Party (and any Affiliate of such Interested Party)
against the Losses, if any, which would not have been incurred or suffered
but for such failure. For example, if BNPLC fails to provide NAI with a copy
of a notice of an obligation covered by the indemnity set out in
subparagraph 5.(c)(i) and NAI is not otherwise already aware of such
obligation, and if as a result of such failure BNPLC becomes liable for
penalties and interest covered by the indemnity in excess of the penalties
and interest that would have accrued if NAI had been promptly provided with
a copy of the notice, then NAI will be excused from any obligation to BNPLC
(or any Affiliate of BNPLC) to pay the excess.

(ii) Notwithstanding anything to the contrary in subparagraph 4.(a) or the
preceding subparagraphs of this Paragraph 5, NAI's liability for payments
required by the preceding subparagraphs of this Paragraph 5, and not excused
by the preceding subparagraph 5.(d)(i), prior to substantial completion of
the Construction Project ("CONSTRUCTION-PERIOD INDEMNITY PAYMENTS") shall be
subject to the following provisions:

a) NAI may decline to pay any Construction-Period Indemnity Payments
other than the following (it being understood that NAI's payment of
the following Construction-Period Indemnity Payments shall not be
subject to any abatement or deferral by anything contained in this
subparagraph 5.(d)(ii):

(1) Construction-Period Indemnity Payments eligible for
reimbursement to NAI under the terms and conditions of the
Construction Management Agreement; and

(2) Construction-Period Indemnity Payments that constitute
Absolute NAI Construction Obligations.

b) Any Construction-Period Indemnity Payment NAI is excused from
paying by this subparagraph , together with interest thereon at the
Default Rate, will be included in the calculation of the Break Even
Price under (and as defined in) the Purchase Agreement.

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6. CONSTRUCTION.

(a) Construction Advances; Outstanding Construction Allowance.  The Construction
Management Agreement entitles NAI to receive from BNPLC - subject to the terms
and conditions set forth in the Construction Management Agreement - Construction
Advances on Advance Dates from time to time to pay or reimburse NAI for the
costs of the Construction Project and certain other costs described in the
Construction Management Agreement. In addition, BNPLC may from time to time make
expenditures or incur costs constituting Construction Advances after a
Landlord's Election to Continue Construction as described in subparagraph 6.(e).
As used herein, references to the "OUTSTANDING CONSTRUCTION ALLOWANCE" mean the
difference on the date in question (but not less than zero) of (A) the total
Construction Advances made by or on behalf of BNPLC on or prior to the date in
question, plus (B) all Carrying Costs added on or prior to the date in question,
less (C) any funds received and applied as Qualified Prepayments on or prior to
the date in question. Charges ("CARRYING COSTS") shall accrue as described below
for each Construction Period and will be added to (and thereafter be included
in) the Outstanding Construction Allowance on the last day of such Construction
Period (i.e., generally on the Advance Date upon which such Construction Period
ends). However, if for any reason Stipulated Loss Value (and thus the
Outstanding Construction Allowance included as a component thereof) must be
determined as of any date between Advance Dates, the Outstanding Construction
Allowance determined on such date shall include not only Carrying Costs added on
or before the immediately preceding Advance Date computed as described below,
but also Carrying Costs accruing on and after such preceding Advance Date to but
not including the date in question.

(b) Calculation of Carrying Costs. Carrying Costs accruing for any Construction
Period shall equal:

-   the sum on the first day of such Construction Period of (i)
Stipulated Loss Value under (and as defined in) the Common
Definitions and Provisions Agreement (Phase II - Improvements) and
(ii) Stipulated Loss Value under (and as defined in) the Other
Common Definitions and Provisions Agreement, times

-   the sum of (a) the Effective Rate with respect to such Construction
Period, plus (b) the Unsecured Spread for such Construction Period,
times

-   the number of days in the period from and including the preceding
Advance Date to but not including the Advance Date upon which the
period ends, divided by

-   three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Construction Period is zero percent (0%); that
on the first day of such Construction Period Combined Stipulated Loss Value
is $15,000,000; that the Effective Rate for the Construction Period is 6%;
that the Unsecured Spread for such Construction Period is one hundred fifty
basis points (150/100 of 1%); and that such Construction Period contains
exactly thirty days. Under such assumptions, the Carrying Costs for the
hypothetical Construction Period will equal:

$15,000,000 x (6% + 1.50%) x 30/360 = $93,750

(c) Limits on the Amount of Carrying Costs.  Notwithstanding the foregoing,
because the Construction Allowance available to NAI under the Construction
Management Agreement is limited in amount to the Maximum Construction Allowance,
and because Carrying Costs are to be charged against the Construction Allowance,
Carrying Costs added to the Outstanding Construction Allowance on the Base Rent
Commencement Date shall not exceed the amount that can be added without causing
the Funded Construction Allowance to exceed the Maximum Construction Allowance.
If, because of an extension of the Base Rent Commencement Date by BNPLC (as
described in the definition thereof in the Common Definitions and Provisions
Agreement (Phase II - Improvements)) or because of any Landlord's Election to
Continue Construction, the

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Funded Construction Allowance already exceeds the Maximum Construction
Allowance, then no Carrying Costs will be added to the Outstanding Construction
Allowance on the Base Rent Commencement Date.

(d) NAI's Right to Control the Construction Project.  Subject to BNPLC's rights
under subparagraph 6.(e) of this Improvements Lease, the Construction Management
Agreement grants to NAI the sole right and responsibility for designing and
constructing the Construction Project, it being understood that although title
to all Improvements will pass directly to BNPLC (as more particularly provided
in Paragraph 7), BNPLC's obligation with respect to the Construction Project
shall be limited to the making of advances under and subject to the conditions
set forth in the Construction Management Agreement. No contractor or other third
party shall be entitled to require BNPLC to make advances as a third party
beneficiary of this Improvements Lease or of the Construction Management
Agreement or otherwise.

(e) Landlord's Election to Continue Construction.  Without limiting BNPLC's
other rights and remedies under this Improvements Lease, and without terminating
this Improvements Lease or NAI's obligations hereunder or under any of the other
documents referenced herein, in the event of any termination of the Construction
Management Agreement as provided in subparagraph 5(D) or subparagraph 5(E)
thereof, BNPLC shall be entitled (but not obligated) to take whatever action it
deems necessary or appropriate by the use of legal proceedings or otherwise to
continue or complete the Construction Project in a manner substantially
consistent (to the extent practicable under Applicable Laws) with the general
description of the Construction Project set forth in Exhibit B to the
Construction Management Agreement and with the permitted use of the Property set
forth in subparagraph 2.(a).  (As used herein, "LANDLORD'S ELECTION TO CONTINUE
CONSTRUCTION" means any election by BNPLC to continue or complete the
Construction Project pursuant to the preceding sentence.) After any Landlord's
Election to Continue Construction, BNPLC may do any one or more of the following
pursuant to this subparagraph without further notice and regardless of whether
any Event of Default is then continuing:

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

(ii) Continuation of Construction.  BNPLC may perform or cause to be
performed any work to complete or continue the construction of the
Construction Project. In this regard, so long as work ordered or undertaken
by BNPLC is substantially consistent (to the extent practicable under
Applicable Laws) with the general description of the Construction Project
set forth in Exhibit B to the Construction Management Agreement and the
permitted use of the Property set forth in subparagraph 2.(a), BNPLC shall
have complete discretion to:

a) proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;

b) establish and extend construction deadlines as BNPLC from time to
time deems appropriate, without obligation to adhere to the deadlines
for Construction Milestones set forth in the Construction Management
Agreement;

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

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

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

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

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

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

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

(iv) Suspension or Termination of Construction.  Notwithstanding any
Landlord's Election to Continue Construction, BNPLC may subsequently elect
at any time to suspend or terminate further construction without obligation
to NAI.

For purposes of this Improvements Lease and other Operative Documents (including
the determination of the Outstanding Construction Allowance, Stipulated Loss
Value, the Break Even Price and the Maximum Permitted Prepayment), after any
Landlord's Election to Continue Construction, all costs and expenditures
incurred or paid by or on behalf of BNPLC to complete or continue construction
as provided in this subparagraph shall be considered Construction Advances and
Project Costs, regardless of whether they cause the Funded Construction
Allowance to exceed the Maximum Construction Allowance. Further, as used in the
preceding sentence, "costs incurred" by BNPLC will include costs that BNPLC has
become obligated to pay to any third party that is not an Affiliate of BNPLC
(including any contractor), even if the payments for which BNPLC has become so
obligated will constitute prepayments for work or services to be rendered after
payment and notwithstanding that BNPLC's obligations for the payments may be
conditioned upon matters beyond BNPLC's control. For example, even if a
construction contract between BNPLC and a contractor excused BNPLC from making
further progress payments to the contractor upon NAI's failure to make any
required Issue 97-10 Prepayment hereunder, the obligation to make a progress
payment would nonetheless be "incurred" by BNPLC, for purposes of determining
whether BNPLC has incurred costs considered to be Project Costs and Construction
Advances, when BNPLC's obligation to pay it became subject only to NAI's payment
of an Issue 97-10 Prepayment or other conditions beyond BNPLC's control. If and
to the extent, however, BNPLC does incur costs considered as Construction
Advances under this subparagraph, but (1) BNPLC does not actually pay the costs
and after incurring them BNPLC is fully and finally excused from the obligation
to pay them for any reason other than a breach by NAI of this Improvements Lease
or other Operative Documents, or (2) BNPLC receives a refund of such costs, then
the costs BNPLC is excused from paying or refunded to BNPLC shall be considered
Qualified Prepayments.

(f) Powers Coupled With an Interest.  BNPLC's rights under subparagraph 6.(e)
are intended to constitute powers coupled with an interest which cannot be
revoked.

(g) Completion Notice.  After any Landlord's Election to Continue Construction,
BNPLC may provide a notice (a "COMPLETION NOTICE") to NAI, advising NAI that
construction of the Construction Project is substantially complete or that BNPLC
no longer intends to continue such construction at that time.

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7. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. All Improvements
constructed during the term of this Improvements Lease shall be owned by BNPLC
and shall constitute "Property" covered by this Improvements Lease. Further, to
the extent heretofore or hereafter acquired (in whole or in part) with any
portion of the Initial Funding Advance or with any Construction Advances or with
other funds for which NAI has received or hereafter receives reimbursement from
the Initial Funding Advance or Construction Advances, all furnishings,
furniture, chattels, permits, licenses, franchises, certificates and other
personal property of whatever nature shall have been acquired on behalf of BNPLC
by NAI, shall be owned by BNPLC and shall constitute "Property" covered by this
Improvements Lease, as shall all renewals or replacements of or substitutions
for any such Property. NAI shall not authorize or permit the transfer of title
to the Improvements or to any other such Property to pass through NAI or NAI's
Affiliates before it is transferred to BNPLC from contractors, suppliers,
vendors or other third Persons. Nothing herein shall constitute authorization of
NAI by BNPLC to bind BNPLC to any construction contract or other agreement with
a third Person, but any construction contract or other agreement executed by NAI
for the acquisition or construction of Improvements or other components of the
Property may provide for the transfer of title as required by the preceding
sentence. Upon request of BNPLC, but not more often than once in any period of
twelve consecutive months, NAI shall deliver to BNPLC an inventory describing
all significant items of Personal Property (and, in the case of tangible
personal property, showing the make, model, serial number and location thereof)
other than Improvements, with a certification by NAI that such inventory is true
and complete and that all items specified in the inventory are covered by this
Improvements Lease free and clear of any Lien other than the Permitted
Encumbrances or Liens Removable by BNPLC.

8. ENVIRONMENTAL.

(a) Environmental Covenants by NAI. NAI covenants that:

(i) NAI shall not conduct or permit others to conduct Hazardous Substance
Activities, except Permitted Hazardous Substance Use and Remedial Work.

(ii) NAI shall not discharge or permit the discharge of anything on or from
the Property that would require any permit under applicable Environmental
Laws, other than (1) storm water runoff, (2) waste water discharges through
a publicly owned treatment works, (3) discharges that are a necessary part
of any Remedial Work, and (4) other similar discharges consistent with the
definition herein of Permitted Hazardous Substance Use, in each case in
strict compliance with Environmental Laws.

(iii) Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably required,
and to the extent not inconsistent with the other provisions of this
Improvements Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict compliance
with Environmental Laws.

(iv) If requested by BNPLC in connection with any Remedial Work required by
this subparagraph, NAI shall retain independent environmental consultants
acceptable to BNPLC to evaluate any significant new information generated
during NAI's implementation of the Remedial Work and to discuss with NAI
whether such new information indicates the need for any additional measures
that NAI should take to protect the health and safety of persons (including
employees, contractors and subcontractors and their employees) or to protect
the environment. NAI shall implement any such additional measures to the
extent required with respect to the Property by Environmental Laws or
otherwise believed by BNPLC to be reasonably required and to the extent not
inconsistent with the other provisions of this Improvements Lease.

(b) Right of BNPLC to do Remedial Work Not Performed by NAI.  If NAI's failure
to cure any breach of the covenants set forth in subparagraph 8.(a) continues
beyond the Environmental Cure Period (as defined below), BNPLC may, in

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addition to any other remedies available to it, conduct all or any part of the
Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.

(c) Environmental Inspections and Reviews.  BNPLC reserves the right to retain
environmental consultants to review any report prepared by NAI or to conduct
BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph 8.  NAI grants to BNPLC and to BNPLC's agents,
employees, consultants and contractors the right to enter upon the Property at
any time to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. NAI shall
promptly reimburse BNPLC for the fees of its environmental consultants and the
costs of any such inspections and tests.

(d) Communications Regarding Environmental Matters.

(i) NAI shall immediately advise BNPLC of (1) any discovery of any event or
circumstance which would render any of the representations of NAI herein or
in the Closing Certificate concerning environmental matters materially
inaccurate or misleading if made at the time of such discovery and assuming
that NAI was aware of all relevant facts, (2) any Remedial Work (or change
in Remedial Work) required or undertaken by NAI or its Affiliates in
response to any (A) discovery of any Hazardous Substances on, under or about
the Property other than Permitted Hazardous Substances or (B) any claim for
damages resulting from Hazardous Substance Activities, (3) NAI's discovery
of any occurrence or condition on any real property adjoining or in the
vicinity of the Property which could cause the Property or any part thereof
to be subject to any ownership, occupancy, transferability or use
restrictions under Environmental Laws, or (4) any investigation or inquiry
of any failure or alleged failure by NAI to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, NAI shall deliver to BNPLC
within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action that
NAI proposes to take with respect thereto, if any, to bring the Property
into compliance with Environmental Laws or to correct any breach by NAI of
this Paragraph 8, including any proposed Remedial Work, the estimated cost
and time of completion, the name of the contractor and a copy of the
construction contract, if any, and such additional data, instruments,
documents, agreements or other materials or information as BNPLC may
request.

(ii) NAI shall provide BNPLC with copies of all material written
communications with federal, state and local governments, or agencies
relating to the matters listed in the preceding clause (i). NAI shall also
provide BNPLC with copies of any correspondence from third Persons which
threaten litigation over any significant failure or alleged significant
failure of NAI to maintain or operate the Property in accordance with
Environmental Laws.

(iii) Prior to NAI's submission of a Material Environmental Communication to
any governmental or regulatory agency or third party, NAI shall, to the
extent practicable, deliver to BNPLC a draft of the proposed submission
(together with the proposed date of submission), and in good faith assess
and consider any comments of BNPLC regarding the same. Promptly after
BNPLC's request, NAI shall meet with BNPLC to discuss the submission, shall
provide any additional information requested by BNPLC and shall provide a
written explanation to BNPLC addressing the issues

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raised by comments (if any) of BNPLC regarding the submission, including a
reasoned analysis supporting any decision by NAI not to modify the
submission in accordance with comments of BNPLC.

9. INSURANCE REQUIRED AND CONDEMNATION.

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

(b) Property Insurance.  Throughout the Term NAI will keep all Improvements
(including all alterations, additions and changes made to the Improvements)
insured against fire and other casualty under one or more property insurance
policies that satisfy the requirements set forth in Exhibit B.  NAI shall
deliver and maintain with BNPLC for each property insurance policy required by
this Improvements Lease written confirmation of the policy and the scope of the
coverage provided thereby issued by the applicable insurer or its authorized
agent, which confirmation must also satisfy the requirements set forth in
Exhibit B. If any of the Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which insurance shall have been
required hereunder, (i) BNPLC may, but shall not be obligated to, make proof of
loss if not made promptly by NAI after notice from BNPLC, (ii) each insurance
company concerned is hereby authorized and directed to make payment for such
loss directly to BNPLC for application as required by Paragraph , and (iii)
BNPLC may settle, adjust or compromise any and all claims for loss, damage or
destruction under any policy or policies of insurance (provided, that if any
such claim is for less than $500,000, if no CMA Termination Event shall have
occurred and no Event of Default shall have occurred and be continuing, NAI
shall have the right to settle, adjust or compromise the claim as NAI deems
appropriate; and, provided further, that so long as no CMA Termination Event
shall have occurred and no Event of Default shall have occurred and be
continuing, BNPLC must provide NAI with at least forty-five days notice of
BNPLC's intention to settle any such claim before settling it unless NAI shall
already have approved of the settlement by BNPLC). If any casualty shall result
in damage to or loss or destruction of the Property, NAI shall give immediate
notice thereof to BNPLC and Paragraph 10 shall apply.

(c) Failure to Obtain Insurance.  If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Improvements
Lease, BNPLC shall be entitled (but not required) to obtain the insurance that
NAI has failed to obtain or for which NAI has not provided the required
confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require NAI to reimburse BNPLC for the cost of such
insurance and to pay interest thereon computed at the Default Rate from the date
such cost was paid by BNPLC until the date of reimbursement by NAI (provided,
however, that any such insurance cost paid by BNPLC prior to the Base Rent
Commencement Date will be charged against the Construction Allowance under the
Construction Management Agreement as if it had been paid by NAI).

(d) Condemnation.  Immediately upon obtaining knowledge of the institution of
any proceedings for the condemnation of the Property or any portion thereof, or
any other similar governmental or quasi-governmental proceedings arising out of
injury or damage to the Property or any portion thereof, each party shall notify
the other (provided, however, BNPLC shall have no liability for its failure to
provide such notice) of the pendency of such proceedings. NAI shall, at its
expense, diligently prosecute any such proceedings and shall consult with BNPLC,
its attorneys and experts and cooperate with them as requested in the carrying
on or defense of any such proceedings. All proceeds of condemnation awards or
proceeds of sale in lieu of condemnation with respect to the Property and all
judgments, decrees and awards for injury or damage to the Property shall be paid
to BNPLC as Escrowed Proceeds, and all such proceeds will be applied as provided
in Paragraph 10. BNPLC is hereby authorized, in the name of NAI, at any time
after a CMA Termination Event or when an Event of Default shall have occurred
and be continuing, or otherwise with NAI's prior consent, to execute and deliver
valid acquittances

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for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Property. BNPLC shall not be in any event or
circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.

(e) Waiver of Subrogation. NAI, for itself and for any Person claiming through
it (including any insurance company claiming by way of subrogation), waives any
and every claim which arises or may arise in its favor against BNPLC or any
other Interested Party and the officers, directors, and employees of the
Interested Parties for any and all Losses, to the extent that NAI is compensated
by insurance or would be compensated by the insurance policies contemplated in
this Improvements Lease, but for any deductible or self-insured retention
maintained under such insurance or but for a failure of NAI to maintain the
insurance as required by this Improvements Lease. NAI agrees to have such
insurance policies properly endorsed so as to make them valid notwithstanding
this waiver, if such endorsement is required to prevent a loss of insurance.

10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS. 

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

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

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

(b) Advances of Escrowed Proceeds to NAI.  Except as otherwise provided below in
this Paragraph 10, BNPLC shall advance all Remaining Proceeds held by it as
Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to NAI of
repairing or restoring the Property in accordance with the requirements of this
Improvements Lease and the other Operative Documents as the applicable repair or
restoration progresses and upon compliance by NAI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC. In no event, however,
shall BNPLC be required to pay Escrowed Proceeds to NAI in excess of the actual
out-of-pocket cost to NAI of the applicable repair or restoration, as evidenced
by invoices or other documentation satisfactory to BNPLC, it being understood
that BNPLC may retain and apply any such excess as a Qualified Prepayment.

(c) Application of Escrowed Proceeds as a Qualified Prepayment.  Provided NAI
has completed the Construction Project pursuant to the Construction Management
Agreement and no Event of Default shall have occurred and be continuing, BNPLC
shall apply any Remaining Proceeds paid to it (or other amounts available for
application as a Qualified

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Prepayment) as a Qualified Prepayment on any date that BNPLC is directed to do
so by a notice from NAI; however, if such a notice from NAI specifies an
effective date for a Qualified Prepayment that is less than five Business Days
after BNPLC's actual receipt of the notice, BNPLC may postpone the date of the
Qualified Prepayment to any date not later than five Business Days after BNPLC's
receipt of the notice. In any event, except when BNPLC is required by the
preceding sentence to apply Remaining Proceeds or other amounts as a Qualified
Prepayment on an Advance Date or Base Rent Date, BNPLC may deduct Breakage Costs
incurred in connection with any Qualified Prepayment from the Remaining Proceeds
or other amounts available for application as the Qualified Prepayment, and NAI
will reimburse BNPLC upon request for any such Breakage Costs that BNPLC incurs
but does not deduct.

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

(e) NAI's Obligation to Restore.  Regardless of the adequacy of any Remaining
Proceeds available to NAI hereunder, and notwithstanding other provisions of
this Improvements Lease to the contrary:

(1) If, prior to the Base Rent Commencement Date, the Property is damaged by
fire or other casualty or any part of the Property is taken by condemnation,
NAI shall to the maximum extent possible, as part of the Work contemplated
in the Construction Management Agreement, restore the Property or the
remainder thereof and continue construction of the Construction Project on
and subject to the terms and conditions set forth in the Construction
Management Agreement. However, any additional costs required to complete the
Construction Project resulting from such a casualty or taking prior to the
Base Rent Commencement Date shall, to the extent not covered by Remaining
Proceeds paid to NAI as provided in this Improvements Lease, be subject to
reimbursement by BNPLC under the Construction Management Agreement on the
same terms and conditions that apply to reimbursements of other costs of the
Work thereunder.

(2) If, on or after the Base Rent Commencement Date, the Property is
damaged by fire or other casualty or less than all or substantially all of
the Property is taken by condemnation, NAI must:

A) increase the value of the Property or the remainder thereof
by restoring or improving the same (in a manner consistent with the
requirements and limitations imposed by this Improvements Lease and
the other Operative Documents or otherwise acceptable to BNPLC), or
decrease Stipulated Loss Value by tendering a payment to BNPLC for
application as a Qualified Prepayment, as necessary to cause Current
AS IS Market Value to be not less than sixty percent (60%) of
Stipulated Loss Value; and

B) restore the Property or the remainder thereof to a reasonably
safe and sightly condition.

(f) Takings of All or Substantially All of the Property on or after the Base
Rent Commencement Date.  In the event of any taking of all or substantially all
of the Property on or after the Base Rent Commencement Date, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such condemnation, then BNPLC shall be
entitled to recover the excess from NAI upon demand as an additional Qualified
Prepayment, whereupon this Improvements Lease shall terminate. Any taking of so
much of the Real Property as, in BNPLC's reasonable good faith judgment, makes
it impracticable to restore or improve the remainder thereof as required by part
(2) of the preceding subparagraph shall be considered a taking of substantially
all the Property for purposes of this Paragraph 10. 

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11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING THE
PROPERTY. NAI represents, warrants and covenants as follows:

(a) Compliance with Covenants and Laws.  The use of the Property permitted by
this Improvements Lease complies, or will comply after NAI obtains available
permits as the tenant under this Improvements Lease, in all material respects
with all Applicable Laws. NAI has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for the
construction contemplated herein and the use of the Property permitted by this
Improvements Lease.

(b) Operation of the Property.  During the Term, NAI shall operate the Property
in a good and workmanlike manner and substantially in compliance with all
Applicable Laws and will pay or cause to be paid all fees or charges of any kind
in connection therewith. (If NAI does not promptly correct any failure of the
Property to comply with Applicable Laws that is the subject of a written notice
given to NAI or BNPLC by any governmental authority, then for purposes of the
preceding sentence, NAI shall be considered not to have maintained the Property
"substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under the Construction Management
Agreement or materially and adversely affect the value of the Property or NAI's
use, occupancy or operations on the Property, NAI shall not, without BNPLC's
prior consent: (i) initiate or permit any zoning reclassification of the
Property; (ii) seek any variance under existing zoning ordinances applicable to
the Property; (iii) use or permit the use of the Property in a manner that would
result in such use becoming a nonconforming use under applicable zoning
ordinances or similar laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Property; or (v) consent to the annexation of the
Property to any municipality. If (A) a change in the zoning or other Applicable
Laws affecting the permitted use or development of the Property shall occur
after the Base Rent Commencement Date that reduces the value of the Property, or
(B) conditions or circumstances on or about the Property are discovered after
the Base Rent Commencement Date (such as the presence of an endangered species)
which substantially impede development and thereby reduce the value of the
Property, and if after any such reduction under clause (A) or (B) preceding the
Current AS IS Market Value of the Property is less than sixty percent (60%) of
Stipulated Loss Value, then NAI shall pay BNPLC upon request the amount by which
Current AS IS Market Value is less than sixty percent (60%) of Stipulated Loss
Value, for application as a Qualified Prepayment. During the Term, NAI shall not
cause or permit any drilling or exploration for, or extraction, removal or
production of, minerals from the surface or subsurface of the Property, and NAI
shall not do any act whereby the market value of the Property may reasonably be
expected to be materially lessened. During the Term, if NAI receives a written
notice or claim from any federal, state or other governmental entity that the
Property is not in compliance in any material respect with any Applicable Law,
or that any action may be taken against the owner of the Property because the
Property does not comply with Applicable Law, NAI shall promptly furnish a copy
of such notice or claim to BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPLC or
the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken by any governmental
authority against BNPLC or any property owned by BNPLC (including the Property)
because of such violation, or (iii) a Designated Sale Date upon which, 

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for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

(c) Debts for Construction, Maintenance, Operation or Development.  NAI shall
cause all debts and liabilities incurred in the construction, maintenance,
operation or development of the Property, including all debts and liabilities
for labor, material and equipment and all debts and charges for utilities
servicing the Property, to be promptly paid; provided, that nothing in this
subparagraph will be construed to require NAI to remove Liens Removable by
BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest NAI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, NAI bonds over to BNPLC's
reasonable satisfaction all such contested liens against the Property alleged to
secure an amount in excess of $500,000 (individually or in the aggregate), (2)
NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (3) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final; provided, however,
that in any event each such contest shall be concluded and the lien, interest
and costs must be paid by NAI prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPLC or its
directors, officers or employees because of the nonpayment thereof, (ii) the
date that any writ or order is issued under which the Property or any other
property in which BNPLC has an interest may be seized or sold or any other
action is taken against BNPLC or any property in which BNPLC has an interest
because of the nonpayment thereof, or (iii) a Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

(d) Repair, Maintenance, Alterations and Additions.  NAI shall keep the Property
in good order, operating condition and appearance and shall cause all necessary
repairs, renewals and replacements to be promptly made. NAI will not allow any
of the Property to be materially misused, abused or wasted, and NAI shall
promptly replace any worn-out fixtures and Personal Property with fixtures and
Personal Property comparable to the replaced items when new. NAI shall not,
without the prior consent of BNPLC, (i) remove from the Property any fixture or
Personal Property having significant value except such as are replaced by NAI by
fixtures or Personal Property of equal suitability and value, free and clear of
any lien or security interest (and for purposes of this clause "significant
value" will mean any fixture or Personal Property that has a value of more than
$100,000 or that, when considered together with all other fixtures and Personal
Property removed and not replaced by NAI by items of equal suitability and
value, has an aggregate value of $500,000 or more) or (ii) make material new
Improvements or alter Improvements in any material respect, except as part of
the Work performed in accordance with the Construction Management Agreement.
Without limiting the foregoing, NAI will notify BNPLC before making any
significant alterations to the Improvements after the completion of the
Construction Project. Nothing in this subparagraph, however, is intended to
limit NAI's rights and obligations under other express provisions of this
Improvements Lease and the Construction Management Agreement with respect to the
Construction Project.

(e) Permitted Encumbrances and Development Documents.  NAI shall during the Term
comply with and will cause to be performed all of the covenants, agreements and
obligations imposed upon the owner of any interest in the Property by the
Permitted Encumbrances (including the Existing Space Leases) or the Development
Documents. Without limiting the foregoing, NAI shall cause all amounts to be
paid when due, the payment of which is secured by any Lien against the Property
created by the Permitted Encumbrances. Without the prior consent of BNPLC, NAI
shall not enter into, initiate, approve or consent to any modification of any
Permitted Encumbrance or Development Document that would create or 

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expand or purport to create or expand obligations or restrictions which would
encumber BNPLC's interest in the Property. (Whether BNPLC must give any such
consent requested by NAI during the Term of this Improvements Lease shall be
governed by subparagraph 3(A) of the Closing Certificate and Agreement.)

(f) Books and Records Concerning the Property.  NAI shall keep books and records
that are accurate and complete in all material respects for the Property and,
subject to Paragraph 16.(c), will permit all such books and records (including
all contracts, statements, invoices, bills and claims for labor, materials and
services supplied for the construction and operation of any Improvements) to be
inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.

12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO 
SCHEDULE
1.  Throughout the Term of this Improvements Lease, NAI shall comply with the
requirements of Schedule 1 attached hereto.

13. FINANCIAL STATEMENTS AND OTHER REPORTS.

(a) Financial Statements; Required Notices; Certificates.  Throughout the Term
of this Improvements Lease, NAI shall deliver to BNPLC and to each Participant:

(i) as soon as available and in any event within one hundred twenty days
after the end of each fiscal year of NAI, a consolidated balance sheet of
NAI and its Consolidated Subsidiaries as of the end of such fiscal year and
a consolidated income statement and statement of cash flows of NAI and its
Consolidated Subsidiaries for such fiscal year, all in reasonable detail and
all prepared in accordance with GAAP and accompanied by a report and opinion
of accountants of national standing selected by NAI, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any qualifications or exceptions as to
the scope of the audit nor to any qualification or exception which BNPLC
determines, in BNPLC's reasonable discretion, is unacceptable;

(ii) as soon as available and in any event within sixty days after the end
of each of the first three quarters of each fiscal year of NAI, the
consolidated balance sheet of NAI and its Consolidated Subsidiaries as of
the end of such quarter and the consolidated income statement and the
consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and
all prepared in accordance with GAAP and certified by the chief financial
officer or controller of NAI (subject to year-end adjustments);

(iii) together with the financial statements furnished in accordance with
subparagraph 13.(a)(i)and 13.(a)(ii), a certificate of the chief financial
officer or controller of NAI: (i) certifying that to the knowledge of NAI no
Default or Event of Default under this Improvements Lease has occurred and
is continuing or, if a Default or Event of Default has occurred and is
continuing, a brief statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, (ii) certifying that the
representations of NAI set forth in the Operative Documents are true and
correct in all material respects as of the date thereof as though made on
and as of the date thereof or, if not then true and correct, a brief
statement as to why such representations are no longer true and correct, and
(iii) with computations demonstrating compliance with the financial
covenants contained in Schedule 1;

(iv) within five days after the end of each calendar month, a certificate of
the chief financial officer or controller of NAI certifying that at the end
of the preceding calendar month, NAI had sufficient cash and other assets
described in Paragraph 1 of Part II of Schedule 1 to comply with the
requirements of that paragraph;

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(v) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which NAI sends to NAI's
stockholders, and copies of all regular, periodic and special reports, and
all registration statements (other than registration statements on Form S-8
or any form substituted therefor) which NAI files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange;

(vi) upon request by BNPLC, 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 the dates to which the
Base Rent has been paid and either stating that to the knowledge of NAI no
Default or Event of Default under this Improvements Lease has occurred and
is continuing or, if a Default or Event of Default under this Improvements
Lease has occurred and is continuing, a brief statement as to the nature
thereof; it being intended that any such statement by NAI may be relied upon
by any prospective purchaser or mortgagee of the Property and by the
Participants

(vii) as soon as possible after, and in any event within ten days after NAI
becomes aware that, any of the following has occurred, with respect to which
the potential aggregate liability to NAI relating thereto is $500,000 or
more, a notice signed by a senior financial officer of NAI setting forth
details of the following and the response, if any, which NAI or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by NAI or an ERISA
Affiliate with respect to any of the following or the events or conditions
leading up to the following): (A) the assertion, to secure any Unfunded
Benefit Liabilities, of any Lien against the assets of NAI, against the
assets of any Plan or Multiemployer Plan or against any interest of BNPLC or
NAI in the Property, or (B) the taking of any action by the PBGC or any
other governmental authority against NAI to terminate any Plan of NAI or any
ERISA Affiliate of NAI or to cause the appointment of a trustee or receiver
to administer any such Plan ; and

(viii) such other information respecting the condition or operations,
financial or otherwise, of NAI, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC may from time to time
reasonably request.

BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.

14.            ASSIGNMENT AND SUBLETTING BY NAI.

(a) BNPLC's Consent Required.  Without the prior consent of BNPLC, NAI shall not
assign, transfer, mortgage, pledge or hypothecate this Improvements Lease or any
interest of NAI hereunder and shall not sublet all or any part of the Property,
by operation of law or otherwise; provided, that subject to subparagraph 14.(c)
below, if (and after) NAI completes the Construction Project pursuant to the
Construction Management Agreement and so long as no Event of Default has
occurred and is continuing: (1) NAI shall be entitled to sublet no more than
forty-nine percent (49%) (computed on the basis of square footage) of the
useable space in then existing and completed building Improvements, if any, so
long as (i) any sublease by NAI is made expressly subject and subordinate to the
terms hereof, and (ii) such sublease has a term equal to or less than the
remainder of the then effective Term of this Improvements Lease; and (2) NAI
shall be entitled to assign or transfer this Improvements Lease or any interest
of NAI hereunder to an Affiliate of NAI if both NAI and its Affiliate confirm
their joint and several liability hereunder by written notice given to BNPLC.

(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters. 
Consents and approvals of BNPLC which are required by this Paragraph will not be
unreasonably withheld or delayed, but NAI acknowledges that BNPLC's withholding
of such consent or approval shall be reasonable if BNPLC determines in good
faith that (1) giving the approval may materially increase BNPLC's risk of
liability for any existing or future environmental problem, or (2) giving the

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approval is likely to increase BNPLC's administrative burden of complying with
or monitoring NAI's compliance with the requirements of this Improvements Lease.

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

15. ASSIGNMENT BY BNPLC.

(a) Restrictions on Transfers.  Except by a Permitted Transfer, BNPLC shall not
assign, transfer, mortgage, pledge, encumber or hypothecate this Improvements
Lease or the other Operative Documents or any interest of BNPLC in and to the
Property during the Term without the prior consent of NAI, which consent NAI may
withhold in its sole discretion. Further, notwithstanding anything to the
contrary herein contained, if withholding taxes are imposed on the rents and
other amounts payable to BNPLC hereunder because of BNPLC's assignment of this
Improvements Lease to any citizen of, or any corporation or other entity formed
under the laws of, a country other than the United States, NAI shall not be
required to compensate BNPLC or any such assignee for the withholding tax. If,
in breach of this subparagraph, BNPLC transfer the Property or any part thereof
by a conveyance or that does not constitute a Permitted Transfer, with the
result that additional transfer taxes or other Impositions are assessed against
the Property or the owner thereof, BNPLC shall be required to pay such
additional transfer taxes or other Impositions.

(b) Effect of Permitted Transfer or other Assignment by BNPLC.  If, without
breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the Property
and assigns all of its rights under this Improvements Lease and the other
Operative Documents, then BNPLC shall thereby be released from any obligations
arising after such assumption under this Improvements Lease or the other
Operative Documents (other than any liability for a breach of any continuing
obligation to provide Construction Advances under the Construction Management
Agreement), and NAI shall look solely to each successor in interest of BNPLC for
performance of such obligations.

16. BNPLC's RIGHT OF ACCESS.

(a) During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraph 16.(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Improvements Lease or the other Operative Documents.

(b) If NAI fails to perform any act or to take any action required of it by this
Improvements Lease or the Closing Certificate, or to pay any money which NAI is
required by this Improvements Lease or the Closing Certificate to pay, and if
such failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Improvements Lease NAI
may be required to perform, and the performance thereof by BNPLC shall not
constitute a waiver of NAI's default. BNPLC may during the progress of any such
work permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all

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necessary materials, tools, and equipment. BNPLC shall not in any event be
liable for inconvenience, annoyance, disturbance, loss of business, or other
damage to NAI or the subtenants or invitees of NAI by reason of making such
repairs or the performance of any such work on or in the Property, or on account
of bringing materials, supplies and equipment into or through the Property
during the course of such work (except for any liability in excess of the
liability insurance limits established in Exhibit B resulting from death or
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of NAI under this Improvements Lease shall not
thereby be excused in any manner.

(c) NAI shall have no obligation to provide proprietary information (as defined
in the next sentence) to BNPLC, except and to the extent that (1) BNPLC
reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Improvements Lease and the other Operative
Documents without evaluating such information. For purposes of this Improvements
Lease "PROPRIETARY INFORMATION" includes NAI's intellectual property, trade
secrets and other confidential information of value to NAI about, among other
things, NAI's manufacturing processes, products, marketing and corporate
strategies, but in no event will "proprietary information" include any
disclosure of substances and materials (and their chemical composition) which
are or previously have been present in, on or under the Property at the time of
any inspections by BNPLC, nor will "proprietary information" include any
additional disclosures reasonably required to permit BNPLC to determine whether
the presence of such substances and materials has constituted a violation of
Environmental Laws. In addition, under no circumstances shall NAI have any
obligation to disclose to BNPLC or any other party any proprietary information
of NAI (including, without limitation, any pending applications for patents or
trademarks, any research and design and any trade secrets) except if and to the
limited extent reasonably necessary to comply with the express provisions of
this Improvements Lease or the other Operative Documents.

17. EVENTS OF DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" by NAI under this Improvements Lease:

(a) NAI shall fail to pay when due any installment of Rent due hereunder and
such failure shall continue for three (3) Business Days after NAI is notified in
writing thereof.

(b) NAI shall fail to cause any representation or warranty of NAI contained
herein or in the Construction Management Agreement or the Closing Certificate
that was false or misleading in any material respect when made to be made true
and not misleading (other than as described in the other clauses of this
Paragraph 17), or NAI shall fail to comply with any term, provision or covenant
of this Improvements Lease or of the Construction Management Agreement or the
Closing Certificate (other than as described in the other clauses of this
Paragraph 17), and in either case shall not cure such failure prior to the
earlier of (A) thirty days after written notice thereof is sent to NAI or (B)
the date any writ or order is issued for the levy or sale of any property owned
by BNPLC (including the Property) or any criminal prosecution is instituted or
overtly threatened against BNPLC or any of its directors, officers or employees
because of such failure; provided, however, that so long as no such writ or
order is issued and no such criminal prosecution is instituted or overtly
threatened, the period within which such failure may be cured by NAI shall be
extended for a further period (not to exceed an additional sixty days) as shall
be necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI shall promptly have commenced to cure
such failure and shall thereafter continuously prosecute the curing thereof with
reasonable diligence and (z) the extension of the period for cure will not, in
any event, cause the period for cure to extend beyond five days prior to the
expiration of this Improvements Lease.

(c) NAI shall abandon the Property.

(d) NAI or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of NAI described in the next sentence
when due (taking into consideration the time NAI may have to cure such failure,
if any, under the documents governing such Debt). As used in this clause
14(a)(v), "DEBT" shall include only Debt (as defined in the Common

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Definitions and Provisions Agreement (Phase II - Improvements)) of NAI or any of
its Subsidiaries now existing or arising in the future (a) payable to BNPLC or
any Affiliate of BNPLC, or (B) payable to any other Person and with respect to
which $3,000,000 or more is actually due and payable because of acceleration or
otherwise.

(e) NAI: (a) shall generally not, or be unable to, or shall admit in writing its
inability to, pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have had any such petition or application
filed against it; or (e) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty days or more.

(f) One or more final judgments, decrees or orders for the payment of money in
excess of $3,000,000 in the aggregate shall be rendered against NAI and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty consecutive days without NAI's having obtained an agreement (or
after the expiration or termination of an agreement) of the Persons entitled to
enforce such judgment, decrees or orders not to enforce the same pending
negotiations with NAI concerning the satisfaction or other discharge of the
same.

(g) NAI shall breach the requirements of Paragraph 12, which by reference to
Schedule 1 establishes certain financial covenants and other requirements.

(h) as of the effective date of this Improvements Lease, any of the
representations or warranties of NAI contained in subparagraphs 2(A) - (J) of
the Closing Certificate shall be false or misleading in any material respect.

(i) NAI shall fail to pay the full amount of any Supplemental Payment required
by the Purchase Agreement on the Designated Sale Date or shall fail to provide
Collateral as and when due pursuant to the Pledge Agreement Documents.

(j) NAI shall fail to comply with any term, provision or condition of the Pledge
Agreements after the expiration of any applicable notice and cure period set
forth in the Pledge Agreement.

18. REMEDIES.

(a) Basic Remedies.  At any time after an Event of Default and after BNPLC has
given any notice required by subparagraph 18.(b), BNPLC shall be entitled at
BNPLC's option (and without limiting BNPLC in the exercise of any other right or
remedy BNPLC may have, and without any further demand or notice except as
expressly described in this subparagraph 18.(a)), to exercise any one or more of
the following remedies:

(i) By notice to NAI, BNPLC may terminate NAI's right to possession of the
Property. A notice given in connection with unlawful detainer proceedings
specifying a time within which to cure a default shall terminate NAI's right
to possession if NAI fails to cure the default within the time specified in
the notice.

(ii) Upon termination of NAI's right to possession and without further
demand or notice, BNPLC may re-enter the Property in any manner not
prohibited by Applicable Law and take possession of all improvements,
additions, alterations, equipment and fixtures thereon and remove any
persons in possession thereof. Any property in the Improvements may be
removed and stored in a warehouse or elsewhere at the expense and risk of
and for the account of NAI.

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(iii) Upon termination of NAI's right to possession, this Improvements Lease
shall terminate and BNPLC may recover from NAI:

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

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

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

d) Any other amount necessary to compensate BNPLC for all the
detriment proximately caused by NAI's failure to perform NAI's
obligations under this Improvements Lease or which in the ordinary
course of things would be likely to result therefrom, including the
costs and expenses (including Attorneys' Fees, advertising costs and
brokers' commissions) of recovering possession of the Property,
removing persons or property therefrom, placing the Property in good
order, condition, and repair, preparing and altering the Property for
reletting, all other costs and expenses of reletting, and any loss
incurred by BNPLC as a result of NAI's failure to perform NAI's
obligations under the other Operative Documents.

The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall be
computed by allowing interest at the Default Rate. The "WORTH AT THE
TIME OF AWARD" of the amount referred to in subparagraph
18.(a)(iii)c) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).

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

(iv) BNPLC shall have the remedy described in California Civil Code Section
1951.4 (lessor may continue lease in force even after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations). Accordingly, even
if NAI has breached this Improvements Lease and abandoned the Property, this
Improvements Lease shall continue in effect for so long as BNPLC does not
terminate NAI's right to possession, and BNPLC may enforce all of BNPLC's
rights and remedies under this Improvements Lease, including the right to
recover the Rent as it becomes due under this Improvements Lease. NAI's
right to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 18.(a)(i) hereof. The following shall not
constitute a termination of NAI's right to possession:

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

b) The appointment of a receiver upon the initiative of BNPLC to
protect BNPLC's interest under this Improvements Lease; or

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

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(b) Notice Required So Long As the Purchase Option and NAI's Initial Remarketing
Rights and Obligations Continue Under the Purchase Agreement.  So long as NAI
remains in possession of the Property and there has been no termination of the
Purchase Option and NAI's Initial Remarketing Rights and Obligations as provided
Paragraph 4 of the Purchase Agreement, BNPLC's right to exercise remedies
provided in subparagraph 18.(a) will be subject to the condition precedent that
BNPLC shall have notified NAI, at a time when an Event of Default shall have
occurred and be continuing, of BNPLC's intent to exercise remedies provided in
subparagraph 18.(a) at least sixty days prior to exercising the remedies. The
condition precedent is intended to provide NAI with an opportunity to exercise
the Purchase Option or NAI's Initial Remarketing Rights and Obligations before
losing possession of the Property pursuant to subparagraph 18.(a).  The
condition precedent is not, however, intended to extend any period for curing an
Event of Default. Accordingly, if an Event of Default has occurred, and
regardless of whether any Event of Default is then continuing, BNPLC may proceed
immediately to exercise remedies provided in subparagraph 18.(a) at any time
after the earlier of (i) sixty days after BNPLC has given such a notice to NAI,
(ii) any date upon which NAI relinquishes possession of the Property, or (iii)
any termination of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations.

(c) Enforceability.  This Paragraph shall be enforceable to the maximum extent
not prohibited by Applicable Law, and the unenforceability of any provision in
this Paragraph shall not render any other provision unenforceable.

(d) Remedies Cumulative.  No right or remedy herein conferred upon or reserved
to BNPLC is intended to be exclusive of any other right or remedy, and each and
every such right and remedy shall be cumulative and in addition to any other
right or remedy given to BNPLC hereunder or now or hereafter existing in favor
of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Improvements Lease, BNPLC shall be entitled, to the extent
permitted by Applicable Law or in equity, to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the covenants,
agreements, conditions or provisions of this Improvements Lease, or to a decree
compelling performance of any of the other covenants, agreements, conditions or
provisions of this Improvements Lease to be performed by NAI, or to any other
remedy allowed to BNPLC at law or in equity. Nothing contained in this
Improvements Lease shall limit or prejudice the right of BNPLC to prove for and
obtain in proceedings for bankruptcy or insolvency of NAI by reason of the
termination of this Improvements Lease, an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount be
greater, equal to, or less than the amount of the loss or damages referred to
above. Without limiting the generality of the foregoing, nothing contained
herein shall modify, limit or impair any of the rights and remedies of BNPLC
under the Purchase Documents, and BNPLC shall not be required to give the sixty
day notice described in subparagraph 18.(b) as a condition precedent to any
acceleration of the Designated Sale Date or to taking any action to enforce the
Purchase Documents.

19. DEFAULT BY BNPLC. If BNPLC should default in the performance of any of its
obligations under this Improvements Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.

Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph will not in any event extend the time within which BNPLC must remove
Liens Removable by BNPLC as required by Paragraph beyond the Designated Sale
Date.

20. QUIET ENJOYMENT. Provided NAI pays the Base Rent and all Additional Rent
payable hereunder as and when due and payable and keeps and fulfills all of the
terms, covenants, agreements and conditions to be performed by NAI hereunder,
BNPLC shall not during the Term disturb NAI's peaceable and quiet enjoyment of
the Property; however, such enjoyment shall be subject to the terms, provisions,
covenants, agreements and conditions of this Improvements Lease, to Permitted

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37

Encumbrances, to Development Documents and to any other claims not constituting
Liens Removable by BNPLC. If any Lien Removable by BNPLC is claimed against the
Property, BNPLC will remove the Lien Removable by BNPLC promptly. Any breach by
BNPLC of this Paragraph shall render BNPLC liable to NAI for any monetary
damages proximately caused thereby, but as more specifically provided in
subparagraph 4.(b) above, no such breach shall entitle NAI to terminate this
Improvements Lease or excuse NAI from its obligation to pay Rent.

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

22. HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title and
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Improvements Lease
without BNPLC's consent, whether such termination occurs by lapse of time or
otherwise, such holding over shall constitute and be construed as a tenancy from
day to day only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the
day in question, times (ii) the Default Rate for such day; divided by (iii)
three hundred and sixty; subject, however, to all of the terms, provisions,
covenants and agreements on the part of NAI hereunder. No payments of money by
NAI to BNPLC after the termination of this Improvements Lease shall reinstate,
continue or extend the Term of this Improvements Lease and no extension of this
Improvements Lease after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both BNPLC and NAI.

23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS. NAI
acknowledges and agrees that nothing contained in this Improvements Lease shall
limit, modify or otherwise affect any of NAI's obligations under the other
Operative Documents, which obligations are intended to be separate, independent
and in addition to, and not in lieu of, the obligations set forth herein. In the
event of any inconsistency between the express terms and provisions of the
Purchase Documents and the express terms and provisions of this Improvements
Lease, the express terms and provisions of the Purchase Documents shall control.
In the event of any inconsistency between the express terms and provisions of
the Construction Management Agreement or the Closing Certificate and the express
terms and provisions of this Improvements Lease, the express terms and
provisions of this Improvements Lease shall control; provided, nothing herein
will limit or impair NAI's obligations under the Closing Certificate following
any expiration of termination of this Improvements Lease.

[The signature pages follow.]

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Improvements Lease
Agreement to be executed as of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By: 
-------------------------------------
Name:
-------------------------------
Title:

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39

[Continuation of signature pages to Lease Agreement dated to be effective May 3,
1999]

"BNPLC"

BNP LEASING CORPORATION

By:---------------------------------------

Lloyd G. Cox, Vice President

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Exhibit A

LEGAL DESCRIPTION

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

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Exhibit B

INSURANCE REQUIREMENTS

I.      LIABILITY INSURANCE:

A. NAI must maintain commercial general liability ("CGL") insurance on
an occurrence basis, affording immediate protection to the limit of not less
than $20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Improvements Lease (though such coverage
or the amount thereof shall in no way limit such indemnifications).

B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election. After the expiration of NAI's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by NAI, NAI may increase any deductible or self-insured retention
applicable to such insurance, but not to an amount in excess of $500,000.

C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Improvements Lease, and the insurance
company or companies providing the CGL insurance, must be acceptable to BNPLC.
BNPLC shall have the right from time to time and at any time to review and
approve such policy forms (including endorsements) and the insurance company or
companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until NAI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:

(1) Forms: CGL Insurance must be provided on Insurance Services
Office ("ISO") forms CG 0001 1093 or CG 0001 0196 or equivalent
substitute forms providing the same or greater coverage.

(2) Rating Requirements: Insurance must be provided through
insurance or reinsurance companies rated by the A.M. Best Company
of Oldwick, New Jersey as having a policyholder's rating of A or
better and a reported financial information rating of X or
better.

(3) Required Endorsements: CGL Insurance must be endorsed to
provide or include:

(a) in any policy containing a general aggregate limit, ISO
form amendment "Aggregate Limits of Insurance Per Location" CG
2504 1185 or equivalent substitute form;

(b) a waiver of subrogation, using ISO form CG 2404 1093 or
equivalent substitute form (and under the commercial umbrella, if
any), in favor of "BNP Leasing Corporation and other Interested
Parties (as defined in the Common Definitions and Provisions
Agreement (Phase II - Improvements) between Network Appliance,
Inc. and BNP Leasing Corporation dated May 3, 1999)";

(c) ISO additional insured form CG 2026 1185 or equivalent
substitute form, without modification (and under the commercial
umbrella, if any), designating as additional insureds "BNPLC and
other Interested Parties, as defined in the Common Definitions
and Provisions Agreement

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(Phase II - Improvements) between Network Appliance, Inc. and BNP
Leasing Corporation dated May 3, 1999)"; and

(d) provisions entitling BNPLC to 30 days' notice from the
insurer prior to any cancellation, nonrenewal or material
modification to the CGL coverage.

(4) Other Insurance: Each policy to contain standard CGL "other
insurance" wording, unmodified in any way that would make it
excess over or contributory with the additional insured's own
commercial general liability coverage.

II. PROPERTY INSURANCE:

A. NAI must maintain property insurance in "special form" (including
theft) or against "all risks," providing the broadest available coverage for all
Improvements (as defined in the Common Provisions and Definitions Agreement but
excluding those Improvements to be demolished by NAI prior to the commencement
of construction contemplated in the Construction Management Agreement) and
equipment included in the Property, on a blanket basis if multiple buildings are
involved, with no exclusions for vandalism, malicious mischief, or sprinkler
leakage, and including coverage against earthquake and all coverage perils
normally included within the definitions of extended coverage, vandalism,
malicious mischief and, if the Property is in a flood zone, flood. In addition,
boiler and machinery coverage must be maintained at all times by endorsement to
the property insurance policy or by separate policy. Also, during any period of
significant construction on any Improvements, the property insurance must
include builder's completed value risk insurance for such Improvements, with no
protective safeguard endorsement, and (without limiting the other requirements
of this Exhibit) builder's completed value risk insurance must provide the
following coverages:

(1)   materials and supplies at other locations awaiting
installation;

(2)   materials and supplies in transit to the worksite for
installation;

(3)   loss of use or consequential loss;

(4)   pollutant cleanup and removal;

(5)   freezing;

(6)   collapse during construction, resulting from fault, defect,
error or omission in design, plan, specification or
workmanship;

(7)   construction ordinance or law;

(8)   mechanical or electrical breakdown;

(9)   debris removal additional limit;

(10)  preservation of property;

(11)  fire department service charge;

(12)  additional interest on construction loan due to delays in the
completion of construction;

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43

(13)  loss of rental income;

(14)  legal/professional fees (in the amount of no less than
$1,500,000) and other soft costs as reasonably determined by
NAI, subject to BNPLC's approval.

B. The property insurance required hereby must provide coverage in the
amount no less than replacement value (exclusive of land, foundation, footings,
excavations and grading) with endorsements for contingent liability from
operation of building laws, increased cost of construction and demolition costs
which may be necessary to comply with building laws. Subject to the approval of
BNPLC, NAI will be responsible for determining the amount of property insurance
to be maintained from time to time, but NAI must maintain such coverage on an
agreed value basis to eliminate the effects of coinsurance.

C. Any deductible or self-insured retention applicable to the property
insurance shall not exceed $50,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election; provided, that with respect to earthquake
coverage the deductible may be as high as five percent of the value of the
Improvements. After the expiration of NAI's right to exercise any Issue 97-10
Election, and provided no Issue 97-10 Election has been exercised by NAI, NAI
may increase any deductible or self-insured retention applicable to such
insurance, provided the increased amount shall not exceed (1) $500,000 for all
coverages other than earthquake coverage, and (2) for earthquake coverage only,
five percent of the aggregate amount of the property insurance required to
satisfy this Improvements Lease, calculated as described in the preceding
paragraph.

D. The property insurance shall cover not only the value of NAI's
interest in the Improvements, but also the interest of BNPLC, with BNPLC shown
as an insured as its interests may appear.

E. The forms of insurance policies (including endorsements) used to
provide the property insurance required by this Improvements Lease, and the
insurance company or companies providing the property insurance, must be
acceptable to BNPLC. BNPLC shall have the right from time to time and at any
time to review and approve such policy forms (including endorsements) and the
insurance company or companies providing such insurance. Without limiting the
generality of the foregoing, BNPLC may reasonably require (and unless and until
NAI is otherwise notified by BNPLC, BNPLC does require) that such insurance be
provided under forms and by companies consistent with the following:

(1) Rating Requirements: Insurance to be provided through insurance
or reinsurance companies rated by the A.M. Best Company of Oldwick, New
Jersey as having (a) a policyholder's rating of A or better, (b) a
reported financial information rating of no less than X, and (c) in the
case of each insurance or reinsurance company, a reported financial
information rating which indicates an adjusted policyholders' surplus
equal to or greater than the underwriting exposure that such company has
under the insurance or reinsurance it is providing for the Property.

(2)   Required Endorsements: NAI's property insurance must be
endorsed to provide or include:

(a)   a waiver of subrogation in favor of "BNPLC and other
Interested Parties, as defined in the Common Definitions and
Provisions Agreement (Phase II - Improvements) between Network
Appliance, Inc. and BNP Leasing Corporation dated May 3,
1999)";

(b)   that NAI's insurance is primary, with any policies of BNPLC or
other Interested Parties being excess, secondary and
noncontributing;

(c)   that the protection afforded to BNPLC by such insurance shall
not be reduced or impaired by acts or omissions of NAI or any
other beneficiary or insured; and

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44
(d)   that BNPLC must be notified at least thirty days prior to any
cancellation, nonrenewal or reduction of insurance coverage.

III.  OTHER INSURANCE RELATED REQUIREMENTS:

A. BNPLC must be notified in writing immediately by NAI of claims
against NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.

B. NAI's property insurance must be evidenced by ACORD form 27 "Evidence
of Property Insurance" completed and interlineated in a manner satisfactory to
BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the property insurance must be attached to such form.

C. NAI's CGL insurance must be evidenced by ACORD form 25 "Certificate
of Insurance" completed and interlineated in a manner satisfactory to BNPLC to
show compliance with the requirements of this Exhibit. Copies of endorsements to
the CGL insurance must be attached to such form.

D. Such evidence of required insurance must be delivered upon execution
of this Improvements Lease and new certificate or evidence of insurance must be
delivered no later than 10 days prior to expiration of existing policy.

E. NAI shall not cancel, fail to renew, or make or permit any material
reduction in any of the policies or certificates described in this Exhibit
without the prior written consent of BNPLC. The certificates (ACORD forms 27 and
25) described in this Exhibit must contain the following express provision:

"This is to certify that the policies of insurance described herein have been
issued to the insured Network Appliance, Inc. for whom this certificate is
executed and are in force at this time. In the event of cancellation,
non-renewal, or material reduction in coverage affecting the certificate holder,
at least sixty days prior notice shall be given to the certificate holder."

F. The limits of liability under the liability insurance required by
this Improvements Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.

G. NAI shall provide copies, certified as complete and correct by an
authorized agent of the applicable insurer, of all insurance policies required
by this Exhibit within ten days after receipt of a request for such copies from
BNPLC.

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Exhibit C

NOTICE OF LIBOR PERIOD ELECTION

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Lease Agreement (Phase II - Improvements) and Lease Agreement (Phase
II - Land), both dated as of May 3, 1999, and both between Network Appliance,
Inc., as tenant, and BNP Leasing Corporation, as landlord

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements shall be:

________________ month(s),

beginning with the first Base Rent Period that commences on or after:

______________, ____.

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

Executed this _____ day of ______________, 19___.

Network Appliance, Inc.

Name: 
-------------------------------
Title: 
------------------------------

[cc all Participants]

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46
Schedule 1

FINANCIAL COVENANTS

This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase II - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of May 3, 1999 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase II - 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 II - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and Banque
Nationale de Paris, as a Participant and as agent for any financial institutions
that become Participants thereunder from time to time, and (d) the Pledge
Agreement (Phase II - Land) (collectively with the Pledge Agreement
(Improvements), the "PLEDGE AGREEMENTS") dated to be effective as of the
Effective Date, among BNPLC, NAI, and Banque Nationale de Paris, 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.

"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and the earlier of
the following dates after each fiscal quarter of NAI that ends after the Base
Rent Commencement Date : (1) the seventh Business Day after the release by NAI
of its financial statements for the fiscal quarter; or (2) the first Business
Day of the third calendar month following the end of the fiscal quarter.

"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
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

1

47
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).

"MANDATORY COLLATERAL PERIOD" means any period during which, notwithstanding any
contrary designation of a Collateral Percentage by NAI under the Pledge
Agreements, the Collateral Percentage for purposes of the Pledge Agreements
shall be one hundred percent (100%), determined as set forth in Part III of this
Schedule 1.

"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 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.

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48
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 - TESTS FOR MANDATORY COLLATERAL PERIODS

The period commencing on any Collateral Test Date, and ending on the
next Collateral Test Date, shall constitute a Mandatory Collateral Period if, at
the end of the latest fiscal quarter of NAI ending before such period, NAI shall
have both:

(A) failed to maintain a ratio of (1) the sum (without duplication of
any item) of Collateral delivered and pledged under the Pledge Agreements in
accordance with the requirements thereof (if any), unencumbered 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 (2) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis), of at least 1.25 to 1.00
through and including the end of the last quarter of NAI's fiscal year 2000, and
of at least 1.50 to 1.00 thereafter; and.

(B) failed to maintain a ratio of (i) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis) to (ii) Consolidated Tangible
Net Worth of NAI, of no more than 0.45 to 1.00.

PART IV - 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:

3

49
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:

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.

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.

4

50
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 $20,000,000.00.

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 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.

5

51
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE II - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

AND

NETWORK APPLIANCE, INC.

DATED AS OF MAY 3, 1999

1

52
TABLE OF CONTENTS

Page
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ARTICLE I - LIST OF DEFINED TERMS:

ABSOLUTE NAI CONSTRUCTION OBLIGATIONS ...............................................         1
ACTIVE NEGLIGENCE ...................................................................         2
ADDITIONAL RENT .....................................................................         3
ADMINISTRATIVE AGENCY FEE ...........................................................         3
ADJUSTED EBIT .......................................................................         3
ADVANCE DATE ........................................................................         3
AFFILIATE ...........................................................................         3
APPLICABLE LAWS .....................................................................         3
APPLICABLE PURCHASER ................................................................         3
ARRANGEMENT FEE .....................................................................         3
ATTORNEYS' FEES .....................................................................         3
BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS ............................         3
BANKING RULES CHANGE ................................................................         3
BASE RATE ...........................................................................         4
BASE RENT ...........................................................................         4
BASE RENT COMMENCEMENT DATE .........................................................         4
BASE RENT DATE ......................................................................         4
BASE RENT PERIOD ....................................................................         5
BNPLC ...............................................................................         5
BNPLC's PARENT ......................................................................         6
BREAKAGE COSTS ......................................................................         6
BREAK EVEN PRICE ....................................................................         6
BUSINESS DAY ........................................................................         6
CAPITAL ADEQUACY CHARGES ............................................................         6
CAPITAL LEASE .......................................................................         6
CARRYING COSTS ......................................................................         6
CLOSING CERTIFICATE .................................................................         6
CMA SUSPENSION EVENT ................................................................         7
CMA SUSPENSION NOTICE ...............................................................         7
CMA SUSPENSION PERIOD ...............................................................         7
CMA TERMINATION EVENT ...............................................................         7
CODE ................................................................................         7
COLLATERAL ..........................................................................         7
COLLATERAL PERCENTAGE ...............................................................         7
COMMITMENT FEE RATE .................................................................         7
COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - IMPROVEMENTS) ...............         8
COMPLETION NOTICE ...................................................................         8
CONSTRUCTION ADVANCES ...............................................................         8
CONSTRUCTION ADVANCE REQUEST ........................................................         8
CONSTRUCTION ALLOWANCE ..............................................................         8
CONSTRUCTION MANAGEMENT AGREEMENT ...................................................         8

53

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CONSTRUCTION MILESTONE ..............................................................         9
CONSTRUCTION PERIOD .................................................................         9
CONSTRUCTION-PERIOD INDEMNITY PAYMENTS ..............................................         9
CONSTRUCTION PROJECT ................................................................         9
CURRENT AS IS MARKET VALUE ..........................................................         9
DEBT ................................................................................        10
DEFAULT .............................................................................        10
DEFAULT RATE ........................................................................        10
DEFAULTING PARTICIPANT ..............................................................        10
DEFECTIVE WORK ......................................................................        10
DEPOSIT TAKER .......................................................................        11
DEPOSIT TAKER LOSSES ................................................................        11
DESIGNATED SALE DATE ................................................................        11
DEVELOPMENT DOCUMENTS ...............................................................        11
DIRECT PAYMENTS TO PARTICIPANTS .....................................................        11
EFFECTIVE DATE ......................................................................        12
EFFECTIVE RATE ......................................................................        12
ENVIRONMENTAL LAWS ..................................................................        12
ENVIRONMENTAL CUTOFF DATE ...........................................................        12
ENVIRONMENTAL LOSSES ................................................................        12
ENVIRONMENTAL REPORTS ...............................................................        13
ERISA ...............................................................................        13
ERISA AFFILIATE .....................................................................        13
ESCROWED PROCEEDS ...................................................................        13
ESTABLISHED MISCONDUCT ..............................................................        13
EUROCURRENCY LIABILITIES ............................................................        14
EURODOLLAR RATE RESERVE PERCENTAGE ..................................................        14
EVENT OF DEFAULT ....................................................................        14
EXCLUDED TAXES ......................................................................        14
EXISTING CONTRACT ...................................................................        14
EXISTING SPACE LEASES ...............................................................        15
FAILED COLLATERAL TEST DATE .........................................................        15
FED FUNDS RATE ......................................................................        15
FOCB NOTICE .........................................................................        15
FUNDED CONSTRUCTION ALLOWANCE .......................................................        15
FUNDING ADVANCES ....................................................................        15
FUTURE WORK .........................................................................        15
GAAP ................................................................................        15
HAZARDOUS SUBSTANCE .................................................................        15
HAZARDOUS SUBSTANCE ACTIVITY ........................................................        16
IMPOSITIONS .........................................................................        16
IMPROVEMENTS ........................................................................        16
IMPROVEMENTS LEASE ..................................................................        16
INITIAL FUNDING ADVANCE .............................................................        16
INTERESTED PARTY ....................................................................        17
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT ......................        17
ISSUE 97-10 ELECTION ................................................................        17

54

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ISSUE 97-10 PREPAYMENT ..............................................................        17
LAND ................................................................................        18
LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION ........................................        18
LIBOR ...............................................................................        18
LIBOR PERIOD ELECTION ...............................................................        18
LIEN ................................................................................        19
LIENS REMOVABLE BY BNPLC ............................................................        19
LOSSES ..............................................................................        19
MANDATORY COLLATERAL PERIOD .........................................................        19
MATERIAL ENVIRONMENTAL COMMUNICATION ................................................        20
MAXIMUM CONSTRUCTION ALLOWANCE ......................................................        20
MAXIMUM PERMITTED TERMINATION FEES ..................................................        20
MAXIMUM PERMITTED PREPAYMENT ........................................................        20
MAXIMUM REMARKETING OBLIGATION ......................................................        20
MINIMUM EXTENDED REMARKETING PRICE ..................................................        20
MULTIEMPLOYER PLAN ..................................................................        20
NAI .................................................................................        20
NAI'S EXTENDED REMARKETING PERIOD ...................................................        20
NAI'S EXTENDED REMARKETING RIGHT ....................................................        20
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS ....................................        20
NORMAL TENANT IMPROVEMENTS ..........................................................        21
NOTICE OF NAI'S INTENT TO TERMINATE .................................................        21
OPERATIVE DOCUMENTS .................................................................        21
OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT ...................................        21
OTHER LEASE AGREEMENT ...............................................................        21
OTHER PURCHASE AGREEMENT ............................................................        21
OUTSTANDING CONSTRUCTION ALLOWANCE ..................................................        21
PARTICIPANT .........................................................................        21
PARTICIPATION AGREEMENT .............................................................        21
PBGC ................................................................................        22
PERIOD ..............................................................................        22
PERMITTED ENCUMBRANCES ..............................................................        22
PERMITTED HAZARDOUS SUBSTANCE USE ...................................................        22
PERMITTED HAZARDOUS SUBSTANCES ......................................................        22
PERMITTED TRANSFER ..................................................................        22
PERSON ..............................................................................        23
PERSONAL PROPERTY ...................................................................        23
PLAN ................................................................................        23
PLEDGE AGREEMENT ....................................................................        23
PRE-COMMENCEMENT CASUALTY ...........................................................        23
PREEMPTIVE NOTICE ...................................................................        23
PRIME RATE ..........................................................................        23
PRIOR WORK ..........................................................................        24
PROJECT COSTS .......................................................................        24
PROJECTED COST OVERRUNS .............................................................        25
PROPERTY ............................................................................        25
PURCHASE AGREEMENT ..................................................................        25

55

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PURCHASE DOCUMENTS ..................................................................        25
PURCHASE OPTION .....................................................................        25
QUALIFIED AFFILIATE .................................................................        25
QUALIFIED PREPAYMENTS ...............................................................        25
REAL PROPERTY .......................................................................        26
REIMBURSABLE CONSTRUCTION-PERIOD COSTS ..............................................        26
REMEDIAL WORK .......................................................................        26
RENT ................................................................................        26
RESIDUAL RISK PERCENTAGE ............................................................        26
RESPONSIBLE FINANCIAL OFFICER .......................................................        26
SALE CLOSING DOCUMENTS ..............................................................        26
SCOPE CHANGE ........................................................................        26
SECURED SPREAD ......................................................................        26
SELLER ..............................................................................        26
STIPULATED LOSS VALUE ...............................................................        26
SUBSIDIARY ..........................................................................        26
SUPPLEMENTAL PAYMENT ................................................................        27
TERM ................................................................................        27
THIRD PARTY CONTRACT ................................................................        27
THIRD PARTY PRICE ...................................................................        27
THIRD PARTY SALE NOTICE .............................................................        27
THIRD PARTY SALE PROPOSAL ...........................................................        27
THIRD PARTY TARGET PRICE ............................................................        27
TRANSACTION EXPENSES ................................................................        27
UNFUNDED BENEFIT LIABILITIES ........................................................        27
UPFRONT SYNDICATION FEES ............................................................        27
UNSECURED SPREAD ....................................................................        27
VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS ............................................        28
VOLUNTARY RETENTION OF THE PROPERTY .................................................        28
WORK ................................................................................        28

ARTICLE II - PROVISIONS USED IN COMMON:

1   NOTICES ........................................................................        29
2   SEVERABILITY ...................................................................        30
3   NO MERGER ......................................................................        30
4   NO IMPLIED WAIVER ..............................................................        31
5   ENTIRE AND ONLY AGREEMENTS .....................................................        31
6   BINDING EFFECT .................................................................        31
7   TIME IS OF THE ESSENCE .........................................................        31
8   GOVERNING LAW ..................................................................        31
9   PARAGRAPH HEADINGS .............................................................        31
10  NEGOTIATED DOCUMENTS ...........................................................        32
11  TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT ...........................        32
12  OTHER TERMS AND REFERENCES .....................................................        32

56

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13  EXECUTION IN COUNTERPARTS ......................................................        32
14  NOT A PARTNERSHIP, ETC .........................................................        32

57
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE II - IMPROVEMENTS)

This Common Definitions and Provisions Agreement (Phase II -
Improvements), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
dated as of May 3, 1999, the Effective Date.

RECITALS

Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase II - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Improvements Lease (as defined below), the Construction Management
Agreement (as defined below), and the Purchase Agreement (as defined below), all
of which concern the Property (as defined below). Each of the Closing
Certificate, the Improvements Lease, the Construction Management Agreement and
the Purchase Agreement (together with this Common Definitions and Provisions
Agreement (Phase II - Improvements) and the Pledge Agreement [as defined below],
the "OPERATIVE DOCUMENTS") are intended to create separate and independent
obligations upon the parties thereto. However, NAI and BNPLC intend that all of
the Operative Documents share certain consistent definitions and other
miscellaneous provisions. To that end, the parties are executing this Common
Definitions and Provisions Agreement (Phase II - Improvements) and incorporating
it by reference into each of the other Operative Documents.

AGREEMENTS

ARTICLE I - LIST OF DEFINED TERMS

UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL
HAVE THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:

"ABSOLUTE NAI CONSTRUCTION OBLIGATIONS" means the following:

(1) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Environmental Losses incurred or suffered
by any Interested Party;

(2) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
BNPLC would not have incurred or suffered but for any act or any omission of
NAI or of any NAI's contractors or subcontractors during the period that the
Construction Management Agreement remains in force or during any other
period that NAI remains in possession or control of the Construction Project
(excluding, however, as described below certain Losses consisting of claims
related to any failure by NAI to complete the Construction Project);

(3) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any fraud, misapplication of funds
(including 

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 1

58

Construction Advances), illegal acts, or willful misconduct on the part of
the NAI or its employees or agents or any other party for whom NAI is
responsible; and

(4) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any bankruptcy proceeding involving
NAI.

For purposes of clause (2) of this definition, "acts and omissions of NAI" shall
include (i) any decision by NAI to make a Scope Change without the prior
approval of BNPLC, (ii) any failure of NAI to maintain insurance required by the
Improvements Lease or the Construction Management Agreement, (iii) any decision
not to continue or complete Work under the Construction Management Agreement
because of a change in NAI's facility needs or in NAI's plans to meet its
facility needs (such as, for example, a decision by NAI to lease or acquire
another less expensive facility as an alternative to the Improvements), (iv) any
failure by NAI to reserve termination rights in Third Party Contracts as
required by subparagraph 1(A)(2)(b) of the Construction Management Agreement,
and (v) any other breach by NAI of the Construction Management Agreement.

Thus, for example, if a third party asserts a claim for damages against BNPLC
because of injuries the third party sustained while on the Land as a result of
NAI's breach of its obligation under the Construction Management Agreement to
keep the Land and the Improvements thereon in a reasonably safe condition as
Work progresses under NAI's direction and control, then any Construction-Period
Indemnity Payment required because of such third party claim will constitute an
Absolute NAI Construction Obligation under clause (2) of this definition.
Similarly, if a claim against BNPLC by a third party injured on the Land during
the progress of the Work is uninsured or under-insured only because of NAI's
failure to obtain liability insurance in accordance with the requirements of the
Improvements Lease (the premiums for which insurance are reimbursable from
Construction Advances as provided in the Construction Management Agreement),
then Construction-Period Indemnity Payments to BNPLC for the uninsured or
under-insured Losses arising out of the third party claim will constitute
Absolute NAI Construction Obligations under clause (2) of this definition.

It is understood, however, that a failure of NAI to complete construction of the
Construction Project will not necessarily constitute a breach of the
Construction Management Agreement, given that NAI may elect to terminate the
Construction Management Agreement as provided in subparagraph 5(D) thereof. In
the event the Construction Management Agreement is terminated by NAI pursuant to
subparagraph 5(D) thereof or by BNPLC pursuant to subparagraph 5(E) thereof,
clause (2) of this definition will not be construed to include
Construction-Period Indemnity Payments, the sole reason for which are Losses
suffered by BNPLC consisting of claims related to NAI's failure to complete the
Construction Project.

"ACTIVE NEGLIGENCE" of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Improvements Lease to
carry) insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent
failure of BNPLC to act when the duty to act would not have been imposed but for
BNPLC's status as owner of the Land, the Improvements or any interest in any
other Property or as a party to the transactions described in the Improvements
Lease or the other Operative Documents or in the Other Lease Agreement or the
Other Purchase Agreement, (2) any negligent failure of any other Interested
Party to act when the duty to act would not have been imposed but for such
party's contractual or other relationship to BNPLC or participation or
facilitation in any manner, directly or indirectly, of the transactions
described in the Improvements Lease or other Operative Documents or in the Other
Lease Agreement or Other Purchase Agreement, or (3) the exercise in a lawful
manner by BNPLC (or any party lawfully claiming through or under BNPLC) of any
right or remedy provided in or under the Improvements Lease or the other
Operative Documents or in the Other Lease Agreement or Other Purchase Agreement.

"ADDITIONAL RENT" shall have the meaning assigned to it in subparagraph
of the Improvements Lease.

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59

"ADMINISTRATIVE AGENCY FEE" shall have the meaning assigned to it in
subparagraph 9 of the Improvements Lease.

"ADJUSTED EBIT" shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Improvements Lease and to the Pledge Agreement.

"ADVANCE DATE" means, regardless of whether any Construction Advance
shall actually be made thereon, the first Business Day of every calendar month,
beginning with the first Business Day in May, 1999 and continuing regularly
thereafter to and including the Base Rent Commencement Date.

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

"APPLICABLE LAWS" means any or all of the following, to the extent
applicable to NAI or the Property or the Improvements Lease or the other
Operative Documents: restrictive covenants; zoning ordinances and building
codes; flood disaster laws; health, safety and environmental laws and
regulations; the Americans with Disabilities Act and other laws pertaining to
disabled persons; and other laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions.

"APPLICABLE PURCHASER" means any third party designated by NAI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.

"ARRANGEMENT FEE" shall have the meaning assigned to it in subparagraph
3.(e) of the Improvements Lease.

"ATTORNEYS' FEES" means the expenses and reasonable fees of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.

"BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have
the meaning assigned to it in subparagraph 1(B)(1) of the Purchase Agreement.

"BANKING RULES CHANGE" means either: (1) the introduction of or any
change in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).

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60

"BASE RATE" for any Construction Period or Base Rent Period means a
rate equal to the higher of (1) the Prime Rate in effect on the first day of
such period, or (2) the rate which is fifty basis points (50/100 of 1%) above
the Fed Funds Rate for that period.

"BASE RENT" means the rent payable by NAI pursuant to subparagraph 3.(a)
of the Improvements Lease.

"BASE RENT COMMENCEMENT DATE" means the earlier of (1) the first
Business Day of July, 2000, (2) the first Business Day of the first calendar
month to follow by twenty days or more the day upon which any Completion Notice
is given, or (3) the first Business Day of the first calendar month upon which
the Funded Construction Allowance shall equal or exceed the Maximum Construction
Allowance. For example, if on the first Business Day of November, 1999
construction of the Construction Project is continuing, the Funded Construction
Allowance is $18,990,000 (before adding any Carrying Costs for the preceding
month) and the Maximum Construction Allowance is $19,000,000, and if Carrying
Costs of $17,500 would be added to the Funded Construction Allowance on such day
if the Construction Allowance were not limited to the Maximum Construction
Allowance, then (absent an extension by BNPLC as described below) such day shall
be the Base Rent Commencement Date and on such day $10,000 will be added to the
Funded Construction Allowance as Carrying Cost and $7,500 will be payable as
Base Rent pursuant to subparagraph 3.(c)(i) of the Improvements Lease.
Notwithstanding the forgoing, if for any reason (including a termination of the
Construction Management Agreement) NAI has not completed the Construction
Project thirty days in advance of the scheduled Base Rent Commencement Date
determined pursuant to the first sentence of this definition, BNPLC shall be
entitled (but not obligated) to extend the Base Rent Commencement Date one or
more times and at any time before the Construction Project actually is complete
and ready for occupancy. To so extend the Base Rent Commencement Date, BNPLC
shall notify NAI thereof and of the date to which the Base Rent Commencement
Date is extended, which may be the first Business Day of any calendar month
designated by BNPLC in the notice of extension, provided that BNPLC will not so
designate any date more than sixty days after the date upon which the
Construction Project is expected by BNPLC (at the time of the designation) to be
complete.

"BASE RENT DATE" means a date upon which Base Rent must be paid under
the Improvements Lease, all of which dates shall be the first Business Day of a
calendar month. The first Base Rent Date shall be determined as follows:

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

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

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

(1) If a LIBOR Period Election of one month is in effect on a
Base Rent Date, then the first Business Day of the first calendar
month following such Base Rent Date shall be the next following Base
Rent Date.

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

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61

Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of September, 1999 and a LIBOR Period Election of two months
commences on the Base Rent Commencement Date, then the first Base Rent Date
shall be the first Business Day of November, 1999.

"BASE RENT PERIOD" means a period for which Base Rent must be paid
under the Improvements Lease, each of which periods shall correspond to the
LIBOR Period Election for such period. The first Base Rent Period shall begin on
and include the Base Rent Commencement Date, and each successive Base Rent
Period shall begin on and include the Base Rent Date upon which the preceding
Base Rent Period ends. Each Base Rent Period, including the first Base Rent
Period, shall end on but not include the first or second Base Rent Date after
the Base Rent Date upon which such period began, determined as follows:

(1) If the LIBOR Period Election for a Base Rent Period is one
month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
began.

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

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

1) If NAI makes a LIBOR Period Election of three months for a
hypothetical Base Rent Period beginning on the first Business Day in
January, 2001, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent
Period will end on the first Business Day in April, 2001, the third
calendar month after January, 2001.

2) If, however, NAI makes a LIBOR Period Election of six months
for the hypothetical Base Rent Period beginning the first Business
Day in January, 2001, then such Base Rent Period will end on but not
include the second Base Rent Date after it begins; that is, the first
Business Day in July, 2001.

"BNPLC" means BNP Leasing Corporation, a Delaware corporation.

"BNPLC's PARENT" means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.

"BREAKAGE COSTS" means any and all costs, losses or expenses incurred
or sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:

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

(2) reserved to provide a Construction Advance that NAI requests, but
thereafter declines to take for any reason, or that NAI requests but is not
permitted to take because of its failure to satisfy any of the conditions
specified in the Construction Management Agreement; or

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 5

62

(3) used to make or maintain Funding Advances upon the acceleration of
the end of any Base Rent Period pursuant subparagraph 3.(c)(iii) of the
Improvements Lease.

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

"BREAK EVEN PRICE" shall have the meaning assigned to it in
subparagraph 1(B)(1) of the Purchase Agreement.

"BUSINESS DAY" means any day that is (1) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in New
York City, New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (1).

"CAPITAL ADEQUACY CHARGES" means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(b)(ii) of the Improvements
Lease.

"CAPITAL LEASE" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP or for federal income tax
purposes.

"CARRYING COSTS" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(a) of the Improvements Lease.

"CLOSING CERTIFICATE" means the Closing Certificate and Agreement dated
as of May 3, 1999 executed by NAI in favor of BNPLC, as such Closing Certificate
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

"CMA SUSPENSION EVENT" shall have the meaning assigned to it in
subparagraph 5(A) of the Construction Management Agreement.

"CMA SUSPENSION NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(1) of the Construction Management Agreement.

"CMA SUSPENSION PERIOD" shall have the meaning assigned to it in
subparagraph 5(C) of the Construction Management Agreement.

"CMA TERMINATION EVENT" shall have the meaning assigned to it in
subparagraph 5(B)(3) of the Construction Management Agreement.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COLLATERAL" shall have the meaning assigned to it in the Pledge
Agreement.

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63

"COLLATERAL PERCENTAGE" for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Improvements Lease, the
Collateral Percentage for any Base Rent Period shall not exceed a fraction; the
numerator of which fraction shall equal the value (determined as provided in the
Pledge Agreement) of all Collateral (a) that is, on the first day of such
period, held by the Deposit Takers under (and as defined in) the Pledge
Agreement subject to a Qualifying Security Interest (as defined below), (b) that
is free from claims or security interests held or asserted by any third party,
and (c) that is not in excess of Stipulated Loss Value; and the denominator of
which fraction shall equal the Stipulated Loss Value on the first day of such
period. "QUALIFYING SECURITY INTEREST" means a first priority perfected security
interest under the Pledge Agreement.

"COMMITMENT FEE RATE" means, for each Construction Period, the amount
established as described below in this definition on the date (in this
definition, the "CFR TEST DATE") that is two Business Days prior to such
Construction Period by reference to the ratio calculated be dividing (1)
Adjusted EBIT for the then latest Rolling Four Quarters Period that ended prior
to (and for which NAI has reported earnings as necessary to compute Adjusted
EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined on a
consolidated basis) as of the end of such Rolling Four Quarters Period. The
Commitment Fee Rate shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:

(a) for any Construction Period commencing on or prior to the first
Business Day of June, 1999, the Commitment Fee Rate will be the amount
indicated for Level II in the pricing grid below;

(b) promptly after earnings are reported by NAI for the latest quarter
in any Rolling Four Quarters Period, NAI must notify BNPLC of any resulting
change in the Commitment Fee Rate under this definition, and no reduction in
the Commitment Fee Rate from one period to the next will be effective for
purposes of the Operative Documents unless, prior to the CFR Test Date for
the next period, NAI shall have provided BNPLC with a written notice setting
forth and certifying the calculation under this definition that justifies
the reduction; and

(c) notwithstanding anything to the contrary in this definition, on any
date when an Event of Default has occurred and is continuing, the Commitment
Fee Rate shall equal the amount indicated for Level V in the pricing grid
below.

RATIO OF TOTAL DEBT                        COMMITMENT
LEVELS                     TO ADJUSTED EBIT                          FEE RATE
--------------       -------------------------------------           -----------------

Level I                      less than 0.50                       25.0 basis points

Level II           greater than or equal to 0.50, but             25.0 basis points
less than 1.0

Level III           greater than or equal to 1.0, but              32.5 basis points
less than 1.5

Level IV           greater than or equal to 1.5, but              50.0 basis points
less than 2.0

Level V               greater than or equal to 2.0                50.0 basis points

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

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 7

64

"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - IMPROVEMENTS)"
means this Agreement, which is incorporated by reference into each of the other
Operative Documents.

"COMPLETION NOTICE" means (1) a notice required by subparagraph 1(B) of
the Construction Management Agreement from NAI to BNPLC, advising BNPLC when
construction of the Construction Project is substantially complete, or (2) a
notice permitted by subparagraph 6.(g) of the Improvements Lease from BNPLC to
NAI, advising NAI after any Landlord's Election to Complete Construction when
construction of the Construction Project is substantially complete or that BNPLC
no longer intends to continue such construction.

"CONSTRUCTION ADVANCES" means (1) actual advances of funds made by or
on behalf of BNPLC to or on behalf of NAI pursuant to Paragraph 2 of the
Construction Management Agreement, and (2) amounts considered as Construction
Advances pursuant to subparagraph 6.(e) of the Improvements Lease.

"CONSTRUCTION ADVANCE REQUEST" shall have the meaning assigned to it in
subparagraph 2(C)(1) of the Construction Management Agreement.

"CONSTRUCTION ALLOWANCE" means the allowance, consisting of
Construction Advances and Carrying Costs, which is to be provided for the
Construction Project as more particularly described in the Construction
Management Agreement and Paragraph 6 of the Improvements Lease.

"CONSTRUCTION MANAGEMENT AGREEMENT" means the Construction Management
Agreement dated as of May 3, 1999 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"CONSTRUCTION MILESTONE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.

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

"CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have the meaning
assigned to it in subparagraph 5.(d)(ii) of the Improvements Lease.

"CONSTRUCTION PROJECT" means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.

"CURRENT AS IS MARKET VALUE" means an amount equal to the fair market
value of BNPLC's interest in the Property (or any applicable portion thereof),
AS IS, WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a
determination of Current AS IS Market Value is required by the express terms of
any Operative Document, it will be determined accordance with the following
procedure unless BNPLC and NAI have otherwise agreed in writing upon a Current
AS IS Market Value at that time:

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 8

65

(A)     BNPLC and NAI shall each, within ten days after written notice
from either to the other, select an appraiser. If either BNPLC
or NAI fails to select an appraiser within the required period,
then the appraiser who has been timely selected shall
conclusively determine the fair market value of the Property (or
applicable portion thereof) in accordance with this definition
within forty-five days after his or her selection.

(B)     Upon the selection of the two appraisers as provided above, such
appraisers shall proceed to determine the fair market value of
BNPLC's interest in the Property (or applicable portion thereof)
in accordance with this clause (v). Such appraisals shall be
submitted in writing no later than forty-five days after
selection of the second appraiser. If the fair market value as
determined by such appraisers is identical, such sum shall be
Current AS IS Market Value. If the fair market value indicated
by the lower appraisal differs from the fair market value
indicated by the higher appraisal by less than five percent (5%)
of the fair market value indicated by the higher appraisal, then
Current AS IS Market Value shall be the sum of the two appraisal
figures divided by two (2). If either appraiser fails to timely
submit his or her appraisal, the timely submitted appraisal
shall be determinative of Current AS IS Market Value.

(C)     If the fair market value indicated by the lower appraisal
differs from the fair market value indicated by the higher
appraisal by more than five percent (5%) of the fair market
value indicated by the higher appraisal, then the two appraisers
previously selected shall select a third appraiser. The name of
such appraiser shall be submitted at the same time the written
appraisals are due. Such third appraiser shall then review the
previously submitted appraisals and select the one that, in his
professional opinion, more closely reflects the fair market
value of BNPLC's interest in the Property (or applicable portion
thereof), such selection to be submitted in writing no later
than ten days after selection of the third appraiser. Such
selection shall be determinative of Current AS IS Market Value.

(D)     In making any such determination of fair market value, the
appraisers shall assume that any improvements then located on
the Property (or applicable portion thereof) or under
construction thereon constitute the highest and best use, and
that neither the Improvements Lease nor the Purchase Agreement
add any value to the Property. Each appraiser selected hereunder
shall be an independent MAI-designated appraiser with not less
than ten years' experience in commercial real estate appraisal
in Sunnyvale, California and surrounding areas.

"DEBT" of any Person means (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
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

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 9

66

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.

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

"DEFAULT RATE" means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.

"DEFAULTING PARTICIPANT" shall have the meaning assigned to it in
Section 1 of the Participation Agreement.

"DEFECTIVE WORK" shall have the meaning assigned to it in subparagraph
1(A)(2)(f) of the Construction Management Agreement.

"DEPOSIT TAKER" shall have the meaning assigned to it in the Pledge
Agreement.

"DEPOSIT TAKER LOSSES" shall have the meaning assigned to it in the
Pledge Agreement.

"DESIGNATED SALE DATE" means the earlier of:

(1) the first Business Day of May, 2004; or

(2) any Business Day designated as such in an irrevocable, unconditional
notice given by NAI to BNPLC before NAI has made an Issue 97-10 Election;
provided, that to be effective for purposes of this definition, any such
notice from NAI to BNPLC must designate a Business Day that is more than
thirty days after the date of such notice; and provided, further, to be
effective for purposes of this definition, the notice must include an
express, unconditional, unequivocal and irrevocable (A) waiver by NAI of any
remaining right NAI may have under any of the Operative Documents to make
any Issue 97-10 Election, and (B) acknowledgment by NAI that because of
NAI's election to accelerate the Designated Sale Date, the Maximum
Remarketing Obligation will equal the Break Even Price under the Purchase
Agreement; or

(3) any Business Day designated as such in a notice given by BNPLC to
NAI after the effective date of any termination of the Construction
Management Agreement as provided in subparagraphs 5(D) or 5(E) thereof;
provided, that to be effective for purposes of this definition, any such
notice from BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice; or

(4) the first Business Date after any termination by NAI of the Purchase
Option and NAI's Initial Remarketing Rights and Obligations as provided in
subparagraph 4(B) of the Purchase Agreement; or

(5) any Business Day designated as such in a notice given by BNPLC to
NAI when any Event of Default has occurred and is continuing; provided, that
to be effective for purposes of this definition, any such notice from BNPLC
to NAI must designate a Business Day that is more than thirty days after the
date of such notice.

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 10

67

"DEVELOPMENT DOCUMENTS" means the contracts, ordinances and other
documents described in Exhibit C attached to the Closing Certificate, as the
same may be modified from time to time in accordance with the Improvements Lease
and the Closing Certificate, and any applications, permits or certificates
concerning or affecting the use or development of the Property that may be
submitted, issued or executed from time to time as contemplated in such
contracts, ordinances and other documents or that BNPLC may hereafter execute,
approve or consent to at the request of NAI.

"DIRECT PAYMENTS TO PARTICIPANTS" means the amounts paid or required to
be paid directly to Participants on the Designated Sale Date as provided in
Section 6.2 of the Pledge Agreement at the direction of and for NAI by the
collateral agent appointed pursuant to the Pledge Agreement from all or any part
of the Collateral described therein.

"EFFECTIVE DATE" means May 3, 1999.

"EFFECTIVE RATE" means for each Construction Period and for each Base
Rent Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, then the Effective Rate shall be automatically
increased or decreased as of the date of such change, as the case may be,
without prior notice to NAI. If for any reason BNPLC determines that it is
impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the foregoing, then the "EFFECTIVE RATE" for that Construction Period or Base
Rent Period shall equal any published index or per annum interest rate
determined in good faith by BNPLC's Parent to be comparable to LIBOR at the
beginning of the first day of that period. A comparable interest rate might be,
for example, the then existing yield on short term United States Treasury
obligations (as compiled by and published in the then most recently published
United States Federal Reserve Statistical Release H.15(519) or its successor
publication), plus or minus a fixed adjustment based on BNPLC's Parent's
comparison of past eurodollar market rates to past yields on such Treasury
obligations. Any determination by BNPLC of the Effective Rate under this
definition shall, in the absence of clear and demonstrable error, be conclusive
and binding upon NAI.

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

"ENVIRONMENTAL CUTOFF DATE" means the later of the dates upon which (i)
the Improvements Lease terminates, or (ii) NAI surrenders possession and control
of the Property and ceases to have interest in the Land or Improvements or
rights with respect thereto under any of the Operative Documents.

"ENVIRONMENTAL LOSSES" means Losses suffered or incurred by BNPLC or
any other Interested Party, directly or indirectly, relating to or arising out
of, based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable Environmental Laws
relating to the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity that occurs or is
alleged to have occurred on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, 

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68

whether meritorious or not, brought or asserted against any Interested Party
which directly or indirectly relates to, arises from, is based on, or results
from any of the matters described in clauses (i), (ii), or (iii) of this
definition or any allegation of any such matters. For purposes of determining
whether Losses constitute "Environmental Losses," as the term is used in the
Improvements Lease, any actual or alleged Hazardous Substance Activity or
violation of Environmental Laws relating to the Property will be presumed to
have occurred prior to the Environmental Cutoff Date unless NAI establishes by
clear and convincing evidence to the contrary that the relevant Hazardous
Substance Activity or violation of Environmental Laws did not occur or commence
prior to the Environmental Cutoff Date.

"ENVIRONMENTAL REPORTS" means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I dated March 1997 by Hygeienetics Environmental Services,
Inc.; Phase I dated June 1998 by Dames & Moore; and, an Asbestos Containing
Material Survey conducted in 1989 by Vesar, Inc.

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

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

"ESCROWED PROCEEDS" means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Escrowed Proceeds" there shall be deducted all expenses and costs of every
type, kind and nature (including Attorneys' Fees) incurred by BNPLC to collect
such proceeds. Notwithstanding the foregoing, "Escrowed Proceeds" will not
include (A) any payment to BNPLC by a Participant or an Affiliate of BNPLC that
is made to compensate BNPLC for the Participant's or Affiliate's share of any
Losses BNPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4), (B) any money or proceeds that have been
applied as a Qualified Prepayment or to pay any Breakage Costs or other costs
incurred in connection with a Qualified Prepayment, (C) any money or proceeds
that, after no less than ten days notice to NAI, BNPLC returns or pays to a
third party because of BNPLC's good faith belief that such return or payment is
required by law, (D) any money or proceeds paid by BNPLC to NAI or offset
against any amount owed by NAI, or (E) any money or proceeds used by BNPLC in
accordance with the Improvements Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph 10 of the Improvements
Lease, transferred to a purchaser under the Purchase Agreement as therein
provided or applied as a Qualified Prepayment or as otherwise described in the
preceding sentence, BNPLC shall keep the same deposited in one or more interest
bearing accounts, and all interest earned on such account shall be added to and
made a part of Escrowed Proceeds.

"ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established

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69

Misconduct of one Interested Party shall not be attributed to a second
Interested Party unless the second Interested Party is an Affiliate of the
first. Negligence which does not constitute Active Negligence shall not in any
event constitute Established Misconduct. For purposes of this definition,
"conduct of a Person" will include (1) the conduct of an employee of that
Person, but only to the extent that the employee is acting within the scope of
his employment by that Person, as determined in or as a necessary element of a
final judgment rendered against such Person by a court with jurisdiction to make
such determination, and (2) the conduct of an agent of that Person (such as an
independent environmental consultant engaged by that Person), but only to the
extent that the agent is, as determined in or as a necessary element of a final
judgment rendered against such Person by a court with jurisdiction to make such
determination, (x) acting within the scope of the authority granted to him by
such Person, (y) not acting with the consent or approval of or under the
direction of NAI or NAI's Affiliates, employees or agents, and (z) not acting in
good faith to mitigate Losses that such Person may suffer because of a breach or
repudiation by NAI of the Improvements Lease or the Purchase Documents.

"EUROCURRENCY LIABILITIES" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

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

"EVENT OF DEFAULT" shall have the meaning assigned to it in
subparagraph 17 of the Improvements Lease.

"EXCLUDED TAXES" means (1) all federal, state and local income taxes
upon Base Rent, Administrative Agency Fees, any interest paid to BNPLC or any
Participant pursuant to subparagraph 3.(j) of the Improvements Lease, and any
additional compensation claimed by BNPLC pursuant to subparagraph 5.(b)(ii) of
the Improvements Lease; (2) any transfer or change of ownership taxes assessed
because of BNPLC's transfer or conveyance to any third party of any rights or
interest in the Improvements Lease, the Purchase Agreement or the Property
(other than any such taxes assessed because of any Permitted Transfer under
clauses (1), (3), (4), (5), (6) or (7) of the definition of Permitted Transfer
in this Agreement), (3) all federal, state and local income taxes upon any
amounts paid as reimbursement for or to satisfy Losses incurred by BNPLC or any
Participant to the extent such taxes are offset by a corresponding reduction of
BNPLC's or the applicable Participant's income taxes because of BNPLC's or such
Participant's deduction of the reimbursed Losses from its taxable income or
because of any tax credits attributable thereto. If, however, a change in
Applicable Laws after the Effective Date results in an increase in such taxes
for any reason other than an increase in the applicable tax rates (e.g., a
disallowance of deductions that would otherwise be available against payments
described in clause (A) of this definition), then for purposes of the Operative
Documents, the term "Excluded Taxes" will not include the increase in such taxes
attributable to the change.

"EXISTING CONTRACT" means the Purchase and Sale Agreement dated July
31, 1998, between Seller and NAI covering the Land described in Exhibit A
attached to the Improvements Lease, as amended by a First Amendment to Purchase
and Sale Agreement dated as of December 9, 1999, the interests of NAI therein
having being assigned to BNPLC pursuant to the assignment dated as of May 3,
1999 between NAI and BNPLC, with the consent and approval of Seller.

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70

"EXISTING SPACE LEASES" means the following leases (whether one or
more) of space within the Improvements to the extent the same are still in force
on the Effective Date: indenture of lease dated June 12, 1975 between The
Equitable Life Assurance Society of the United States, and landlord, and ESL
Incorporated, as tenant, as amended by (a) that certain extension of lease dated
June 16, 1980; (b) that certain extension of lease dated March 20, 1985; (c)
that certain lease amendment dated August 1, 1989; (d) that certain lease
amendment dated September 1, 1991; and (e) that certain third amendment to lease
dated July 6, 1998.

"FAILED COLLATERAL TEST DATE" means any date upon which commences a
Mandatory Collateral Period as described in Part III of Schedule 1 attached to
the Improvements Lease.

"FED FUNDS RATE" means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon NAI.

"FOCB NOTICE" shall have the meaning assigned to it in subparagraph
5(B)(1) of the Construction Management Agreement.

"FUNDED CONSTRUCTION ALLOWANCE" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Prepayments deducted on or prior to
that day in the calculation of such Outstanding Construction Allowance, less any
Voluntary NAI Construction Contributions added on or prior to that day in the
calculation of such Qualified Prepayments.

"FUNDING ADVANCES" means (1) the Initial Funding Advance and (2) all
future advances made by BNPLC's Parent or any other Participant to or on behalf
of BNPLC to allow BNPLC to provide the Construction Allowance.

"FUTURE WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.

"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
subparagraph 13.(a) of the Improvements Lease (except for changes with which
NAI's independent public accountants concur).

"HAZARDOUS SUBSTANCE" means (i) any chemical, compound, material,
mixture or substance that is now or hereafter defined or listed in, regulated
under, or otherwise classified pursuant to, any Environmental Laws as a
"hazardous substance," "hazardous material," "hazardous waste," "extremely
hazardous waste or substance," "infectious waste," "toxic substance," "toxic
pollutant," or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or reproductive toxicity;
(ii) petroleum, any fraction of petroleum, natural gas, natural gas liquids,
liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas
and such synthetic gas), and ash produced by a resource recovery facility
utilizing a municipal solid waste stream, and drilling

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fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iii) asbestos and any asbestos containing material; and (v) any other material
that, because of its quantity, concentration or physical or chemical
characteristics, poses a significant present or potential hazard to human health
or safety or to the environment if released into the workplace or the
environment.

"HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property.

"IMPOSITIONS" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Improvements Lease or which are imposed upon BNPLC or the
Property because of the ownership, leasing, occupancy, sale or operation of the
Property, or any part thereof or interest therein, or relating to or required to
be paid by any of the Permitted Encumbrances or the Development Documents,
excluding only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes
imposed because of a change of use or ownership of the Property on or prior to
the date of any sale by BNPLC pursuant to the Purchase Agreement.

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

"IMPROVEMENTS LEASE " means the Lease Agreement (Phase II -
Improvements") dated as of May 3, 1999 between BNPLC, as landlord, and NAI, as
tenant, pursuant to which NAI has agreed to lease BNPLC's interest in the
Property, as such Lease Agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms.

"INITIAL FUNDING ADVANCE " means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate closing certificate executed by NAI as of the Effective Date. To the
extent that BNPLC does not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC, the remainder thereof will be advanced
to NAI, with the understanding that NAI shall use any such amount advanced for
one or more of the following purposes: (1) the payment or reimbursement of
Transaction Expenses incurred by NAI; (2) the payment or reimbursement of
expenses incurred by NAI in connection with the Construction Project, including
the planning, design, engineering, construction and permitting of thereof; (3)
the maintenance of the Property; or (4) the payment of Rents next due.

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72

"INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.

"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT" means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph 17.(e) of the
Improvements Lease, the occurrence of which event cannot be objectively
determined. For example, an Event of Default under subparagraph 17.(e) of the
Improvements Lease resulting solely from a failure of NAI to "generally" pay its
debts as such debts become due (in contrast to a failure of NAI to pay Rent to
BNPLC as it becomes due under the Improvements Lease) would constitute an Issue
97-1 Non-performance-related Subjective Event of Default. In no event, however,
will the term "Issue 97-1 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of NAI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by NAI of
the provisions set forth in Schedule 1 attached to the Improvements Lease (which
set forth financial covenants), (3) any failure of NAI to use, maintain and
insure the Property in accordance with the requirements of the Improvements
Lease, or (4) any failure of NAI to pay the full amount of any Supplemental
Payment on the Designated Sale Date as required by the Purchase Agreement.
Except as provided in subparagraph 1(A)(2)(c)(i) of the Purchase Agreement, the
characterization of any Event of Default as an Issue 97-1
Non-performance-related Subjective Event of Default will not affect the rights
or remedies available to BNPLC because of the Event of Default.

"ISSUE 97-10 ELECTION" means any of the following elections by NAI: (1)
an election to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof; and (2) an election to terminate NAI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B) of the
Purchase Agreement.

"ISSUE 97-10 PREPAYMENT" means a payment to BNPLC, required by
subparagraph 3.(h) of the Improvements Lease or by subparagraphs 4(B) or 4(C) of
the Purchase Agreement, equal in each case to (A) the Maximum Permitted
Prepayment, computed as of the date on which the payment becomes due, less (B)
the accreted value of any prior payments actually received by BNPLC from NAI
constituting Issue 97-10 Prepayments or Voluntary NAI Construction
Contributions. For purposes of the preceding sentence, "accreted value" of a
payment shall mean the amount of the payment plus an amount equal to the
interest that would have accrued on the payment if it bore interest at the
Effective Rate.

"LAND" means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Improvements Lease and the Purchase
Agreement.

"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(e) of the Improvements Lease.

"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC's Parent
to be the average rate of interest per annum (rounded upwards, if necessary, to
the

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73

next 1/16 of 1%) of the rates at which deposits of dollars are offered or
available to BNPLC's Parent in the London interbank market at approximately
11:00 a.m. (London time) on the second Business Day preceding the first day of
such period. BNPLC shall instruct BNPLC's Parent to consider deposits, for
purposes of making the determination described in the preceding sentence, that
are offered: (i) for delivery on the first day of such Construction Period or
Base Rent Period, as the case may be, (ii) in an amount equal or comparable to
the total (projected on the applicable date of determination by BNPLC's Parent)
Stipulated Loss Value on the first day of such period, and (iii) for a time
equal or comparable to the length of such period. If BNPLC's Parent so chooses,
it may determine LIBOR for any period by reference to the rate reported by the
British Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business Day preceding the
first day of such period. If for any reason BNPLC's Parent determines that it is
impossible or unreasonably difficult to determine LIBOR with respect to a given
Construction Period or Base Rent Period in accordance with the foregoing, or if
BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain Funding Advances during any
Construction Period or Base Rent Period for which Carrying Costs or Base Rent is
computed by reference to LIBOR, then "LIBOR" for that period shall equal the
Base Rate for that period. All determinations of LIBOR by BNPLC's Parent shall,
in the absence of clear and demonstrable error, be binding and conclusive upon
NAI.

"LIBOR PERIOD ELECTION" for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit C attached to the Improvements Lease. (For purposes
of the Improvements Lease a LIBOR Period Election for any Base Rent Period shall
also be considered the LIBOR Period Election in effect on the Base Rent
Commencement Date or Base Rent Date upon which such Base Rent Period begins.)
Any Libor Period Election so designated by NAI shall remain in effect for the
entire Base Rent Period specified in NAI's notice to BNPLC (provided such Base
Rent Period commences at least ten Business Days after BNPLC's receipt of the
notice) and for all subsequent Base Rent Periods until a new designation becomes
effective in accordance with the provisions set forth in this definition.
Notwithstanding the foregoing, however: (1) NAI shall not be entitled to
designate a LIBOR Period Election that would cause a Base Rent Period to extend
beyond the end of the scheduled Term; (2) changes in the LIBOR Period Election
shall become effective only upon the commencement of a new Base Rent Period; (3)
for each Base Rent Period that occurs within any Mandatory Collateral Period,
the LIBOR Period Election shall be one month; (4) no LIBOR Period Election
designated by NAI hereunder shall be different than the LIBOR Period Election
specified under (and as defined in) the Other Common Definitions and Provisions
Agreement; and (5) if NAI fails to make a LIBOR Period Election consistent with
the foregoing requirements for any Base Rent Period, or if an Event of Default
shall have occurred and be continuing on the third Business Day preceding the
commencement of any Base Rent Period, the LIBOR Period Election for such Base
Rent Period shall be deemed to be one month.

"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part IV of
Schedule 1 attached to the Improvements Lease, "Lien" includes any Liens under
ERISA relating to Unfunded Benefit Liabilities of which NAI is required to
notify BNPLC under subparagraph 13.(a)(vii) of the Improvements Lease
(irrespective of whether NAI actually notifies BNPLC as required thereunder).

"LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPLC itself, (2) by third parties lawfully claiming through or
under BNPLC (which for purposes of the Improvements Lease shall include any
judgment liens established against the Property

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74

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

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

"MANDATORY COLLATERAL PERIOD" shall have the meaning assigned to it in
Part I of Schedule 1 attached to the Improvements Lease and to the Pledge
Agreement.

"MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between
NAI or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.

"MAXIMUM CONSTRUCTION ALLOWANCE" means an amount equal to $19,250,000,
less the sum of the Initial Funding Advance under and as defined in this
Agreement and the Initial Funding Advance under and as defined in the Other
Common Definitions and Provisions Agreement.

"MAXIMUM PERMITTED TERMINATION FEES" shall have the meaning indicated
in subparagraph 1(A)(2)(b) of the Construction Management Agreement.

"MAXIMUM PERMITTED PREPAYMENT" as of any date means the amount equal to
the lesser of the following:

(1) eighty-nine and nine-tenths of one percent (89.9%) of the aggregate
of (i) all Project Costs paid or incurred on or prior to such date, plus
(ii) ninety-seven percent (97%) of (a) Carrying Costs added to the
Outstanding Construction Allowance on or prior to such date, and (b)
Commitment Fees reimbursed pursuant to the Construction Management Agreement
on or prior to such date, plus (iii) any Upfront Syndication Fees paid to
Participants pursuant to the Closing Certificate and Agreement and
reimbursed pursuant to the Construction Management Agreement on or prior to
such date; or

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75

(2) eighty-nine and nine-tenths of one percent (89.9%) of Stipulated
Loss Value on such date.

"MAXIMUM REMARKETING OBLIGATION" shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"MINIMUM EXTENDED REMARKETING PRICE" shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.

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

"NAI" means Network Appliance, Inc., a California corporation.

"NAI'S EXTENDED REMARKETING PERIOD" shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S EXTENDED REMARKETING RIGHT" shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS" shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.

"NORMAL TENANT IMPROVEMENTS" shall have the meaning assigned to it in
subparagraph 3(A) of the Construction Management Agreement.

"NOTICE OF NAI'S INTENT TO TERMINATE" shall have the meaning assigned
to it in subparagraph 5(D) of the Construction Management Agreement.

"OPERATIVE DOCUMENTS" means the Closing Certificate, the Improvements
Lease, the Construction Management Agreement, the Purchase Agreement, the Pledge
Agreement and this Common Definitions and Provisions Agreement (Phase II -
Improvements).

"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT" means the Common
Definitions and Provisions Agreement (Phase II - Land), dated as of the
Effective Date, between BNPLC and NAI, as such Common Definitions and Provisions
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"OTHER LEASE AGREEMENT" means the Lease Agreement (Phase II - Land),
dated as of the Effective Date, between BNPLC and NAI, as such Lease Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

"OTHER PURCHASE AGREEMENT" means the Purchase Agreement (Phase II -
Land), dated as of the Effective Date, between BNPLC and NAI, as such Purchase
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

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76

"OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to
it in subparagraph 6.(a) of the Improvements Lease.

"PARTICIPANT" means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Improvements
Lease and the Purchase Documents. As of the Effective Date, the only Participant
is BNPLC's Parent, but BNPLC may agree after the Effective Date to share in
risks and rewards of the Improvements Lease and the Purchase Documents with
other Participants. However, no Person other than BNPLC's Parent and its
Affiliates shall qualify as a Participant for purposes of the Operative
Documents or other agreements concerning the Property to which NAI is a party
unless such Person, during the continuance of an Event of Default or otherwise
with NAI's prior written approval (which approval will not be unreasonably
withheld), became a party to the Pledge Agreement and to the Participation
Agreement by executing supplements to those agreements as contemplated therein.

"PARTICIPATION AGREEMENT" means the Participation Agreement between
BNPLC and BNPLC's Parent dated as of the Effective Date, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Improvements Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms. It is understood, however, that
because the Participation Agreement expressly makes NAI a third party
beneficiary of the Participant's obligations thereunder to make advances to
BNPLC in connection with Construction Advances under the Construction Management
Agreement, NAI's consent will be required to any amendment of the Participation
Agreement that purports to limit or excuse such obligations.

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

"PERIOD" means a Construction Period or a Base Rent Period, as the
context requires.

"PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) any
ground lease executed pursuant to the Other Purchase Agreement, (iv) any Liens
securing the payment of Impositions which are not delinquent or claimed to be
delinquent or which are being contested in accordance with subparagraph 5.(a) of
the Improvements Lease, and (iv) mechanics' and materialmen's liens for amounts
not past due or claimed to be past due or which are being contested in
accordance with subparagraph 11.(c) of the Improvements Lease.

"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:

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

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77

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

Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.

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

"PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in the Land and the Property;
(3) any assignment or conveyance by BNPLC or its permitted successors or assigns
to any present or future Participant of any lien or security interest against
the Property (in contrast to a conveyance of BNPLC's fee estate in the Land and
Improvements) or of any interest in Rent, payments required by or under the
Purchase Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of NAI under the Operative Documents; (4) any agreement to exercise or
refrain from exercising rights or remedies under the Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by NAI or required by any Permitted Encumbrance, by the
Purchase Agreement, by the Existing Contract, by any other Development Contract
or by Applicable Laws; or (6) any assignment or conveyance after a Designated
Sale Date on which NAI shall not have purchased or caused an Applicable
Purchaser to purchase BNPLC's interest in the Property and, if applicable, after
the expiration of the thirty day cure period specified in Paragraph 4(D) of the
Purchase Agreement.

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

"PERSONAL PROPERTY" shall have the meaning assigned to it on page of
the Improvements Lease.

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

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78

"PLEDGE AGREEMENT" means the Pledge Agreement (Phase II - Improvements)
dated as of the date hereof between BNPLC and NAI, pursuant to which NAI may
pledge certificates of deposit as security for NAI's obligations under the
Purchase Agreement (and for the corresponding obligations of BNPLC to the
Participants under the Participation Agreement), as such Pledge Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.

"PRE-COMMENCEMENT CASUALTY" shall have the meaning assigned to it in
subparagraph 1(A)(2)(a) of the Construction Management Agreement.

"PREEMPTIVE NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.

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

"PRIOR WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.

"PROJECT COSTS" means the following:

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

-       soft costs, such as architectural fees, engineering fees
and fees and costs paid in connection with obtaining
project permits and approvals required by governmental
authorities or the Development Documents,

-       site preparation costs, and

-       costs of offsite and other public improvements required
as conditions of governmental approvals for the
Construction Project;

(b) costs incurred to maintain insurance required by (and consistent
with the requirements of) the Improvements Lease prior to the Base Rent
Commencement Date, and costs of repairing any damage to the Improvements by
fire or other casualty prior to the Base Rent Commencement Date, to the
extent such cost is not covered by insurance proceeds made available to NAI
as provided in the Improvements Lease;

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79

(c) a fraction of the cost of any title insurance policy or binder
provided to BNPLC in connection with its acquisition of the Land and
Improvements, the numerator of which fraction is the difference computed by
subtracting the price paid by BNPLC for the Land from the maximum dollar
amount of coverage provided by the title insurance, and the denominator of
which fraction is equal to such maximum dollar amount of coverage;

(d) Impositions that have accrued or become due under the Improvements
Lease prior to the Base Rent Commencement Date; and

(e) cancellation or termination fees or other compensation payable by
NAI or BNPLC pursuant to any contract concerning the Construction Project
made by NAI or BNPLC with any general contractor, architect, engineer or
other third party because of any election by NAI or BNPLC to cancel or
terminate such contract.

Project Costs will include costs incurred by BNPLC to continue or complete the
Construction Project after any Landlord's Election to Continue Construction as
provided in subparagraph 6.(e) of the Improvements Lease.

"PROJECTED COST OVERRUNS" shall have the meaning assigned to it in
subparagraph 4(A) of the Construction Management Agreement.

"PROPERTY" means the Personal Property and the Real Property,
collectively. Except to the extent covered by the Other Lease Agreement, all
rights, titles and interests acquired by BNPLC under the Existing Contract are
intended to be encompassed within the term "Property" as such term is used in
the Operative Documents.

"PURCHASE AGREEMENT " means the Purchase Agreement (Phase II -
Improvements) dated as of May 3, 1999 between BNPLC and NAI, as such Purchase
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"PURCHASE DOCUMENTS" means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.

"PURCHASE OPTION" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.

"QUALIFIED AFFILIATE" means any Person that is one hundred percent
(100%) owned, directly or indirectly, by Banque Nationale de Paris or any
successor of such bank; provided, that such Person can make (and has in writing
made) the same representations to NAI that BNPLC has made in Paragraphs 3(D) and
3(E) of the Closing Certificate; and, provided, further, that such Person is not
insolvent.

"QUALIFIED PREPAYMENTS" means (A) any Issue 97-10 Prepayments received
by BNPLC, (B) any Voluntary NAI Construction Contributions received by BNPLC
pursuant to subparagraph 4(C) of the Construction Management Agreement, and (C)
any payments received by BNPLC from time to time during the Term (1) under any
property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction placed upon the use or development of the
Property or for the condemnation of the Property or any portion thereof, (3)
because of any judgment, decree or award for injury or damage to the Property or
(4) under any title insurance policy or otherwise as a result of any title
defect or claimed title defect

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 23

80
with respect to the Property; provided, however, that (x) in determining the
amount of "Qualified Prepayments", there shall be deducted all expenses and
costs of every kind, type and nature (including taxes, Breakage Costs and
Attorneys' Fees) incurred by BNPLC with respect to the collection or application
of such payments, (y) "Qualified Prepayments" shall not include any payment to
BNPLC by a Participant or an Affiliate of BNPLC that is made to compensate BNPLC
for the Participant's or Affiliate's share of any Losses BNPLC may incur as a
result of any of the events described in the preceding clauses (1) through (4)
and (z) "Qualified Prepayments" shall not include any payments received by BNPLC
that BNPLC has paid or is obligated to pay to NAI for the restoration or repair
of the Property or that BNPLC is holding as Escrowed Proceeds pursuant to
Paragraph 10 of the Improvements Lease or any other provision of the
Improvements Lease. For purposes of computing the total Qualified Prepayments
(and other amounts dependent upon Qualified Prepayments, such as Stipulated Loss
Value and the Outstanding Construction Allowance) paid to or received by BNPLC
as of any date, payments described in the preceding clauses (1) through (4) will
be considered as Escrowed Proceeds, not Qualified Prepayments, until they are
actually applied as Qualified Prepayments by BNPLC as provided in the Paragraph
of the Improvements Lease.

"REAL PROPERTY " shall have the meaning assigned to it on page of the
Improvements Lease.

"REIMBURSABLE CONSTRUCTION-PERIOD COSTS" shall have the meaning
assigned to it in Paragraph 2 of the Construction Management Agreement.

"REMEDIAL WORK" means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.

"RENT" means the Base Rent and all Additional Rent.

"RESIDUAL RISK PERCENTAGE" means fifteen percent (15%).

"RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.

"SALE CLOSING DOCUMENTS" shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.

"SCOPE CHANGE" shall have the meaning assigned to it in subparagraph
1(A)(1)(b) of the Construction Management Agreement.

"SECURED SPREAD" means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any Mandatory
Collateral Period, the Secured Spread shall equal one-half of the Unsecured
Spread for the same period.

"SELLER" means Martin/Crossman, LLC, a California limited liability
company.

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 24

81

"STIPULATED LOSS VALUE" as of any date means the amount equal to the
sum of the Initial Funding Advance, plus the sum of all Construction Advances
and Carrying Costs added to the Outstanding Construction Allowance on or prior
to such date, minus all funds actually received by BNPLC and applied as
Qualified Prepayments on or prior to such date. Under no circumstances will any
payment of Base Rent, the Arrangement Fee, any Upfront Syndication Fees,
Administrative Agency Fees or Commitment Fees reduce Stipulated Loss Value.

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

"SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"TERM" shall have the meaning assigned to it in subparagraph 1.(a) of
the Improvements Lease.

"THIRD PARTY CONTRACT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.

"THIRD PARTY PRICE" shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.

"THIRD PARTY SALE NOTICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY SALE PROPOSAL" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY TARGET PRICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.

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

"UPFRONT SYNDICATION FEES" shall have the meaning assigned to it in
subparagraph 2(M) of the Closing Certificate and Agreement.

"UNSECURED SPREAD" means, for each Construction Period or any period
beginning on and including the Base Rent Commencement Date or a Base Rent Date
and ending on but not including the next Base Rent Date, the amount established
as described below in this definition on the date (in this definition, the
"SPREAD TEST DATE") that is two Business Days prior to such period by reference
to the ratio calculated by dividing (1) Adjusted EBIT for the then latest
Rolling Four Quarters Period that ended prior to (and for which NAI has reported
earnings as necessary to compute Adjusted EBIT) into (2) the total Debt of

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82

NAI and its Subsidiaries (determined on a consolidated basis) as of the end of
such Rolling Four Quarters Period. The Unsecured Spread shall be established at
the Level in the pricing grid below which corresponds to such ratio; provided,
that:

(a) for any period commencing on or prior to the first Business Day of
August, 1999, the Unsecured Spread will be the amount indicated for Level
III in the pricing grid below;

(b) promptly after earnings are reported by NAI for the latest quarter
in any Rolling Four Quarters Period, NAI must notify BNPLC of any resulting
change in the Unsecured Spread under this definition, and no reduction in
the Unsecured Spread from one period to the next will be effective for
purposes of the Operative Documents unless, prior to the Spread Test Date
for the next period, NAI shall have provided BNPLC with a written notice
setting forth and certifying the calculation under this definition that
justifies the reduction; and

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

LEVELS           RATIO OF TOTAL DEBT TO ADJUSTED EBIT            UNSECURED SPREAD
--------------      ------------------------------------          -------------------

Level I                      less than 0.5                       125.0 basis points

Level II           greater than or equal to 0.5, but             137.5 basis points
less than 1.0

Level III           greater than or equal to 1.0, but             150.0 basis points
less than 1.5

Level IV           greater than or equal to 1.5, but             175.0 basis points
less than 2.0

Level V               greater than or equal to 2.0               200.0 basis points

All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the
Improvements Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.

"VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS" shall have the meaning
assigned to it in subparagraph 4(C) of the Construction Management Agreement.

"VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election
made by BNPLC to keep the Property pursuant to, and under the circumstances
described in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase
Agreement.

"WORK" shall have the meaning assigned to it in subparagraph 1(A)(2)(a)
of the Construction Management Agreement.

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83
ARTICLE II - RULES OF INTERPRETATION

THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:

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

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

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Improvements Lease

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

(ii) All Collateral required to be paid by NAI to the Agent shall be paid in
immediately available funds by wire transfer to:

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Payment

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

(iii) All advances paid to NAI by BNPLC under the Construction Management
Agreement or in connection therewith shall be paid to NAI in immediately
available funds at such place and in such manner as NAI may reasonably
designate from time to time by notice to BNPLC signed by a Responsible
Financial Officer of NAI.

(iv) All notices, demands, approvals, consents and other communications to
be made under any Operative Document to or by the parties thereto must, to
be effective for purpose of such Operative Document, be in writing. Notices,
demands and other communications required or permitted under any Operative
Document are to be sent to the addresses set forth below (or in the case of
communications to Participants, at the addresses set forth in Schedule 1 to
the Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted delivery
retained; (B) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by notice to the
other parties given in the same manner as provided above. Any notice or
other communication sent pursuant to clause (A) or (B) hereof shall be
deemed received upon such personal service or upon dispatch by electronic
means, and, if sent pursuant to clause (C) shall be deemed received five
days following deposit in the mail.

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84

Address of BNPLC:

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

With a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Gavin Holles
Telecopy: (415) 296-8954

And for draw requests and funding notices, with a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: George Fung
Telecopy: (415) 296-8954

Address of NAI:

Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452

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

3 NO MERGER. There shall be no merger of the Improvements Lease or of the
leasehold estate created by the Improvements Lease with any other interest in
the Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Improvements Lease or the leasehold estate created
hereby and any other interest in the Property, unless all Persons with an
interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur. There shall be no
merger of the Purchase Agreement or of the purchase options or

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 28

85

obligations created by the Purchase Agreement with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Improvements Lease or the leasehold estate created
hereby and any other interest in the Property, unless all Persons with an
interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur.

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

5 ENTIRE AND ONLY AGREEMENTS. The Operative Documents supersede any prior
negotiations and agreements between BNPLC, Agent and NAI concerning the Property
or the Collateral, and no amendment or modification of any Operative Document
shall be binding or valid unless expressed in a writing executed by all parties
to such Operative Document.

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

7 TIME IS OF THE ESSENCE. Time is of the essence as to all obligations of NAI
and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.

8 GOVERNING LAW. Each Operative Document shall be governed by and construed in
accordance with the laws of the State of California without regard to conflict
or choice of laws (subject, however, in the case of the Pledge Agreement to any
contrary provisions of the "UCC," as defined in the Pledge Agreement).

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

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

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 29

86

11 TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT. As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase II - Improvements), but is
defined in another Operative Document, shall have the meaning ascribed to it in
the other Operative Document.

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

13 EXECUTION IN COUNTERPARTS. To facilitate execution, each Operative Document
may be executed in as many identical counterparts as may be required. It shall
not be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts, taken together, shall collectively constitute a single
instrument. It shall not be necessary in making proof of any Operative Document
to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages.

14 NOT A PARTNERSHIP, ETC. NOTHING IN ANY OPERATIVE DOCUMENT IS INTENDED TO
CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN BNPLC
AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE ADMINISTRATION
THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER RIGHT, DUTY
OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE DOCUMENT IS INTENDED
TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO NAI.

[The signature pages follows.]

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 30

87

IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement

"NAI"

NETWORK APPLIANCE, INC.

By: 
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 31

88

[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase II - Improvements) dated to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By: 
-------------------------------------
Lloyd G. Cox, Vice President

Common Definitions and Provisions Agreement (Phase II - Improvements) - Page 32

1
Exhibit 10.29

================================================================================

LEASE AGREEMENT
(PHASE II - LAND)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

MAY 3, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page
----

1.      TERM                                                                                          2
(a)    Scheduled Term                                                                         2
(b)    Intentionally Deleted                                                                  2
(c)    Intentionally Deleted                                                                  2
(d)    Election by NAI to Terminate After Accelerating the Designated Sale Date               2
(e)    Extension of the Term                                                                  3

2.      USE AND CONDITION OF THE PROPERTY                                                             3
(a)    Use                                                                                    3
(b)    Condition of the Property                                                              3
(c)    Consideration for and Scope of Waiver                                                  4

3.      RENT                                                                                          4
(a)    Base Rent Generally                                                                    4
(b)    Impact of Collateral Upon Formulas                                                     4
(c)    Calculation of and Due Dates for Base Rent                                             5
(i)    Determination of Payment Due Dates, Generally                                   5
(ii)   Special Adjustments to Base Rent Payment Dates and Periods                      5
(iii)  Base Rent Formula for Periods During Which The Collateral Percentage is 
100%                                                                            5
(iv)   Base Rent Formula for Periods During Which The Collateral Percentage is 
Greater Than Zero and Less Than 100%                                            6
(v)    Base Rent Formula for Periods During Which The Collateral Percentage is 
Zero                                                                            7
(d)    Additional Rent                                                                        7
(e)    Intentionally Deleted                                                                  8
(f)    Intentionally Deleted                                                                  8
(g)    Intentionally Deleted                                                                  8
(h)    Intentionally Deleted                                                                  8
(i)    No Demand or Setoff                                                                    8
(j)    Default Interest and Order of Application                                              8

4.      NATURE OF THIS AGREEMENT

8 
(a)    "Net" Lease Generally                                                                  8 
(b)    No Termination                                                                         8 
(c)    Tax Reporting                                                                          9 
(d)    Characterization of this Land Lease                                                   10

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY                                10 
(a)    Impositions                                                                           10 
(b)    Increased Costs; Capital Adequacy Charges                                             10 

3

(c)    NAI's Payment of Other Losses; General Indemnification                                        11 
(d)    Exceptions and Qualifications to Indemnities                                                  13

6.      INTENTIONALLY DELETED                                                                                14

7.      INTENTIONALLY DELETED                                                                                14

8.      ENVIRONMENTAL                                                                                        14
(a)    Environmental Covenants by NAI                                                                14
(b)    Right of BNPLC to do Remedial Work Not Performed by NAI                                       14 
(c)    Environmental Inspections and Reviews                                                         15 
(d)    Communications Regarding Environmental Matters                                                15

9.      INSURANCE REQUIRED AND CONDEMNATION                                                                  16 
(a)    Liability Insurance                                                                           16 
(b)    Intentionally Deleted                                                                         16 
(c)    Failure to Obtain Insurance                                                                   16 
(d)    Condemnation                                                                                  16 
(e)    Waiver of Subrogation                                                                         16

10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS                                                   17
(a)    Collection and Application of Insurance and Condemnation Proceeds Generally                   17
(b)    Advances of Escrowed Proceeds to NAI                                                          17
(c)    Application of Escrowed Proceeds as a Qualified Prepayment                                    17 
(d)    Special Provisions Applicable After an Event of Default                                       18 
(e)    NAI's Obligation to Restore                                                                   18 
(f)    Takings of All or Substantially All of the 
Property on or after the Base Rent Commencement Date                                          18

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING THE PROPERTY                  18
(a)    Compliance with Covenants and Laws                                                            18
(b)    Operation of the Property                                                                     19
(c)    Debts for Construction, Maintenance, Operation or Development                                 20
(d)    Repair, Maintenance, Alterations and Additions                                                20
(e)    Permitted Encumbrances and Development Documents                                              20
(f)    Books and Records Concerning the Property                                                     21

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO SCHEDULE 1                      21

13.     FINANCIAL STATEMENTS AND OTHER REPORTS                                                               21
(a)    Financial Statements; Required Notices; Certificates                                          21

14.     ASSIGNMENT AND SUBLETTING BY NAI                                                                     23
(a)    BNPLC's Consent Required                                                                      23
(b)    Standard for BNPLC's Consent to Assignments and Certain Other Matters                         23 
(c)    Consent Not a Waiver                                                                          23

15.     ASSIGNMENT BY BNPLC                                                                                  23
(a)    Restrictions on Transfers                                                                     23

2

4

(b)    Effect of Permitted Transfer or other Assignment by BNPLC                                     23

16.     BNPLC'S RIGHT OF ACCESS                                                                              24

17.     EVENTS OF DEFAULT                                                                                    25

18.     REMEDIES                                                                                             26
(a)    Basic Remedies                                                                                26
(b)    Notice Required So Long As the Purchase Option and NAI's Initial Remarketing 
Rights and Obligations Continue Under the Purchase Agreement                                  27
(c)    Enforceability                                                                                28
(d)    Remedies Cumulative                                                                           28

19.     DEFAULT BY BNPLC                                                                                     28

20.     QUIET ENJOYMENT                                                                                      28

21.     SURRENDER UPON TERMINATION                                                                           29

22.     HOLDING OVER BY NAI                                                                                  29

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS                                   29

EXHIBITS AND SCHEDULES

Exhibit A    Legal Description

Exhibit B    Insurance Requirements

Exhibit C    Libor Period Election Form

Schedule 1   Financial Covenants and Other Requirements

3

5
LEASE AGREEMENT
(PHASE II - LAND)

This LEASE AGREEMENT (PHASE II - LAND) (this "LAND LEASE"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of May
3, 1999, the Effective Date. ("EFFECTIVE DATE" and other capitalized terms used
and not otherwise defined in this Land Lease are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement (Phase II -
Land) executed by BNPLC and NAI contemporaneously with this Land Lease. By this
reference, the Common Definitions and Provisions Agreement (Phase II - Land) is
incorporated into and made a part of this Land Lease for all purposes.)

RECITALS

Pursuant to the Existing Contract, which covers the Land described in
Exhibit , BNPLC is acquiring the Land and any appurtenances thereto and all
existing Improvements thereon from Seller contemporaneously with the execution
of this Land Lease.

In anticipation of BNPLC's acquisition of the Land and the existing
Improvements thereon under the Existing Contract, BNPLC and NAI have reached
agreement as to the terms and conditions upon which BNPLC is willing to lease
the Land to NAI, and by this Land Lease BNPLC and NAI desire to evidence such
agreement.

GRANTING CLAUSES

BNPLC does hereby LEASE, DEMISE and LET unto NAI for the term
hereinafter set forth all right, title and interest of BNPLC, now owned or
hereafter acquired, in and to:

(1)     the Land;

(2)     all easements and other rights appurtenant to the Land, whether
now owned or hereafter acquired by BNPLC; and

(3)     (A) any land lying within the right-of-way of any street, open
or proposed, adjoining the Land, (B) any sidewalks and alleys adjacent
to the Land and (C) any strips and gores between the Land and any
abutting land not owned or leased by BNPLC.

BNPLC's interest in all property described in clauses (1) through (3) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include any Improvements (now existing or those to be constructed as
provided in the Other Lease Agreement and the Construction Management Agreement)
or BNPLC's rights appurtenant to the Improvements, it being understood that the
Other Lease Agreement constitutes a separate lease of the Improvements and the
appurtenances thereto, and only the Improvements and the appurtenances thereto,
from BNPLC to NAI.

To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contract or acquired by BNPLC pursuant to Paragraph below,
BNPLC also hereby grants and assigns to NAI for the term of this Land Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such
rights or interests of BNPLC:

4

6
(a)     the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and

(b)     any permits, licenses, franchises, certificates, and other
rights and privileges against third parties related to the Real
Property.

Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."

However, the leasehold estate conveyed hereby and NAI's rights
hereunder are expressly made subject and subordinate to the terms and conditions
of this Land Lease, to the Permitted Encumbrances, and to any other claims or
encumbrances not constituting Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

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

1.      TERM.

(a)     Scheduled Term . The term of this Land Lease (the "TERM") shall commence
on and include the Effective Date, and end on the first Business Day of
February, 2004, unless sooner terminated as expressly herein provided.

(b)     Intentionally Deleted .

(c)     Intentionally Deleted .

(d)     Election by NAI to Terminate After Accelerating the Designated Sale

Date .

NAI shall be entitled to accelerate the Designated Sale Date (and thus
accelerate the purchase of BNPLC's interest in the Property by NAI or by an
Applicable Purchaser pursuant to the Purchase Agreement) by sending a notice to
BNPLC as provided in clause (2) of the definition of "Designated Sale Date" in
the Common Definitions and Provisions Agreement (Phase II - Land). In the event,
because of NAI's election to so accelerate the Designated Sale Date or for any
other reason, the Designated Sale Date occurs before the end of the scheduled
Term, NAI may terminate this Land Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI must have
done the following prior to the termination:

(i)     purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Purchase Agreement and satisfied all of NAI's
other obligations under the Purchase Agreement;

(ii)    paid to BNPLC all Base Rent and all other Rent due on or before
or accrued through the Designated Sale Date; and

(iii)   paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to the Purchase Agreement.

(e)     Extension of the Term . The Term may be extended at the option of NAI
for two successive periods of five years each; provided, however, that prior to
any such extension the following conditions must have been satisfied: (A) at
least ninety days prior to the commencement of any such extension, BNPLC and NAI
must have agreed in writing upon, and received the consent and approval of
BNPLC's Parent and all other Participants to (1) a corresponding extension not
only to 

2

7
the date for the expiration of the Term specified above in this Section, but
also to the date specified in clause (1) of the definition of Designated Sale
Date in the Common Definitions and Provisions Agreement (Phase II - Land), and
(2) an adjustment to the Rent that NAI will be required to pay for the
extension, it being expected that the Rent for the extension may be different
than the Rent required for the original Term, and it being understood that the
Rent for any extension must in all events be satisfactory to both BNPLC and NAI,
each in its sole and absolute discretion; (B) no Event of Default shall have
occurred and be continuing at the time of NAI's exercise of its option to
extend; and (C) immediately prior to any such extension, this Land Lease must
remain in effect. With respect to the condition that BNPLC and NAI must have
agreed upon the Rent required for any extension of the Term, neither NAI nor
BNPLC is willing to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both NAI and BNPLC hereby
disclaim any obligation express or implied to be reasonable in negotiating the
Rent for any such extension. Subject to the changes to the Rent payable during
any extension of the Term as provided in this Paragraph, if NAI exercises its
option to extend the Term as provided in this Paragraph, this Land Lease shall
continue in full force and effect, and the leasehold estate hereby granted to
NAI shall continue without interruption and without any loss of priority over
other interests in or claims against the Property that may be created or arise
after the date hereof and before the extension.

2.      USE AND CONDITION OF THE PROPERTY.

(a)     Use . Subject to the Permitted Encumbrances, the Development Documents
and the terms hereof, NAI may use and occupy the Property during the Term, but
only for the following purposes.

(i)     constructing, maintaining and using Improvements on the Land for
purposes expressly permitted by and described in Paragraph 2(a) of the
Other Lease Agreement; and

(ii)    other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but NAI acknowledges that BNPLC's
withholding of such approval shall be reasonable if BNPLC determines in
good faith that (1) giving the approval may materially increase BNPLC's
risk of liability for any existing or future environmental problem, or
(2) giving the approval is likely to substantially increase BNPLC's
administrative burden of complying with or monitoring NAI's compliance
with the requirements of this Land Lease or other Operative Documents).

(b)     Condition of the Property. NAI ACKNOWLEDGES THAT IT HAS CAREFULLY AND
FULLY INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY IN ITS PRESENT STATE, AS
IS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
CONDITION OF SUCH PROPERTY OR AS TO THE USE WHICH MAY BE MADE THEREOF. NAI ALSO
ACCEPTS THE PROPERTY WITHOUT ANY COVENANT, REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, BY BNPLC OR ITS AFFILIATES REGARDING THE TITLE THERETO OR THE RIGHTS
OF ANY PARTIES IN POSSESSION OF ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH
IN PARAGRAPH . BNPLC SHALL NOT BE RESPONSIBLE FOR ANY LATENT OR OTHER DEFECT OR
CHANGE OF CONDITION IN THE PROPERTY OR FOR ANY VIOLATIONS WITH RESPECT THERETO
OF APPLICABLE LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES ANY
FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT AND
LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE OF THIS LAND LEASE, BNPLC SHALL NOT
BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY KIND, INCLUDING
WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR POWER.

(c)     Consideration for and Scope of Waiver . The provisions of subparagraph
above have been negotiated by BNPLC and NAI after due consideration for the Rent
payable hereunder and are intended to be a complete exclusion and negation of
any representations or warranties of BNPLC or its Affiliates, express or
implied, with respect to the Property that may arise pursuant to any law now or
hereafter in effect or otherwise, except as expressly set forth herein.

3

8

However, such exclusion of representations and warranties by BNPLC is
not intended to impair any representations or warranties made by other parties,
the benefit of which may pass to NAI during the Term because of the definition
of Personal Property and Property above.

3.      RENT.

(a)     Base Rent Generally . On each Base Rent Date through the end of the
Term, NAI shall pay BNPLC rent ("BASE RENT"). Each payment of Base Rent must be
received by BNPLC no later than 10:00 a.m. (Pacific time) on the date it becomes
due; if received after 10:00 a.m. (Pacific time) it will be considered for
purposes of this Land Lease as received on the next following Business Day. At
least five days prior to any Base Rent Date upon which an installment of Base
Rent shall become due, BNPLC shall notify NAI in writing of the amount of each
installment, calculated as provided below. Any failure by BNPLC to so notify
NAI, however, shall not constitute a waiver of BNPLC's right to payment, but
absent such notice NAI shall not be in default hereunder for any underpayment
resulting therefrom if NAI, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.

(b)     Impact of Collateral Upon Formulas . To ease the administrative burden
of this Land Lease and the Pledge Agreement, the formulas for calculating Base
Rent set out below in subparagraph reflect a reduction in the Base Rent equal to
the interest that would accrue on any Collateral provided in accordance with the
requirements of the Pledge Agreement from time to time if the Accounts (as
defined in the Pledge Agreement) bore interest at the Effective Rate. BNPLC has
agreed to such reduction to provide NAI with the economic equivalent of interest
on such Collateral, and in return NAI has agreed to the provisions of the Pledge
Agreement that excuse the actual payment of interest on the Accounts. By
incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in the Pledge Agreement, the parties
will avoid an unnecessary and cumbersome periodic exchange of equal payments. It
is not, however, the intent of BNPLC or NAI to understate Base Rent or interest
for financial reporting purposes. Accordingly, for purposes of any financial
reports that this Land Lease requires of NAI from time to time, NAI may report
Base Rent as if there had been no such reduction and as if the Collateral from
time to time provided in accordance with the requirements of the Pledge
Agreement had been maintained in Accounts bearing interest at the Effective
Rate.

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

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

(ii)     Special Adjustments to Base Rent Payment Dates and Periods .
Notwithstanding the foregoing:

a)      Any Base Rent Period that begins before, and does not
otherwise end before, a Failed Collateral Test Date shall end
upon but not include such Failed Collateral Test Date, and such
Failed Collateral Test Date shall constitute a Base Rent Date,
upon which NAI must pay all accrued, unpaid Base Rent for the
Base Rent Period just ended.

4

9
b)      Consistent with clause (3) of the definition of LIBOR
Period Election in the Common Definitions and Provisions
Agreement (Phase II - Land), each successive Base Rent Date
after any such Failed Collateral Test Date shall be the first
Business Day of the first calendar month following the calendar
month which includes the preceding Base Rent Date, so long as
any Mandatory Collateral Period shall continue.

c)      In addition to Base Rent due on a Failed Collateral Test
Date, NAI must pay the Breakage Costs, if any, resulting from
any early ending of a Base Rent Period on the Failed Collateral
Test Date pursuant to the preceding clause 3(c)(ii)(a).

d)      If NAI or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent
shall be due on the date of purchase in addition to the purchase
price and other sums due BNPLC under the Purchase Agreement.

(iii)   Base Rent Formula for Periods During Which The Collateral
Percentage is 100% . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is one hundred
percent (100%) shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the Secured Spread for the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent (100%);
that prior to the first day of such Base Rent Period a total of $1,750,000 of
Qualified Prepayments have been received by BNPLC, leaving a Stipulated Loss
Value of $15,000,000; that the Secured Spread is thirty basis points (30/100 of
1%); and that such Base Rent Period contains exactly thirty days. Under such
assumptions, the Base Rent for the hypothetical Base Rent Period will equal:

$15,000,000 x .30% x 30/360 = $3,750

(iv)     Base Rent Formula for Periods During Which The Collateral
Percentage is Greater Than Zero and Less Than 100% . Each installment of
Base Rent payable for any Base Rent Period during which the Collateral
Percentage is greater than zero and less than one hundred percent (100%)
shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the sum of:

(A)     the product of:

(1)     the Collateral Percentage for such Base
Rent Period, times

5

10
(2)     the Secured Spread for the period from
and including the preceding Base Rent
Date to but not including the Base Rent
Date upon which the installment is due,
plus

(B)     the product of:

(1)     one minus the Collateral Percentage for
such Base Rent Period, times

(2)     the sum of (a) the Effective Rate with
respect to such Base Rent Period, plus
(b) the Unsecured Spread for the period
from and including the preceding Base
Rent Date to but not including the Base
Rent Date upon which the installment is
due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is forty
percent (40%); that prior to the first day of such Base Rent Period a
total of $1,750,000 of Qualified Prepayments have been received by
BNPLC, leaving a Stipulated Loss Value of $15,000,000; that the
Effective Rate for the Base Rent Period is 6%; that the Secured Spread
is thirty basis points (30/100 of 1%); that upon the commencement of
such Base Rent Period the Unsecured Spread is one hundred fifty basis
points (150/100 of 1%); and that such Base Rent Period contains exactly
thirty days. Under such assumptions, the Base Rent for the hypothetical
Base Rent Period will equal:

$15,000,000 x {(40% x .30%) + ([1 - 40%] x [6% + 1.50%])} x 30/360 = $57,750

(v)     Base Rent Formula for Periods During Which The Collateral
Percentage is Zero . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is zero shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the sum of (a) the Effective Rate with respect to such
Base Rent Period, plus (b) the Unsecured Spread for the
period from and including the preceding Base Rent Date
to but not including the Base Rent Date upon which the
installment is due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is zero percent (0%); that prior
to the first day of such Base Rent Period a total of $1,750,000 of Qualified
Prepayments have been received by BNPLC, leaving a Stipulated Loss Value of
$15,000,000; that the Effective Rate for the Base Rent Period is 6%; that the
Unsecured Spread is one hundred fifty basis points (150/100 of 1%) upon the
commencement of 

6

11
such Base Rent Period; and that such Base Rent Period contains exactly thirty
days. Under such assumptions, the Base Rent for the hypothetical Base Rent
Period will equal:

$15,000,000 x (6% + 1.50%) x 30/360 = $93,750

(d)     Additional Rent. All amounts which NAI is required to pay to or on
behalf of BNPLC pursuant to this Land Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "ADDITIONAL Rent", and together Base Rent and Additional
Rent are herein sometimes called "RENT").

(e)     Intentionally Deleted.

(f)     Intentionally Deleted.

(g)     Intentionally Deleted.

(h)     Intentionally Deleted.

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

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

4.      NATURE OF THIS AGREEMENT.

(a)     "Net" Lease Generally. Subject only to the exceptions listed in
subparagraph 5.(d) below, it is the intention of BNPLC and NAI that Base Rent
and other payments herein specified shall be absolutely net to BNPLC and that
NAI shall pay all costs, expenses and obligations of every kind relating to the
Property or this Land Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Land Lease or the transactions contemplated herein.

However, neither this subparagraph 4.(a) nor the indemnity in this
subparagraph 5.(c)(i) shall be construed to make NAI liable for (I) an
allocation of general overhead or internal administrative expenses of BNPLC or
any other Interested Party or (II) any duplicate payment of the same Loss to
both BNPLC and another Interested Party. (If, for example, BNPLC were required
to make a $10 fine because of a failure of the Property to comply with
Applicable Laws, and a Participant were required by the Participation Agreement
to reimburse BNPLC for 20% of the $10, NAI would not be required by this
subparagraph 4.(a) or by subparagraph 5.(c)(i) to pay both $10 to BNPLC and $2
to the Participant on account of the fine.)

(b)     No Termination. Except as expressly provided in this Land Lease itself,
this Land Lease shall not terminate, nor shall NAI have any right to terminate
this Land Lease, nor shall NAI be entitled to any abatement of the Rent, nor
shall the obligations of NAI under this Land Lease be excused, for any reason
whatsoever, including any of the following: (i) any damage to or the destruction
of all or any part of the Property from whatever cause, (ii) the taking of the
Property or any portion thereof by eminent domain or otherwise for any reason,
(iii) the prohibition, limitation or restriction of NAI's use or 

7

12
development of all or any portion of the Property or any interference with such
use by governmental action or otherwise, (iv) any eviction of NAI or of anyone
claiming through or under NAI, (v) any default on the part of BNPLC under this
Land Lease or under any other agreement to which BNPLC and NAI are parties, (vi)
the inadequacy in any way whatsoever of the Property (it being understood that
BNPLC has not made, does not make and will not make any representation express
or implied as to the adequacy thereof), (vii) any latent or other defect in the
Property or any change in the condition thereof or the existence with respect to
the Property of any violations of Applicable Laws, or (viii) any other cause
whether similar or dissimilar to the foregoing. It is the intention of the
parties hereto that the obligations of NAI hereunder shall be separate and
independent of the covenants and agreements of BNPLC, that Base Rent and all
other sums payable by NAI hereunder shall continue to be payable in all events
and that the obligations of NAI hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated or limited
pursuant to an express provision of this Land Lease. Without limiting the
foregoing, NAI waives to the extent permitted by Applicable Laws, except as
otherwise expressly provided herein, all rights to which NAI may now or
hereafter be entitled by law (including any such rights arising because of any
implied "warranty of suitability" or other warranty under Applicable Laws) (i)
to quit, terminate or surrender this Land Lease or the Property or any part
thereof or (ii) to any abatement, suspension, deferment or reduction of the
Rent.

However, nothing in this subparagraph 4.(b) shall be construed as a
waiver by NAI of any right NAI may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Land Lease that continues
beyond the period for cure provided in Paragraph 19: (i) the recovery of
monetary damages, (ii) injunctive relief in case of the violation, or attempted
or threatened violation, by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Land Lease which are binding upon BNPLC
(including the confidentiality provisions set forth in subparagraph 16.(c)
below), or (iii) a decree compelling performance by BNPLC of any of the express
covenants, agreements, conditions or provisions of this Land Lease which are
binding upon BNPLC.

(c)     Tax Reporting . BNPLC and NAI shall report this Land Lease and the
Purchase Agreement for federal income tax purposes as a conditional sale unless
prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Land Lease and
the Purchase Agreement as a conditional sale for federal income tax reporting
purposes, BNPLC shall notify NAI in writing of such challenge and consider in
good faith any reasonable suggestions by NAI about an appropriate response. In
any event, NAI shall (subject only to the limitations set forth in this
subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice to NAI shall not
excuse NAI from its obligations under this Paragraph; provided, that if none of
the officers of NAI and none of the employees of NAI responsible for tax matters
are aware of the challenge described in the notice and such failure by BNPLC
renders unavailable defenses that NAI might otherwise assert, or precludes
actions that NAI might otherwise take, to minimize its obligations hereunder,
then NAI shall be excused from its obligation to indemnify BNPLC against
liabilities, costs, additional taxes and other expenses, if any, which would not
have been incurred but for such failure. For example, if BNPLC fails to provide
NAI with a copy of a notice of a challenge by the Internal Revenue Service
covered by the indemnities set out in this Land Lease and NAI is not otherwise
already aware of such challenge, and if as a result of such failure BNPLC
becomes liable for penalties and interest covered by the indemnities in excess
of the penalties and interest that would have accrued if NAI had been promptly
provided with a copy of the notice, then NAI will be excused from any obligation
to BNPLC to pay the excess.

(d)     Characterization of this Land Lease . For purposes of determining the
appropriate financial accounting for this Land Lease and for purposes of
determining their respective rights and remedies under state law, BNPLC and NAI
believe 

8

13
and intend that (i) this Land Lease constitutes a true lease, not a mere
financing arrangement, enforceable in accordance with its express terms, and the
preceding subparagraph is not intended to affect the enforcement of any other
provisions of this Land Lease or the Purchase Agreement, and (ii) the Purchase
Agreement shall constitute a separate and independent contract, enforceable in
accordance with the express terms and conditions set forth therein. In this
regard, NAI acknowledges that NAI asked BNPLC to participate in the transactions
evidenced by this Land Lease and the Purchase Agreement as a landlord and owner
of the Property, not as a lender. Although other transactions might have been
used to accomplish similar results, NAI expects to receive certain material
accounting and other advantages through the use of a lease transaction.
Accordingly, and notwithstanding the reporting for income tax purposes described
in the preceding subparagraph, NAI cannot equitably deny that this Land Lease
and the Purchase Agreement should be construed and enforced in accordance with
their respective terms, rather than as a mortgage or other security device, in
any action brought by BNPLC to enforce this Land Lease or the Purchase
Agreement.

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.

(a)     Impositions. Subject only to the exceptions listed in subparagraph
5.(d) below, NAI shall pay or cause to be paid prior to delinquency all ad
valorem taxes assessed against the Property and other Impositions. If requested
by BNPLC from time to time, NAI shall furnish BNPLC with receipts showing
payment of all Impositions prior to the applicable delinquency date therefor.

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

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

(i)     If after the Effective Date there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then NAI shall from time
to time, pay to BNPLC for the account of BNPLC's Parent or such other
Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of reserve
requirements applicable to Collateral held from time to time by BNPLC's
Parent or other Participants pursuant to the Pledge Agreement would be
an increase covered by the preceding sentence. A certificate as to the
amount of such increased cost, submitted to BNPLC and NAI by BNPLC's
Parent or the other Participant, shall be conclusive and binding upon
NAI, absent clear and demonstrable error.

(ii)    BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount
of capital to be 

9

14
maintained by it and that the amount of such capital is increased by or
based upon the existence of advances made or to be made to BNPLC to
permit BNPLC to maintain BNPLC's investment in the Property. To the
extent that BNPLC's Parent or another Participant demands Capital
Adequacy Charges as compensation for the additional capital requirements
reasonably allocable to such investment or advances, NAI shall pay to
BNPLC for the account of BNPLC's Parent or the other Participant, as the
case may be, the amount so demanded. Without limiting the foregoing,
BNPLC and NAI hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
Pledge Agreement will cause a zero percent (0%) risk weight to be
assigned to a percentage (equal to the Collateral Percentage) of the
collective investment of BNPLC and the Participants in the Property
pursuant to 12 Code of Federal Regulations, part 225, as from time to
time supplemented or amended, or pursuant to any other similar or
successor statute or regulation applicable to BNPLC and the
Participants. If and so long as such risk weight is increased the
assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of
return to BNPLC, BNPLC's Parent and any other Participants (net of their
costs of maintaining required capital) that they would have enjoyed from
this Land Lease absent such increase.

(iii)   Any amount required to be paid by NAI under this subparagraph
shall be due ten days after a demand for such payment is received by
NAI.

(c)     NAI's Payment of Other Losses; General Indemnification . Subject only to
the exceptions listed in subparagraph below:

(i)     All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time
and from time to time by reason of, in connection with or arising out of
(A) their ownership or alleged ownership of any interest in the Property
or the Rents, (B) the use and operation of the Property, (C) the
negotiation, administration or enforcement of the Operative Documents,
(D) the making of the Initial Funding Advance, (E) the breach by NAI of
this Land Lease or any other document executed by NAI in connection
herewith, (F) any failure of the Property or NAI itself to comply with
Applicable Laws, (G) Permitted Encumbrances, (H) Hazardous Substance
Activities, including those occurring prior to Effective Date, (I) any
obligations under the Existing Contract related to the Property that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever, shall be paid by NAI, and NAI
shall indemnify and defend BNPLC and other Interested Parties from and
against all such Losses.

(ii)    THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF
BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN
THE PRECEDING SUBPARAGRAPH 5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE
SUBJECT MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE
OUT OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED
PARTY. FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF
INSURANCE OBTAINED BY NAI OR REQUIRED OF NAI BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
THE INDEMNITIES AND RELEASES ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH
INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE
IS INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES
AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
INDEMNIFICATION BY THIS LAND LEASE.

(iii)   Costs and expenses for which NAI shall be responsible pursuant
to this subparagraph 5.(c) will include appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes, brokerage fees and
commissions, abstract fees, title policy fees, Uniform Commercial Code
search fees, escrow fees and Attorneys' Fees incurred by BNPLC with
respect to the 

10

15
Property, whether such costs and expenses are incurred at the time of
execution of this Land Lease or at any time during the Term.

(iv)    NAI's obligations under this subparagraph 5.(c) shall survive
the termination or expiration of this Land Lease. Any amount to be paid
by NAI under this subparagraph shall be due ten days after a demand for
such payment is received by NAI.

(v)     If an Interested Party notifies NAI of any claim or proceeding
included in, or any investigation or allegation concerning, Losses for
which NAI is responsible pursuant to this subparagraph 5.(c), NAI shall
assume on behalf of the Interested Party and conduct with due diligence
and in good faith the investigation and defense thereof and the response
thereto with counsel selected by NAI, but satisfactory to the Interested
Party; provided, that the Interested Party shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both NAI and the Interested Party
and the Interested Party shall have reasonably concluded that there are
legal defenses available to it which are inconsistent with or in
addition to those available to NAI, then the Interested Party shall have
the right to select separate counsel to participate in the investigation
and defense of and response to such claim, proceeding, investigation or
allegation on its own behalf, and NAI shall pay or reimburse the
Interested Party for all Attorney's Fees incurred by the Interested
Party because of the selection of such separate counsel. If NAI fails to
assume promptly (and in any event within fifteen days after being
notified of the applicable claim, proceeding, investigation or
allegation) the defense of the Interested Party, then the Interested
Party may contest (or settle, with the prior consent of NAI, which
consent will not be unreasonably withheld) the claim, proceeding,
investigation or allegation at NAI's expense using counsel selected by
the Interested Party. Moreover, if any such failure by NAI continues for
forty-five days or more after NAI is notified of any such claim,
proceeding, investigation or allegation, the Interested Party may elect
not to contest or continue contesting the same and instead, in
accordance with the written advice of counsel, settle (or pay in full)
all claims related thereto without NAI's consent and without releasing
NAI from any obligations to the Interested Party under this
subparagraph 5.(c).

(d)                   Exceptions and Qualifications to Indemnities.

(i)     BNPLC acknowledges and agrees that nothing in subparagraph 4.(a)
or the preceding subparagraphs of this Paragraph 5 shall be construed to
require NAI to pay or reimburse an Interested Party for (w) any costs or
expenses incurred by BNPLC or any transferee to accomplish any Permitted
Transfers described in clauses (2), (3), (4), (6) or (7) of the
definition thereof in the Common Definitions and Provisions Agreement
(Phase II - Land), (x) Excluded Taxes, (y) Losses incurred or suffered
by such Interested Party that are proximately caused by (and attributed
by any applicable principles of comparative fault to) the Established
Misconduct of that Interested Party, or (z) Losses incurred or suffered
by Participants in connection with their negotiation or execution of the
Participation Agreement or Pledge Agreement (or supplements making them
parties thereto) or in connection with any due diligence they may
undertake before entering into the Participation Agreement or Pledge
Agreement. Further, without limiting BNPLC's rights (as provided in
other provisions of this Land Lease and other Operative Documents) to
include the following in the calculation of Stipulated Loss Value or the
Break Even Price or collect Base Rent, a Supplemental Payment and other
amounts, the calculation of which depends upon the Stipulated Loss Value
or the Break Even Price, BNPLC acknowledges and agrees that nothing in
subparagraph 4.(a) or the preceding subparagraphs of this Paragraph 5
shall be construed to require NAI to pay or reimburse an Interested
Party for:

a)      costs paid by BNPLC with the proceeds of the Initial
Funding Advance as part of the Transaction Expenses; or

b)      Construction Advances made under (and as defined in) the
Construction Management Agreement or the Other Lease Agreement,
including costs and expenditures incurred or paid by or on
behalf of BNPLC after any Landlord's Election to Continue
Construction under (and as defined in) the Other Lease
Agreement, to the extent

11

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that such costs and expenditures are considered to be
Construction Advances pursuant to subparagraph 6(e) of the Lease
Agreement.

Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in
subparagraph 5.(c)(i), then such Interested Party will be expected to
promptly furnish a copy of such notice to NAI. The failure to so provide
a copy of the notice to NAI shall not excuse NAI from its obligations
under subparagraph 5.(c)(i); provided, that if NAI is unaware of the
matters described in the notice and such failure renders unavailable
defenses that NAI might otherwise assert, or precludes actions that NAI
might otherwise take, to minimize its obligations, then NAI shall be
excused from its obligation to indemnify such Interested Party (and any
Affiliate of such Interested Party) against the Losses, if any, which
would not have been incurred or suffered but for such failure. For
example, if BNPLC fails to provide NAI with a copy of a notice of an
obligation covered by the indemnity set out in subparagraph 5.(c)(i) and
NAI is not otherwise already aware of such obligation, and if as a
result of such failure BNPLC becomes liable for penalties and interest
covered by the indemnity in excess of the penalties and interest that
would have accrued if NAI had been promptly provided with a copy of the
notice, then NAI will be excused from any obligation to BNPLC (or any
Affiliate of BNPLC) to pay the excess.

(ii)    [Intentionally Deleted.].

6.      INTENTIONALLY DELETED.

7.      INTENTIONALLY DELETED.

8.      ENVIRONMENTAL.

(a)     Environmental Covenants by NAI . NAI covenants that:

(i)     NAI shall not conduct or permit others to conduct Hazardous
Substance Activities, except Permitted Hazardous Substance Use and
Remedial Work.

(ii)    NAI shall not discharge or permit the discharge of anything on
or from the Property that would require any permit under applicable
Environmental Laws, other than (1) storm water runoff, (2) waste water
discharges through a publicly owned treatment works, (3) discharges that
are a necessary part of any Remedial Work, and (4) other similar
discharges consistent with the definition herein of Permitted Hazardous
Substance Use, in each case in strict compliance with Environmental
Laws.

(iii)   Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions
of this Land Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict
compliance with Environmental Laws.

(iv)    If requested by BNPLC in connection with any Remedial Work
required by this subparagraph, NAI shall retain independent
environmental consultants acceptable to BNPLC to evaluate any
significant new information generated during NAI's implementation of the
Remedial Work and to discuss with NAI whether such new information
indicates the need for any additional measures that NAI should take to
protect the health and safety of persons (including employees,
contractors and subcontractors and their employees) or to protect the
environment. NAI shall implement any such additional measures to the
extent required with respect to the Property by Environmental Laws or
otherwise believed by BNPLC to be reasonably required and to the extent
not inconsistent with the other provisions of this Land Lease.

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(b)     Right of BNPLC to do Remedial Work Not Performed by NAI . If NAI's
failure to cure any breach of the covenants set forth in subparagraph 8.(a)
continues beyond the Environmental Cure Period (as defined below), BNPLC may, in
addition to any other remedies available to it, conduct all or any part of the
Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.

(c)     Environmental Inspections and Reviews . BNPLC reserves the right to
retain environmental consultants to review any report prepared by NAI or to
conduct BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph . NAI grants to BNPLC and to BNPLC's agents,
employees, consultants and contractors the right to enter upon the Property at
any time to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. NAI shall
promptly reimburse BNPLC for the fees of its environmental consultants and the
costs of any such inspections and tests.

(d)     Communications Regarding Environmental Matters .

(i)     NAI shall immediately advise BNPLC of (1) any discovery of any
event or circumstance which would render any of the representations of
NAI herein or in the Closing Certificate concerning environmental
matters materially inaccurate or misleading if made at the time of such
discovery and assuming that NAI was aware of all relevant facts, (2) any
Remedial Work (or change in Remedial Work) required or undertaken by NAI
or its Affiliates in response to any (A) discovery of any Hazardous
Substances on, under or about the Property other than Permitted
Hazardous Substances or (B) any claim for damages resulting from
Hazardous Substance Activities, (3) NAI's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the
Property which could cause the Property or any part thereof to be
subject to any ownership, occupancy, transferability or use restrictions
under Environmental Laws, or (4) any investigation or inquiry of any
failure or alleged failure by NAI to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, NAI shall deliver to BNPLC
within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action
that NAI proposes to take with respect thereto, if any, to bring the
Property into compliance with Environmental Laws or to correct any
breach by NAI of this Paragraph 8, including any proposed Remedial Work,
the estimated cost and time of completion, the name of the contractor
and a copy of the construction contract, if any, and such additional
data, instruments, documents, agreements or other materials or
information as BNPLC may request.

(ii)    NAI shall provide BNPLC with copies of all material written
communications with federal, state and local governments, or agencies
relating to the matters listed in the preceding clause (i). NAI shall
also provide BNPLC with copies of any correspondence from third Persons
which threaten litigation over any significant failure or alleged
significant failure of NAI to maintain or operate the Property in
accordance with Environmental Laws.

(iii)   Prior to NAI's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
NAI shall, to the extent practicable, deliver to BNPLC a draft of the
proposed submission (together with the proposed date of submission), and
in good faith assess and consider any comments of BNPLC regarding the

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same. Promptly after BNPLC's request, NAI shall meet with BNPLC to
discuss the submission, shall provide any additional information
requested by BNPLC and shall provide a written explanation to BNPLC
addressing the issues raised by comments (if any) of BNPLC regarding the
submission, including a reasoned analysis supporting any decision by NAI
not to modify the submission in accordance with comments of BNPLC.

9.      INSURANCE REQUIRED AND CONDEMNATION.

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

(b)     Intentionally Deleted .

(c)     Failure to Obtain Insurance . If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Land Lease, BNPLC
shall be entitled (but not required) to obtain the insurance that NAI has failed
to obtain or for which NAI has not provided the required confirmation and,
without limiting BNPLC's other remedies under the circumstances, BNPLC may
require NAI to reimburse BNPLC for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date such cost was paid
by BNPLC until the date of reimbursement by NAI (provided, however, that any
such insurance cost paid by BNPLC prior to the Base Rent Commencement Date will
be charged against the Construction Allowance under, and as defined in, the
Construction Management Agreement as if it had been paid by NAI).

(d)     Condemnation . Immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Property or any portion thereof,
or any other similar governmental or quasi-governmental proceedings arising out
of injury or damage to the Property or any portion thereof, each party shall
notify the other (provided, however, BNPLC shall have no liability for its
failure to provide such notice) of the pendency of such proceedings. NAI shall,
at its expense, diligently prosecute any such proceedings and shall consult with
BNPLC, its attorneys and experts and cooperate with them as requested in the
carrying on or defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with respect to the Property
and all judgments, decrees and awards for injury or damage to the Property shall
be paid to BNPLC as Escrowed Proceeds, and all such proceeds will be applied as
provided in Paragraph . BNPLC is hereby authorized, in the name of NAI, at any
time when an Event of Default shall have occurred and be continuing, or
otherwise with NAI's prior consent, to execute and deliver valid acquittances
for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Property. BNPLC shall not be in any event or
circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.

(e)     Waiver of Subrogation . NAI, for itself and for any Person claiming
through it (including any insurance company claiming by way of subrogation),
waives any and every claim which arises or may arise in its favor against BNPLC
or any other Interested Party and the officers, directors, and employees of the
Interested Parties for any and all Losses, to the extent that NAI is compensated
by insurance or would be compensated by the insurance policies contemplated in
this Land Lease, but for any deductible or self-insured retention maintained
under such insurance or but for a failure of NAI to maintain the insurance as
required by this Land Lease. NAI agrees to have such insurance policies properly
endorsed so as to make them valid notwithstanding this waiver, if such
endorsement is required to prevent a loss of insurance.

10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.

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

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

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

(b)     Advances of Escrowed Proceeds to NAI . Except as otherwise provided
below in this Paragraph 10, BNPLC shall advance all Remaining Proceeds held by
it as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to
NAI of repairing or restoring the Property in accordance with the requirements
of this Land Lease and the other Operative Documents as the applicable repair or
restoration progresses and upon compliance by NAI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC. In no event, however,
shall BNPLC be required to pay Escrowed Proceeds to NAI in excess of the actual
out-of-pocket cost to NAI of the applicable repair or restoration, as evidenced
by invoices or other documentation satisfactory to BNPLC, it being understood
that BNPLC may retain and apply any such excess as a Qualified Prepayment.

(c)     Application of Escrowed Proceeds as a Qualified Prepayment . Provided no
Event of Default shall have occurred and be continuing, BNPLC shall apply any
Remaining Proceeds paid to it (or other amounts available for application as a
Qualified Prepayment) as a Qualified Prepayment on any date that BNPLC is
directed to do so by a notice from NAI; however, if such a notice from NAI
specifies an effective date for a Qualified Prepayment that is less than five
Business Days after BNPLC's actual receipt of the notice, BNPLC may postpone the
date of the Qualified Prepayment to any date not later than five Business Days
after BNPLC's receipt of the notice. In any event, except when BNPLC is required
by the preceding sentence to apply Remaining Proceeds or other amounts as a
Qualified Prepayment on an Advance Date or Base Rent Date, BNPLC may deduct
Breakage Costs incurred in connection with any Qualified Prepayment from the
Remaining Proceeds or other amounts available for application as the Qualified
Prepayment, and NAI will reimburse BNPLC upon request for any such Breakage
Costs that BNPLC incurs but does not deduct.

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

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(e)     NAI's Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, and notwithstanding other
provisions of this Land Lease to the contrary, if the Property is damaged or
less than all or substantially all of the Property is taken by condemnation, NAI
must:

A)      increase the value of the Property or the remainder thereof by
restoring the same (in a manner consistent with the requirements and
limitations imposed by this Land Lease and the other Operative Documents
or otherwise acceptable to BNPLC), or decrease Stipulated Loss Value by
tendering a payment to BNPLC for application as a Qualified Prepayment,
as necessary to cause Current AS IS Market Value to be not less than
sixty percent (60%) of Stipulated Loss Value; and

B)      restore the Property or the remainder thereof to a reasonably
safe and sightly condition.

(f)     Takings of All or Substantially All of the Property on or after the Base
Rent Commencement Date. In the event of any taking of all or substantially all
of the Property on or after the Base Rent Commencement Date, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such condemnation, then BNPLC shall be
entitled to recover the excess from NAI upon demand as an additional Qualified
Prepayment, whereupon this Land Lease shall terminate. Any taking of so much of
the Real Property as, in BNPLC's reasonable good faith judgment, makes it
impracticable to restore or improve the remainder thereof as required by part
(2) of the preceding subparagraph shall be considered a taking of substantially
all the Property for purposes of this Paragraph 10.

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING
THE PROPERTY. NAI represents, warrants and covenants as follows:

(a)     Compliance with Covenants and Laws. The use of the Property permitted
by this Land Lease complies, or will comply after NAI obtains available permits
as the tenant under this Land Lease, in all material respects with all
Applicable Laws. NAI has obtained or will promptly obtain all utility, building,
health and operating permits as may be required by any governmental authority or
municipality having jurisdiction over the Property for any construction upon or
use of the Property permitted by this Land Lease.

(b)     Operation of the Property. During the Term, NAI shall operate the
Property in a good and workmanlike manner and substantially in compliance with
all Applicable Laws and will pay or cause to be paid all fees or charges of any
kind in connection therewith. (If NAI does not promptly correct any failure of
the Property to comply with Applicable Laws that is the subject of a written
notice given to NAI or BNPLC by any governmental authority, then for purposes of
the preceding sentence, NAI shall be considered not to have maintained the
Property "substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under (and as defined in) the Construction
Management Agreement or materially and adversely affect the value of the
Property or NAI's use, occupancy or operations on the Property, NAI shall not,
without BNPLC's prior consent: (i) initiate or permit any zoning
reclassification of the Property; (ii) seek any variance under existing zoning
ordinances applicable to the Property; (iii) use or permit the use of the
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations; (iv)
execute or file any subdivision plat affecting the Property; or (v) consent to
the annexation of the Property to any municipality. If (A) a change in the
zoning or other Applicable Laws affecting the permitted use or development of
the Property shall occur after the Base Rent Commencement Date that reduces the
value of the Property, or (B) conditions or circumstances on or about the
Property are 

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discovered after the Base Rent Commencement Date (such as the presence of an
endangered species) which substantially impede development and thereby reduce
the value of the Property, and if after any such reduction under clause (A) or
(B) preceding the Current AS IS Market Value of the Property is less than sixty
percent (60%) of Stipulated Loss Value, then NAI shall pay BNPLC upon request
the amount by which Current AS IS Market Value is less than sixty percent (60%)
of Stipulated Loss Value, for application as a Qualified Prepayment. During the
Term, NAI shall not cause or permit any drilling or exploration for, or
extraction, removal or production of, minerals from the surface or subsurface of
the Property, and NAI shall not do any act whereby the market value of the
Property may reasonably be expected to be materially lessened. During the Term,
if NAI receives a written notice or claim from any federal, state or other
governmental entity that the Property is not in compliance in any material
respect with any Applicable Law, or that any action may be taken against the
owner of the Property because the Property does not comply with Applicable Law,
NAI shall promptly furnish a copy of such notice or claim to BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPLC or
the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken by any governmental
authority against BNPLC or any property owned by BNPLC (including the Property)
because of such violation, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

(c)     Debts for Construction, Maintenance, Operation or Development . NAI
shall cause all debts and liabilities incurred in the construction, maintenance,
operation or development of the Property, including all debts and liabilities
for labor, material and equipment and all debts and charges for utilities
servicing the Property, to be promptly paid; provided, that nothing in this
subparagraph will be construed to require NAI to remove Liens Removable by
BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest NAI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, NAI bonds over to BNPLC's
reasonable satisfaction all such contested liens against the Property alleged to
secure an amount in excess of $500,000 (individually or in the aggregate), (2)
NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (3) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final; provided, however,
that in any event each such contest shall be concluded and the lien, interest
and costs must be paid by NAI prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPLC or its
directors, officers or employees because of the nonpayment thereof, (ii) the
date that any writ or order is issued under which the Property or any other
property in which BNPLC has an interest may be seized or sold or any other
action is taken against BNPLC or any property in which BNPLC has an interest
because of the nonpayment thereof, or (iii) a Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

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(d)     Repair, Maintenance, Alterations and Additions . NAI shall keep the
Property in good order, operating condition and appearance and shall cause all
necessary repairs, renewals and replacements to be promptly made. NAI will not
allow any of the Property to be materially misused, abused or wasted. NAI shall
not, without the prior consent of BNPLC, make material new Improvements or alter
Improvements in any material respect, except as part of the work performed in
accordance with the Construction Management Agreement. Without limiting the
foregoing, NAI will notify BNPLC before making any significant alterations to
the Improvements after the completion of the Construction Project. Nothing in
this subparagraph, however, is intended to limit NAI's rights and obligations
under other express provisions of the Other Lease Agreement and the Construction
Management Agreement with respect to the Construction Project.

(e)     Permitted Encumbrances and Development Documents . NAI shall during the
Term comply with and will cause to be performed all of the covenants, agreements
and obligations imposed upon the owner of any interest in the Property by the
Permitted Encumbrances or the Development Documents. Without limiting the
foregoing, NAI shall cause all amounts to be paid when due, the payment of which
is secured by any Lien against the Property created by the Permitted
Encumbrances. Without the prior consent of BNPLC, NAI shall not enter into,
initiate, approve or consent to any modification of any Permitted Encumbrance or
Development Document that would create or expand or purport to create or expand
obligations or restrictions which would encumber BNPLC's interest in the
Property. (Whether BNPLC must give any such consent requested by NAI during the
Term of this Land Lease shall be governed by subparagraph 3(A) of the Closing
Certificate and Agreement.)

(f)     Books and Records Concerning the Property . NAI shall keep books and
records that are accurate and complete in all material respects for the Property
and, subject to Paragraph 16.(c), will permit all such books and records to be
inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1. Throughout the Term of this Land Lease, NAI shall comply with the
requirements of Schedule 1 attached hereto.

13.     FINANCIAL STATEMENTS AND OTHER REPORTS.

(a)     Financial Statements; Required Notices; Certificates . Throughout the
Term of this Land Lease, NAI shall deliver to BNPLC and to each Participant:

(i)     as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of NAI, a consolidated balance
sheet of NAI and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash
flows of NAI and its Consolidated Subsidiaries for such fiscal year, all
in reasonable detail and all prepared in accordance with GAAP and
accompanied by a report and opinion of accountants of national standing
selected by NAI, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be
subject to any qualifications or exceptions as to the scope of the audit
nor to any qualification or exception which BNPLC determines, in BNPLC's
reasonable discretion, is unacceptable;

(ii)     as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of NAI,
the consolidated balance sheet of NAI and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and
the consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail
and all prepared in accordance with GAAP and certified by the chief
financial officer or controller of NAI (subject to year-end
adjustments);

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(iii)     together with the financial statements furnished in accordance
with subparagraph 13.(a)(i) and 13.(a)(ii), a certificate of the chief
financial officer or controller of NAI: (i) certifying that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a brief statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, (ii)
certifying that the representations of NAI set forth in the Operative
Documents are true and correct in all material respects as of the date
thereof as though made on and as of the date thereof or, if not then
true and correct, a brief statement as to why such representations are
no longer true and correct, and (iii) with computations demonstrating
compliance with the financial covenants contained in Schedule 1;

(iv)     within five days after the end of each calendar month, a
certificate of the chief financial officer or controller of NAI
certifying that at the end of the preceding calendar month, NAI had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;

(v)     promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which NAI sends to
NAI's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which NAI files
with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange;

(vi)     upon request by BNPLC, 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 the dates to
which the Base Rent has been paid and either stating that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default
under this Land Lease has occurred and is continuing, a brief statement
as to the nature thereof; it being intended that any such statement by
NAI may be relied upon by any prospective purchaser or mortgagee of the
Property and by the Participants

(vii)     as soon as possible after, and in any event within ten days
after NAI becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to NAI relating
thereto is $500,000 or more, a notice signed by a senior financial
officer of NAI setting forth details of the following and the response,
if any, which NAI or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by NAI or an ERISA Affiliate with respect to any of the
following or the events or conditions leading up to the following): (A)
the assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of NAI, against the assets of any Plan or
Multiemployer Plan or against any interest of BNPLC or NAI in the
Property, or (B) the taking of any action by the PBGC or any other
governmental authority against NAI to terminate any Plan of NAI or any
ERISA Affiliate of NAI or to cause the appointment of a trustee or
receiver to administer any such Plan ; and

(viii)     such other information respecting the condition or
operations, financial or otherwise, of NAI, of any of its Subsidiaries
or of the Property as BNPLC or any Participant through BNPLC may from
time to time reasonably request.

BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.

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14.     ASSIGNMENT AND SUBLETTING BY NAI.

(a)     BNPLC's Consent Required . Without the prior consent of BNPLC, NAI shall
not assign, transfer, mortgage, pledge or hypothecate this Land Lease or any
interest of NAI hereunder and shall not sublet all or any part of the Property,
by operation of law or otherwise; provided, that this provision will not be
construed to prohibit any sublease of space within Improvements expressly
permitted by the Other Lease Agreement.

(b)     Standard for BNPLC's Consent to Assignments and Certain Other Matters .
Consents and approvals of BNPLC which are required by this Paragraph will not be
unreasonably withheld or delayed, but NAI acknowledges that BNPLC's withholding
of such consent or approval shall be reasonable if BNPLC determines in good
faith that (1) giving the approval may materially increase BNPLC's risk of
liability for any existing or future environmental problem, or (2) giving the
approval is likely to increase BNPLC's administrative burden of complying with
or monitoring NAI's compliance with the requirements of this Land Lease.

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

15.     ASSIGNMENT BY BNPLC.

(a)     Restrictions on Transfers . Except by a Permitted Transfer, BNPLC shall
not assign, transfer, mortgage, pledge, encumber or hypothecate this Land Lease
or the other Operative Documents or any interest of BNPLC in and to the Property
during the Term without the prior consent of NAI, which consent NAI may withhold
in its sole discretion. Further, notwithstanding anything to the contrary herein
contained, if withholding taxes are imposed on the rents and other amounts
payable to BNPLC hereunder because of BNPLC's assignment of this Land Lease to
any citizen of, or any corporation or other entity formed under the laws of, a
country other than the United States, NAI shall not be required to compensate
BNPLC or any such assignee for the withholding tax. If, in breach of this
subparagraph, BNPLC transfer the Property or any part thereof by a conveyance or
that does not constitute a Permitted Transfer, with the result that additional
transfer taxes or other Impositions are assessed against the Property or the
owner thereof, BNPLC shall be required to pay such additional transfer taxes or
other Impositions.

(b)     Effect of Permitted Transfer or other Assignment by BNPLC . If, without
breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the Property
and assigns all of its rights under this Land Lease and the other Operative
Documents, then BNPLC shall thereby be released from any obligations arising
after such assumption under this Land Lease or the other Operative Documents,
and NAI shall look solely to each successor in interest of BNPLC for performance
of such obligations.

16.     BNPLC'S RIGHT OF ACCESS.

(a)     During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraph 16.(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Land Lease or the other Operative Documents.

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(b)     If NAI fails to perform any act or to take any action required of it by
this Land Lease or the Closing Certificate, or to pay any money which NAI is
required by this Land Lease or the Closing Certificate to pay, and if such
failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Land Lease NAI may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of NAI's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to NAI or the subtenants or invitees of NAI by reason of making
such repairs or the performance of any such work on or in the Property, or on
account of bringing materials, supplies and equipment into or through the
Property during the course of such work (except for any liability in excess of
the liability insurance limits established in Exhibit B resulting from death or
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of NAI under this Land Lease shall not thereby
be excused in any manner.

(c)     NAI shall have no obligation to provide proprietary information (as
defined in the next sentence) to BNPLC, except and to the extent that (1) BNPLC
reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Land Lease and the other Operative Documents
without evaluating such information. For purposes of this Land Lease
"PROPRIETARY INFORMATION" includes NAI's intellectual property, trade secrets
and other confidential information of value to NAI about, among other things,
NAI's manufacturing processes, products, marketing and corporate strategies, but
in no event will "proprietary information" include any disclosure of substances
and materials (and their chemical composition) which are or previously have been
present in, on or under the Property at the time of any inspections by BNPLC,
nor will "proprietary information" include any additional disclosures reasonably
required to permit BNPLC to determine whether the presence of such substances
and materials has constituted a violation of Environmental Laws. In addition,
under no circumstances shall NAI have any obligation to disclose to BNPLC or any
other party any proprietary information of NAI (including, without limitation,
any pending applications for patents or trademarks, any research and design and
any trade secrets) except if and to the limited extent reasonably necessary to
comply with the express provisions of this Land Lease or the other Operative
Documents.

17.     EVENTS OF DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" by NAI under this Land Lease:

(a)     NAI shall fail to pay when due any installment of Rent due hereunder and
such failure shall continue for three (3) Business Days after NAI is notified in
writing thereof.

(b)     NAI shall fail to cause any representation or warranty of NAI contained
herein or in the Closing Certificate that was false or misleading in any
material respect when made to be made true and not misleading (other than as
described in the other clauses of this Paragraph 17), or NAI shall fail to
comply with any term, provision or covenant of this Land Lease or the Closing
Certificate (other than as described in the other clauses of this Paragraph 17),
and in either case shall not cure such failure prior to the earlier of (A)
thirty days after written notice thereof is sent to NAI or (B) the date any writ
or order is issued for the levy or sale of any property owned by BNPLC
(including the Property) or any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such failure; provided, however, that so long as no such writ or order is
issued and no such criminal prosecution is instituted or overtly threatened, the
period within which such failure may be cured by NAI shall be extended for a
further period (not to exceed an additional sixty days) as shall 

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be necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI shall promptly have commenced to cure
such failure and shall thereafter continuously prosecute the curing thereof with
reasonable diligence and (z) the extension of the period for cure will not, in
any event, cause the period for cure to extend beyond five days prior to the
expiration of this Land Lease.

(c)     NAI shall abandon the Property.

(d)     NAI or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of NAI described in the next sentence
when due (taking into consideration the time NAI may have to cure such failure,
if any, under the documents governing such Debt). As used in this clause
14(a)(v), "DEBT" shall include only Debt (as defined in the Common Definitions
and Provisions Agreement (Phase II - Land)) of NAI or any of its Subsidiaries
now existing or arising in the future (a) payable to BNPLC or any Affiliate of
BNPLC, or (B) payable to any other Person and with respect to which $3,000,000
or more is actually due and payable because of acceleration or otherwise.

(e)     NAI: (a) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have had any such petition or application
filed against it; or (e) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty days or more.

(f)     One or more final judgments, decrees or orders for the payment of money
in excess of $3,000,000 in the aggregate shall be rendered against NAI and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty consecutive days without NAI's having obtained an agreement (or
after the expiration or termination of an agreement) of the Persons entitled to
enforce such judgment, decrees or orders not to enforce the same pending
negotiations with NAI concerning the satisfaction or other discharge of the
same.

(g)     NAI shall breach the requirements of Paragraph 12, which by reference to
Schedule 1 establishes certain financial covenants and other requirements.

(h)     as of the effective date of this Land Lease, any of the representations
or warranties of NAI contained in subparagraphs 2(A) - (J) of the Closing
Certificate shall be false or misleading in any material respect.

(i)     NAI shall fail to pay the full amount of any Supplemental Payment
required by the Purchase Agreement on the Designated Sale Date or shall fail to
provide Collateral as and when due pursuant to the Pledge Agreement Documents.

(j)     NAI shall fail to comply with any term, provision or condition of the
Pledge Agreements after the expiration of any applicable notice and cure period
set forth in the Pledge Agreement.

18.     REMEDIES.

(a)     Basic Remedies . At any time after an Event of Default and after BNPLC
has given any notice required by subparagraph 18(b), BNPLC shall be entitled at
BNPLC's option (and without limiting BNPLC in the exercise of any other right or
remedy BNPLC may have, and without any further demand or notice except as
expressly described in this subparagraph 18(a)), to exercise any one or more of
the following remedies:

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(i)     By notice to NAI, BNPLC may terminate NAI's right to possession
of the Property. A notice given in connection with unlawful detainer
proceedings specifying a time within which to cure a default shall
terminate NAI's right to possession if NAI fails to cure the default
within the time specified in the notice.

(ii)    Upon termination of NAI's right to possession and without
further demand or notice, BNPLC may re-enter the Property in any manner
not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land may
be removed and stored in a warehouse or elsewhere at the expense and
risk of and for the account of NAI.

(iii)   Upon termination of NAI's right to possession, this Land Lease
shall terminate and BNPLC may recover from NAI:

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

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

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

d)      Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by NAI's failure to perform
NAI's obligations under this Land Lease or which in the ordinary
course of things would be likely to result therefrom, including
the costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of the
Property, removing persons or property therefrom, placing the
Property in good order, condition, and repair, preparing and
altering the Property for reletting, all other costs and
expenses of reletting, and any loss incurred by BNPLC as a
result of NAI's failure to perform NAI's obligations under the
other Operative Documents.

The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall
be computed by allowing interest at the Default Rate. The "WORTH
AT THE TIME OF AWARD" of the amount referred to in subparagraph
18.(a)(iii)c)shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).

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

(iv)    BNPLC shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in force even after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable limitations).
Accordingly, even if NAI has breached this Land Lease and abandoned the
Property, this Land Lease shall continue in effect for so long as BNPLC
does not terminate NAI's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Land Lease, including the
right to recover the Rent as it becomes due under this Land Lease. NAI's
right to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 18.(a)(i) hereof. The following shall
not constitute a termination of NAI's right to possession:

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

b)      The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Land Lease; or

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

(b)     Notice Required So Long As the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Continue Under the Purchase Agreement . So
long as NAI remains in possession of the Property and there has been no
termination of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations as provided Paragraph 4 of the Purchase Agreement, BNPLC's right to
exercise remedies provided in subparagraph 18.(a) will be subject to the
condition precedent that BNPLC shall have notified NAI, at a time when an Event
of Default shall have occurred and be continuing, of BNPLC's intent to exercise
remedies provided in subparagraph 18.(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing Rights
and Obligations before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPLC may proceed immediately to exercise remedies provided in subparagraph
18.(a) at any time after the earlier of (i) sixty days after BNPLC has given
such a notice to NAI, (ii) any date upon which NAI relinquishes possession of
the Property, or (iii) any termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.

(c)     Enforceability . This Paragraph shall be enforceable to the maximum
extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.

(d)     Remedies Cumulative . No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy shall be cumulative and in addition to any
other right or remedy given to BNPLC hereunder or now or hereafter existing in
favor of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Land Lease, BNPLC shall be entitled, to the extent permitted by
Applicable Law or in equity, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Land Lease, or to a decree compelling
performance of any of the other covenants, agreements, conditions or provisions
of this Land Lease to be performed by NAI, or to any other remedy allowed to
BNPLC at law or in equity. Nothing contained in this Land Lease shall limit or
prejudice the right of BNPLC to prove for and obtain in proceedings for
bankruptcy or insolvency of NAI by reason of the termination of this Land Lease,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the generality of the
foregoing, nothing contained herein shall modify, limit or impair any of the
rights and remedies of BNPLC under the Purchase Documents, and BNPLC shall not
be required to give the sixty day notice described in subparagraph 18.(b) as a
condition precedent to any acceleration of the Designated Sale Date or to taking
any action to enforce the Purchase Documents.

19.     DEFAULT BY BNPLC. If BNPLC should default in the performance of any of
its obligations under this Land Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.

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Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph will not in any event extend the time within which BNPLC must remove
Liens Removable by BNPLC as required by Paragraph beyond the Designated Sale
Date.

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

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

22.     HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title and
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Land Lease without
BNPLC's consent, whether such termination occurs by lapse of time or otherwise,
such holding over shall constitute and be construed as a tenancy from day to day
only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the day in
question, times (ii) the Default Rate for such day; divided by (iii) three
hundred and sixty; subject, however, to all of the terms, provisions, covenants
and agreements on the part of NAI hereunder. No payments of money by NAI to
BNPLC after the termination of this Land Lease shall reinstate, continue or
extend the Term of this Land Lease and no extension of this Land Lease after the
termination thereof shall be valid unless and until the same shall be reduced to
writing and signed by both BNPLC and NAI.

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS. NAI
acknowledges and agrees that nothing contained in this Land Lease shall limit,
modify or otherwise affect any of NAI's obligations under the other Operative
Documents, which obligations are intended to be separate, independent and in
addition to, and not in lieu of, the obligations set forth herein. In the event
of any inconsistency between the express terms and provisions of the Purchase
Documents and the express terms and provisions of this Land Lease, the express
terms and provisions of the Purchase Documents shall control. In the event of
any inconsistency between the express terms and provisions of the Closing
Certificate and the express terms and provisions of this Land Lease, the express
terms and provisions of this Land Lease shall control; provided, nothing herein
will limit or impair NAI's obligations under the Closing Certificate following
any expiration of termination of this Land Lease.

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[The signature pages follow.]

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Land Lease Agreement
to be executed as of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:_________________________________
Title:________________________________

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[Continuation of signature pages to Lease Agreement dated to be effective May 3,
1999]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Lloyd G. Cox, Vice President

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Exhibit A

LEGAL DESCRIPTION

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

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Exhibit B

INSURANCE REQUIREMENTS

I.      LIABILITY INSURANCE:

A.      NAI must maintain commercial general liability ("CGL") insurance on an
occurrence basis, affording immediate protection to the limit of not less than
$20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Land Lease (though such coverage or the
amount thereof shall in no way limit such indemnifications).

B.      Any deductible or self-insured retention applicable to the CGL insurance
shall not exceed $1,000 at any time when NAI shall continue to have the right to
exercise any Issue 97-10 Election under (and as defined in) the Other Lease
Agreement, or shall have previously exercised an Issue 97-10 Election. After the
expiration of NAI's right to exercise any Issue 97-10 Election, and provided no
Issue 97-10 Election has been exercised by NAI, NAI may increase any deductible
or self-insured retention applicable to such insurance, but not to an amount in
excess of $500,000.

C.      The forms of insurance policies (including endorsements) used to provide
the CGL insurance required by this Land Lease, and the insurance company or
companies providing the CGL insurance, must be acceptable to BNPLC. BNPLC shall
have the right from time to time and at any time to review and approve such
policy forms (including endorsements) and the insurance company or companies
providing the insurance. Without limiting the generality of the foregoing, BNPLC
may reasonably require (and unless and until NAI is otherwise notified by BNPLC,
BNPLC does require) that such insurance be provided under forms and by companies
consistent with the following:

(1)     Forms: CGL Insurance must be provided on Insurance Services
Office ("ISO") forms CG 0001 1093 or CG 0001 0196 or equivalent
substitute forms providing the same or greater coverage.

(2)     Rating Requirements: Insurance must be provided through
insurance or reinsurance companies rated by the A.M. Best Company of
Oldwick, New Jersey as having a policyholder's rating of A or better and
a reported financial information rating of X or better.

(3)     Required Endorsements: CGL Insurance must be endorsed to provide
or include:

(a)     in any policy containing a general aggregate limit, ISO
form amendment "Aggregate Limits of Insurance Per Location" CG 2504 1185
or equivalent substitute form;

(b)     a waiver of subrogation, using ISO form CG 2404 1093 or
equivalent substitute form (and under the commercial umbrella, if any),
in favor of "BNP Leasing Corporation and other Interested Parties (as
defined in the Common Definitions and Provisions Agreement (Phase II -
Land) between Network Appliance, Inc. and BNP Leasing Corporation dated
May 3, 1999)";

(c)     ISO additional insured form CG 2026 1185 or equivalent
substitute form, without modification (and under the commercial
umbrella, if any), designating as additional insureds "BNPLC and other
Interested Parties, as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) between Network Appliance, Inc. and BNP
Leasing Corporation dated May 3, 1999)"; and

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(d)     provisions entitling BNPLC to 30 days' notice from the
insurer prior to any cancellation, nonrenewal or material modification
to the CGL coverage.

(4)     Other Insurance: Each policy to contain standard CGL "other
insurance" wording, unmodified in any way that would make it excess over
or contributory with the additional insured's own commercial general
liability coverage.

II.     INTENTIONALLY DELETED.

III.    OTHER INSURANCE RELATED REQUIREMENTS:

A.      BNPLC must be notified in writing immediately by NAI of claims
against NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.

B.      Intentionally Deleted..

C.      NAI's CGL insurance must be evidenced by ACORD form 25
"Certificate of Insurance" completed and interlineated in a manner satisfactory
to BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the CGL insurance must be attached to such form.

D.      Such evidence of required insurance must be delivered upon
execution of this Land Lease and new certificate or evidence of insurance must
be delivered no later than 10 days prior to expiration of existing policy.

E.      NAI shall not cancel, fail to renew, or make or permit any
material reduction in any of the policies or certificates described in this
Exhibit without the prior written consent of BNPLC. The certificates (ACORD
forms 25) described in this Exhibit must contain the following express
provision:

"This is to certify that the policies of insurance described herein have been
issued to the insured Network Appliance, Inc. for whom this certificate is
executed and are in force at this time. In the event of cancellation,
non-renewal, or material reduction in coverage affecting the certificate holder,
at least sixty days prior notice shall be given to the certificate holder."

F.      The limits of liability under the liability insurance required
by this Land Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.

G.      NAI shall provide copies, certified as complete and correct by
an authorized agent of the applicable insurer, of all insurance policies
required by this Exhibit within ten days after receipt of a request for such
copies from BNPLC.

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Exhibit C

NOTICE OF LIBOR PERIOD ELECTION

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Lease Agreement (Phase II - Improvements) and Lease Agreement (Phase
II - Land), both dated as of May 3, 1999, and both between Network Appliance,
Inc., as tenant, and BNP Leasing Corporation, as landlord

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements shall be:

________________ month(s),

beginning with the first Base Rent Period that commences on or after:

______________, ____.

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

Executed this _____ day of ______________, 19___.

Network Appliance, Inc.

Name:____________________________________
Title:___________________________________
[cc all Participants]

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Schedule 1

FINANCIAL COVENANTS

This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase II Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of May 3, 1999 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase II - 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 II - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and Banque
Nationale de Paris, as a Participant and as agent for any financial institutions
that become Participants thereunder from time to time, and (d) the Pledge
Agreement (Phase II - Land) (collectively with the Pledge Agreement
(Improvements), the "PLEDGE AGREEMENTS") dated to be effective as of the
Effective Date, among BNPLC, NAI, and Banque Nationale de Paris, 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.

"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and the earlier of
the following dates after each fiscal quarter of NAI that ends after the Base
Rent Commencement Date : (1) the seventh Business Day after the release by NAI
of its financial statements for the fiscal quarter; or (2) the first Business
Day of the third calendar month following the end of the fiscal quarter.

"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
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 

1

38
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).

"MANDATORY COLLATERAL PERIOD" means any period during which, notwithstanding any
contrary designation of a Collateral Percentage by NAI under the Pledge
Agreements, the Collateral Percentage for purposes of the Pledge Agreements
shall be one hundred percent (100%), determined as set forth in Part III of this
Schedule 1.

"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 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.

2

39
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 - TESTS FOR MANDATORY COLLATERAL PERIODS

The period commencing on any Collateral Test Date, and ending on the
next Collateral Test Date, shall constitute a Mandatory Collateral Period if, at
the end of the latest fiscal quarter of NAI ending before such period, NAI shall
have both:

(A)     failed to maintain a ratio of (1) the sum (without duplication
of any item) of Collateral delivered and pledged under the Pledge Agreements in
accordance with the requirements thereof (if any), unencumbered 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 (2) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis), of at least 1.25 to 1.00
through and including the end of the last quarter of NAI's fiscal year 2000, and
of at least 1.50 to 1.00 thereafter; and.

(B)     failed to maintain a ratio of (i) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis) to (ii) Consolidated Tangible
Net Worth of NAI, of no more than 0.45 to 1.00.

PART IV - 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:

3

40
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:

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 (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 , 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.

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.

4

41

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 $20,000,000.00.

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 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.

5

42
COMMON DEFINITIONS AND PROVISIONS AGREEMENT

(PHASE II - LAND)

BETWEEN

BNP LEASING CORPORATION

AND

NETWORK APPLIANCE, INC.

DATED AS OF MAY 3, 1999

1

43
TABLE OF CONTENTS

Page
----

ARTICLE I - LIST OF DEFINED TERMS:

ACTIVE NEGLIGENCE ...........................................................................  1
ADDITIONAL RENT .............................................................................  1
ADJUSTED EBIT ...............................................................................  1
ADVANCE DATE ................................................................................  2
AFFILIATE ...................................................................................  2
APPLICABLE LAWS .............................................................................  2
APPLICABLE PURCHASER ........................................................................  2
ATTORNEYS' FEES .............................................................................  2
BANKING RULES CHANGE ........................................................................  2
BASE RATE ...................................................................................  2
BASE RENT ...................................................................................  2
BASE RENT COMMENCEMENT DATE..................................................................  2
BASE RENT DATE ..............................................................................  2
BASE RENT PERIOD ............................................................................  3
BNPLC .......................................................................................  4
BNPLC'S PARENT ..............................................................................  4
BREAKAGE COSTS ..............................................................................  4
BREAK EVEN PRICE ............................................................................  4
BUSINESS DAY ................................................................................  4
CAPITAL ADEQUACY CHARGES.....................................................................  4
CAPITAL LEASE ...............................................................................  4
CLOSING CERTIFICATE .........................................................................  5
CODE ........................................................................................  5
COLLATERAL ..................................................................................  5
COLLATERAL PERCENTAGE........................................................................  5
COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND)................................  5
CONSTRUCTION MANAGEMENT AGREEMENT............................................................  5
CONSTRUCTION PROJECT ........................................................................  5
CURRENT AS IS MARKET VALUE...................................................................  5
DEBT ........................................................................................  6
DEFAULT .....................................................................................  6
DEFAULT RATE ................................................................................  7
DEFAULTING PARTICIPANT.......................................................................  7
DEPOSIT TAKER ...............................................................................  7
DEPOSIT TAKER LOSSES ........................................................................  7
DESIGNATED SALE DATE ........................................................................  7
DEVELOPMENT DOCUMENTS........................................................................  7
DIRECT PAYMENTS TO PARTICIPANTS..............................................................  8
EFFECTIVE DATE ..............................................................................  8
EFFECTIVE RATE ..............................................................................  8
ENVIRONMENTAL LAWS ..........................................................................  8

44

Page
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ENVIRONMENTAL CUTOFF DATE....................................................................  8
ENVIRONMENTAL LOSSES ........................................................................  8
ENVIRONMENTAL REPORTS........................................................................  9
ERISA .......................................................................................  9
ERISA AFFILIATE .............................................................................  9
ESCROWED PROCEEDS ...........................................................................  9
ESTABLISHED MISCONDUCT.......................................................................  9
EUROCURRENCY LIABILITIES..................................................................... 10
EURODOLLAR RATE RESERVE PERCENTAGE........................................................... 10
EVENT OF DEFAULT ............................................................................ 10
EXCLUDED TAXES .............................................................................. 10
EXISTING CONTRACT ........................................................................... 10
FAILED COLLATERAL TEST DATE.................................................................. 11
FED FUNDS RATE .............................................................................. 11
GAAP ........................................................................................ 11
HAZARDOUS SUBSTANCE ......................................................................... 11
HAZARDOUS SUBSTANCE ACTIVITY................................................................. 11
IMPOSITIONS ................................................................................. 12
IMPROVEMENTS ................................................................................ 12
INITIAL FUNDING ADVANCE...................................................................... 12
INTERESTED PARTY ............................................................................ 12
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT............................... 12
LAND ........................................................................................ 13
LAND LEASE .................................................................................. 13
LIBOR ....................................................................................... 13
LIBOR PERIOD ELECTION........................................................................ 13
LIEN ........................................................................................ 14
LIENS REMOVABLE BY BNPLC..................................................................... 14
LOSSES ...................................................................................... 14
MANDATORY COLLATERAL PERIOD.................................................................. 15
MATERIAL ENVIRONMENTAL COMMUNICATION......................................................... 15
MAXIMUM REMARKETING OBLIGATION............................................................... 15
MINIMUM EXTENDED REMARKETING PRICE........................................................... 15
MULTIEMPLOYER PLAN .......................................................................... 15
NAI. ........................................................................................ 15
NAI'S EXTENDED REMARKETING PERIOD............................................................ 15
NAI'S EXTENDED REMARKETING RIGHT............................................................. 15
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS............................................. 15
OPERATIVE DOCUMENTS ......................................................................... 15
OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT............................................ 15
OTHER LEASE AGREEMENT........................................................................ 15
OTHER PURCHASE AGREEMENT..................................................................... 15
PARTICIPANT ................................................................................. 16
PARTICIPATION AGREEMENT...................................................................... 16
PBGC ........................................................................................ 16
PERMITTED ENCUMBRANCES....................................................................... 16
PERMITTED HAZARDOUS SUBSTANCE USE............................................................ 16

45

Page
----

PERMITTED HAZARDOUS SUBSTANCES............................................................... 17
PERMITTED TRANSFER .......................................................................... 17
PERSON ...................................................................................... 17
PERSONAL PROPERTY ........................................................................... 17
PLAN ........................................................................................ 17
PLEDGE AGREEMENT ............................................................................ 17
PRIME RATE .................................................................................. 18
PROPERTY .................................................................................... 18
PURCHASE AGREEMENT .......................................................................... 18
PURCHASE DOCUMENTS .......................................................................... 18
PURCHASE OPTION ............................................................................. 18
QUALIFIED AFFILIATE ......................................................................... 18
QUALIFIED PREPAYMENTS........................................................................ 18
REAL PROPERTY ............................................................................... 19
REMEDIAL WORK ............................................................................... 19
RENT ........................................................................................ 19
RESIDUAL RISK PERCENTAGE..................................................................... 19
RESPONSIBLE FINANCIAL OFFICER................................................................ 19
SALE CLOSING DOCUMENTS....................................................................... 19
SECURED SPREAD .............................................................................. 19
SELLER ...................................................................................... 19
STIPULATED LOSS VALUE........................................................................ 19
SUBSIDIARY .................................................................................. 19
SUPPLEMENTAL PAYMENT ........................................................................ 20
TERM ........................................................................................ 20
THIRD PARTY PRICE ........................................................................... 20
THIRD PARTY SALE NOTICE...................................................................... 20
THIRD PARTY SALE PROPOSAL.................................................................... 20
THIRD PARTY TARGET PRICE..................................................................... 20
TRANSACTION EXPENSES ........................................................................ 20
UNFUNDED BENEFIT LIABILITIES................................................................. 20
UNSECURED SPREAD ............................................................................ 20
VOLUNTARY RETENTION OF THE PROPERTY.......................................................... 21

ARTICLE II - PROVISIONS USED IN COMMON:

1   NOTICES ................................................................................. 21
2   SEVERABILITY ............................................................................ 23
3   NO MERGER ............................................................................... 23
4   NO IMPLIED WAIVER ....................................................................... 23
5   ENTIRE AND ONLY AGREEMENTS............................................................... 24
6   BINDING EFFECT .......................................................................... 24
7   TIME IS OF THE ESSENCE................................................................... 24
8   GOVERNING LAW ........................................................................... 24
9   PARAGRAPH HEADINGS....................................................................... 24

46

Page
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10  NEGOTIATED DOCUMENTS..................................................................... 24
11  TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT..................................... 24
12  OTHER TERMS AND REFERENCES............................................................... 24
13  EXECUTION IN COUNTERPARTS................................................................ 25
14  NOT A PARTNERSHIP, ETC................................................................... 25

47
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE II - LAND)

This Common Definitions and Provisions Agreement (Phase II - Land), by
and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is dated as of May 3,
1999, the Effective Date.

RECITALS

Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase II - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Land Lease (as defined below) and the Purchase Agreement (as
defined below), both of which concern the Property (as defined below). Each of
the Closing Certificate, the Land Lease and the Purchase Agreement (together
with this Common Definitions and Provisions Agreement (Phase II - Land) and the
Pledge Agreement [as defined below], the "OPERATIVE DOCUMENTS") are intended to
create separate and independent obligations upon the parties thereto. However,
NAI and BNPLC intend that all of the Operative Documents share certain
consistent definitions and other miscellaneous provisions. To that end, the
parties are executing this Common Definitions and Provisions Agreement (Phase II
- Land) and incorporating it by reference into each of the other Operative
Documents.

AGREEMENTS

ARTICLE I - LIST OF DEFINED TERMS

UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL
HAVE THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:

"ACTIVE NEGLIGENCE " of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Land Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Land, the Improvements or any interest in any other
Property or as a party to the transactions described in the Land Lease or the
other Operative Documents or in the Other Lease Agreement or the Other Purchase
Agreement, (2) any negligent failure of any other Interested Party to act when
the duty to act would not have been imposed but for such party's contractual or
other relationship to BNPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Land Lease or other
Operative Documents or in the Other Lease Agreement or Other Purchase Agreement,
or (3) the exercise in a lawful manner by BNPLC (or any party lawfully claiming
through or under BNPLC) of any right or remedy provided in or under the Land
Lease or the other Operative Documents or in the Other Lease Agreement or Other
Purchase Agreement.

"ADDITIONAL RENT " shall have the meaning assigned to it in subparagraph
3.(d) of the Land Lease.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 1

48

"ADJUSTED EBIT " shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Land Lease and to the Pledge Agreement.

"ADVANCE DATE " means the first Business Day of every calendar month,
beginning with the first Business Day in May, 1999 and continuing regularly
thereafter to and including the Base Rent Commencement Date.

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

"APPLICABLE LAWS " means any or all of the following, to the extent
applicable to NAI or the Property or the Land Lease or the other Operative
Documents: restrictive covenants; zoning ordinances and building codes; flood
disaster laws; health, safety and environmental laws and regulations; the
Americans with Disabilities Act and other laws pertaining to disabled persons;
and other laws, statutes, ordinances, rules, permits, regulations, orders,
determinations and court decisions.

"APPLICABLE PURCHASER " means any third party designated by NAI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.

"ATTORNEYS' FEES " means the expenses and reasonable fees of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.

"BANKING RULES CHANGE " means either: (1) the introduction of or any
change in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).

"BASE RATE " for any Base Rent Period means a rate equal to the higher
of (1) the Prime Rate in effect on the first day of such period, or (2) the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for that
period.

"BASE RENT " means the rent payable by NAI pursuant to subparagraph of
the Land Lease.

"BASE RENT COMMENCEMENT DATE " shall mean the earlier of (1) the first
Business Day of July, 2000, or (2) the "Base Rent Commencement Date" under and
as defined in the Other Common Definitions and Provisions Agreement.

"BASE RENT DATE " means a date upon which Base Rent must be paid under
the Land Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be determined as follows:

Common Definitions and Provisions Agreement (Phase II - Land) - Page 2

49
a)      If a LIBOR Period Election of one month is in effect on
the Base Rent Commencement Date, then the first Business Day of the
first calendar month following the Base Rent Commencement Date shall be
the first Base Rent Date.

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

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

(1)     If a LIBOR Period Election of one month is in effect on
a Base Rent Date, then the first Business Day of the first calendar
month following such Base Rent Date shall be the next following Base
Rent Date.

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

Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of September, 1999 and a LIBOR Period Election of two months
commences on the Base Rent Commencement Date, then the first Base Rent Date
shall be the first Business Day of November, 1999.

"BASE RENT PERIOD " means a period for which Base Rent must be paid
under the Land Lease, each of which periods shall correspond to the LIBOR Period
Election for such period. The first Base Rent Period shall begin on and include
the Base Rent Commencement Date, and each successive Base Rent Period shall
begin on and include the Base Rent Date upon which the preceding Base Rent
Period ends. Each Base Rent Period, including the first Base Rent Period, shall
end on but not include the first or second Base Rent Date after the Base Rent
Date upon which such period began, determined as follows:

(1)     If the LIBOR Period Election for a Base Rent Period is
one month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
began.

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

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

1)      If NAI makes a LIBOR Period Election of three months for
a hypothetical Base Rent Period beginning on the first Business Day in
January, 2001, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent Period
will end on the first Business Day in April, 2001, the third calendar
month after January, 2001.

2)      If, however, NAI makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2001, then such Base Rent Period will end on
but not include the second Base Rent Date after it begins; that is, the
first Business Day in July, 2001.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 3

50
"BNPLC " means BNP Leasing Corporation, a Delaware corporation.

"BNPLC'S PARENT " means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.

"BREAKAGE COSTS " means any and all costs, losses or expenses incurred
or sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:

(1)     used to make or maintain the Initial Funding Advance
upon application of a Qualified Prepayment or upon any sale of the
Property pursuant to the Purchase Agreement, if such application or sale
occurs on any day other than an Advance Date or the last day of a Base
Rent Period; or

(2)     used to make or maintain the Initial Funding Advance
upon the acceleration of the end of any Base Rent Period pursuant
subparagraph 3.(c)(ii) of the Land Lease.

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

"BREAK EVEN PRICE " shall have the meaning assigned to it in
subparagraph 1(B)(1) of the Purchase Agreement.

"BUSINESS DAY " means any day that is (1) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in New
York City, New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (1).

"CAPITAL ADEQUACY CHARGES " means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(b)(ii) of the Land Lease.

"CAPITAL LEASE " means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP or for federal income tax
purposes.
"CLOSING CERTIFICATE " means the Closing Certificate and Agreement dated
as of May 3, 1999 executed by NAI in favor of BNPLC, as such Closing Certificate
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

"CODE " means the Internal Revenue Code of 1986, as amended.

"COLLATERAL " shall have the meaning assigned to it in the Pledge
Agreement.

"COLLATERAL PERCENTAGE " for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Land Lease, the Collateral
Percentage for any Base Rent Period shall not exceed a fraction; the numerator
of which fraction shall equal the value 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 4

51
(determined as provided in the Pledge Agreement) of all Collateral (a) that is,
on the first day of such period, held by the Deposit Takers under (and as
defined in) the Pledge Agreement subject to a Qualifying Security Interest (as
defined below), (b) that is free from claims or security interests held or
asserted by any third party, and (c) that is not in excess of Stipulated Loss
Value; and the denominator of which fraction shall equal the Stipulated Loss
Value on the first day of such period. "QUALIFYING SECURITY INTEREST" means a
first priority perfected security interest under the Pledge Agreement.

"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND) " means
this Agreement, which is incorporated by reference into each of the other
Operative Documents.

"CONSTRUCTION MANAGEMENT AGREEMENT " means the Construction Management
Agreement dated as of May 3, 1999 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"CONSTRUCTION PROJECT " means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.

"CURRENT AS IS MARKET VALUE " means an amount equal to the fair market
value of BNPLC's interest in the Property (or any applicable portion thereof),
AS IS, WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a
determination of Current AS IS Market Value is required by the express terms of
any Operative Document, it will be determined accordance with the following
procedure unless BNPLC and NAI have otherwise agreed in writing upon a Current
AS IS Market Value at that time:

(A)     BNPLC and NAI shall each, within ten days after written notice
from either to the other, select an appraiser. If either BNPLC
or NAI fails to select an appraiser within the required period,
then the appraiser who has been timely selected shall
conclusively determine the fair market value of the Property (or
applicable portion thereof) in accordance with this definition
within forty-five days after his or her selection.

(B)     Upon the selection of the two appraisers as provided above, such
appraisers shall proceed to determine the fair market value of
BNPLC's interest in the Property (or applicable portion thereof)
in accordance with this clause (v). Such appraisals shall be
submitted in writing no later than forty-five days after
selection of the second appraiser. If the fair market value as
determined by such appraisers is identical, such sum shall be
Current AS IS Market Value. If the fair market value indicated
by the lower appraisal differs from the fair market value
indicated by the higher appraisal by less than five percent (5%)
of the fair market value indicated by the higher appraisal, then
Current AS IS Market Value shall be the sum of the two appraisal
figures divided by two (2). If either appraiser fails to timely
submit his or her appraisal, the timely submitted appraisal
shall be determinative of Current AS IS Market Value.

(C)     If the fair market value indicated by the lower appraisal
differs from the fair market value indicated by the higher
appraisal by more than five percent (5%) of the fair market
value indicated by the higher appraisal, then the two appraisers
previously selected shall select a third appraiser. The name of
such appraiser shall be submitted at the same time the written
appraisals are due. Such third appraiser shall then review the
previously submitted appraisals and select the one that, in his
professional opinion, more closely reflects the fair market
value of BNPLC's interest in the Property (or applicable portion
thereof), such selection to be submitted in writing no later
than ten days after selection of the third appraiser. Such
selection shall be determinative of Current AS IS Market Value.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 5

52
(D)     In making any such determination of fair market value, the
appraisers shall assume that any improvements then located on
the Property (or applicable portion thereof) or under
construction thereon constitute the highest and best use, and
that neither the Land Lease nor the Purchase Agreement add any
value to the Property. Each appraiser selected hereunder shall
be an independent MAI-designated appraiser with not less than
ten years' experience in commercial real estate appraisal in
Sunnyvale, California and surrounding areas.

"DEBT " of any Person means (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
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.

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

"DEFAULT RATE " means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.

"DEFAULTING PARTICIPANT " shall have the meaning assigned to it in
Section 1 of the Participation Agreement.

"DEPOSIT TAKER " shall have the meaning assigned to it in the Pledge
Agreement.

"DEPOSIT TAKER LOSSES " shall have the meaning assigned to it in the
Pledge Agreement.

"DESIGNATED SALE DATE " means the earlier of:

(1)     the first Business Day of May, 2004; or

Common Definitions and Provisions Agreement (Phase II - Land) - Page 6

53
(2)     any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC; provided, that to be
effective for purposes of this definition, any such notice from NAI to
BNPLC must designate a Business Day that is more than thirty days after
the date of such notice; and provided, further, to be effective for
purposes of this definition, the notice must include an express,
unconditional, unequivocal and irrevocable acknowledgment by NAI that
because of NAI's election to accelerate the Designated Sale Date, the
Maximum Remarketing Obligation will equal the Break Even Price under the
Purchase Agreement; or

(3)     any Business Day designated as such in a notice given by
BNPLC to NAI after the effective date of any termination of the
Construction Management Agreement as provided in subparagraphs 5(D) or
5(E) thereof; provided, that to be effective for purposes of this
definition, any such notice from BNPLC to NAI must designate a Business
Day that is more than thirty days after the date of such notice; or

(4)     [Intentionally Deleted]; or

(5)     any Business Day designated as such in a notice given by
BNPLC to NAI when any Event of Default has occurred and is continuing;
provided, that to be effective for purposes of this definition, any such
notice from BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice.

"DEVELOPMENT DOCUMENTS " means the contracts, ordinances and other
documents described in Exhibit C attached to the Closing Certificate, as the
same may be modified from time to time in accordance with the Land Lease and the
Closing Certificate, and any applications, permits or certificates concerning or
affecting the use or development of the Property that may be submitted, issued
or executed from time to time as contemplated in such contracts, ordinances and
other documents or that BNPLC may hereafter execute, approve or consent to at
the request of NAI.

"DIRECT PAYMENTS TO PARTICIPANTS " means the amounts paid or required to
be paid directly to Participants on the Designated Sale Date as provided in
Section 6.2 of the Pledge Agreement at the direction of and for NAI by the
collateral agent appointed pursuant to the Pledge Agreement from all or any part
of the Collateral described therein.

"EFFECTIVE DATE " means May 3, 1999.

"EFFECTIVE RATE " means for each Base Rent Period, the per annum rate
determined by dividing (A) LIBOR for such Base Rent Period, as the case may be,
by (B) one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
for such Base Rent Period. If LIBOR or the Eurodollar Rate Reserve Percentage
changes from Base Rent Period to Base Rent Period, then the Effective Rate shall
be automatically increased or decreased as of the date of such change, as the
case may be, without prior notice to NAI. If for any reason BNPLC determines
that it is impossible or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with the foregoing, then
the "EFFECTIVE RATE" for that Base Rent Period shall equal any published index
or per annum interest rate determined in good faith by BNPLC's Parent to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on BNPLC's Parent's comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by BNPLC of the Effective Rate
under this definition shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 7

54
"ENVIRONMENTAL LAWS " means any and all existing and future Applicable
Laws pertaining to safety, health or the environment, or to Hazardous Substances
or Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "CERCLA"), and the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, "RCRA").

"ENVIRONMENTAL CUTOFF DATE " means the later of the dates upon which (i)
the Land Lease terminates, or (ii) NAI surrenders possession and control of the
Property and ceases to have interest in the Land or Improvements or rights with
respect thereto under any of the Operative Documents.

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

"ENVIRONMENTAL REPORTS " means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I dated March 1997 by Hygeienetics Environmental Services,
Inc.; Phase I dated June 1998 by Dames & Moore; and, an Asbestos Containing
Material Survey conducted in 1989 by Vesar, Inc.

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

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

"ESCROWED PROCEEDS " means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Escrowed Proceeds" there shall be deducted all expenses and costs of every
type, kind and nature (including Attorneys' Fees) incurred by BNPLC to collect
such proceeds. Notwithstanding the foregoing, 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 8

55
"Escrowed Proceeds" will not include (A) any payment to BNPLC by a Participant
or an Affiliate of BNPLC that is made to compensate BNPLC for the Participant's
or Affiliate's share of any Losses BNPLC may incur as a result of any of the
events described in the preceding clauses (1) through (4), (B) any money or
proceeds that have been applied as a Qualified Prepayment or to pay any Breakage
Costs or other costs incurred in connection with a Qualified Prepayment, (C) any
money or proceeds that, after no less than ten days notice to NAI, BNPLC returns
or pays to a third party because of BNPLC's good faith belief that such return
or payment is required by law, (D) any money or proceeds paid by BNPLC to NAI or
offset against any amount owed by NAI, or (E) any money or proceeds used by
BNPLC in accordance with the Land Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph of the Land Lease,
transferred to a purchaser under the Purchase Agreement as therein provided or
applied as a Qualified Prepayment or as otherwise described in the preceding
sentence, BNPLC shall keep the same deposited in one or more interest bearing
accounts, and all interest earned on such account shall be added to and made a
part of Escrowed Proceeds.

"ESTABLISHED MISCONDUCT " of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition, "conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent environmental
consultant engaged by that Person), but only to the extent that the agent is, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, (x) acting
within the scope of the authority granted to him by such Person, (y) not acting
with the consent or approval of or under the direction of NAI or NAI's
Affiliates, employees or agents, and (z) not acting in good faith to mitigate
Losses that such Person may suffer because of a breach or repudiation by NAI of
the Land Lease or the Purchase Documents.

"EUROCURRENCY LIABILITIES " shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

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

"EVENT OF DEFAULT " shall have the meaning assigned to it in
subparagraph 17 of the Land Lease.

"EXCLUDED TAXES " means (1) all federal, state and local income taxes
upon Base Rent, any interest paid to BNPLC or any Participant pursuant to
subparagraph 3.(j) of the Land Lease, and any additional compensation claimed by
BNPLC pursuant to subparagraph 5.(b)(ii) of the Land Lease; (2) any transfer or
change of ownership taxes assessed because of BNPLC's 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 9

56
transfer or conveyance to any third party of any rights or interest in the Land
Lease, the Purchase Agreement or the Property (other than any such taxes
assessed because of any Permitted Transfer under clauses (1), (3), (4), (5), (6)
or (7) of the definition of Permitted Transfer in this Agreement), (3) all
federal, state and local income taxes upon any amounts paid as reimbursement for
or to satisfy Losses incurred by BNPLC or any Participant to the extent such
taxes are offset by a corresponding reduction of BNPLC's or the applicable
Participant's income taxes because of BNPLC's or such Participant's deduction of
the reimbursed Losses from its taxable income or because of any tax credits
attributable thereto. If, however, a change in Applicable Laws after the
Effective Date results in an increase in such taxes for any reason other than an
increase in the applicable tax rates (e.g., a disallowance of deductions that
would otherwise be available against payments described in clause (A) of this
definition), then for purposes of the Operative Documents, the term "Excluded
Taxes" will not include the increase in such taxes attributable to the change.

"EXISTING CONTRACT " means the Purchase and Sale Agreement dated July
31, 1998, between Seller and NAI covering the Land described in Exhibit A
attached to the Land Lease, as amended by a First Amendment to Purchase and Sale
Agreement dated as of December 9, 1999, the interests of NAI therein having
being assigned to BNPLC pursuant to the assignment dated as of May 3, 1999
between NAI and BNPLC, with the consent and approval of Seller.

"FAILED COLLATERAL TEST DATE " means any date upon which commences a
Mandatory Collateral Period as described in Part III of Schedule 1 attached to
the Land Lease.

"FED FUNDS RATE " means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon NAI.

"GAAP " means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
subparagraph 13.(a) of the Land Lease (except for changes with which NAI's
independent public accountants concur).

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

Common Definitions and Provisions Agreement (Phase II - Land) - Page 10

57
"HAZARDOUS SUBSTANCE ACTIVITY " means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property.

"IMPOSITIONS " means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Land Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.

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

"INITIAL FUNDING ADVANCE " means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate closing certificate executed by NAI as of the Effective Date. To the
extent that BNPLC does not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC, the remainder thereof will be advanced
to NAI, with the understanding that NAI shall use any such amount advanced for
one or more of the following purposes: (1) the payment or reimbursement of
Transaction Expenses incurred by NAI; (2) the maintenance of the Property; or
(3) the payment of Rents next due.

"INTERESTED PARTY " means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 11

58

"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT " means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph 17.(e) of the Land
Lease, the occurrence of which event cannot be objectively determined. For
example, an Event of Default under subparagraph 17.(e) of the Land Lease
resulting solely from a failure of NAI to "generally" pay its debts as such
debts become due (in contrast to a failure of NAI to pay Rent to BNPLC as it
becomes due under the Land Lease) would constitute an Issue 97-1
Non-performance-related Subjective Event of Default. In no event, however, will
the term "Issue 97-1 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of NAI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by NAI of
the provisions set forth in Schedule 1 attached to the Land Lease (which set
forth financial covenants), (3) any failure of NAI to use, maintain and insure
the Property in accordance with the requirements of the Land Lease, or (4) any
failure of NAI to pay the full amount of any Supplemental Payment on the
Designated Sale Date as required by the Purchase Agreement. Except as provided
in subparagraph 1(A)(2)(c)(i) of the Purchase Agreement, the characterization of
any Event of Default as an Issue 97-1 Non-performance-related Subjective Event
of Default will not affect the rights or remedies available to BNPLC because of
the Event of Default.

"LAND " means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Land Lease and the Purchase Agreement.

"LAND LEASE " means the Lease Agreement (Phase II - Land") dated as of
May 3, 1999 between BNPLC, as landlord, and NAI, as tenant, pursuant to which
NAI has agreed to lease BNPLC's interest in the Property, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"LIBOR " means, for purposes of determining the Effective Rate for each
Base Rent Period, the rate determined by BNPLC's Parent to be the average rate
of interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of
the rates at which deposits of dollars are offered or available to BNPLC's
Parent in the London interbank market at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such period. BNPLC shall
instruct BNPLC's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered: (i) for
delivery on the first day of such Base Rent Period, as the case may be, (ii) in
an amount equal or comparable to the total (projected on the applicable date of
determination by BNPLC's Parent) Stipulated Loss Value on the first day of such
period, and (iii) for a time equal or comparable to the length of such period.
If BNPLC's Parent so chooses, it may determine LIBOR for any period by reference
to the rate reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason BNPLC's
Parent determines that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance with the foregoing,
or if BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain the Initial Funding Advance
during any Base Rent Period for which Base Rent is computed by reference to
LIBOR, then "LIBOR" for that period shall equal the Base Rate for that period.
All determinations of LIBOR by BNPLC's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon NAI.

"LIBOR PERIOD ELECTION " for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit attached to the Land Lease. (For purposes of the
Land Lease a LIBOR Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on the Base Rent Commencement
Date or 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 12

59
Base Rent Date upon which such Base Rent Period begins.) Any Libor Period
Election so designated by NAI shall remain in effect for the entire Base Rent
Period specified in NAI's notice to BNPLC (provided such Base Rent Period
commences at least ten Business Days after BNPLC's receipt of the notice) and
for all subsequent Base Rent Periods until a new designation becomes effective
in accordance with the provisions set forth in this definition. Notwithstanding
the foregoing, however: (1) NAI shall not be entitled to designate a LIBOR
Period Election that would cause a Base Rent Period to extend beyond the end of
the scheduled Term; (2) changes in the LIBOR Period Election shall become
effective only upon the commencement of a new Base Rent Period; (3) for each
Base Rent Period that occurs within any Mandatory Collateral Period, the LIBOR
Period Election shall be one month; (4) no LIBOR Period Election designated by
NAI hereunder shall be different than the LIBOR Period Election specified under
(and as defined in) the Other Common Definitions and Provisions Agreement; and
(5) if NAI fails to make a LIBOR Period Election consistent with the foregoing
requirements for any Base Rent Period, or if an Event of Default shall have
occurred and be continuing on the third Business Day preceding the commencement
of any Base Rent Period, the LIBOR Period Election for such Base Rent Period
shall be deemed to be one month.

"LIEN " means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part IV of
Schedule 1 attached to the Land Lease, "Lien" includes any Liens under ERISA
relating to Unfunded Benefit Liabilities of which NAI is required to notify
BNPLC under subparagraph 13.(a)(vii) of the Land Lease (irrespective of whether
NAI actually notifies BNPLC as required thereunder).

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

"LOSSES " means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs and expenses (including Attorneys'
Fees and the fees of outside accountants and 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 13

60
environmental consultants), of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote.

"MANDATORY COLLATERAL PERIOD " shall have the meaning assigned to it in
Part I of Schedule 1 attached to the Land Lease and to the Pledge Agreement.

"MATERIAL ENVIRONMENTAL COMMUNICATION " means a communication between
NAI or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.

"MAXIMUM REMARKETING OBLIGATION " shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"MINIMUM EXTENDED REMARKETING PRICE " shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.

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

"NAI " means Network Appliance, Inc., a California corporation.

"NAI'S EXTENDED REMARKETING PERIOD " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S EXTENDED REMARKETING RIGHT " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS " shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.

"OPERATIVE DOCUMENTS " means the Closing Certificate, the Land Lease,
the Purchase Agreement, the Pledge Agreement and this Common Definitions and
Provisions Agreement (Phase II - Land).

"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT " means the Common
Definitions and Provisions Agreement (Phase II - Improvements), dated as of the
Effective Date, between BNPLC and NAI, as such Common Definitions and Provisions
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"OTHER LEASE AGREEMENT " means the Lease Agreement (Phase II -
Improvements), dated as of the Effective Date, between BNPLC and NAI, as such
Lease Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.

"OTHER PURCHASE AGREEMENT " means the Purchase Agreement (Phase II -
Improvements), dated as of the Effective Date, between BNPLC and NAI, as such
Purchase Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 14

61
"PARTICIPANT " means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Land Lease
and the Purchase Documents. As of the Effective Date, the only Participant is
BNPLC's Parent, but BNPLC may agree after the Effective Date to share in risks
and rewards of the Land Lease and the Purchase Documents with other
Participants. However, no Person other than BNPLC's Parent and its Affiliates
shall qualify as a Participant for purposes of the Operative Documents or other
agreements concerning the Property to which NAI is a party unless such Person,
during the continuance of an Event of Default or otherwise with NAI's prior
written approval (which approval will not be unreasonably withheld), became a
party to the Pledge Agreement and to the Participation Agreement by executing
supplements to those agreements as contemplated therein.

"PARTICIPATION AGREEMENT " means the Participation Agreement between
BNPLC and BNPLC's Parent dated as of the Effective Date, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Land Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"PBGC " means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

"PERMITTED ENCUMBRANCES " means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) any
ground lease executed pursuant to the Other Purchase Agreement, (iv) any Liens
securing the payment of Impositions which are not delinquent or claimed to be
delinquent or which are being contested in accordance with subparagraph 5.(a) of
the Land Lease, and (iv) mechanics' and materialmen's liens for amounts not past
due or claimed to be past due or which are being contested in accordance with
subparagraph 11.(c) of the Land Lease.

"PERMITTED HAZARDOUS SUBSTANCE USE " means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:

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

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

Common Definitions and Provisions Agreement (Phase II - Land) - Page 15

62
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.

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

"PERMITTED TRANSFER " means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in the Land and the Property;
(3) any assignment or conveyance by BNPLC or its permitted successors or assigns
to any present or future Participant of any lien or security interest against
the Property (in contrast to a conveyance of BNPLC's fee estate in the Land and
Improvements) or of any interest in Rent, payments required by or under the
Purchase Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of NAI under the Operative Documents; (4) any agreement to exercise or
refrain from exercising rights or remedies under the Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by NAI or required by any Permitted Encumbrance, by the
Purchase Agreement, by the Existing Contract, by any other Development Contract
or by Applicable Laws; or (6) any assignment or conveyance after a Designated
Sale Date on which NAI shall not have purchased or caused an Applicable
Purchaser to purchase BNPLC's interest in the Property and, if applicable, after
the expiration of the thirty day cure period specified in Paragraph 4(D) of the
Purchase Agreement.

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

"PERSONAL PROPERTY " shall have the meaning assigned to it on page of
the Land Lease.

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

"PLEDGE AGREEMENT " means the Pledge Agreement (Phase II - Land) dated
as of the date hereof between BNPLC and NAI, pursuant to which NAI may pledge
certificates of deposit as security for NAI's obligations under the Purchase
Agreement (and for the corresponding obligations of BNPLC to the Participants
under the Participation Agreement), as such Pledge Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 16

16

63
"PRIME RATE " means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPLC shall be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from time to time after the Effective Date without notice to NAI as
of the effective time of each change in rates described in this definition.

"PROPERTY " means the Personal Property and the Real Property,
collectively. All rights, titles and interests acquired by BNPLC under the
Existing Contract are, to the extent not covered by the Land Lease and thus not
encompassed within this definition of Property, are intended to be covered by
the Other Lease Agreement and encompassed within the term "Property" as defined
in the Other Common Definitions and Provisions Agreement.

"PURCHASE AGREEMENT " means the Purchase Agreement (Phase II - Land)
dated as of May 3, 1999 between BNPLC and NAI, as such Purchase Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.

"PURCHASE DOCUMENTS " means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.

"PURCHASE OPTION " shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.

"QUALIFIED AFFILIATE " means any Person that is one hundred percent
(100%) owned, directly or indirectly, by Banque Nationale de Paris or any
successor of such bank; provided, that such Person can make (and has in writing
made) the same representations to NAI that BNPLC has made in Paragraphs 3(D) and
3(E) of the Closing Certificate; and, provided, further, that such Person is not
insolvent.

"QUALIFIED PREPAYMENTS " means any payments received by BNPLC from time
to time during the Term (1) under any property insurance policy as a result of
damage to the Property, (2) as compensation for any restriction placed upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof, (3) because of any judgment, decree or award for injury or
damage to the Property or (4) under any title insurance policy or otherwise as a
result of any title defect or claimed title defect with respect to the Property;
provided, however, that (x) in determining the amount of "Qualified
Prepayments", there shall be deducted all expenses and costs of every kind, type
and nature (including taxes, Breakage Costs and Attorneys' Fees) incurred by
BNPLC with respect to the collection or application of such payments, (y)
"Qualified Prepayments" shall not include any payment to BNPLC by a Participant
or an Affiliate of BNPLC that is made to compensate BNPLC for the Participant's
or Affiliate's share of any Losses BNPLC may incur as a result of any of the
events described in the preceding clauses (1) through (4) and (z) "Qualified
Prepayments" shall not include any payments received by BNPLC that BNPLC has
paid or is obligated to pay to NAI for the restoration or repair of the Property
or that BNPLC is holding as Escrowed Proceeds pursuant to Paragraph 10 of the
Land Lease or any other provision of the Land Lease. For purposes of computing
the total Qualified Prepayments (and other amounts dependent upon Qualified
Prepayments, such as Stipulated Loss Value) paid to or received by BNPLC as of
any date, payments described in the preceding clauses (1) through 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 17

64
(4) will be considered as Escrowed Proceeds, not Qualified Prepayments, until
they are actually applied as Qualified Prepayments by BNPLC as provided in the
Paragraph 10 of the Land Lease.

"REAL PROPERTY " shall have the meaning assigned to it on page 1 of the
Land Lease.

"REMEDIAL WORK " means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.

"RENT " means the Base Rent and all Additional Rent.

"RESIDUAL RISK PERCENTAGE " means fifteen percent (15%).

"RESPONSIBLE FINANCIAL OFFICER " means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.

"SALE CLOSING DOCUMENTS " shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.

"SECURED SPREAD " means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any Mandatory
Collateral Period, the Secured Spread shall equal one-half of the Unsecured
Spread for the same period.

"SELLER " means Martin/Crossman, LLC, a California limited liability
company.

"STIPULATED LOSS VALUE " as of any date means the amount equal to the
sum of the Initial Funding Advance, minus all funds actually received by BNPLC
and applied as Qualified Prepayments on or prior to such date. Under no
circumstances will any payment of Base Rent reduce Stipulated Loss Value.

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

"SUPPLEMENTAL PAYMENT " shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"TERM " shall have the meaning assigned to it in subparagraph 1.(a) of
the Land Lease.

"THIRD PARTY PRICE " shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 18

65
"THIRD PARTY SALE NOTICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY SALE PROPOSAL " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY TARGET PRICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"TRANSACTION EXPENSES " means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.

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

"UNSECURED SPREAD " means, for each period beginning on and including
the Base Rent Commencement Date or a Base Rent Date and ending on but not
including the next Base Rent Date, the amount established as described below in
this definition on the date (in this definition, the "SPREAD TEST DATE") that is
two Business Days prior to such period by reference to the ratio calculated by
dividing (1) Adjusted EBIT for the then latest Rolling Four Quarters Period that
ended prior to (and for which NAI has reported earnings as necessary to compute
Adjusted EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined
on a consolidated basis) as of the end of such Rolling Four Quarters Period. The
Unsecured Spread shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:

(a)     for any period commencing on or prior to the first
Business Day of August, 1999, the Unsecured Spread will be the amount
indicated for Level III in the pricing grid below;

(b)     promptly after earnings are reported by NAI for the
latest quarter in any Rolling Four Quarters Period, NAI must notify
BNPLC of any resulting change in the Unsecured Spread under this
definition, and no reduction in the Unsecured Spread from one period to
the next will be effective for purposes of the Operative Documents
unless, prior to the Spread Test Date for the next period, NAI shall
have provided BNPLC with a written notice setting forth and certifying
the calculation under this definition that justifies the reduction; and

Common Definitions and Provisions Agreement (Phase II - Land) - Page 19

66
(c)     notwithstanding anything to the contrary in this
definition, on any date when an Event of Default has occurred and is
continuing, the Unsecured Spread shall equal the Default Rate less the
Effective Rate.

====================================================================================
LEVELS           RATIO OF TOTAL DEBT TO ADJUSTED EBIT            UNSECURED SPREAD
------------------------------------------------------------------------------------

Level I                      less than 0.5                       125.0 basis points
------------------------------------------------------------------------------------
Level II           greater than or equal to 0.5, but             137.5 basis points
less than 1.0
------------------------------------------------------------------------------------
Level III           greater than or equal to 1.0, but             150.0 basis points
less than 1.5
------------------------------------------------------------------------------------
Level IV           greater than or equal to 1.5, but             175.0 basis points
less than 2.0
------------------------------------------------------------------------------------
Level V               greater than or equal to 2.0               200.0 basis points
====================================================================================

All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the Land
Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.

"VOLUNTARY RETENTION OF THE PROPERTY " means an affirmative election
made by BNPLC to keep the Property pursuant to, and under the circumstances
described in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase
Agreement.

ARTICLE II - RULES OF INTERPRETATION

THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:

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

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

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Land Lease

Common Definitions and Provisions Agreement (Phase II - Land) - Page 20

67
or at such other place and in such other manner as BNPLC may designate
in a notice to NAI.

(ii)     All Collateral required to be paid by NAI to the Agent shall be
paid in immediately available funds by wire transfer to:

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Payment

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

(iii)    All notices, demands, approvals, consents and other
communications to be made under any Operative Document to or by the
parties thereto must, to be effective for purpose of such Operative
Document, be in writing. Notices, demands and other communications
required or permitted under any Operative Document are to be sent to the
addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (B) hereof shall be deemed received upon such personal
service or upon dispatch by electronic means, and, if sent pursuant to
clause (C) shall be deemed received five days following deposit in the
mail. 

Address of BNPLC:                                           

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

With a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Gavin Holles
Telecopy: (415) 296-8954

And for draw requests and funding notices, with a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street

Common Definitions and Provisions Agreement (Phase II - Land) - Page 21

68
San Francisco, California 94104
Attention: George Fung
Telecopy: (415) 296-8954

Address of NAI:

Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452

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

3       NO MERGER . There shall be no merger of the Land Lease or of the
leasehold estate created by the Land Lease with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Land Lease or the leasehold estate created hereby
and any other interest in the Property, unless all Persons with an interest in
the Property that would be adversely affected by any such merger specifically
agree in writing that such a merger shall occur. There shall be no merger of the
Purchase Agreement or of the purchase options or obligations created by the
Purchase Agreement with any other interest in the Property by reason of the fact
that the same person may acquire or hold, directly or indirectly, the Land Lease
or the leasehold estate created hereby and any other interest in the Property,
unless all Persons with an interest in the Property that would be adversely
affected by any such merger specifically agree in writing that such a merger
shall occur.

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

5       ENTIRE AND ONLY AGREEMENTS . The Operative Documents supersede any prior
negotiations and agreements between BNPLC, Agent and NAI concerning the Property
or the Collateral, and no amendment or modification of 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 22

69
any Operative Document shall be binding or valid unless expressed in a writing
executed by all parties to such Operative Document.

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

7       TIME IS OF THE ESSENCE . Time is of the essence as to all obligations of
NAI and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.

8       GOVERNING LAW . Each Operative Document shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the "UCC," as defined in the Pledge
Agreement).

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

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

11      TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT . As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase II - Land), but is defined in
another Operative Document, shall have the meaning ascribed to it in the other
Operative Document.

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

Common Definitions and Provisions Agreement (Phase II - Land) - Page 23

70

13      EXECUTION IN COUNTERPARTS . To facilitate execution, each Operative
Document may be executed in as many identical counterparts as may be required.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart. All counterparts, taken together, shall collectively constitute a
single instrument. It shall not be necessary in making proof of any Operative
Document to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages.

14      NOT A PARTNERSHIP, ETC . NOTHING IN ANY OPERATIVE DOCUMENT IS INTENDED
TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
BNPLC AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE
ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY
OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE
DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
NAI.

[The signature pages follows.]

Common Definitions and Provisions Agreement (Phase II - Land) - Page 24

71
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase II - Land) to be executed as of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:_________________________________
Title:________________________________

Common Definitions and Provisions Agreement (Phase II - Land) - Page 25

72
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase II - Land) dated to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Lloyd G. Cox, Vice President

Common Definitions and Provisions Agreement (Phase II - Land) - Page 26

1
Exhibit 10.30

===============================================================================

PLEDGE AGREEMENT
(PHASE II - LAND)

AMONG

BNP LEASING CORPORATION

("BNPLC")

BANQUE NATIONALE DE PARIS, AS AGENT

("AGENT")

NETWORK APPLIANCE, INC.

("NAI")

AND

PARTICIPANTS AS DESCRIBED HEREIN

MAY 3, 1999

===============================================================================

2

TABLE OF CONTENTS

Page

ARTICLE I   DEFINITIONS AND INTERPRETATION                                                -1-
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement              -1-
Section 1.2  Definitions                                                          -1-

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                                                      -2-
DEFAULT                                                                    -3-
DEPOSIT TAKER                                                              -3-
DEPOSIT TAKER LOSSES                                                       -3-
DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT                               -3-
DISQUALIFIED DEPOSIT TAKER                                                 -3-
EVENT OF DEFAULT                                                           -3-
FAILED COLLATERAL TEST DATE                                                -4-
INITIALLY QUALIFIED DEPOSIT TAKER                                          -4-
LIEN                                                                       -4-
MATERIAL LEASE DEFAULT                                                     -5-
MANDATORY COLLATERAL PERIOD                                                -5-
MINIMUM COLLATERAL VALUE                                                   -5-
NAI                                                                        -5-
NAI'S PURCHASE AGREEMENT OBLIGATIONS                                       -5-
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-
VALUE                                                                      -6-

Section 1.3  Attachments                                                          -7-
Section 1.4  Amendment of Defined Instruments

-7-
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-

3

ARTICLE III DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE                                  -8-
Section 3.1 Determination of Minimum Collateral Percentage Generally              -8- 
Section 3.2 Limitations on NAI's Right to Lower the 
Collateral Percentage                                                             -8-
Section 3.3 Mandatory Collateral Periods                                          -9-

ARTICLE IV   PROVISIONS CONCERNING DEPOSIT TAKERS                                         -9-
Section 4.1  Qualification of Deposit Takers Generally                            -9-
Section 4.2  Existing Deposit Takers                                              -9-
Section 4.3  Replacement of Participants Proposed by NAI                          -9-
Section 4.4  Mandatory Substitution for 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             -10-
Section 4.7  Constructive Possession of Collateral                                -10-
Section 4.8  Attempted Setoff by Deposit Takers                                   -11-
Section 4.9  Deposit Taker Losses                                                 -11-
Section 4.10 Losses Resulting from Failure of Deposit Taker to 
Comply with this Agreement                                           -11-

ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL                                     -11-
Section 5.1 Delivery of Funds by NAI                                              -11-
Section 5.2 Transition Account                                                    -12- 
Section 5.3 Allocation of Cash Collateral Among Deposit Takers                    -12-
Section 5.4 Issuance and Redemption of Certificates of Deposit                    -12-
Section 5.5 Status of the Accounts Under the Reserve Requirement
Regulations                                                                       -13-
Section 5.6 Acknowledgment by NAI that Requirements of this 
Agreement are Commercially Reasonable                                             -13-

ARTICLE VI WITHDRAWAL OF CASH COLLATERAL                                                  -13-
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date            -13-
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or 
Satisfy the Secured Obligations to the Participants                               -14-
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC                                          -14-
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by 
Disqualified Deposit Takers                                                       -15-

ARTICLE VII   REPRESENTATIONS AND COVENANTS OF NAI                                        -15-
Section 7.1  Representations of NAI                                               -15-
Section 7.2  Covenants of NAI                                                     -16-

ARTICLE VIII    AUTHORIZED ACTION BY AGENT                                                -17-
Section 8.1  Power of Attorney                                                    -17-

ARTICLE IX    DEFAULT AND REMEDIES                                                        -17-
Section 9.1  Remedies                                                             -17-

ARTICLE X    OTHER RECOURSE                                                               -18-
Section 10.1  Recovery Not Limited                                                -18-

ARTICLE XI   PROVISIONS CONCERNING AGENT                                                  -18-
Section 11.1  Appointment and Authority                                           -18-
Section 11.2  Exculpation, Agent's Reliance, Etc                                  -19-
Section 11.3  Participant's Credit Decisions                                      -19-

ii

4

Section 11.4  Indemnity                                                           -19-
Section 11.5  Agent's Rights as Participant and Deposit Taker                     -20-
Section 11.6  Investments                                                         -20-
Section 11.7  Benefit of Article XI                                               -20-
Section 11.8  Resignation                                                         -20-

ARTICLE XII   MISCELLANEOUS                                                               -21-
Section 12.1 Provisions Incorporated From Other Operative Documents               -21-
Section 12.2  Cumulative Rights, etc                                              -21-
Section 12.3  Survival of Agreements                                              -21-
Section 12.4  Other Liable Party                                                  -21-
Section 12.5  Termination                                                         -21-

Attachment 1   Form of Certificate of Deposit

Attachment 2   Supplement to Pledge Agreement (Phase II - Land)

Attachment 3   Notice of NAI's Election to Change the Collateral Percentage

Attachment 4   Notice of Security Interest

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 Participants

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

iii

5

PLEDGE AGREEMENT
(PHASE II - LAND)

This PLEDGE AGREEMENT (PHASE II - LAND) (this "AGREEMENT") is made as of
May 3, 1999 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a California
corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation ("BNPLC");
BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and BANQUE
NATIONALE DE PARIS, 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 II - Land) dated as of the Effective Date (the "COMMON
DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND)"); and (ii) a Purchase
Agreement (Phase II - Land) dated as of the Effective Date (the "PURCHASE
AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL PAYMENT"
(as defined in the Common Definitions and Provisions Agreement (Phase II -
Land)), in consideration of the rights granted to NAI by the Purchase Agreement.

B. 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
II - Land)), 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.

C. 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:

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 II - Land) and not otherwise
defined herein shall have the same meanings herein as set forth in the Common
Definitions and Provisions Agreement (Phase II - Land). 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.

1

6

"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 (i) 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 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 the percentage designated by
NAI or required during a Mandatory Collateral Period pursuant to Article
III.

"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 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.

2

7

"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 Land Lease an
amount equal to interest at the Default Rate (as defined in the
Land Lease) 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 to
BNPLC any additional Base Rent that has accrued under the Land
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 Land 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 

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required to avoid an Event of Default under clauses (c) 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.

"FAILED COLLATERAL TEST DATE " means any date upon which
commences a Mandatory Collateral Period as described in Part III of
Schedule 1.

"INITIALLY QUALIFIED DEPOSIT TAKER " means (1) Banque Nationale
de Paris, acting through any branch, office or agency that can lawfully
maintain an Account as a Deposit Taker hereunder, and (2) any of the
fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, with debt
ratings of at least (i) 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 Moody's
Investor Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by Moody's
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 Moody 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) any "Event of Default" under and as defined in the
Land Lease, including any such Event of Default consisting of a
failure of NAI to comply with the requirements of Exhibit I
attached to the Land Lease; and

(2)(a) any failure of NAI to make any payment required by
and when first due under the Land Lease, regardless of whether
any period provided in the Land 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 Land
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.)

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"MANDATORY COLLATERAL PERIOD " shall mean any period, as
determined in accordance with Part III of Schedule 1, during which NAI
is required to maintain a Collateral Percentage of one hundred percent
(100%) pursuant to Section 3.2.

"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 Land Lease; and (2) as of any date after the
Designated Sale 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 (i) NAI's obligation
to pay any Supplemental Payment as required under subparagraph 1(A) of
the Purchase Agreement, and (ii) 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 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 (i) 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 Land Lease, the Purchase Agreement and the Participation
Agreement.

"TRANSITION ACCOUNT" shall have the meaning given it in Section

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"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 perfection or
non-perfection of the pledge of and security interests in the Collateral
created by this Agreement.

"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 Land
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 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 

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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

Section 3.1 Determination of Minimum Collateral Percentage Generally . Effective
as of the date of this Agreement, and until a new Collateral Percentage becomes
effective, the Collateral Percentage is zero percent (0%). Subject to the
provisions of this Article III, NAI may from time to time designate a new
Collateral Percentage between 0% and 100% by written notice delivered to Agent,
BNPLC and the Participants in the form of ATTACHMENT 3. Any new Collateral
Percentage so designated shall not become effective, however, until the
commencement of the later of (A) the first Base Rent Period to commence on or
after the first Business Day of October, 2000, or (B) the next following Base
Rent Period which is at least ten Business Days after (1) the receipt of such
notice by Agent, BNPLC and the Participants, and (2) the approval in writing by
a "Majority" under (and as defined in) the Participation Agreement of the new
Collateral Percentage designated by NAI (which approval may be withheld in the
sole and absolute discretion of BNPLC or any Participant); provided, however,
the prior approval of a Majority under the Participation Agreement will not be
required for a designation by NAI of a Collateral Percentage above zero percent
(0%) that is to become effective as of the commencement the first Base Rent
Period starting after the second anniversary of the Effective Date, if the
notice from NAI designating such Collateral Percentage is delivered to Agent,
BNPLC and the Participants at least ten Business Days prior to such Base Rent
Period. In any event, if NAI provides more than one notice of a change in the
Collateral Percentage to be effective on a particular Base Rent Date, then the
latest such notice from NAI which satisfies the requirements of the preceding
sentence (and of Sections 3.2 and 3.3) will control. After any Collateral
Percentage becomes effective as provided in this Article, it shall remain in
effect until a different Collateral Percentage becomes effective as provided in
this Article.

Section 3.2 Limitations on NAI's Right to Lower the Collateral Percentage .
Notwithstanding the foregoing, no designation by NAI of a new Collateral
Percentage will be effective to reduce the Collateral Percentage if the
designation is given, or the reduction would otherwise become effective, on or
after the Designated Sale Date or when any of the following shall have occurred
and be continuing: 

3.2.1 any Material Lease Default;

3.2.2 any Event of Default under and as defined in this Agreement;

3.2.3 any Default under and as defined in this Agreement - excluding,
however, any such Default limited to a failure of NAI described in
clause (c) or clause (e) of the definition of Event of Default above,
with respect to which the time for cure specified in clause (c) or
clause (e), as applicable, has not expired.

Section 3.3 Mandatory Collateral Periods . NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.

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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:

4.1.1 Such Person must have received from Agent and NAI a completed,
executed Notice of Security Interest in the form of ATTACHMENT 4 (a
"NOTICE OF SECURITY INTEREST") 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 Existing Deposit Takers . BNPLC's Parent (as Deposit Taker for
itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subsections 4.1.1 and 4.1.2. 

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 required to pay the termination fee
by Section 6.4 of the 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

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event will BNPLC be required to approve a substitution pursuant to
this Section 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 Substitution for Disqualified Deposit Takers . If 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. Pending the designation of the substitute and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral held by the
Disqualified Deposit Taker and deposit such Collateral with other Deposit
Takers, subject to Section 5.3 below.

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 further, unless the designation of a new Deposit Taker is required
by Section to replace a Disqualified Deposit Taker, 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. 

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 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. However, Deposit Taker Losses with respect to a Deposit
Taker for a particular Participant shall reduce the amount of BNPLC's

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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 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 . 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 be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.

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 the Land Lease 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 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.

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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 a Certificate of Deposit evidencing the Account into which such deposit is
made and deliver such Certificate of Deposit to 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 ATTACHMENT 1 to this Agreement. Upon depositing any Cash
Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has 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 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 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 the Certificate, upon the
written request of Agent, shall issue 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.

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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:

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 2.2 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 and BNPLC of the
required withdrawal and payment to BNPLC at least ten days prior to the date
upon which it is to occur.

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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 II - Land) 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 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

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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.

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 Land 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.

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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 Land Lease, the Purchase
Agreement, the Participation Agreement, the UCC and other Applicable Laws, Agent
may, upon the occurrence and 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

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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:

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 

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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 (6) 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.

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, Banque Nationale de Paris 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, Banque Nationale de Paris shall
have the same rights and obligations as any Deposit Taker and may exercise such
rights as though it were not Agent. Banque Nationale de Paris 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 Banque Nationale de Paris 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.

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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. 

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 Article 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 II - Land), 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 II -
Land) 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.

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.

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[The signature pages follow.]

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IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of May 3,
1999.

"NAI"

NETWORK APPLIANCE, INC.

By: ___________________

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25

[Continuation of signature pages to Pledge Agreement (Phase II - Land) dated to
be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By: ____________________________

Lloyd G. Cox, Vice President

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[Continuation of signature pages to Pledge Agreement (Phase II - Land) dated to
be effective May 3, 1999]

"AGENT"

BANQUE NATIONALE DE PARIS

By:
----------------------

Name:

Title:

By:
----------------------

Name:

Title:

"PARTICIPANT"

BANQUE NATIONALE DE PARIS

By:
----------------------

Name:

Title:

By:
----------------------

Name:

Title:

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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:  BANQUE NATIONALE DE PARIS, as Agent under the Pledge
Agreement (Phase II - Land) dated May 3, 1999, among Network
Appliance, Inc., BNP Leasing Corporation, Banque Nationale de
Paris and any other financial institutions which are from time to
time Participants under such Pledge Agreement (Phase II - Land)
and Banque Nationale de Paris, 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

1

28

ATTACHMENT 2
TO PLEDGE AGREEMENT

SUPPLEMENT TO PLEDGE AGREEMENT

[----------, ----]

Banque Nationale de Paris
-------------------------
-------------------------
-------------------------

Network Appliance, Inc.
-------------------------
-------------------------
-------------------------

1. Reference is made to the Pledge Agreement (Phase II - Land) (the "PLEDGE
AGREEMENT") dated May 3, 1999 among Network Appliance, Inc. ("NAI"), BNP Leasing
Corporation ("BNPLC"), Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such Pledge
Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de Paris,
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: 

1

29

ATTACHMENT 3
TO PLEDGE AGREEMENT

NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE

[---------, -----]

Banque Nationale de Paris
[address of BNP]

Re:           Pledge Agreement (Phase II - Land) (the "PLEDGE AGREEMENT") dated
May 3, 1999 among Network Appliance, Inc., BNP Leasing
Corporation, Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such
Pledge Agreement and Banque Nationale de Paris, 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 referenced above. This letter constitutes notice
to you, as Agent under the Pledge Agreement, that pursuant to Section 3.1 of the
Pledge Agreement, NAI elects to change the Collateral Percentage to:

__________ percent (___%),

on the following Base Rent Date:

----------, ----

NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:

____________________________ Dollars ($__________),

will result in an expected new Minimum Collateral Value of:

____________________________ Dollars ($__________).

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:

Because of the increase in the Collateral Percentage which will result from
this notice and the corresponding increase in the Minimum Collateral Value, NAI
will deliver additional Cash Collateral to you as required by Section of the
Pledge Agreement no later than 12:00 noon (San Francisco time) on the Base Rent
Date specified above, in the amount of:

____________________________ Dollars ($__________).]

1

30

To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:

1. NAI is giving this notice to you, BNPLC and the Participants
at least ten Business Days prior to the Base Rent Date specified above,
and such Base Rent Date is the commencement of a Base Rent Period.

2. No Event of Default or other event or circumstance that would,
pursuant to Section 3.2 of the Pledge Agreement, preclude NAI from
designating the new Collateral Percentage above has occurred and is
continuing, and NAI does not anticipate that on the Base Rent Date
specified above there will have occurred and be continuing any such
Event of Default or other event or circumstance.

3. No Mandatory Collateral Period shall be in effect as of the
effective date specified above.

NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
ABOVE ARE NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY
IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.

Network Appliance, Inc.

By: 

Name:

Title:

[cc BNPLC and all Participants]

2

31

ATTACHMENT 4
TO PLEDGE AGREEMENT

NOTICE OF SECURITY INTEREST

[---------, -----]

[Name of Deposit Taker]
[Address of Deposit Taker]

--------------------------------
--------------------------------

1. Reference is made to the Pledge Agreement (Phase II - Land) (the "PLEDGE
AGREEMENT") dated May 3, 1999 among Network Appliance, Inc. ("NAI"), BNP Leasing
Corporation ("BNPLC"), Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such Pledge
Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de Paris,
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 (the "DEPOSIT TAKER") the following non-interest bearing Account(s) to be
maintained at the following Account Office(s):

Account           Account       Account
Type             Office       Number

Time Deposit        --------                --------                      
Time Deposit        --------                --------                      
Time Deposit        --------                --------                      

NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the 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(s) 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(s);

(b) make a notation in its books and records of the interest of
Agent in the Collateral and that the Account(s) and all deposits therein
or sums credited thereto are subject to a pledge and security interest
in favor of Agent;

3

32

(c) issue and redeem Certificates of Deposit evidencing the
Account(s), as directed by Agent pursuant to the Pledge Agreement;

(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 the Deposit Taker may require compliance by Agent
with the provisions in Section 5.4 of the Pledge Agreement for
redemption of any outstanding Certificates of Deposit which evidence the
Account(s).

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 hereunder 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 the 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"

BANQUE NATIONALE DE PARIS

By:             
Name:  
Title: 

By:             
Name:  
Title: 

"NAI"

Network Appliance, Inc.

By:             
Name:  
Title: 

2

33

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 Offices 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(s) is
accurate. Such Account(s) is (are) currently open and Deposit Taker has
no prior notice of any other pledge, security interest, Lien, adverse
claim or interest in such Account(s).

(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 (i) allow the withdrawal of funds
from any 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 Secured Obligations owed to Deposit Taker against
any Collateral held from time to time by Deposit Taker, or (iii) WITHOUT
IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF BOTH NAI
AND AGENT, setoff or attempt to setoff any obligations owed to Deposit
Taker other than Secured Obligations, against any Collateral held from
time to time by Deposit Taker.

[ ]

By:

Name:

Title:

[Date]

3

34

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. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.

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, Funding Advances (including those to
cover Carrying Costs under the Land 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 was
$7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
Loss Value).

4.      On the Base Rent Commencement Date, NAI had delivered to Agent Cash
Collateral of $7,200,000, 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 $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:

A.      BNPLC's Deposit Taker (5% of Minimum Collateral Value)               $  360,000
B.      Participant A's Deposit Taker (50% of Minimum Collateral Value)       3,600,000
C.      Participant B's Deposit Taker (45% of Minimum Collateral Value)       3,240,000

TOTAL                                                                $7,200,000

EXAMPLE NO. 2

Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:

1

35

1.      Effective as of the first Base Rent Date, NAI increased its Collateral
Percentage from 60% to 80%, raising the Minimum Collateral Value to
$9,600,000. Because of such increase, NAI also delivered an additional
$2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
bringing the total of all Cash Collateral delivered by NAI to $9,600,000
as required by Section 5.1 of this Agreement.

2.      Also 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)               $  480,000
B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)       3,840,000
C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)       3,360,000
D.      Participant C's Deposit Taker (20% of Minimum Collateral Value)       1,920,000

TOTAL                                                                $9,600,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($480,000 less $360,000 already on  deposit)              $  120,000
B.      Participant A's Deposit Taker ($3,840,000 less $3,600,000 already on deposit)      240,000
C.      Participant B's Deposit Taker ($3,360,000 less $3,240,000 already on deposit)      120,000
D.      Participant C's Deposit Taker ($1,920,000 less $0 already on deposit) ---        1,920,000

TOTAL                                                                           $2,400,000

EXAMPLE NO. 3

Assumptions:  Assume the same facts as in Example No. 2, except that:

1.      Instead of increasing its Collateral Percentage from 60% to 80%, NAI
increased its Collateral Percentage to 70% on the first Base Rent Date,
raising the Minimum Collateral Value to $8,400,000. Because of such
increase, NAI delivered an additional $1,200,000 as additional Cash
Collateral to Agent on the first Base Rent Date, bringing the total of
all Cash Collateral delivered by NAI to $8,400,000 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 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)               $  420,000
B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)       3,360,000
C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)       2,940,000
D.      Participant C's Deposit Taker (20% of Minimum Collateral Value)       1,680,000

TOTAL                                                                $8,400,000

2

36

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($420,000 less $360,000 already on
deposit) $60,000
B.      Participant A's Deposit Taker ($3,360,000 less $3,600,000
already on deposit) (240,000)
C.      Participant B's Deposit Taker ($2,940,000 less $3,240,000
already on deposit) (300,000)
D.      Participant C's Deposit Taker ($1,680,000 less $0 already on
deposit) --- 1,680,000

TOTAL  $1,200,000

NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.

3

37

ATTACHMENT 6
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL

[---------, -----]

Banque Nationale de Paris
[address of BNP]

Re:    Pledge Agreement (Phase II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 ($__________),

1

38

and the Minimum Collateral Value on the date specified above will equal:

____________________________ Dollars ($__________).

Such Minimum Collateral Value equals the Collateral Percentage of:

__________ 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.

2

39

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]

3

40

Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH EXCESS COLLATERAL

[---------, -----]

Deposit Takers on the
Attached Distribution List

Re:    Pledge Agreement (Phase II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) referenced above (the
"PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned, as
Agent under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires Agent 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:        $              
------------

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
Title: 
[cc BNPLC and NAI]

4

41

ATTACHMENT 7
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENTS TO PARTICIPANTS

[---------, -----]

Banque Nationale de Paris
[address of BNP]

Re:    Pledge Agreement (Phase II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 the 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 ($__________).

1

42

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 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

43

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 II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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:        $              
------------

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
Title: 
[cc BNPLC and NAI]

3

44

ATTACHMENT 8
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENT TO BNPLC

[---------, -----]

Banque Nationale de Paris
[address of BNP]

Re:    Pledge Agreement (Phase II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 for
BNPLC 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 the
Deposit Taker for BNPLC 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 the 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 amount NAI believes you must withdraw to comply with Section
6.3 of the Pledge Agreement.

Network Appliance, Inc.

By:    
Name:  
Title:
[cc BNPLC]

1

45

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 II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 Account maintained by you, as
Deposit Taker for BNPLC, the sum of:

____________________________ Dollars ($__________)

and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:

----------, ----

Accordingly, on such date, the undersigned intends to withdraw such
amount 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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
Title:

[cc BNPLC and NAI]

2

46

ATTACHMENT 9
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER

[---------, -----]

Banque Nationale de Paris
[address of BNP]

Re:    Pledge Agreement (Phase II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 PERMIT THE PARTICIPANT FOR WHOM SUCH
DEPOSIT TAKER HAS BEEN MAINTAINING AN ACCOUNT TO RESPOND IF IT BELIEVES THAT NAI
IS IN ERROR.]

1

47
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

48

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 II - Land) dated May 3, 1999 among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Land) and Banque Nationale de Paris, 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 II - Land) 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 has advised Agent that you are a Disqualified Deposit Taker, and
NAI requires Agent to withdraw from the Account maintained by you, as a Deposit
Taker under the Pledge Agreement, the sum of:

____________________________ Dollars ($__________)

no later than the following date:

----------, ----

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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
Title:

[cc BNPLC and NAI]

3

1
Exhibit 10.31

================================================================================

PLEDGE AGREEMENT
(PHASE II - IMPROVEMENTS)

AMONG

BNP LEASING CORPORATION

("BNPLC")

BANQUE NATIONALE DE PARIS, AS AGENT

("AGENT")

NETWORK APPLIANCE, INC.

("NAI")

AND

PARTICIPANTS AS DESCRIBED HEREIN

MAY 3, 1999

================================================================================

2
TABLE OF CONTENTS

Page
----

ARTICLE I  DEFINITIONS AND INTERPRETATION ........................................   -1-
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement .........   -1-
Section 1.2 Definitions ......................................................   -1-
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 ....................................................   -2-
DEFAULT ..................................................................   -3-
DEPOSIT TAKER ............................................................   -3-
DEPOSIT TAKER LOSSES .....................................................   -3-
DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT .............................   -3-
DISQUALIFIED DEPOSIT TAKER ...............................................   -3-
EVENT OF DEFAULT .........................................................   -3-
FAILED COLLATERAL TEST DATE ..............................................   -4-
INITIALLY QUALIFIED DEPOSIT TAKER ........................................   -4-
LIEN .....................................................................   -4-
MATERIAL LEASE DEFAULT ...................................................   -5-
MANDATORY COLLATERAL PERIOD ..............................................   -5-
MINIMUM COLLATERAL VALUE .................................................   -5-
NAI ......................................................................   -5-
NAI'S PURCHASE AGREEMENT OBLIGATIONS .....................................   -5-
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-
VALUE ....................................................................   -6-
Section 1.3 Attachments ......................................................   -7-
Section 1.4 Amendment of Defined Instruments

.................................   -7-
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 ........................   -8-

i

3

Page
----

Section 3.1 Determination of Minimum Collateral Percentage Generally .........   -8-
Section 3.2 Limitations on NAI's Right to Lower the Collateral Percentage ....   -8-
Section 3.3 Mandatory Collateral Periods .....................................   -9-

ARTICLE IV  PROVISIONS CONCERNING DEPOSIT TAKERS .................................   -9-
Section 4.1 Qualification of Deposit Takers Generally ........................   -9-
Section 4.2 Existing Deposit Takers ..........................................   -9-
Section 4.3 Replacement of Participants Proposed by NAI ......................   -9-
Section 4.4 Mandatory Substitution for 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 .........   -10-
Section 4.7 Constructive Possession of Collateral ............................   -11-
Section 4.8 Attempted Setoff by Deposit Takers ...............................   -11-
Section 4.9 Deposit Taker Losses .............................................   -11-
Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply
with this Agreement .............................................   -11-

ARTICLE V  DELIVERY AND MAINTENANCE OF CASH COLLATERAL ...........................   -12-
Section 5.1 Delivery of Funds by NAI .........................................   -12-
Section 5.2 Transition Account ...............................................   -12-
Section 5.3 Allocation of Cash Collateral Among Deposit Takers ...............   -12-
Section 5.4 Issuance and Redemption of Certificates of Deposit ...............   -12-
Section 5.5 Status of the Accounts Under the Reserve 
Requirement Regulations ..........................................   -13-
Section 5.6 Acknowledgment by NAI that Requirements of this Agreement are
Commercially Reasonable ..........................................   -13-

ARTICLE VI  WITHDRAWAL OF CASH COLLATERAL ........................................   -13-
Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date .......   -13-
Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants ..............   -14-
Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or 
Satisfy the Secured Obligations to BNPLC .........................   -14-
Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by
Disqualified Deposit Takers ......................................   -15-

ARTICLE VII  REPRESENTATIONS AND COVENANTS OF NAI ................................   -15-
Section 7.1 Representations of NAI ...........................................   -15-
Section 7.2 Covenants of NAI .................................................   -16-

ARTICLE VIII  AUTHORIZED ACTION BY AGENT .........................................   -17-
Section 8.1 Power of Attorney ................................................   -17-

ARTICLE IX  DEFAULT AND REMEDIES .................................................   -18-
Section 9.1 Remedies .........................................................   -18-

ARTICLE X  OTHER RECOURSE ........................................................   -18-
Section 10.1 Recovery Not Limited ............................................   -18-

ARTICLE XI  PROVISIONS CONCERNING AGENT ..........................................   -19-
Section 11.1 Appointment and Authority .......................................   -19-
Section 11.2 Exculpation, Agent's Reliance, Etc ..............................   -19-
Section 11.3 Participant's Credit Decisions ..................................   -19-

ii

4

Page
----

Section 11.4 Indemnity .......................................................   -20-
Section 11.5 Agent's Rights as Participant and Deposit Taker .................   -20-
Section 11.6 Investments .....................................................   -20-
Section 11.7 Benefit of Article XI ...........................................   -20-
Section 11.8 Resignation .....................................................   -21-

ARTICLE XII  MISCELLANEOUS .......................................................   -21-
Section 12.1 Provisions Incorporated From Other Operative Documents ..........   -21-
Section 12.2 Cumulative Rights, etc ..........................................   -21-
Section 12.3 Survival of Agreements ..........................................   -21-
Section 12.4 Other Liable Party ..............................................   -21-
Section 12.5 Termination .....................................................   -22-

Attachment 1 Form of Certificate of Deposit

Attachment 2 Supplement to Pledge Agreement (Phase II - Improvements)

Attachment 3 Notice of NAI's Election to Change the Collateral Percentage

Attachment 4 Notice of Security Interest

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 Participants

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

iii

5
PLEDGE AGREEMENT
(PHASE II - IMPROVEMENTS)

This PLEDGE AGREEMENT (PHASE II - IMPROVEMENTS) (this "AGREEMENT") is
made as of May 3, 1999 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and
BANQUE NATIONALE DE PARIS, 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 II - Improvements) dated as of the Effective Date (the "COMMON
DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - IMPROVEMENTS)"); and (ii) a
Purchase Agreement (Phase II - 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 II - Improvements)), in consideration of the
rights granted to NAI by the Purchase Agreement.

B. 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
II - 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.

C. 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:

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 II - Improvements) and not
otherwise defined herein shall have the same meanings herein as set forth in the
Common Definitions and Provisions Agreement (Phase II - 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.

1

6
"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 (i) 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 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 the percentage designated by
NAI or required during a Mandatory Collateral Period pursuant to Article
III.

"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 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.

2

7
"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 (as defined in the
Improvements Lease) 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 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

3

8
required to avoid an Event of Default under clauses (c) 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.

"FAILED COLLATERAL TEST DATE " means any date upon which
commences a Mandatory Collateral Period as described in Part III of
Schedule 1.

"INITIALLY QUALIFIED DEPOSIT TAKER " means (1) Banque Nationale
de Paris, acting through any branch, office or agency that can lawfully
maintain an Account as a Deposit Taker hereunder, and (2) any of the
fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, with debt
ratings of at least (i) 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 Moody's
Investor Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by Moody's
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 Moody 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) any "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.)

4

9
"MANDATORY COLLATERAL PERIOD " shall mean any period, as
determined in accordance with Part III of Schedule 1, during which NAI
is required to maintain a Collateral Percentage of one hundred percent
(100%) pursuant to Section 3.2.

"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 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 (i) 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 (i) 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

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"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 perfection or
non-perfection of the pledge of and security interests in the Collateral
created by this Agreement.

"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 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

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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

Section 3.1 Determination of Minimum Collateral Percentage Generally . Effective
as of the date of this Agreement, and until a new Collateral Percentage becomes
effective, the Collateral Percentage is zero percent (0%). Subject to the
provisions of this Article III, NAI may from time to time designate a new
Collateral Percentage between 0% and 100% by written notice delivered to Agent,
BNPLC and the Participants in the form of ATTACHMENT 3. Any new Collateral
Percentage so designated shall not become effective, however, until the
commencement of the later of (A) the first Base Rent Period to commence on or
after the first Business Day of October, 2000, or (B) the next following Base
Rent Period which is at least ten Business Days after (1) the receipt of such
notice by Agent, BNPLC and the Participants, and (2) the approval in writing by
a "Majority" under (and as defined in) the Participation Agreement of the new
Collateral Percentage designated by NAI (which approval may be withheld in the
sole and absolute discretion of BNPLC or any Participant); provided, however,
the prior approval of a Majority under the Participation Agreement will not be
required for a designation by NAI of a Collateral Percentage above zero percent
(0%) that is to become effective as of the commencement the first Base Rent
Period starting after the second anniversary of the Effective Date, if the
notice from NAI designating such Collateral Percentage is delivered to Agent,
BNPLC and the Participants at least ten Business Days prior to such Base Rent
Period. In any event, if NAI provides more than one notice of a change in the
Collateral Percentage to be effective on a particular Base Rent Date, then the
latest such notice from NAI which satisfies the requirements of the preceding
sentence (and of Sections 3.2 and 3.3) will control. After any Collateral
Percentage becomes effective as provided in this Article, it shall remain in
effect until a different Collateral Percentage becomes effective as provided in
this Article.

Section 3.3 Limitations on NAI's Right to Lower the Collateral Percentage .
Notwithstanding the foregoing, no designation by NAI of a new Collateral
Percentage will be effective to reduce the Collateral Percentage if the
designation is given, or the reduction would otherwise become effective, on or
after the Designated Sale Date or when any of the following shall have occurred
and be continuing:

3.2.1 any Material Lease Default;

3.2.2 any Event of Default under and as defined in this Agreement;

3.2.3 any Default under and as defined in this Agreement - excluding,
however, any such Default limited to a failure of NAI described in
clause (c) or clause (e) of the definition of Event of Default above,
with respect to which the time for cure specified in clause (c) or
clause (e), as applicable, has not expired.

Section 3.3 Mandatory Collateral Periods . NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.

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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:

4.1.1 Such Person must have received from Agent and NAI a completed,
executed Notice of Security Interest in the form of ATTACHMENT 4 (a
"NOTICE OF SECURITY INTEREST") 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 Existing Deposit Takers . BNPLC's Parent (as Deposit Taker for
itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subSections 4.1.1 and 4.1.2.

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 required to pay the termination fee
by Section 6.4 of the 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

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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 Substitution for Disqualified Deposit Takers . If 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. Pending the designation of the substitute and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral held by the
Disqualified Deposit Taker and deposit such Collateral with other Deposit
Takers, subject to Section 5.3 below.

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 further, unless the designation of a new Deposit Taker is required
by Section 4.4 to replace a Disqualified Deposit Taker, 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.

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 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. However, Deposit Taker Losses with respect to a Deposit
Taker for a particular Participant shall reduce the amount of BNPLC's

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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 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 . 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 be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.

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 the Improvements Lease 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 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.

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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 a Certificate of Deposit evidencing the Account into which such deposit is
made and deliver such Certificate of Deposit to 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 ATTACHMENT 1 to this Agreement. Upon depositing any Cash
Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has 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 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 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 the Certificate, upon the
written request of Agent, shall issue 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.

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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:

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 2.2 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;

6.1.2 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

6.1.3 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 and BNPLC of the
required withdrawal and payment to BNPLC at least ten days prior to the date
upon which it is to occur.

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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 5.3
Disqualified Deposit Takers (in accordance with the requirements of Sections 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 II - 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 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.

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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.

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.

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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.

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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 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

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In the event of any conflict between the following and other provisions
in this Agreement, the following will control:

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 (6) 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.

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

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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, Banque Nationale de Paris 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, Banque Nationale de Paris shall
have the same rights and obligations as any Deposit Taker and may exercise such
rights as though it were not Agent. Banque Nationale de Paris 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 Banque Nationale de Paris 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.

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 Article 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

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Section 12.1 Provisions Incorporated From Other Operative Documents . Reference
is made to the Common Definitions and Provisions Agreement (Phase II -
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 II - 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.

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.

[The signature pages follow.]

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IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of May 3,
1999.

"NAI"

NETWORK APPLIANCE, INC.

By:
---------------------------

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25
[Continuation of signature pages to Pledge Agreement (Phase II - Improvements)
dated to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:
-------------------------------
Lloyd G. Cox, Vice President

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26
[Continuation of signature pages to Pledge Agreement (Phase II - Improvements)
dated to be effective May 3, 1999]

"AGENT"

BANQUE NATIONALE DE PARIS

By:         
-------------------------------
Name:        

-------------------------------
Title:       

By:         
-------------------------------
Name:        

-------------------------------
Title:       

"PARTICIPANT"

BANQUE NATIONALE DE PARIS

By:         
-------------------------------
Name:        

-------------------------------
Title:       

By:         
-------------------------------
Name:        

-------------------------------
Title:       

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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:  BANQUE NATIONALE DE PARIS, as Agent under the Pledge
Agreement (Phase II - Improvements) dated May 3, 1999, among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Improvements) and Banque Nationale de Paris, 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

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ATTACHMENT 2

TO PLEDGE AGREEMENT

SUPPLEMENT TO PLEDGE AGREEMENT

[_________, _____]

Banque Nationale de Paris

____________________

____________________

____________________

Network Appliance, Inc.

____________________

____________________

____________________

1. Reference is made to the Pledge Agreement (Phase II - Improvements) (the
"PLEDGE AGREEMENT") dated May 3, 1999 among Network Appliance, Inc. ("NAI"), BNP
Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such Pledge
Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de Paris,
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:
-------------------------

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ATTACHMENT 3

TO PLEDGE AGREEMENT

NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE

[_________, _____]

Banque Nationale de Paris

[address of BNP]

Re:            Pledge Agreement (Phase II - Improvements) (the "PLEDGE
AGREEMENT") dated May 3, 1999 among Network Appliance, Inc., BNP
Leasing Corporation, Banque Nationale de Paris and any other
financial institutions which are from time to time Participants
under such Pledge Agreement and Banque Nationale de Paris, 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 referenced above. This letter
constitutes notice to you, as Agent under the Pledge Agreement, that pursuant to
Section 3.1 of the Pledge Agreement, NAI elects to change the Collateral
Percentage to:

__________ percent (___%),

on the following Base Rent Date:

__________, ____

NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:

____________________________ Dollars ($__________),

will result in an expected new Minimum Collateral Value of:

____________________________ Dollars ($__________).

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:

Because of the increase in the Collateral Percentage which will result from
this notice and the corresponding increase in the Minimum Collateral Value, NAI
will deliver additional Cash Collateral to you as required by Section 5.1 of the
Pledge Agreement no later than 12:00 noon (San Francisco time) on the Base Rent
Date specified above, in the amount of:

____________________________ Dollars ($__________).]

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To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:

1. NAI is giving this notice to you, BNPLC and the Participants
at least ten Business Days prior to the Base Rent Date specified above,
and such Base Rent Date is the commencement of a Base Rent Period.

2. No Event of Default or other event or circumstance that
would, pursuant to Section 3.2 of the Pledge Agreement, preclude NAI
from designating the new Collateral Percentage above has occurred and is
continuing, and NAI does not anticipate that on the Base Rent Date
specified above there will have occurred and be continuing any such
Event of Default or other event or circumstance.

3. No Mandatory Collateral Period shall be in effect as of the
effective date specified above.

NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
ABOVE ARE NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY
IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.

Network Appliance, Inc.

By:     
-------------------------------

Name: 
--------------------------

Title:
-------------------------

[cc BNPLC and all Participants]

2

31
ATTACHMENT 4

TO PLEDGE AGREEMENT

NOTICE OF SECURITY INTEREST

[_________, _____]

[Name of Deposit Taker]

[Address of Deposit Taker]

_______________________________________

_______________________________________

1. Reference is made to the Pledge Agreement (Phase II - Improvements) (the
"PLEDGE AGREEMENT") dated May 3, 1999 among Network Appliance, Inc. ("NAI"), BNP
Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such Pledge
Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de Paris,
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 (the "DEPOSIT TAKER") the following non-interest bearing Account(s) to be
maintained at the following Account Office(s):

Account             Account         Account
Type              Office           Number

Time Deposit           ________        ________
Time Deposit           ________        ________
Time Deposit           ________        ________

NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the 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(s) 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(s);

(b) make a notation in its books and records of the interest of
Agent in the Collateral and that the Account(s) and all deposits therein
or sums credited thereto are subject to a pledge and security interest
in favor of Agent;

1

32
(c) issue and redeem Certificates of Deposit evidencing the
Account(s), as directed by Agent pursuant to the Pledge Agreement;

(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 the Deposit Taker may require compliance by Agent
with the provisions in Section 5.4 of the Pledge Agreement for
redemption of any outstanding Certificates of Deposit which evidence the
Account(s).

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 hereunder 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 the 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"

BANQUE NATIONALE DE PARIS

By:             
-------------------------------

Name:  
--------------------------

Title: 
-------------------------

By:             
-------------------------------

Name:  
--------------------------

Title: 
-------------------------

"NAI"

Network Appliance, Inc.

By:             
-------------------------------

Name:  
--------------------------

Title: 
-------------------------

2

33
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 Offices 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(s) is
accurate. Such Account(s) is (are) currently open and Deposit Taker has
no prior notice of any other pledge, security interest, Lien, adverse
claim or interest in such Account(s).

(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 (i) allow the withdrawal of funds
from any 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 Secured Obligations owed to Deposit Taker against
any Collateral held from time to time by Deposit Taker, or (iii) WITHOUT
IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF BOTH NAI
AND AGENT, setoff or attempt to setoff any obligations owed to Deposit
Taker other than Secured Obligations, against any Collateral held from
time to time by Deposit Taker.

[______]

By:             
-------------------------------

Name:  
--------------------------

Title: 
-------------------------

[Date]

3

34
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. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.

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, 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 was
$7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
Loss Value).

4.      On the Base Rent Commencement Date, NAI had delivered to Agent Cash
Collateral of $7,200,000, 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 $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:

A.     BNPLC's Deposit Taker (5% of Minimum Collateral Value)           $    360,000
B.     Participant A's Deposit Taker (50% of Minimum Collateral Value)     3,600,000
C.     Participant B's  Deposit Taker (45% of Minimum Collateral Value)    3,240,000
------------
TOTAL                                                            $  7,200,000

EXAMPLE NO. 2

Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:

1

35
1.      Effective as of the first Base Rent Date, NAI increased its Collateral
Percentage from 60% to 80%, raising the Minimum Collateral Value to
$9,600,000. Because of such increase, NAI also delivered an additional
$2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
bringing the total of all Cash Collateral delivered by NAI to $9,600,000
as required by Section 5.1 of this Agreement.

2.      Also 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)           $    480,000

B.     Participant A's Deposit Taker (40% of Minimum Collateral Value)     3,840,000

C.     Participant B's Deposit Taker (35% of Minimum Collateral Value)     3,360,000

D.     Participant C's  Deposit Taker (20% of Minimum Collateral Value)    1,920,000
------------
TOTAL                                                            $  9,600,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($480,000 less $360,000 already on
deposit)                                                        $   120,000

B.      Participant A's Deposit Taker ($3,840,000 less $3,600,000
already on deposit)                                                 240,000

C.      Participant B's Deposit Taker ($3,360,000 less $3,240,000
already on deposit)                                                 120,000

D.      Participant C's Deposit Taker ($1,920,000 less $0 already on
deposit)                                                          1,920,000

-----------
TOTAL                                                           $ 2,400,000

EXAMPLE NO. 3

Assumptions:  Assume the same facts as in Example No. 2, except that:

1.      Instead of increasing its Collateral Percentage from 60% to 80%, NAI
increased its Collateral Percentage to 70% on the first Base Rent Date,
raising the Minimum Collateral Value to $8,400,000. Because of such
increase, NAI delivered an additional $1,200,000 as additional Cash
Collateral to Agent on the first Base Rent Date, bringing the total of
all Cash Collateral delivered by NAI to $8,400,000 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 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)           $   420,000

B.     Participant A's Deposit Taker (40% of Minimum Collateral Value)    3,360,000

C.     Participant B's Deposit Taker (35% of Minimum Collateral Value)    2,940,000

D.     Participant C's  Deposit Taker (20% of Minimum Collateral Value)   1,680,000
---------

2

36

TOTAL                                                                   $ 8,400,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($420,000 less $360,000 already on
deposit)                                                          $   60,000

B.      Participant A's Deposit Taker ($3,360,000 less $3,600,000
already on deposit)                                                 (240,000)

C.      Participant B's Deposit Taker ($2,940,000 less $3,240,000
already on deposit)                                                 (300,000)

D.      Participant C's Deposit Taker ($1,680,000 less $0 already on
deposit)                                                           1,680,000
----------
TOTAL                                                             $1,200,000

NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.

3

37
ATTACHMENT 6

TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT TO

WITHDRAW EXCESS CASH COLLATERAL

[_________, _____]

Banque Nationale de Paris

[address of BNP]

Re:     Pledge Agreement (Phase II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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 ($__________),

1

38
and the Minimum Collateral Value on the date specified above will equal:

____________________________ Dollars ($__________).

Such Minimum Collateral Value equals the Collateral Percentage of:

__________ 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.

2

39
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]

3

40
Annex 1

TO NAI'S NOTICE OF REQUIREMENT TO

WITHDRAW CASH EXCESS COLLATERAL

[_________, _____]

Deposit Takers on the

Attached Distribution List

Re:     Pledge Agreement (Phase II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.1
of the Pledge Agreement, NAI requires Agent 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:            $___________________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
--------------------------
Title:
-------------------------

[cc BNPLC and NAI]

4

41
ATTACHMENT 7

TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF

DIRECT PAYMENTS TO PARTICIPANTS

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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
the 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 ($__________).

1

42
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 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

43
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 II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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:            $___________________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
--------------------------
Title:
-------------------------

[cc BNPLC and NAI]

3

44
ATTACHMENT 8

TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF

DIRECT PAYMENT TO BNPLC

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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 for BNPLC 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 the
Deposit Taker for BNPLC 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 the 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 amount NAI believes you must withdraw to comply with
Section 6.3 of the Pledge Agreement.

Network Appliance, Inc.

By:    
-------------------------------

Name:  
--------------------------
Title:
-------------------------

[cc BNPLC]

1

45
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 II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement (Phase
II - Improvements) and Banque Nationale de Paris, 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 II - 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 Account
maintained by you, as Deposit Taker for BNPLC, the sum of:

____________________________ Dollars ($__________)

and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:

__________, ____

Accordingly, on such date, the undersigned intends to withdraw such
amount 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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
--------------------------
Title:
-------------------------

[cc BNPLC and NAI]

2

46
ATTACHMENT 9

TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL

OF CASH COLLATERAL FROM

A DISQUALIFIED DEPOSIT TAKER

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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 PERMIT THE PARTICIPANT FOR WHOM SUCH
DEPOSIT TAKER HAS BEEN MAINTAINING AN ACCOUNT TO RESPOND IF IT BELIEVES THAT NAI
IS IN ERROR.]

1

47
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

48
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 II - Improvements) dated May 3, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase II - Improvements) and Banque Nationale de Paris, 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 II - 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 has advised Agent that you are a Disqualified
Deposit Taker, and NAI requires Agent to withdraw from the Account maintained by
you, as a Deposit Taker under the Pledge Agreement, the sum of:

____________________________ Dollars ($__________)

no later than the following date:

__________, ____

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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:  
--------------------------
Title:
-------------------------

[cc BNPLC and NAI]

3

1
Exhibit 10.32

================================================================================

PURCHASE AGREEMENT
(PHASE II - LAND)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

MAY 3, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2

TABLE OF CONTENTS

Page

1.       NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE                         1
(A)      Right to Purchase; Right and Obligation to Remarket                      1
(B)      Determinations Concerning Price                                          3
(C)      Designation of the Purchaser                                             4
(D)      Effect of the Purchase Option and NAI's Initial Remarketing 
Rights and Obligations on Subsequent Title Encumbrances                  4
(E)      Security  for the Purchase  Option and NAI's  Initial
Remarketing Rights and Obligations                                       4
(F)      Delivery of Books and Records If BNPLC Retains the Property              5

2.       NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE                           5
(A)      NAI's Extended Right to Remarket                                         5
(B)      Definition of Minimum Extended Remarketing Price                         5
(C)      BNPLC's Right to Sell                                                    6
(D)      NAI's Right to Excess Sales Proceeds                                     6
(E)      Permitted Transfers During NAI's Extended Remarketing Period             7

3.       TERMS OF CONVEYANCE UPON PURCHASE                                                 7

4.       SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC           7
(A)      Status of this Agreement Generally                                       7
(B)      Intentionally Deleted.                                                   8
(C)      Intentionally Deleted                                                    8
(D)      Automatic Termination of NAI's Rights                                    8
(E)      Termination of NAI's Extended

Remarketing Rights to Permit 
a Sale by BNPLC                                                          8
(F)      Payment Only to BNPLC                                                    9
(G)      Remedies Under the Other Operative Documents                             9
(H)      Occupancy by NAI Prior to Closing of a Sale                              9

5.       SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS                                   9

6.       CERTAIN REMEDIES CUMULATIVE                                                      10

7.       ATTORNEYS' FEES AND LEGAL EXPENSES                                               10

8.       ESTOPPEL CERTIFICATE                                                             10

9.       SUCCESSORS AND ASSIGNS                                                           10

3

Exhibits and Schedules

Exhibit A  Legal Description

Exhibit B  Requirements Re: Form of Grant Deed and Ground Lease

Exhibit C  Bill of Sale and Assignment

Exhibit D  Acknowledgment and Disclaimer

Exhibit E  Secretary's Certificate

Exhibit F  Certificate Concerning Tax Withholding

2

4

PURCHASE AGREEMENT
(PHASE II - LAND)

This PURCHASE AGREEMENT (PHASE II - LAND) (this "AGREEMENT"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of May
3, 1999, the Effective Date. ("EFFECTIVE DATE" and other capitalized terms used
and not otherwise defined in this Agreement are intended to have the meanings
assigned to them in the Common Definitions and Provisions Agreement (Phase I -
Land) executed by BNPLC and NAI contemporaneously with this Agreement. By this
reference, the Common Definitions and Provisions Agreement (Phase II - Land) is
incorporated into and made a part of this Agreement for all purposes.)

RECITALS

Pursuant to the Existing Contract, which covers the Land described in
Exhibit , BNPLC is acquiring the Land and any appurtenances thereto and the
existing Improvements thereon from Seller contemporaneously with the execution
of this Agreement. Pursuant to the Lease Agreement (Phase II - Land) executed by
BNPLC and NAI contemporaneously with this Agreement (the "LAND LEASE"), BNPLC is
leasing the Land to NAI. (All of BNPLC's interests, including those created by
the documents delivered at the closing under the Existing Contract, in the Land
and in all other real and personal property from time to time covered by the
Land Lease and included within the "Property" as defined therein are hereinafter
collectively referred to as the "PROPERTY". The Property does not include the
Improvements, it being understood that the Other Purchase Agreement constitutes
a separate agreement providing for the possible sale of the Improvements and the
appurtenances thereto, and only the Improvements and the appurtenances thereto,
from BNPLC to NAI or a third party designated by NAI.)

NAI and BNPLC have reached agreement upon the terms and conditions upon
which NAI will purchase or arrange for the purchase of the Property, and by this
Agreement they desire to evidence such agreement.

AGREEMENTS

1    NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE. 

(A)  Right to Purchase; Right and Obligation to Remarket . Whether or not an
Event of Default shall have occurred and be continuing or the Land Lease shall
have been terminated, but subject to Paragraph below:

(1)  NAI shall have the right (the "PURCHASE OPTION") to purchase or cause
an Affiliate of NAI to purchase the Property and BNPLC's interest in Escrowed
Proceeds, if any, on the Designated Sale Date for a cash price equal to the
Break Even Price (as defined below).

(2)  If neither NAI nor an Affiliate of NAI purchases the Property and
BNPLC's interest in any Escrowed Proceeds on the Designated Sale Date as
provided in the preceding subparagraph , then NAI shall have the following
rights and obligations (collectively, "NAI'S INITIAL REMARKETING RIGHTS AND
OBLIGATIONS"):

(a)  First, NAI shall have the right (but not the obligation) to cause an
Applicable Purchaser who is not an Affiliate of NAI to purchase the
Property and BNPLC's interest in any Escrowed Proceeds on the Designated

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5

Sale Date for a cash purchase price (the "THIRD PARTY PRICE") determined as
provided below. If, however, the Break Even Price exceeds the sum of any
Third Party Price tendered or to be tendered to BNPLC by an Applicable
Purchaser and any Supplemental Payment paid by NAI as described below, then
BNPLC may affirmatively elect to decline such tender from the Applicable
Purchaser and to keep the Property and any Escrowed Proceeds rather than
sell to the Applicable Purchaser pursuant to this subparagraph (a
"VOLUNTARY RETENTION OF THE PROPERTY").

(b)  Second, if the Third Party Price actually paid by an Applicable
Purchaser to BNPLC on the Designated Sale Date exceeds the Break Even
Price, NAI shall be entitled to such excess, subject, however, to BNPLC's
right to offset against such excess any and all sums that are then due from
NAI to BNPLC under the other Operative Documents.

(c)  Third, if for any reason whatsoever (including a Voluntary Retention
of the Property or a decision by NAI not to exercise its right to purchase
or cause an Applicable Purchaser to purchase from BNPLC as described above)
neither NAI nor an Applicable Purchaser pays a net cash price to BNPLC on
the Designated Sale Date equal to or in excess of the Break Even Price in
connection with a sale of the Property and BNPLC's interest in any Escrowed
Proceeds pursuant to this Agreement, then NAI shall have the obligation to
pay to BNPLC on the Designated Sale Date a supplemental payment (the
"SUPPLEMENTAL PAYMENT") equal to the lesser of (1) the amount by which the
Break Even Price exceeds such net cash price (if any) actually received by
BNPLC on the Designated Sale Date (such excess being hereinafter called a
"DEFICIENCY") or (2) the Maximum Remarketing Obligation. As used herein,
the "MAXIMUM REMARKETING OBLIGATION" means a dollar amount determined in
accordance with the following provisions:

1)   The "MAXIMUM REMARKETING OBLIGATION" will equal the product of
(i) Stipulated Loss Value on the Designated Sale Date, times (ii) 100%
minus the Residual Risk Percentage, provided that both of the
following conditions are satisfied:

(x)  NAI shall not have elected to accelerate the Designated Sale
Date as provided in clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement
(Phase II - Land).

(y)  No Event of Default, other than an Issue 97-1
Non-performance-related Subjective Event of Default, shall occur
on or be continuing on the Designated Sale Date.

2)   If either of the conditions listed in subparagraph 1) preceding
are not satisfied, the "MAXIMUM REMARKETING OBLIGATION" will equal the
Break Even Price.

If any  Supplemental  Payment or other amount  payable to BNPLC pursuant to this
subparagraph  is not actually  paid to BNPLC on the  Designated  Sale Date,  NAI
shall pay interest on the past due amount  computed at the Default Rate from the
Designated Sale Date.

(B)  Determinations Concerning Price .

(1)  Determination of the Break Even Price. As used herein, "BREAK EVEN
PRICE" means an amount equal, on the Designated Sale Date, to Stipulated
Loss Value, plus all out-of-pocket costs and expenses (including appraisal
costs, withholding taxes (if any) not constituting Excluded Taxes, and
Attorneys' Fees) incurred by BNPLC in connection with any sale of BNPLC's
interests in the Property under this Agreement or in connection with
collecting payments due hereunder, but less the aggregate amounts (if any)
of Direct Payments to Participants and Deposit Taker Losses (other than
Excluded Deposit Taker Losses).

2

6

(2)  Determination of Third Party Price. The Third Party Price required of
any Applicable Purchaser purchasing from BNPLC under subparagraph will be
determined as follows:

(a)  NAI may give a notice (a "REMARKETING NOTICE") to BNPLC and to
each of the Participants no earlier than one hundred twenty days
before the Designated Sale Date and no later than ninety days before
the Designated Sale Date, specifying an amount as the Third Party
Price that NAI believes in good faith to constitute reasonably
equivalent value for the Property and any Escrowed Proceeds. Once
given, a Remarketing Notice shall not be rescinded or modified without
BNPLC's written consent.

(b)  If BNPLC believes in good faith that the Third Party Price
specified by NAI in a Remarketing Notice does not constitute
reasonably equivalent value for the Property and any Escrowed
Proceeds, BNPLC may at any time before sixty days prior to the
Designated Sale Date respond to the Remarketing Notice with a notice
back to NAI, objecting to the Third Party Price so specified by NAI.
If BNPLC receives a Remarketing Notice, yet does not respond with an
objection as provided in the preceding sentence, the Third Party Price
suggested by NAI in the Remarketing Notice will be the Third Party
Price for purposes of this Agreement. If, however, BNPLC does respond
with an objection as provided in this subparagraph, and if NAI and
BNPLC do not otherwise agree in writing upon a Third Party Price, then
the Third Party Price will be the lesser of (I) fair market value of
the Property, plus the amount of any Escrowed Proceeds, as determined
by a professional independent appraiser satisfactory to BNPLC, or (II)
the Break Even Price.

(c)  If for any reason, including an acceleration of the Designated
Sale Date as provided in the definition thereof in the Common
Definitions and Provisions Agreement (Phase II - Land), NAI does not
deliver a Remarketing Notice to BNPLC within the time period specified
above, then the Third Party Price will be an amount determined in good
faith by BNPLC as constituting reasonably equivalent value for the
Property and any Escrowed Proceeds, but in no event more than the
Break Even Price.

If any payment to BNPLC by an  Applicable  Purchaser  hereunder  is held to
constitute a preference or a voidable  transfer  under  Applicable  Law, or
must for any other reason be refunded by BNPLC to the Applicable  Purchaser
or to  another  Person,  and if such  payment  to BNPLC  reduced or had the
effect of reducing a Supplemental Payment or increased or had the effect of
increasing  any excess sale proceeds  paid to NAI pursuant to  subparagraph
1(A)(2)(b) or pursuant to  subparagraph  , then NAI shall pay to BNPLC upon
demand an amount equal to the reduction of the  Supplemental  Payment or to
the increase of the excess sale  proceeds paid to NAI, as  applicable,  and
this  Agreement  shall  continue to be effective or shall be  reinstated as
necessary  to permit BNPLC to enforce its right to collect such amount from
NAI.

(C)  Designation of the Purchaser . To give BNPLC the opportunity before the
Designated Sale Date to prepare the deed and other documents that BNPLC must
tender pursuant to Paragraph (collectively, the "SALE CLOSING DOCUMENTS"), NAI
must, by a notice to BNPLC given at least seven days prior to the Designated
Sale Date, specify irrevocably, unequivocally and with particularity the party
who will purchase the Property in order to satisfy the obligations of NAI set
forth in subparagraph . If for any reason NAI fails to so specify a party who
will in accordance with the terms and conditions set forth herein purchase the
Property (be it NAI itself, an Affiliate of NAI or another Applicable
Purchaser), BNPLC shall be entitled to postpone the tender of the Sale Closing
Documents until a date after the Designated Sale Date and not more than twenty
days after NAI finally does so specify a party, but such postponement will not
relieve or postpone the obligation of NAI to make a Supplemental Payment on the
Designated Sale Date as provided in Paragraph .

(D)  Effect of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations on Subsequent Title Encumbrances . Any conveyance of the Property to
NAI or any Applicable Purchaser pursuant to this Paragraph shall cut off and
terminate any interest in the Land or other Property claimed by, through or
under BNPLC, including any interest claimed by the Participants and including
any Liens Removable by BNPLC (such as, but not limited to, any judgment liens
established

3

7

against the Property because of a judgment rendered against BNPLC and any
leasehold or other interests conveyed by BNPLC in the ordinary course of BNPLC's
business), but not including personal obligations of NAI to BNPLC under the Land
Lease or other Operative Documents (including obligations arising under the
indemnities therein). Anyone accepting or taking any interest in the Property by
or through BNPLC after the date of this Agreement shall acquire such interest
subject to the Purchase Option and NAI's Initial Remarketing Rights and
Obligations. Further, NAI and any Applicable Purchaser shall be entitled to pay
any payment required by this Agreement for the purchase of the Property directly
to BNPLC notwithstanding any prior conveyance or assignment by BNPLC, voluntary
or otherwise, of any right or interest in this Agreement or the Property, and
neither NAI nor any Applicable Purchaser shall be responsible for the proper
distribution or application of any such payments by BNPLC; and any such payment
to BNPLC shall discharge the obligation of NAI to cause such payment to all
Persons claiming an interest in such payment. Contemporaneously with the
execution of this Agreement, the parties shall record a memorandum of this
Agreement for purposes of effecting constructive notice to all Persons of NAI's
rights under this Agreement, including its rights under this subparagraph.

(E) Security for the Purchase Option and NAI's Initial Remarketing Rights and
Obligations . To secure BNPLC's obligation to sell the Property pursuant to this
Paragraph and to pay any damages to NAI caused by a breach of such obligations,
including any such breach caused by a rejection or termination of this Agreement
in any bankruptcy or insolvency proceeding instituted by or against BNPLC, as
debtor, BNPLC does hereby grant to NAI a lien and security interest against all
rights, title and interests of BNPLC from time to time in and to the Land and
other Property. NAI may enforce such lien and security interest judicially after
any such breach by BNPLC, but not otherwise. Contemporaneously with the
execution of this Agreement, NAI and BNPLC will execute a memorandum of this
Agreement which is in recordable form and which specifically references the lien
granted in this subparagraph, and NAI shall be entitled to record such
memorandum at any time prior to the Designated Sale Date. 

(F)  Delivery of Books and Records If BNPLC Retains the Property . Unless NAI or
its Affiliate or another Applicable Purchaser purchases the Property pursuant to
Paragraph , promptly after the Designated Sale Date NAI shall deliver to BNPLC
copies of books and records of NAI which will be necessary or useful to any
future owner's or occupant's use of the Property.

2    NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE.

(A)  NAI's Extended Right to Remarket . During the two years following the
Designated Sale Date ("NAI'S EXTENDED REMARKETING PERIOD"), NAI shall have the
right ("NAI'S EXTENDED REMARKETING RIGHT") to cause an Applicable Purchaser who
is not an Affiliate of NAI to purchase the Property for a cash purchase price
not below the lesser of (I) the Minimum Extended Remarketing Price (as defined
below), or (II) if applicable, the Third Party Target Price (as defined below)
specified in any Third Party Sale Notice (as defined below) given by BNPLC
pursuant to subparagraph 2(C)(2) within the ninety days prior to the date (the
"FINAL SALE DATE") upon which BNPLC receives such purchase price from the
Applicable Purchaser. NAI's Extended Remarketing Right shall, however, be
subject to all of the following conditions:

(1)  The Property and BNPLC's interest in Escrowed Proceeds, if any, shall
not have been sold on the Designated Sale Date as provided in Paragraph 1.

(2)  No Voluntary Retention of the Property shall have occurred as
described in subparagraph 1(A)(2)(a).

(3)  NAI's Extended Remarketing Right shall not have been terminated
pursuant to subparagraph 4(D) below because of NAI's failure to make any
Supplemental Payment required on the Designated Sale Date.

(4)  NAI's Extended Remarketing Right shall not have been terminated by
BNPLC pursuant to subparagraph 4(E) below to facilitate BNPLC's sale of the
Property to a third party in accordance with subparagraph 2(C).

4

8
(5)  At least thirty days prior to the Final Sale Date, NAI shall have
notified BNPLC of (x) the date proposed by NAI as the Final Sale Date
(which must be a Business Day), (y) the full legal name of the Applicable
Purchaser and such other information as will be required to prepare the
Sale Closing Documents, and (z) the amount of the purchase price that the
Applicable Purchaser will pay (consistent with the minimum required
pursuant to the other provisions of this subparagraph 2(A)) for the
Property.

(B)  Definition of Minimum Extended Remarketing Price . As used herein, "MINIMUM
EXTENDED REMARKETING PRICE" means an amount equal to the sum of the following:

(1)  the amount by which the Break Even Price computed on the Designated
Sale Date exceeds any Supplemental Payment actually paid to BNPLC on the
Designated Sale Date, together with interest on such excess computed at the
Default Rate from the period commencing on the Designated Sale Date and
ending on the Final Sale Date, plus

(2)  all out-of-pocket costs and expenses (including withholding taxes [if
any], other than Excluded Taxes, and Attorneys' Fees) incurred by BNPLC in
connection with the sale to the Applicable Purchaser, to the extent not
already included in the computation of Break Even Price, and plus

(3)  the sum of all Impositions, insurance premiums and other Losses of
every kind suffered or incurred by BNPLC or any other Interested Party with
respect to the ownership, operation or maintenance of the Property on or
after the Designated Sale Date (except to the extent already reimbursed by
any lessee of the Property after the Designated Sale Date), together with
interest on such Impositions, insurance premiums and other Losses computed
at the Default Rate from the date paid or incurred to the Final Sale Date.

If, however, Losses described in the preceding clause (3) consist of claims
against BNPLC or another Interested Party that have not been liquidated prior to
the Final Sale Date (and, thus, such Losses have yet to be fixed in amount as of
the Final Sale Date), then NAI may elect to exclude any such Losses from the
computation of the Minimum Extended Remarketing Price by providing to BNPLC, for
the benefit of BNPLC and other Interested Parties, a written agreement to
indemnify and defend BNPLC and other Interested Parties against such Losses. To
be effective hereunder for purposes of reducing the Minimum Extended Remarketing
Price (and, thus, the Break Even Price), any such written indemnity must be
fully executed and delivered by NAI on or prior to the Final Sale Date, must
include provisions comparable to subparagraphs 5(c)(ii), (iii), (iv) and (v) of
the Land Lease and otherwise must be in form and substance satisfactory to
BNPLC.

(C) BNPLC's Right to Sell . After the Designated Sale Date, if the Property has
not already been sold by BNPLC pursuant to Paragraph or this Paragraph , BNPLC
shall have the right to sell the Property or offer the Property for sale to any
third party on any terms believed to be appropriate by BNPLC in its sole good
faith business judgment; provided, however, that so long as the conditions to
NAI's Extended Remarketing Rights specified in subparagraph continue to be
satisfied: 

(1)  BNPLC shall not sell the Property to an Affiliate of BNPLC on terms
less favorable than those which BNPLC would require from a prospective
purchaser not an Affiliate of BNPLC;

(2)  If BNPLC receives or desires to make a written proposal (whether in
the form of a "letter of intent" or other nonbinding expression of interest
or in the form of a more definitive purchase and sale agreement) for a sale
of the Property to a prospective purchaser (a "THIRD PARTY SALE PROPOSAL"),
and if on the basis of such Third Party Sale Proposal BNPLC expects to
enter into or to pursue negotiations for a definitive purchase and sale
agreement with the prospective purchaser, then prior to executing any such
definitive agreement, BNPLC shall submit the Third Party Sale Proposal to
NAI with a notice (the "THIRD PARTY SALE NOTICE") explaining that (A) BNPLC
is then prepared to accept a price not below an amount specified in such
Third Party Sale Notice (the "THIRD PARTY TARGET PRICE") if BNPLC and the
prospective purchaser reach agreement on other terms and conditions to be
incorporated into a definitive purchase and

5

9
sale agreement, and (B) NAI's Extended Remarketing Right may be terminated
pursuant to subparagraph 4(E) of this Agreement unless NAI causes an
Applicable Purchaser to consummate a purchase of the Property pursuant to
this Paragraph 2 within ninety days after the date of such Third Party Sale
Notice.

(D)  NAI's Right to Excess Sales Proceeds . If the cash price actually paid by
any third party purchasing the Property from BNPLC during NAI's Extended
Remarketing Period, including any price paid by an Applicable Purchaser
purchasing from BNPLC pursuant to this Paragraph 2, exceeds the Minimum Extended
Remarketing Price, then NAI shall be entitled to the excess; provided, that
BNPLC may offset and retain from the excess any and all sums that are then due
and unpaid from NAI to BNPLC under any of the Operative Documents.

(E)  Permitted Transfers During NAI's Extended Remarketing Period . Any
"Permitted Transfer" described in clause (6) of the definition thereof in the
Common Definitions and Provisions Agreement (Phase II - Land) to an Affiliate of
BNPLC or that covers BNPLC's entire interest in the Land will be subject to
NAI's Extended Remarketing Right if, at the time of the Permitted Transfer,
NAI's Extended Remarketing Right has not expired or been terminated as provided
herein. Any other Permitted Transfer described in clause (6) of the definition
thereof, however, will not be subject to NAI's Extended Remarketing Right. Thus,
for example, BNPLC's conveyance of a utility easement or space lease more than
thirty days after the Designated Sale Date to a Person not an Affiliate of BNPLC
shall not be subject to NAI's Extended Remarketing Right, though following the
conveyance of the lesser estate, NAI's Extended Remarketing Right may continue
to apply to BNPLC's remaining interest in the Land and any Personal Property.

3.   TERMS OF CONVEYANCE UPON PURCHASE. As necessary to consummate any sale of
the Property to NAI or an Applicable Purchaser pursuant to this Agreement, BNPLC
must, subject to any postponement permitted by subparagraph 1(C), promptly after
the tender of the purchase price and any other payments to BNPLC required
pursuant to Paragraph 1 or Paragraph 2, as applicable, convey all of BNPLC's
right, title and interest in the Land and other Property to NAI or the
Applicable Purchaser, as the case may be, by BNPLC's execution, acknowledgment
(where appropriate) and delivery of the Sale Closing Documents. Such conveyance
by BNPLC will be subject only to the Permitted Encumbrances and any other
encumbrances that do not constitute Liens Removable by BNPLC. However, such
conveyance shall not include the rights of BNPLC or other Interested Parties
under the indemnities provided in the Operative Documents, including rights to
any payments then due from NAI under the indemnities or that may become due
thereafter because of any expense or liability incurred by BNPLC or another
Interested Party resulting in whole or in part from events or circumstances
occurring or alleged to have occurred before such conveyance. All costs, both
foreseen and unforeseen, of any purchase by NAI or an Applicable Purchaser
hereunder shall be the responsibility of the purchaser. The Sale Closing
Documents used to accomplish such conveyance shall consist of the following: (1)
a Corporation Grant Deed in the form attached as Exhibit B-1 or Exhibit B-2 or
Exhibit B-4, as required by Exhibit B, (2) if required by Exhibit B, a Ground
Lease in the form attached as Exhibit B-3, which NAI or the Applicable Purchase
must execute and return to BNPLC, (3) a Bill of Sale and Assignment in the form
attached as Exhibit C, (4) an Acknowledgment of Disclaimer of Representations
and Warranties, in the form attached as Exhibit D, which NAI or the Applicable
Purchaser must execute and return to BNPLC, (5) a Secretary's Certificate in the
form attached as Exhibit E, and (6) a certificate concerning tax withholding in
the form attached as Exhibit F. If for any reason BNPLC fails to tender the Sale
Closing Documents as required by this Paragraph , BNPLC may cure such refusal at
any time before thirty days after receipt of a demand for such cure from NAI.

4    SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC.

(A)  Status of this Agreement Generally . Except as expressly provided herein,
this Agreement shall not terminate; nor shall NAI have any right to terminate
this Agreement; nor shall NAI be entitled to any reduction of the Break Even
Price, any Deficiency, the Maximum Remarketing Obligation, any Supplemental
Payment or the Minimum Extended Remarketing Price hereunder; nor shall the
obligations of NAI to BNPLC under Paragraph 1 be affected, by reason of (i) any
damage to or the destruction of all or any part of the Property from whatever
cause (though it is understood that NAI will receive any remaining Escrowed
Proceeds yet to be applied as provided in the Land Lease that may result from
such damage

6

10

if NAI purchases the Property and the Escrowed Proceeds as herein provided),
(ii) the taking of or damage to the Property or any portion thereof by eminent
domain or otherwise for any reason (though it is understood that NAI will
receive any remaining Escrowed Proceeds yet to be applied as provided in the
Land Lease that may result from such taking or damage if NAI purchases the
Property and the Escrowed Proceeds as herein provided), (iii) the prohibition,
limitation or restriction of NAI's use of all or any portion of the Property or
any interference with such use by governmental action or otherwise, (iv) any
eviction of NAI or any party claiming under NAI by paramount title or otherwise,
(v) NAI's prior acquisition or ownership of any interest in the Property, (vi)
any default on the part of BNPLC under this Agreement, the Land Lease or any
other agreement to which BNPLC is a party, or (vii) any other cause, whether
similar or dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties hereto that the
obligations of NAI to make payment to BNPLC hereunder shall be separate and
independent covenants and agreements from BNPLC's obligations under this
Agreement or any other agreement between BNPLC and NAI; provided, however, that
nothing in this subparagraph shall excuse BNPLC from its obligation to tender
the Sale Closing Documents in substantially the form attached hereto as exhibits
when required by Paragraph 3. Further, nothing in this subparagraph shall be
construed as a waiver by NAI of any right NAI may have at law or in equity to
the following remedies, whether because of BNPLC's failure to remove a Lien
Removable by BNPLC or because of any other default by BNPLC under this
Agreement: (i) the recovery of monetary damages, (ii) injunctive relief in case
of the violation, or attempted or threatened violation, by BNPLC of any of the
express covenants, agreements, conditions or provisions of this Agreement which
are binding upon BNPLC, or (iii) a decree compelling performance by BNPLC of any
of the express covenants, agreements, conditions or provisions of this Agreement
which are binding upon BNPLC.

(B)  Intentionally  Deleted.  

(C)  Intentionally Deleted .

(D)  Automatic Termination of NAI's Rights . Without limiting BNPLC's right to
enforce NAI's obligation to pay any Supplemental Payment or other amounts
required by this Agreement, the rights of NAI (to be distinguished from the
obligations of NAI) included in NAI's Initial Remarketing Rights and
Obligations, the Purchase Option and NAI's Extended Remarketing Rights shall all
terminate automatically if NAI shall fail to pay the full amount of any
Supplemental Payment required by subparagraph 1(A)(2)(c) on the Designated Sale
Date or if BNPLC shall elect a Voluntary Retention of the Property as provided
in subparagraph 1(A)(2)(a). However, notwithstanding anything in this
subparagraph to the contrary, even after a failure to pay any required
Supplemental Payment on the Designated Sale Date, NAI may nonetheless tender to
BNPLC the full Break Even Price and all amounts then due under the Operative
Documents, together with interest on the total Break Even Price computed at the
Default Rate from the Designated Sale Date to the date of tender, on any
Business Day within thirty days after the Designated Sale Date, and if presented
with such a tender within thirty days after the Designated Sale Date, BNPLC must
accept it and promptly thereafter deliver any Escrowed Proceeds and the Sale
Closing Documents listed in Paragraph 3 to NAI.

(E)  Termination of NAI's Extended Remarketing Rights to Permit a Sale by BNPLC
At any time more than ninety days after BNPLC has delivered a Third Party Sale
Notice to NAI as described in subparagraph 2(C)(2), BNPLC may terminate NAI's
Extended Remarketing Rights contemporaneously with the consummation of a sale of
the Property by BNPLC to any third party (be it the prospective purchaser named
in the Third Party Sale Notice or another third party) at a price equal to or in
excess of the Third Party Target Price specified in the Third Party Sale Notice,
so as to permit the sale of the Property unencumbered by NAI's Extended
Remarketing Rights.

(F)  Payment Only to BNPLC . All amounts payable under this Agreement by NAI
and, if applicable, by an Applicable Purchaser must be paid directly to BNPLC,
and no payment to any other party shall be effective for the purposes of this
Agreement. In addition to the payments required under subparagraph 1(A), on the
Designated Sale Date NAI must pay all amounts then due to BNPLC under the Land
Lease or other Operative Documents.

7

11

(G)  Remedies Under the Other Operative Documents . No repossession of or
re-entering upon the Property or exercise of any other remedies available to
BNPLC under the Land Lease or other Operative Documents shall terminate NAI's
rights or obligations hereunder, all of which shall survive BNPLC's exercise of
remedies under the other Operative Documents. NAI acknowledges that the
consideration for this Agreement is separate and independent of the
consideration for the Land Lease and the Closing Certificate, and NAI's
obligations hereunder shall not be affected or impaired by any event or
circumstance that would excuse NAI from performance of its obligations under
such other Operative Documents.

(H)  Occupancy by NAI Prior to Closing of a Sale . Prior to the closing of any
sale of the Property to NAI or an Applicable Purchaser hereunder, NAI's
occupancy of the Land and its use of the Property shall continue to be subject
to the terms and conditions of the Land Lease, including the terms setting forth
NAI's obligation to pay rent, prior to any termination or expiration of the Land
Lease pursuant to its express terms and conditions.

5    SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS. NAI's obligations under
this Agreement are secured by the Pledge Agreement, reference to which is hereby
made for a description of the Collateral covered thereby and the rights and
remedies provided to BNPLC thereby. Although the collateral agent appointed for
BNPLC as provided in the Pledge Agreement shall be entitled to hold all
Collateral as security for the full and faithful performance by NAI of NAI's
covenants and obligations under this Agreement, the Collateral shall not be
considered an advance payment of the Break Even Price or any Supplemental
Payment or a measure of BNPLC's damages should NAI breach this Agreement. If NAI
does breach this Agreement and fails to cure the same within any time specified
herein for the cure, BNPLC may, from time to time, without prejudice to any
other remedy and without notice to NAI, require the collateral agent to
immediately apply the proceeds of any disposition of the Collateral (and any
cash included in the Collateral) to amounts then due hereunder from NAI. If by a
Permitted Transfer BNPLC conveys its interest in the Property before the
Designated Sale Date, BNPLC may also assign BNPLC's interest in the Collateral
to the transferee. BNPLC shall be entitled to return any Collateral not sold or
used to satisfy the obligations secured by the Pledge Agreement directly to NAI
notwithstanding any prior actual or attempted conveyance or assignment by NAI,
voluntary or otherwise, of any right to receive the same; neither BNPLC nor the
collateral agent named in the Pledge Agreement shall be responsible for the
proper distribution or application by NAI of any such Collateral returned to
NAI; and any such return of Collateral to NAI shall discharge any obligation of
BNPLC to deliver such Collateral to all Persons claiming an interest in the
Collateral. Further, BNPLC shall be entitled to deliver any Escrowed Proceeds it
holds on the Designated Sale Date directly to NAI or to any Applicable Purchaser
purchasing BNPLC's interest in the Property and the Escrowed Proceeds pursuant
to this Agreement notwithstanding any prior actual or attempted conveyance or
assignment by NAI, voluntary or otherwise, of any right to receive the same;
BNPLC shall not be responsible for the proper distribution or application by NAI
or any Applicable Purchaser of any such Escrowed Proceeds paid over to NAI or
the Applicable Purchaser; and any such payment of Escrowed Proceeds to NAI or an
Applicable Purchaser shall discharge any obligation of BNPLC to deliver the same
to all Persons claiming an interest therein.

6    CERTAIN REMEDIES CUMULATIVE. No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy BNPLC
has with respect to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute. In addition to other
remedies available under this Agreement, either party shall be entitled, to the
extent permitted by applicable law, to a decree compelling performance of any of
the other party's agreements hereunder.

7    ATTORNEYS' FEES AND LEGAL EXPENSES. If either party to this Agreement
commences any legal action or other proceeding to enforce any of the terms of
this Agreement, or because of any breach by the other party or dispute
hereunder, the party prevailing in such action or proceeding shall be entitled
to recover from the other party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is prosecuted to a
final judgment. Any such Attorneys' Fees incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
such judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment.

8

12

8    ESTOPPEL CERTIFICATE. Upon request by BNPLC, NAI shall execute, acknowledge
and deliver a written statement certifying that this Agreement is unmodified and
in full effect (or, if there have been modifications, that this Agreement is in
full effect as modified, and setting forth such modification) and either stating
that no default exists hereunder or specifying each such default of which NAI
has knowledge. Any such statement may be relied upon by any Participant or
prospective purchaser or assignee of BNPLC with respect to the Property. 

9    SUCCESSORS AND ASSIGNS. The terms, provisions, covenants and conditions
hereof shall be binding upon NAI and BNPLC and their respective permitted
successors and assigns and shall inure to the benefit of NAI and BNPLC and all
permitted transferees, mortgagees, successors and assignees of NAI and BNPLC
with respect to the Property; provided, that (A) the rights of BNPLC hereunder
shall not pass to NAI or any Applicable Purchaser or any subsequent owner
claiming through NAI or an Applicable Purchaser, (B) BNPLC shall not assign this
Agreement or any rights hereunder except pursuant to a Permitted Transfer, and
(C) NAI shall not assign this Agreement or any rights hereunder without the
prior written consent of BNPLC. 

[Signature pages follow.]

9

13

IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be executed
as of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:           
--------------------------------
Name:       
---------------------------
Title:  
----------------------

10

14

[Continuation of signature pages to Purchase Agreement (Phase II - Land) dated
to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:            
--------------------------------
Lloyd G. Cox, Vice President

11

15

EXHIBIT A

LEGAL DESCRIPTION

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows: All that certain Real Property in the City of
Sunnyvale, County of Santa Clara, State of California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

1

16

EXHIBIT B

REQUIREMENTS RE: FORM OF GRANT DEED AND GROUND LEASE

The form of deed to be used to convey BNPLC's interest in the Land to NAI or an
Applicable Purchaser will depend upon whether BNPLC's interest in the
Improvements has been or is being conveyed at the same time to the same party.

If BNPLC's interests in BOTH the Land and the Improvements are to be conveyed to
NAI or an Applicable Purchaser at the same time, because a sale under this
Purchase Agreement and a sale under the Other Purchase Agreement (covering the
Improvements) are being consummated at the same time and to the same party, then
the one deed in form attached as Exhibit B-1 will be used to convey both.

If, however, a sale of BNPLC's interest in the Improvements pursuant to the
Other Purchase Agreement has not been consummated before, and is not being
consummated contemporaneously with the sale of BNPLC's interest in the Land
under this Agreement, then BNPLC's interest in the Land will be conveyed by a
deed in the from attached as Exhibit B-2, and BNPLC and the grantee under such
deed shall, as a condition to BNPLC's obligation to deliver the deed, execute
and deliver a Ground Lease covering the Land in the form attached hereto as
Exhibit B-3.

Finally, BNPLC's interest in the Land will be conveyed by a deed in the from
attached as Exhibit B-4 if BNPLC's interest in the Improvements has been sold
pursuant to the Other Purchase Agreement before a sale of BNPLC's interest in
the Land under this Agreement, or if BNPLC's interest in the Improvements is
being sold contemporaneously with a sale of BNPLC's interest in the Land, but
the purchaser of the Improvements is not the same as the purchaser of the Land.

2

17

EXHIBIT B-1

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS:  ___________________
ATTN:     ___________________
CITY:     ___________________
STATE:    ___________________
Zip:      ___________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS:   ___________________
ATTN:      ___________________
CITY:      ___________________
STATE:     ___________________
Zip:       ___________________

CORPORATION GRANT DEED
(Covering Land and Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof and all improvements on such land, together with the
any other right, title and interest of Grantor in and to any easements,
rights-of-way, privileges and other rights appurtenant to such land or the
improvements thereon; provided, however, that this grant is subject to the
encumbrances described on Annex B (the "Permitted Encumbrances"). Grantee hereby
assumes the obligations (including any personal obligations) of Grantor, if any,
created by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the land
or improvements conveyed by this deed.

2

18

BNP LEASING CORPORATION

Date: As of ____________                    By:               
-------------------------------
Its:

Attest:
---------------------------
Its:

[NAI or Applicable Purchaser]

Date: As of ____________                     By:
------------------------------
Its:

Attest:           
Its:

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, _______________, personally appeared 
_______________ and _______________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacities, and that by their signatures on the
instrument the person, or the entity upon behalf of which the persons acted,
executed the instrument.

WITNESS my hand and official seal.

Signature
------------------------

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, _______________, personally appeared 
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature
------------------------

19
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

3

20

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.   TAXES for the fiscal year [current year], a lien not yet due or payable.

2.   General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:                  110-32-004
Code No.:                        09-059
First Installment:               $34,099.75 Paid
Second Installment:              $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:               None
Homeowners Exemption:            None

3.   Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-71
First Installment:               Paid
Second Installment:              $4,217.87, Payable, but not yet due

4.   Supplemental  Taxes for the fiscal year  1998-99  assessed  pursuant to the
provisions of Chapter 3.5  (commencing  with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-72
First Installment:               Paid
Second Installment:              $16,226.03, Payable, but not yet due

5.   The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation
Code of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

6.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

4

21

In Favor Of:           City of Sunnyvale, A Municipal Corporation
For:                   Slope Easement
Recorded:              October 9, 1964, in Book 6695 at Page 430, 
Official Records
Affects:               The Southeasterly 18 feet of Said Land

7.   An easement affecting the portion of said land and for the purposes 
stated herein, and incidental purposes,

In Favor Of:            City of Sunnyvale, A Municipal Corporation
For:                    Public Utilities
Recorded:               October 9, 1964, in Book 6695 at Page 450,
Official Records
Affects:                The Southeasterly 7 feet of Said Land

8.   Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:            Moffett Park Associates, A Partnership
Recorded:               December 23, 1971 in Book 9640 at Page 443 of 
Official Records

An Assignment and Assumption

Executed by:            Moffett Park Associates, A Partnership
To:                     The Prudential Insurance Company of America, 
a New Jersey Corporation
Recorded:               February 8, 1977 in Book C583 at Page 685 of
Official Records

9.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:            Moffett Park Associates, A Partnership
For:                    Private and Public Utility Purposes
Recorded:               November 29, 1974, in Book B190, page 398, as
Instrument No. 4903681, Official Records
Affects:                The Northerly 5 feet of Said Land

10.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:            Paul Enterprises, A Partnership, and Northwest
Poultry and Dairy Products Co., an Oregon 
Corporation
For:                    5 Foot Wide Storm Drain Easement
Recorded:               June 17, 1975, in Book B467, page 167, as 
Instrument No. 5032895, Official Records
Affects:                As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

5

22

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing pipe and the True Point of Beginning of this
description;

Thence South 75 deg 07' 58" East parallel with and istant 2.50 feet
Northerly measured at right angles, from the Southerly line of siad Parcel
"A' and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described  above shall be prolonged
or shortened  so as to form a  continuous  5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and continuing along a center line of an
existing 6 inch Storm Drain Pipe, a distance of 35.00 feet to a point on
the Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

11.  An easement affecting the portion of said land and for the purposes 
stated herein, and incidental purposes,

In Favor Of:       The Prudential Insurance Company of America, a 
New Jersey Corporation 
For:               A 5 foot wide Storm Drain Easement

6

23

Recorded:          June 17, 1975 in Book B467, page 173, as Instrument
No. 5032896 Official Records
Affects:           As follows:

PARCEL ONE

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing storm drain pipe running along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
said True Point of Beginning of this description to point 2.50 feet North
of an existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50
feet North of an existing storm drain inlet structure.

PARCEL THREE

7

24

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

12.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:       The Prudential Insurance Company of America, 
new Jersey Corporation
For:               A pedestrian and motor vehicle Right-of-Way for 
the purposes of Ingress and Egress from motor 
vehicle parking spaces
Recorded:          June 17, 1975, in Book B467, page 178, as Instrument
No. 5032897 Official
Records
Affects:           As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast
corner also being a point on the Westerly line of Crossman Road (90.00 feet
wide); Thence North 75 deg 7' 58" West along the Southerly line of said
Parcel "A", a distance of 40.00 feet to the True Point of Beginning of this
description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

8

25

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A",
a distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

13.  Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

(A)  the fact that the landscaping area, patio and walkways located along
the northwesterly boundary is for the common use of the adjoining property
lying to the northwest of said land.

(B)  the fact that the driveway located near the most northerly corner
along the northeasterly boundary is for the common use of the adjoining
property lying to the northeast of said land.

(C)  the fact that the fence along the northwesterly boundary and across
the most northerly corner encroaches onto the adjoining properties lying to
the northwest and northeast of said land.

(D)  the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E)  the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility
easement (6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430);
onto the 5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and
B467-OR-173); and onto the 5.00 foot Public Utility easement (B190-OR-398).

14.  Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

9

26

EXHIBIT B-2

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: ___________________
ATTN:    ___________________
CITY:    ___________________
STATE:   ___________________
Zip:     ___________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: ___________________
ATTN:    ___________________
CITY:    ___________________
STATE:   ___________________
Zip:     ___________________

CORPORATION GRANT DEED
(Covering Land but not the Improvements On the Land)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof (the "Land"), together with the any other right, title
and interest of Grantor in and to any easements, rights-of-way, privileges and
other rights appurtenant to the Land; provided, however, that this grant is
subject to the encumbrances described on Annex B (the "Permitted Encumbrances")
and any reservations or qualifications set forth below. Grantee hereby assumes
the obligations (including any personal obligations) of Grantor, if any, created
by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the Land.

Although this deed conveys Grantor's interest in the Land itself, this deed does
not convey any interest in any buildings or other improvements on the Land
(collectively, "Improvements") or any rights or easements appurtenant to
Improvements. Grantor retains and reserves all right, title and interest of
Grantor in and to Improvements and any rights and easements appurtenant to
Improvements, together with a leasehold estate in and to the Land and any rights
and easements appurtenant to the Land, which leasehold estate will permit the
construction, maintenance and use of Improvements by Grantor and Grantor's
successors and assigns on and subject to the terms and conditions set forth in
the Ground Lease dated of even date herewith, executed by Grantee, as lessor,
and Grantor, as lessee. Reference is made to such Ground Lease, all the terms
and conditions of which are incorporated into this deed as if set forth herein.

10

27
BNP LEASING CORPORATION

Date: As of ____________                  By:               
-------------------------------
Its:

Attest:           
Its:

[NAI or Applicable Purchaser]

Date: As of ____________                  By:               
-----------------------------
Its:

Attest:           
-------------------------
Its:

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, _______________, personally appeared 
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature                                     
-------------------------------------

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, _________ , personally appeared 
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature                                            
----------------------------------

2

28

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

3

29

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.   TAXES for the fiscal year [current year], a lien not yet due or payable.

2.   General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:                  110-32-004
Code No.:                        09-059
First Installment:               $34,099.75 Paid
Second Installment:              $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:               None
Homeowners Exemption:            None

3.   Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-71
First Installment:               Paid
Second Installment:              $4,217.87, Payable, but not yet due

4.   Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-72
First Installment:               Paid
Second Installment:              $16,226.03, Payable, but not yet due

5.   The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation
Code of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

6.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

4

30

In Favor Of:                     City of Sunnyvale, A Municipal 
Corporation
For:                             Slope Easement
Recorded:                        October 9, 1964, in Book 6695 at 
Page 430, Official Records
Affects:                         The Southeasterly 18 feet of Said Land

7.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                     City of Sunnyvale, A Municipal 
Corporation
For:                             Public Utilities
Recorded:                        October 9, 1964, in Book 6695 at 
Page 450, Official Records
Affects:                         The Southeasterly 7 feet of Said Land

8.   Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:                     Moffett Park Associates, A Partnership
Recorded:                        December 23, 1971 in Book 9640 at 
Page 443 of Official Records

An Assignment and Assumption

Executed by:                     Moffett Park Associates, A Partnership
To:                              The Prudential Insurance Company of 
America, a New Jersey Corporation
Recorded:                        February 8, 1977 in Book C583 at  
Page 685 of Official Records

9.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                     Moffett Park Associates, A Partnership
For:                             Private and Public Utility Purposes
Recorded:                        November 29, 1974, in Book B190, 
page 398, as Instrument No. 4903681,
Official Records
Affects:                         The Northerly 5 feet of Said Land

10.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                     Paul Enterprises, A Partnership, and
Northwest Poultry and Dairy Products
Co., an Oregon Corporation
For:                             5 Foot Wide Storm Drain Easement
Recorded:                        June 17, 1975, in Book B467, page 167,
as Instrument No. 5032895, Official
Records
Affects:                         As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

5

31

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing pipe and the True Point of Beginning of this
description;

Thence South 75 deg 07' 58" East parallel with and distant 2.50 feet
Northerly measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain  Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said  existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and  continuing  along a center line of an
existing 6 inch Storm  Drain  Pipe,  a distance of 35.00 feet to a point on
the Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

11.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 The Prudential Insurance Company of 
America, a New Jersey Corporation
For:                         A 5 foot wide Storm Drain Easement

6

32

Recorded:                    June 17, 1975 in Book B467, page 173, 
as Instrument No. 5032896 Official
Records
Affects:                     As follows:

PARCEL ONE

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing storm drain pipe running along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
said True Point of Beginning of this description to point 2.50 feet North
of an existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50
feet North of an existing storm drain inlet structure.

PARCEL THREE

7

33

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

12.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 The Prudential Insurance Company of 
America,  new Jersey Corporation
For:                         A pedestrian and motor vehicle 
Right-of-Way for the purposes of Ingress
and Egress from motor vehicle parking 
spaces
Recorded:                    June 17, 1975, in Book B467, page 178, as
Instrument No. 5032897 Official Records
Affects:                     As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast
corner also being a point on the Westerly line of Crossman Road (90.00 feet
wide); Thence North 75 deg 7' 58" West along the Southerly line of said
Parcel "A", a distance of 40.00 feet to the True Point of Beginning of this
description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

8

34

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A",
a distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

13.  Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

(A)  the fact that the landscaping area, patio and walkways located along
the northwesterly boundary is for the common use of the adjoining property
lying to the northwest of said land.

(B)  the fact that the driveway located near the most northerly corner
along the northeasterly boundary is for the common use of the adjoining
property lying to the northeast of said land.

(C)  the fact that the fence along the northwesterly boundary and across
the most northerly corner encroaches onto the adjoining properties lying to
the northwest and northeast of said land.

(D)  the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E)  the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility
easement (6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430);
onto the 5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and
B467-OR-173); and onto the 5.00 foot Public Utility easement (B190-OR-398).

14.  Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

9

35

EXHIBIT B-3

GROUND LEASE

This GROUND LEASE (this "GROUND LEASE"), by and between BNP LEASING
CORPORATION, a Delaware corporation ("BNPLC"), whose address is 12201 Merit
Drive, Suite 860, Dallas, Texas 75251, and [NAI or the Applicable Purchaser], a
___________ ("LESSOR"), whose address is ____________________, as of
____________, ____ (the "GL EFFECTIVE DATE").

RECITALS

This Ground Lease is being executed pursuant to a Purchase Agreement (Phase
II - Land) dated as of May 3, 1999 (the "PURCHASE AGREEMENT"), between BNP
Leasing Corporation and Network Appliance, Inc., covering the land described in
Annex 1 attached hereto (the "LAND"). Incorporated by reference into the
Purchase Agreement is a Common Definitions and Provisions Agreement (Phase II -
Land) dated as of the effective date of the Purchase Agreement (the "CDPA"),
between BNP Leasing Corporation and Network Appliance, Inc. The CDPA is hereby
incorporated into and made a part of this Ground Lease for all purposes.
Capitalized terms defined in the CDPA and used but not otherwise defined herein
are intended in this Ground Lease to have the respective meanings ascribed to
them in the CDPA. The provisions in Article II of the CDPA are intended to apply
to this Ground Lease as if set forth herein and as if this Ground Lease were one
of the "Operative Documents" as defined therein.

Lessor and BNPLC have reached agreement as to the terms and conditions upon
which Lessor is willing to lease the Land described in Annex 1 to BNPLC for a
term of approximately just less that 35 years, and by this Ground Lease Lessor
and BNPLC desire to evidence such agreement.

GRANTING CLAUSES

NOW, THEREFORE, in consideration of the rent to be paid and the covenants
and agreements to be performed by BNPLC, as hereinafter set forth, Lessor does
hereby LEASE, DEMISE and LET unto BNPLC for the term hereinafter set forth the
Land, together with:

(1)  all easements and rights-of-way now owned or hereafter acquired by
Lessor for use in connection with the Land or as a means of access thereto;
and

(2)  all right, title and interest of Lessor, now owned or hereafter
acquired, in and to (A) any land lying within the right-of-way of any
street, open or proposed, adjoining the Land, (B) any and all sidewalks and
alleys adjacent to the Land and (C) any strips and gores between the Land
and any abutting land not owned by Lessor.

The Land and all of the property described in the preceding clauses (1) and (2)
are hereinafter referred to collectively as the "REAL PROPERTY".

To the extent, but only to the extent, that assignable rights or interests
in, to or under the following have been or will be acquired by Lessor as the
owner of any interest in the Real Property, Lessor also hereby grants and
assigns to BNPLC for the term of this Ground Lease (and thereafter, if BNPLC
purchases the Real Property from Lessor pursuant to the Repurchase 

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36

Option described in Paragraph ) the right to use and enjoy (and, in the case of
contract rights, to enforce) such rights or interests of Lessor:

(a)  the Permitted Encumbrances; and

(b)  any general intangibles, permits, licenses, franchises,
certificates, and other rights and privileges related to the Real Property
that BNPLC (rather than Lessor) would have acquired if BNPLC had itself
acquired the fee estate in the Real Property (excluding, however, any
rights and privileges of Lessor under this Ground Lease, any rights or
privileges of Lessor under the Purchase Agreement or other Operative
Documents, and [without limiting Lessor's obligations under subparagraphs ,
or ] any rights and privileges of Lessor under the Development Documents
described in Annex 3).

Such rights and interests of Lessor, whether now existing or hereafter arising,
are hereinafter collectively called the "GL PERSONAL PROPERTY". The Real
Property and the GL Personal Property are hereinafter sometimes collectively
called the "GL PROPERTY."

Provided, however, the leasehold estate conveyed hereby and BNPLC's rights
hereunder are expressly made subject and subordinate to the Permitted
Encumbrances, including those listed on Annex 2. FURTHER, IF AND SO LONG AS THE
OTHER LEASE AGREEMENT AND THE OTHER PURCHASE AGREEMENT (BOTH AS DEFINED IN THE
CDPA) REMAIN IN FORCE, THE RIGHTS AND OBLIGATIONS OF LESSOR AND BNPLC HEREUNDER
SHALL BE SUBJECT TO ANY CONTRARY PROVISIONS THEREIN. ACCORDINGLY, BNPLC'S RIGHTS
UNDER PARAGRAPH BELOW SHALL BE SUBJECT TO THE PROVISIONS GOVERNING INSURANCE AND
CONDEMNATION IN THE OTHER LEASE AGREEMENT, IF AND SO LONG AS THE OTHER LEASE
AGREEMENT REMAINS IN FORCE.

GENERAL TERMS AND CONDITIONS

The GL Property is leased by Lessor to BNPLC and is accepted and is to be
used and possessed by BNPLC upon and subject to the following terms and
conditions:

1.   GROUND LEASE TERM AND EARLY TERMINATION BY BNPLC. The term of this Ground
Lease (the "GROUND LEASE TERM") shall commence on and include the GL Effective
Date and end on last Business Day prior to the thirty-fifth anniversary of the
GL Effective Date. However, subject to the prior approval of any Leasehold
Mortgagee, BNPLC shall have the right to terminate this Ground Lease by giving a
notice to Lessor stating that BNPLC unequivocally elects to terminate effective
as of a date specified in such notice, which may be any date more than thirty
days after the notice and after the expiration or termination of the Lease
pursuant to its terms.

2.   NO OTHER GROUND LEASE TERMINATION. Except as expressly provided herein,
this Ground Lease shall not terminate, nor shall Lessor have any right to
terminate this Ground Lease, nor shall the obligations of Lessor under this
Ground Lease be excused, for any reason whatsoever, including any of the
following: (i) any damage to or the destruction of all or any part of the GL
Property from whatever cause, (ii) the taking of the GL Property or any portion
thereof by eminent domain or otherwise for any reason, (iii) any default on the
part of BNPLC under this Ground Lease or under any other agreement to which
Lessor and BNPLC are parties, or (iv) any other cause whether similar or
dissimilar to the foregoing, any existing or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the obligations
of Lessor hereunder shall be separate and independent of the covenants and
agreements of BNPLC. However, nothing in this Paragraph shall be construed as a
waiver by Lessor of any right Lessor may have at law or in equity to recover
monetary damages for any default under this Ground Lease by BNPLC. 

3.   GROUND LEASE RENT. On each anniversary of the GL Effective Date, BNPLC
shall make a payment to Lessor of rent for the then preceding year ("GROUND
LEASE RENT"), in currency that at the time of payment is legal tender for public
and private debts in the United States of America. Each such payment of Ground
Lease Rent shall equal the Fair Rental Value, determined as provided in Annex 4.

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37

4    USE OF GL PROPERTY. 

(A)  Permitted Uses and Construction of Improvements . Subject to the Permitted
Encumbrances and the terms hereof, BNPLC may use and occupy the GL Property for
any purpose permitted by Applicable Laws and may construct, maintain and use any
Improvements on the Land which are permitted by Applicable Laws.

(B)  Cooperation by Lessor and its Affiliates.

(1)  After the expiration or any earlier termination of the Lease, if a use
of the GL Property by BNPLC or any new Improvements or any removal or
modification of Improvements proposed by BNPLC would violate any Permitted
Encumbrance, Development Document or Applicable Law unless Lessor or any of
its Affiliates, as an owner of adjacent property or otherwise, gave its
consent or approval thereto or agreed to join in a modification of a
Permitted Encumbrance or Development Document, then Lessor shall give and
cause its Affiliates to give such consent or approval or join in such
modification.

(2)  To the extent, if any, that any Permitted Encumbrance, Development
Document or Applicable Law requires the consent or approval of Lessor or
any of its Affiliates or of the City of South San Francisco or any other
Person to an assignment of this Ground Lease or a transfer of any interest
in the GL Property by BNPLC or its successors or assigns, Lessor will
without charge give and cause its Affiliates to give such consent or
approval and will cooperate in any way reasonably requested by BNPLC to
assist BNPLC to obtain such consent or approval from the City or any other
Person; provided, however, the assignment or transfer is not then
prohibited by the Lease.

(3)  Lessor's obligations under this subparagraph 4(B) shall be binding
upon any successor or assign of Lessor with respect to the Land and other
properties encumbered by the Permitted Encumbrances or subject to the
Development Documents, and such obligations shall survive any sale of
Lessor's interest in the GL Property to BNPLC because of BNPLC's exercise
of the Repurchase Option (as defined in Paragraph ).

(C)  Title to Improvements . Any and all Improvements of whatever nature at any
time constructed, placed or maintained upon any part of the Land shall be and
remain the property of BNPLC and BNPLC's sublessee's, assignees, licensees and
concessionaires, as their interests may appear; provided, any such Improvements
which remain on the Land when this Ground Lease expires or is terminated shall
become and thereupon be the property of Lessor, free and clear of any Liens
Removable by BNPLC. It is the intention of Lessor and BNPLC that severance of
fee title to the Land and the Improvements shall not change the character of the
Improvements as real property. BNPLC may at any time after Lessor ceases to have
possession of the GL Property as tenant under the Lease and prior to the
expiration or termination of this Ground Lease remove all or any Improvements
from the Land without the consent of Lessor and without any obligation to Lessor
or its Affiliates to provide compensation or to construct other Improvements on
or about the Land. 

5    ASSIGNMENT AND SUBLETTING; PASS THROUGH OF BNPLC'S LIABILITY INSURANCE AND
INDEMNITY RIGHTS. BNPLC may sublet or assign this Ground Lease without the
consent of Lessor or any of its Affiliates, subject only to limitations set
forth in the Lease for the benefit of Lessor so long as those limitations remain
in force.

To the extent that BNPLC may from time to time after the expiration or
earlier termination of the Other Lease Agreement require any subtenant to agree
to maintain liability insurance against claims of third parties and agree to
make BNPLC an additional or named insured under such insurance, BNPLC shall also
require the subtenant to agree to make Lessor an additional or named insured.
However, BNPLC shall have no liability to Lessor for a breach by the subtenant
of any such agreements, and to the extent that BNPLC's rights as an additional
or named insured are subject to exceptions or limitations concerning BNPLC's own
acts or omissions or the acts or omissions of anyone other than the subtenant,
so too may Lessor's rights as an additional or named insured be subject to
exceptions or limitations concerning Lessor's own acts or omissions or the acts
or omissions of anyone other than the subtenant.

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38
To the extent that BNPLC may itself from time to time after the expiration
or earlier termination of the Other Lease Agreement maintain liability insurance
against claims of third parties which may arise because of any occurrence on or
alleged to have occurred on or about the GL Property, BNPLC shall cause Lessor
to be an additional or named insured under such insurance, provided Lessor pays
or reimburses BNPLC for any additional insurance premium required to have Lessor
made an insured.

To the extent that BNPLC may from time to time after the expiration or
earlier termination of the Other Lease Agreement require any subtenant to agree
to indemnify BNPLC against Environmental Losses or other Losses concerning the
GL Property, BNPLC shall also require the subtenant to agree to indemnify
Lessor. However, BNPLC shall have no liability to Lessor for a breach by the
subtenant of any such agreement, and to the extent that BNPLC's rights as an
indemnitee of the subtenant are subject to exceptions or limitations concerning
BNPLC's own acts or omissions or the acts or omissions of anyone other than the
subtenant, so too may Lessor's rights as an indemnitee be subject to exceptions
or limitations concerning Lessor's own acts or omissions or the acts or
omissions of anyone other than the subtenant.

6    REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR Concerning the
Property. Lessor represents, warrants and covenants as follows:

(A)  Title to the Property . This Ground Lease shall vest in BNPLC good and
marketable title to a leasehold estate in the Land, subject only to the terms
and conditions hereof, the Permitted Encumbrances, the Development Documents and
any Liens Removable by BNPLC. Lessor shall not, without the prior consent of
BNPLC, create, place or authorize, or through any act or failure to act,
acquiesce in the placing of, any deed of trust, mortgage or other Lien, whether
statutory, constitutional or contractual against or covering the GL Property or
any part thereof (other than Permitted Encumbrances and Liens Removable by
BNPLC), regardless of whether the same are expressly or otherwise subordinate to
the Operative Documents or BNPLC's interest in the Property.

(B)  Modification of Permitted Encumbrances and Development Documents . Without
the prior consent of BNPLC, Lessor shall not enter into, initiate, approve or
consent to any modification of any Permitted Encumbrance or Development Document
that would create or expand or purport to create or expand obligations or
restrictions which would encumber the GL Property or any improvements
constructed thereon.

(C)  Performance and Preservation of the Development Documents and Permitted
Encumbrances for the Benefit of BNPLC . Not only during the term of the Other
Lease Agreement, but thereafter throughout the term of this Ground Lease, Lessor
shall comply with and perform the obligations imposed by the Permitted
Encumbrances and the Development Documents upon Lessor or upon any owner of the
Land, and shall do whatever is required to preserve the rights and benefits
conferred or intended to be conferred by the Permitted Encumbrances and the
Development Documents, as necessary to facilitate the construction of the
Construction Project on the Land as contemplated in the Other Lease Agreement
and the use of the Improvements included in the Construction Project by BNPLC
and its successors, assigns and subtenants under this Ground Lease after the
expiration or any earlier termination of the Other Lease Agreement. Further, if
Lessor or any Affiliate of Lessor now or hereafter owns, acquires or leases land
(other than the Land) that is the subject of a Permitted Encumbrance or
Development Document, then Lessor shall, and shall cause its Affiliate to,
assume liability for and indemnify BNPLC and other Interested Parties and defend
and hold them harmless from and against all Losses (including Losses caused by
any decline in the value of the Property or of the Improvements) that they would
not have incurred or suffered but for (i) a termination of such Permitted
Encumbrance or Development Document, to which Lessor or its Affiliate agreed, or
which resulted from a breach thereof by Lessor or its Affiliate, or (ii) a
refusal of Lessor or its Affiliate to agree to any waiver or modification
requested by BNPLC of restrictions upon the Property or the transfer thereof
imposed by such Permitted Encumbrance or Development Document, or (iii) anything
done, authorized or suffered by Lessor or its Affiliate in violation of such
Permitted Encumbrance or Development Document. Lessor's obligations under this
subparagraph shall be binding upon any successor or assign of Lessor or its
Affiliates with respect to their interest in properties subject to the
Development Documents and Permitted Encumbrances.

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39

7    INSURANCE AND CONDEMNATION.

(A)  Entitlement to Insurance and Condemnation Proceeds . All insurance and
condemnation proceeds payable with respect to any damage to or taking of the GL
Property shall be payable to and become the property of BNPLC; provided,
however, Lessor shall be entitled to receive condemnation proceeds awarded for
the value of Lessor's remainder interest in the Land exclusive of the
Improvements. BNPLC is authorized to take all action necessary on behalf of both
BNPLC and Lessor (as lessor under this Ground Lease) to collect insurance and
condemnation proceeds.

(B)  Collection of Insurance Proceeds . In the event any of the GL Property is
destroyed or damaged by fire, explosion, windstorm, hail or by any other
casualty against which insurance shall have been required hereunder, (i) BNPLC
may make proof of loss, (ii) each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to BNPLC for
application as required by subparagraph 7(A), and (iii) BNPLC's consent must
be obtained for any settlement, adjustment or compromise of any claims for loss,
damage or destruction under any policy or policies of insurance.

(C)  Collection of Condemnation Proceeds . All proceeds of condemnation awards
or proceeds of sale in lieu of condemnation with respect to the GL Property and
all judgments, decrees and awards for injury or damage to the GL Property shall
be paid to BNPLC and applied as provided in subparagraph 7(A) above. BNPLC is
hereby authorized, in the name of Lessor, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award
concerning condemnation of any of the GL Property. BNPLC shall not be, in any
event or circumstances, liable or responsible for failure to collect, or to
exercise diligence in the collection of, any such proceeds, judgments, decrees
or awards.

8    LEASEHOLD  MORTGAGES.

(A)  By Leasehold Mortgage BNPLC may encumber BNPLC's leasehold estate in the GL
Property created by this Ground Lease, as well as BNPLC's rights and interests
in buildings, fixtures, equipment and Improvements situated on the Land and
rents, issues, profits, revenues and other income to be derived by BNPLC
therefrom.

(B)  Any Leasehold Mortgagee or other party, including any corporation formed by
a Leasehold Mortgagee, may become the legal owner of the leasehold estate
created by this Ground Lease, and of the Improvements, equipment, fixtures and
other property assigned as additional security pursuant to a Leasehold Mortgage,
by foreclosure of a Leasehold Mortgage or as a result of the assignment or
conveyance in lieu of foreclosure. Further, any such Leasehold Mortgagee or
other party may itself, after becoming the legal owner and holder of the
leasehold estate created by this Ground Lease, or of any Improvements,
equipment, fixtures and other property assigned as additional security pursuant
to a Leasehold Mortgage, convey or pledge the same without the consent of
Lessor.

(C)  Lessor shall serve notice of any default by BNPLC hereunder upon any
Leasehold Mortgagee. No notice of a default by BNPLC shall be deemed effective
until it is so served. Any Leasehold Mortgagee shall have the right to correct
or cure any such default within the same period of time after receipt of such
notice as is given to BNPLC under this Ground Lease to correct or cure defaults,
plus an additional period of thirty days thereafter. Lessor will accept
performance by any Leasehold Mortgagee of any covenant, condition or agreement
on BNPLC's part to be performed hereunder with the same force and effect as
though performed by BNPLC.

(D)  If this Ground Lease should terminate by reason of a disaffirmance or
rejection of this Ground Lease by BNPLC or any receiver, liquidator or trustee
for the property of BNPLC, or by any governmental authority which had taken
possession of the business or property of BNPLC by reason of the insolvency or
alleged insolvency of BNPLC, then:

(1)  Lessor shall give notice thereof to each Leasehold Mortgagee; and upon
request of any Leasehold Mortgagee made within sixty days after Lessor has
given such notice, Lessor shall enter into a new ground lease of the 

5

40

GL Property with such Leasehold Mortgagee for the remainder of the Ground
Lease Term, at the same Ground Lease Rent and on the same terms and
conditions as contained in this Ground Lease.

(2)  The estate of the Leasehold Mortgagee, as lessee under the new lease,
shall have priority equal to the estate of BNPLC hereunder. That is, there
shall be no charge, lien or burden upon the GL Property prior to or
superior to the estate granted by such new lease which was not prior to or
superior to the estate of BNPLC under this Ground Lease as of the date
immediately preceding the termination of this Ground Lease.

(3)  Notwithstanding the foregoing, if Lessor shall receive requests to
enter into a new ground lease from more than one Leasehold Mortgagee,
Lessor shall be required to enter into only one new ground lease, and the
new ground lease shall be to the requesting Leasehold Mortgagee who holds
the highest priority lien or interest in BNPLC's leasehold estate in the
Land. If the liens or security interests of two or more such requesting
Leasehold Mortgagees which shared the highest priority just prior to the
termination of this Ground Lease, the new ground lease shall name all such
Leasehold Mortgagees as co-tenants thereunder.

(E)  If BNPLC has agreed with any Leasehold Mortgagee that such Leasehold
Mortgagee's consent will be required to any modification or early termination of
this Ground Lease by BNPLC, and if Lessor has been notified of such agreement,
such consent will be required.

(F)  No Leasehold Mortgagee will assume any liability under this Ground Lease
either by virtue of its Leasehold Mortgage or by any subsequent receipt or
collection of rents or profits generated from the GL Property, unless and until
the Leasehold Mortgagee acquires BNPLC's leasehold estate in the GL Property at
foreclosure or by deed in lieu of foreclosure.

(G)  Although the foregoing provisions concerning Leasehold Mortgages and
Leasehold Mortgagees will be self operative, Lessor agrees to include, in
addition to the items specified in Paragraph 11, confirmation of the foregoing
in any statement provided to a Leasehold Mortgagee or prospective Leasehold
Mortgagee pursuant to Paragraph .

9    EVENTS OF DEFAULT.

(A)  Definition of Ground Lease Default . Each of the following  events shall be
deemed to be a "GROUND LEASE DEFAULT" by BNPLC under this Ground Lease:

(1)  BNPLC shall fail to pay when due any installment of Ground Lease Rent
due hereunder and such failure shall continue for sixty days after BNPLC
receives notice thereof.

(2)  BNPLC shall fail to comply with any term, provision or covenant of
this Ground Lease (other than as described in the other clauses of this
subparagraph 9(A), and shall not cure such failure prior to the earlier of
(A) ninety days after notice thereof is sent to BNPLC, or (B) the date any
writ or order is issued for the levy or sale of any property owned by
Lessor or its Affiliates (including the GL Property) because of such
failure or any criminal action is instituted against BNPLC or any of its
directors, officers or employees because of such failure; provided,
however, that so long as no such writ or order is issued and no such
criminal actions is instituted, if such failure is susceptible of cure but
cannot with reasonable diligence be cured within such ninety day period,
and if BNPLC shall promptly have commenced to cure the same and shall
thereafter prosecute the curing thereof with reasonable diligence, the
period within which such failure may be cured shall be extended for such
further period as shall be necessary for the curing thereof with reasonable
diligence.

(B)  Remedy . Upon the occurrence of a Ground Lease Default which is not cured
within any applicable period expressly permitted by subparagraph 9(A), Lessor's
sole and exclusive remedies shall be to sue BNPLC for the collection of any
amount due under this Ground Lease, to sue for the specific enforcement of
BNPLC's obligations hereunder, or to enjoin the continuation of the Ground Lease
Default; provided, however, no limitation of Lessor's remedies contained herein
will prevent Lessor from recovering any reasonable costs Lessor may incur to
mitigate its damages by curing a Ground Lease Default that

6

41

BNPLC has failed to cure itself (so long as the cure by Lessor is pursued in a
lawful manner and the costs Lessor seeks to recover do not exceed the actual
damages to be mitigated). Lessor may not terminate this Ground Lease or BNPLC's
right to possession under this Ground Lease. Any judgment which Lessor may
obtain against BNPLC for amounts due under this Ground Lease may be collected
only through resort of a judgement lien against BNPLC's interest in the GL
Property and any Improvements. BNPLC shall have no personal liability for the
payment amounts due under this or for the performance of any obligations of
BNPLC under this Ground Lease.

10   QUIET ENJOYMENT. Neither Lessor nor any third party lawfully claiming any
right or interest in the GL Property shall during the Ground Lease Term disturb
BNPLC's peaceable and quiet enjoyment of the GL Property; however, such
enjoyment shall be subject to the terms, provisions, covenants, agreements and
conditions of this Ground Lease and the Permitted Encumbrances, to which this
Ground Lease is subject and subordinate as hereinabove set forth.

11   ESTOPPEL CERTIFICATE. Lessor shall from time to time, within ten days after
receipt of request by BNPLC, deliver a statement in writing certifying:

(A)  that this Ground Lease is unmodified and in full force and effect (or if
modified that this Ground Lease as so modified is in full force and effect);

(B)  that to the knowledge of Lessor BNPLC has not previously assigned or
hypothecated its rights or interests under this Ground Lease, except as is
described in such statement with as much specificity as Lessor is able to
provide;

(C)  the term of this Ground Lease and the Ground Lease Rent then in effect and
any additional charges;

(D)  that BNPLC is not in default under any provision of this Ground Lease (or
if in default, the nature thereof in detail) and a statement as to any
outstanding obligations on the part of Lessor or BNPLC; and

(E)  such other matters as are reasonably requested by BNPLC.

Lessor's failure to deliver such statement within such time shall be conclusive
upon BNPLC (i) that this Ground Lease is in full force and effect, without
modification except as may be represented by BNPLC, (ii) that there are no
uncured defaults in BNPLC's performance hereunder. 

12   OPTION TO REPURCHASE. Subject to the terms and conditions set forth in
Annex 5, BNPLC (and any assignee of BNPLC's entire interest in the GL Property,
but not any subtenant or assignee of a lesser interest) shall have the option
(the "REPURCHASE OPTION") to purchase Lessor's interest in the GL Property. To
secure BNPLC's right to recover any damages caused by a breach of the Repurchase
Option or other provisions of this Ground Lease by Lessor, including any such
breach caused by a rejection or termination of this Ground Lease in any
bankruptcy or insolvency proceeding instituted by or against Lessor, as debtor,
Lessor does hereby grant to BNPLC a lien and security interest against the Land
and against all rights, title and interests of Lessor from time to time in and
to the GL Property. 

[The signature pages follow.]

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42

IN WITNESS WHEREOF, this Ground Lease is hereby executed in multiple
originals as of the date first written above.

"Lessor"

[NAI or the Applicable Purchaser]

By:    
---------------------------------
Name:        
-----------------------------
Title:

8

43
[Continuation of signature pages to GROUND LEASE dated as of ___________, ____]

"BNPLC"

BNP LEASING CORPORATION

By:    
----------------------------------
Name:        
----------------------------
Title:
----------------------

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44

STATE OF ___________                )
)
COUNTY OF _____________             )

On _____________, _____, before me, ________________________, personally
appeared ____________________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature
----------------------------

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45
STATE OF ________          )
)
COUNTY OF __________       )

On ___________, _____, before me, ________________________, personally
appeared ____________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature
-----------------------------

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46

ANNEX 1

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

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ANNEX 2

PERMITTED ENCUMBRANCES

The leasehold and other interests in the Land hereby conveyed by Lessor are
conveyed subject to the following matters to the extent the same are still valid
and in force:

[THE SAME LIST OF PERMITTED ENCUMBRANCES ATTACHED TO THE GRANT DEED FROM BNPLC
TO NAI OR THE APPLICABLE PURCHASER SHALL BE INSERTED HERE.]

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48

ANNEX 3

LIST OF DEVELOPMENT DOCUMENTS

NONE

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49

ANNEX 4

DETERMINATION OF FAIR RENTAL VALUE

Each annual payment of Ground Lease Rent will equal the Fair Rental Value,
computed as of the most recent Rental Determination Date when such payment
becomes due. As used in this Annex:

"FAIR RENTAL VALUE" means (and all appraisers and other persons
involved in the determination of the Fair Rental Value will be so advised)
the annual rent, as determined in accordance with this Annex, that would be
agreed upon between a willing tenant, under no compulsion to lease, and a
willing landlord, under no compulsion to lease, for unimproved land
comparable in size and location to the Land, exclusive of any Improvements
but assuming that there is no higher and better use for such land than as a
site for improvements of comparable size and utility to the Improvements,
at the time a determination is required under hereunder and taking into
consideration the condition of the Land, the encumbrances affecting the
title to the Land and all applicable zoning, land use approvals and other
governmental permits relating to the Land at the time of such
determination; and

"RENTAL DETERMINATION DATE" means the GL Effective Date and each fifth
anniversary of the GL Effective Date.

If Lessor and BNPLC have not agreed upon Fair Rental Value as of any Rental
Determination Date within one hundred eighty days after the such date, then Fair
Rental Value will be determined as follows:

(a)  Lessor and BNPLC shall each appoint a real estate appraiser who is
familiar with rental values for properties in the vicinity of the Land and
who has not previously acted for either party. Each party will make the
appointment no later than ten days after receipt of notice from the other
party that the appraisal process described in this Annex has been invoked.
The agreement of the two appraisers as to Fair Rental Value will be binding
upon Lessor and BNPLC. If the two appraisers cannot agree upon the Fair
Rental Value within ten days following their appointment, they shall within
another ten days agree upon a third real estate appraiser. Immediately
thereafter, each of the first two appraisers will submit his best estimate
of the appropriate Fair Rental Value (together with a written report
supporting such estimate) to the third appraiser and the third appraiser
will choose between the two estimates. The estimate of Fair Rental Value
chosen by the third appraiser as the closest to the prevailing annual fair
rental value will be binding upon Lessor and BNPLC. Notification in writing
of this estimate shall be made to Lessor and BNPLC within fifteen days
following the selection of the third appraiser.

(b)  If appraisers must be selected under the procedure set out above and
either BNPLC or Lessor fails to appoint an appraiser or fails to notify the
other party of such appointment within fifteen days after receipt of notice
that the prescribed time for appointing the appraisers has passed, then the
other party's appraiser will determine the Fair Rental Value. All
appraisers selected for the appraisal process set out in this Annex will be
disinterested, reputable, qualified real estate appraisers with the
designation of MAI or equivalent and with at least 5 years experience in
appraising properties comparable to the Land.

(c)  If a third appraiser must be chosen under the procedure set out above,
he or she will be chosen on the basis of objectivity and competence, not on
the basis of his relationship with the other appraisers or the parties to
this Ground Lease, and the first two appraisers will be so advised.
Although the first two appraisers will be instructed to attempt in good
faith to agree upon the third appraiser, if for any reason they cannot
agree within the prescribed time, either Lessor and BNPLC may require the
first two appraisers to immediately submit its top choice for the third
appraiser to the then highest ranking officer of the California Bar
Association who will agree to help and who has no attorney/client or other
significant relationship to either Lessor or BNPLC. Such officer will have
complete discretion to select the most objective and competent third
appraiser from between the choices of each of the first two appraisers, and
will do so within twenty days after such choices are submitted to him.

15

50

(d)  Either Lessor or BNPLC may notify the appraiser selected by the other
party to demand the submission of an estimate of Fair Rental Value or a
choice of a third appraiser as required under the procedure described
above; and if the submission of such an estimate or choice is required but
the other party's appraiser fails to comply with the demand within fifteen
days after receipt of such notice, then the Fair Rental Value or choice of
the third appraiser, as the case may be, selected by the other appraiser
(i.e., the notifying party's appraiser) will be binding upon Lessor and
BNPLC.

(e)  Lessor and BNPLC shall each bear the expense of the appraiser
appointed by it, and the expense of the third appraiser and of any officer
of the California Bar Association who participates in the appraisal process
described above will be shared equally by Lessor and BNPLC.

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51
ANNEX 5

REPURCHASE OPTION

Subject to the terms of this Annex, BNPLC shall have an option (the
"OPTION") to buy Lessor's fee interest in the GL Property at any time during the
term of this Ground Lease for a purchase price (the "OPTION PRICE") to Lessor
equal to the fair market value of the GL Property, determined as described in
the next paragraph.

For the purposes of this Annex, "fair market value" of the GL Property
means (and all appraisers and other persons involved in the determination of the
Option Price will be so advised) the price that would be agreed upon between a
willing buyer, under no compulsion to buy, and a willing seller, under no
compulsion to sell, for the Land, exclusive of any Improvements as if the Land
were unimproved, but assuming that there is no higher and better use for the
Land than as a site for the construction of improvements of comparable size and
utility to the Improvements, at the time of BNPLC's exercise of the Option and
taking into consideration the encumbrances affecting the title to the Land and
all applicable zoning, land use approvals and other governmental permits
relating to the Land at the time of the exercise of the Option.

If BNPLC exercises the Option, which BNPLC may do by notifying Lessor that
BNPLC has elected to buy Lessor's interest in the GL Property as provided
herein, then:

(a)  To the extent, if any, required as a condition imposed by law to the
conveyance of the fee interest in the GL Property to BNPLC, Lessor shall
promptly at its expense do whatever is necessary to obtain approvals of a
new Parcel Map or lot line adjustments.

(b)  Upon BNPLC's tender of the Option Price to Lessor, Lessor will convey
to BNPLC by general warranty deed and assignment, subject only to the
Permitted Encumbrances, good and marketable title to the fee estate in the
Land , to Lessor's interest in all other GL Property and, to the extent
still in force, to Lessor's Extended Remarketing Rights under the Purchase
Agreement.

(c)  BNPLC's obligation to close the purchase shall be subject to the
following terms and conditions, all of which are for the benefit of BNPLC:
(1) BNPLC shall have been furnished with evidence satisfactory to BNPLC
that Lessor can convey title as required by the preceding subparagraph; (2)
nothing shall have occurred or been discovered after BNPLC exercised the
Option that could significantly and adversely affect title to the GL
Property or BNPLC's use thereof, (3) all of the representations of Lessor
in this Ground Lease shall continue to be true as if made effective on the
date of the closing and, with respect to any such representations which may
be limited to the knowledge of Lessor or any of Lessor's representatives,
would continue to be true on the date of the closing if all relevant facts
and circumstances were known to Lessor and such representatives, (4) BNPLC
shall find the Option Price acceptable after it is determined as provided
in this Annex, and (5) BNPLC shall have been tendered the deed and other
documents which are described in this Annex as documents to be delivered to
BNPLC at the closing of BNPLC's purchase.

(d)  Closing of the purchase will be scheduled on the first Business Day
following thirty days after the Option Price is established in accordance
with the terms and conditions of this Annex and after any approvals
described in subparagraph (a) above are obtained, and prior to closing
BNPLC's occupancy of the GL Property shall continue to be subject to the
terms and conditions of this Ground Lease, including the terms setting
forth BNPLC's obligation to pay rent. Closing shall take place at the
offices of any title insurance company reasonably selected by BNPLC to
insure title under the title insurance policy described below.

(e)  Any transfer taxes or notices or registrations required by law in
connection with the sale contemplated by this Annex will be the
responsibility of Lessor.

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52

(f)  Lessor will deliver a certificate of nonforeign status to BNPLC at
closing as needed to comply with the provisions of the Foreign Investors
Real Property Tax Act (FIRPTA) or any comparable federal, state or local
law in effect at the time.

(g)  Lessor will also pay for and deliver to BNPLC at the closing an
owner's title insurance policy in the full amount of the Option Price,
issued by a title insurance company designated by BNPLC (or written
confirmation from the title company that it is then prepared to issue such
a policy), and subject only to standard printed exceptions which the title
insurance company refuses to delete or modify in a manner acceptable to
BNPLC and to Permitted Encumbrances.

(h)  Lessor shall also deliver at the closing all other documents or things
reasonably required to be delivered to BNPLC or by the title insurance
company to evidence Lessor's ability to transfer the GL Property to BNPLC.

If Lessor and BNPLC do not otherwise agree upon the amount of the Option
Price within twenty days after BNPLC exercises the Option, the Option Price
shall be determined in accordance with the following procedure:

(1)  Lessor and BNPLC shall each appoint a real estate appraiser who
is familiar with properties in the vicinity of the Land and who has
not previously acted for either party. Each party will make the
appointment no later than ten days after receipt of notice from the
other party that the appraisal process described in this Annex has
been invoked. The agreement of the two appraisers as to the Option
Price will be binding upon Lessor and BNPLC. If the two appraisers
cannot agree upon the Option Price within ten days following their
appointment, they shall within another ten days agree upon a third
real estate appraiser. Immediately thereafter, each of the first two
appraisers will submit his best estimate of the appropriate Option
Price (together with a written report supporting such estimate) to the
third appraiser and the third appraiser will choose between the two
estimates. The estimate of Option Price chosen by the third appraiser
as the closest to the prevailing fair market value will be binding
upon Lessor and BNPLC. Notification in writing of the Option Price
shall be made to Lessor and BNPLC within fifteen days following the
selection of the third appraiser.

(2)  If appraisers must be selected under the procedure set out above
and either BNPLC or Lessor fails to appoint an appraiser or fails to
notify the other party of such appointment within fifteen days after
receipt of notice that the prescribed time for appointing the
appraisers has passed, then the other party's appraiser will determine
the Option Price. All appraisers selected for the appraisal process
set out in this Annex will be disinterested, reputable, qualified real
estate appraisers with the designation of MAI or equivalent and with
at least 5 years experience in appraising properties comparable to the
Land.

(3)  If a third appraiser must be chosen under the procedure set out
above, he will be chosen on the basis of objectivity and competence,
not on the basis of his relationship with the other appraisers or the
parties to this Ground Lease, and the first two appraisers will be so
advised. Although the first two appraisers will be instructed to
attempt in good faith to agree upon the third appraiser, if for any
reason they cannot agree within the prescribed time, either Lessor and
BNPLC may require the first two appraisers to immediately submit its
top choice for the third appraiser to the then highest ranking officer
of the California Bar Association who will agree to help and who has
no attorney/client or other significant relationship to either Lessor
or BNPLC. Such officer will have complete discretion to select the
most objective and competent third appraiser from between the choices
of each of the first two appraisers, and will do so within ten days
after such choices are submitted to him.

(4)  Either Lessor or BNPLC may notify the appraiser selected by the
other party to demand the submission of an estimate of Option Price or
a choice of a third appraiser as required under the procedure
described above; and if the submission of such an estimate or choice
is required but the other party's appraiser fails to comply with the
demand within fifteen days after receipt of such notice, then the
Option Price or choice of the third appraiser, as the case may be,
selected by the other appraiser (i.e., the notifying party's
appraiser) will be binding upon Lessor and BNPLC.

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53

(5)  Lessor and BNPLC shall each bear the expense of the appraiser
appointed by it, and the expense of the third appraiser and of any
officer of the California Bar Association who participates in the
appraisal process described above will be shared equally by Lessor and
BNPLC.

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54

EXHIBIT B-4

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: ___________________
ATTN:    ___________________
CITY:    ___________________
STATE:   ___________________
Zip:     ___________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: ___________________
ATTN:    ___________________
CITY:    ___________________
STATE:   ___________________
Zip:     ___________________

CORPORATION GRANT DEED
(Covering Land but not the Improvements On the Land)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof (the "Land"), together with the any other right, title
and interest of Grantor in and to any easements, rights-of-way, privileges and
other rights appurtenant to the Land; provided, however, that this grant is
subject to the encumbrances described on Annex B (the "Permitted Encumbrances")
and any reservations or qualifications set forth below. Grantee hereby assumes
the obligations (including any personal obligations) of Grantor, if any, created
by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the Land.

Although this deed conveys Grantor's interest in the Land itself, this deed does
not convey any interest in any buildings or other improvements on the Land
(collectively, "Improvements") or any rights or easements appurtenant to
Improvements. Prior to or contemporaneously with the delivery of this deed,
Grantor has conveyed or is conveying the Improvements and appurtenant rights and
easements to another party.

20

55

BNP LEASING CORPORATION

Date: As of ____________                By:               
-----------------------------------
Its:

Attest: 
---------------------------
Its:

[NAI or Applicable Purchaser]

Date: As of ____________                By:
-----------------------------------
Its:

Attest:
---------------------------
Its:

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, ____________, personally appeared
____________ and ____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature
---------------------------------

STATE OF ____________      )
)       SS
COUNTY OF ___________      )

On ___________________ before me, ____________, personally appeared
____________and ____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature
---------------------------------

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56

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

3

57

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.   TAXES for the fiscal year [current year], a lien not yet due or payable.

2.   General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:                  110-32-004
Code No.:                        09-059
First Installment:               $34,099.75 Paid
Second Installment:              $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:               None
Homeowners Exemption:            None

3.   Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-71
First Installment:               Paid
Second Installment:              $4,217.87, Payable, but not yet due

4.   Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:            110-32-004-72
First Installment:               Paid
Second Installment:              $16,226.03, Payable, but not yet due

5.   The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation
Code of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

6.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

4

58

In Favor Of:                 City of Sunnyvale, A Municipal
Corporation
For:                         Slope Easement
Recorded:                    October 9, 1964, in Book 6695 at 
Page 430, Official Records
Affects:                     The Southeasterly 18 feet of Said Land

7.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 City of Sunnyvale, A Municipal
Corporation
For:                         Public Utilities
Recorded:                    October 9, 1964, in Book 6695 at 
Page 450, Official Records
Affects:                     The Southeasterly 7 feet of Said Land

8.   Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:                 Moffett Park Associates, A Partnership
Recorded:                    December 23, 1971 in Book 9640 at 
Page 443 of Official Records

An Assignment and Assumption

Executed by:                 Moffett Park Associates, A Partnership
To:                          The Prudential Insurance Company of 
America, a New Jersey Corporation
Recorded:                    February 8, 1977 in Book C583 at Page 685
of Official Records

9.   An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 Moffett Park Associates, A Partnership
For:                         Private and Public Utility Purposes
Recorded:                    November 29, 1974, in Book B190, page 398,
as Instrument No. 4903681, Official 
Records
Affects:                     The Northerly 5 feet of Said Land

10.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 Paul Enterprises, A Partnership, and 
Northwest Poultry and Dairy Products
Co., an Oregon Corporation
For:                         5 Foot Wide Storm Drain Easement
Recorded:                    June 17, 1975, in Book B467, page 167, 
as Instrument No. 5032895, Official
Records
Affects:                     As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

5

59

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing pipe and the True Point of Beginning of this
description;

Thence South 75 deg 07' 58" East parallel with and istant 2.50 feet
Northerly measured at right angles, from the Southerly line of said Parcel
"A' and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and continuing along a center line of an
existing 6 inch Storm Drain Pipe, a distance of 35.00 feet to a point on
the Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

11.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 The Prudential Insurance Company of 
America, a New Jersey Corporation
For:                         A 5 foot wide Storm Drain Easement

6

60

Recorded:                    June 17, 1975 in Book B467, page 173,
as Instrument No. 5032896 Official
Records
Affects:                     As follows:

PARCEL ONE

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel
"A", a distance of 2.50 feet to the Point of Intersection of said center
line of said existing storm drain pipe running along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the
said True Point of Beginning of this description to point 2.50 feet North
of an existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50
feet North of an existing storm drain inlet structure.

PARCEL THREE

7

61

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in
Book 345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance
of 42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

12.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:                 The Prudential Insurance Company of 
America,  new Jersey Corporation
For:                         A pedestrian and motor vehicle 
Right-of-Way for the purposes of Ingress 
and Egress from motor vehicle parking 
spaces
Recorded:                    June 17, 1975, in Book B467, page 178, 
as Instrument No. 5032897 Official
Records
Affects:                     As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast
corner also being a point on the Westerly line of Crossman Road (90.00 feet
wide); Thence North 75 deg 7' 58" West along the Southerly line of said
Parcel "A", a distance of 40.00 feet to the True Point of Beginning of this
description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

8

62

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A",
a distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

13.  Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

(A)  the fact that the landscaping area, patio and walkways located along
the northwesterly boundary is for the common use of the adjoining property
lying to the northwest of said land.

(B)  the fact that the driveway located near the most northerly corner
along the northeasterly boundary is for the common use of the adjoining
property lying to the northeast of said land.

(C)  the fact that the fence along the northwesterly boundary and across
the most northerly corner encroaches onto the adjoining properties lying to
the northwest and northeast of said land.

(D)  the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E)  the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility
easement (6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430);
onto the 5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and
B467-OR-173); and onto the 5.00 foot Public Utility easement (B190-OR-398).

14.  Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

9

63

EXHIBIT C

BILL OF SALE AND ASSIGNMENT

Reference is made to: (1) that certain Purchase Agreement (Phase II - Land)
between BNP Leasing Corporation ("ASSIGNOR") and Network Appliance, Inc., dated
as of May 3, 1999, (the "PURCHASE AGREEMENT") and (2) that certain Lease
Agreement (Phase II - Land) between Assignor, as landlord, and Network
Appliance, Inc., as tenant, dated as of May 3, 1999 (the "LAND LEASE").
(Capitalized terms used and not otherwise defined in this document are intended
to have the meanings assigned to them in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into both the Purchase
Agreement and Land Lease.)

As contemplated by the Purchase Agreement, Assignor hereby sells, transfers
and assigns unto [NAI OR THE APPLICABLE PURCHASER, AS THE CASE MAY BE], a
_____________ ("ASSIGNEE"), all of Assignor's right, title and interest in and
to the following property, if any, to the extent such property is assignable:

(a)  the Land Lease;

(b)  any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property; and

(c)  all other property included within the definition of "Property"
as set forth in the Purchase Agreement.

Provided, however, excluded from this conveyance and reserved to Assignor are
any rights or privileges of Assignor under the following ("EXCLUDED RIGHTS"):
(1) the indemnities set forth in the Land Lease, whether such rights are
presently known or unknown, including rights of the Assignor to be indemnified
against environmental claims of third parties as provided in the Land Lease
which may not presently be known, (2) provisions in the Land Lease that
establish the right of Assignor to recover any accrued unpaid rent under the
Land Lease which may be outstanding as of the date hereof, (3) agreements
between Assignor and "BNPLC's Parent" or any "Participant," both as defined in
the Land Lease, or any modification or extension thereof, or (4) any other
instrument being delivered to Assignor contemporaneously herewith pursuant to
the Purchase Agreement. To the extent that this conveyance does include any
rights to receive future payments under the Land Lease, such rights ("INCLUDED
RIGHTS") shall be subordinate to Assignor's Excluded Rights, and Assignee hereby
waives any rights to enforce Included Rights until such time as Assignor has
received all payments to which it remains entitled by reason of Excluded Rights.
If any amount shall be paid to Assignee on account of any Included Rights at any
time before Assignor has received all payments to which it is entitled because
of Excluded Rights, such amount shall be held in trust by Assignee for the
benefit of Assignor, shall be segregated from the other funds of Assignee and
shall forthwith be paid over to Assignor to be held by Assignor as collateral
for, or then or at any time thereafter applied in whole or in part by Assignor
against, the payments due to Assignor because of Excluded Rights, whether
matured or unmatured, in such order as Assignor shall elect.

Assignor does for itself and its successors covenant and agree to warrant
and defend the title to the property assigned herein against the just and lawful
claims and demands of any person claiming under or through a Lien Removable by
BNPLC, but not otherwise. 

Assignee hereby assumes and agrees to keep, perform and fulfill Assignor's
obligations, if any, relating to any permits or contracts, under which Assignor
has rights being assigned herein.

1

64

IN WITNESS WHEREOF, the parties have executed this instrument as of
_______________, _____.

ASSIGNOR:

BNP LEASING CORPORATION a Delaware corporation

By:
---------------------------------------     
Its:   
-----------------------------------

ASSIGNEE:

[NAI or the Applicable Purchaser], 
a ____________________

By:     
--------------------------------------
Its:   
------------------------------------

2

65

STATE OF ____________ )
)        SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared 
_______________and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature
---------------------------------------

STATE OF ____________ )
)        SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared 
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature
---------------------------------------

3

66

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DOCUMENT TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows: All that certain Real Property in the City of
Sunnyvale, County of Santa Clara, State of California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

4

67

EXHIBIT D

ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES (this
"CERTIFICATE") is made as of ___________________, ____, by [NAI or the
Applicable Purchaser, as the case may be], a ___________________ ("GRANTEE").

Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNPLC"), is executing and delivering to
Grantee (1) a corporate grant deed and (2) a Bill of Sale and Assignment (the
foregoing documents and any other documents to be executed in connection
therewith are herein called the "CONVEYANCING DOCUMENTS" and any of the
properties, rights or other matters assigned, transferred or conveyed pursuant
thereto are herein collectively called the "SUBJECT PROPERTY").

NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS TO
THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNPLC MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees that
warranties of merchantability and fitness for a particular purpose are excluded
from the transaction contemplated by the Conveyancing Documents, as are any
warranties arising from a course of dealing or usage of trade. Grantee hereby
assumes all risk and liability (and agrees that BNPLC shall not be liable for
any special, direct, indirect, consequential, or other damages) resulting or
arising from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property, except for damages
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of BNPLC. As used in the
preceding sentence, "ESTABLISHED MISCONDUCT" is intended to have, and be limited
to, the meaning given to it in the Common Definitions and Provisions Agreement
(Phase II - Land) incorporated by reference into the Purchase Agreement between
BNPLC and Network Appliance, Inc. dated May 3, 1999, pursuant to which Purchase
Agreement BNPLC is delivering the Conveyancing Documents.

The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNPLC is entitled to rely and is relying on this
Certificate.

EXECUTED as of ________________, ____.

[NAI or the Applicable Purchaser]

By:     
----------------------------------
Name:       
-------------------------
Title:      
-------------------------

1

68

EXHIBIT E

SECRETARY'S CERTIFICATE

The undersigned, [Secretary or Assistant Secretary] of BNP Leasing
Corporation, a Delaware corporation (the "Corporation"), hereby certifies as
follows:

1.   That he is the duly, elected, qualified and acting Secretary [or
Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.

2.   That the following named persons have been properly designated,
elected and assigned to the office in the Corporation as indicated below; that
such persons hold such office at this time and that the specimen signature
appearing beside the name of such officer is his or her true and correct
signature.

[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER SALE CLOSING DOCUMENTS ON BEHALF
OF THE CORPORATION.]

Name                               Title                         Signature
----                               -----                         ---------

--------------------        ---------------------         ----------------------

--------------------        ---------------------         ----------------------

3.   That the resolutions attached hereto and made a part hereof were
duly adopted by the Board of Directors of the Corporation in accordance with the
Corporation's Articles of Incorporation and Bylaws. Such resolutions have not
been amended, modified or rescinded and remain in full force and effect.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this ____, day of __________, ____.

----------------------------------
[signature and title]

1

69

CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION

WHEREAS, pursuant to that certain Purchase Agreement (Phase II - Land)
(herein called the "Purchase Agreement") dated as of May 3, 1999, by and between
BNP Leasing Corporation (the "Corporation") and [NAI OR THE APPLICABLE PURCHASER
AS THE CASE MAY BE] ("Purchaser"), the Corporation agreed to sell and Purchaser
agreed to purchase or cause the Applicable Purchaser (as defined in the Purchase
Agreement) to purchase the Corporation's interest in the property (the
"Property") located in Sunnyvale, California more particularly described
therein.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of the
Corporation and its shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each of
them, are hereby authorized and directed in the name and on behalf of the
Corporation to cause the Corporation to fulfill its obligations under the
Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each of
them, are hereby authorized and directed to take or cause to be taken any and
all actions and to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.

2

70

EXHIBIT F

FIRPTA STATEMENT

Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of a
California real property interest must withhold income tax if the transferor is
a nonresident seller.

To inform [NAI OR THE APPLICABLE PURCHASER] (the "Transferee") that
withholding of tax is not required upon the disposition of a California real
property interest by transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the Seller:

1.   The Seller is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

2.   The United States employer identification number for the Seller
is _____________________;

3.   The office address of the Seller is ______________
_________________________ _________________.

4.   The Seller is qualified to do business in California.

The Seller understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

The Seller understands that the Transferee is relying on this affidavit in
determining whether withholding is required upon said transfer.

Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of the Seller.

Dated: ___________, ____.

By:
----------------------------
Name:
--------------------------
Title:                         
-------------------------

1

1
Exhibit 10.33

================================================================================

PURCHASE AGREEMENT
(PHASE II - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

MAY 3, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page
----

1       NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE                                         1
(A)    Right to Purchase; Right and Obligation to Remarket                                        1
(B)    Determinations Concerning Price                                                            3
(C)    Designation of the Purchaser                                                               4
(D)    Effect of the Purchase Option and NAI's Initial Remarketing Rights and 
Obligations on Subsequent Title Encumbrances                                               4
(E)    Security for the Purchase Option and NAI's Initial Remarketing Rights and 
Obligations                                                                                5
(F)    Delivery of Books and Records If BNPLC Retains the Property                                5

2       NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE                                           5
(A)    NAI's Extended Right to Remarket                                                           5
(B)    Definition of Minimum Extended Remarketing Price                                           6
(C)    BNPLC's Right to Sell                                                                      6
(D)    NAI's Right to Excess Sales Proceeds                                                       7
(E)    Permitted Transfers During NAI's Extended Remarketing Period                               7

3       TERMS OF CONVEYANCE UPON PURCHASE                                                                 7

4       SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC                           8
(A)    Status of this Agreement Generally                                                         8
(B)    Election by NAI to Terminate the Purchase Option and NAI's Initial Remarketing 
Rights and Obligations Prior

to the Base Rent Commencement Date                            8
(C)    Election by BNPLC to Terminate the Purchase Option and NAI's Initial 
Remarketing Rights and Obligations                                                         9
(D)    Automatic Termination of NAI's Rights                                                      9
(E)    Termination of NAI's Extended Remarketing Rights to Permit a Sale by BNPLC                10
(F)    Payment Only to BNPLC                                                                     10
(G)    Remedies Under the Other Operative Documents                                              10
(H)    Occupancy by NAI Prior to Closing of a Sale                                               10

5       SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS                                                  10

6       CERTAIN REMEDIES CUMULATIVE                                                                      11

7       ATTORNEYS' FEES AND LEGAL EXPENSES                                                               11

8       ESTOPPEL CERTIFICATE                                                                             11

9       SUCCESSORS AND ASSIGNS                                                                           11

Exhibits and Schedules

3
Exhibit A        Legal Description

Exhibit B        Grant Deed Form Requirements

Exhibit C        Bill of Sale and Assignment

Exhibit D        Acknowledgment and Disclaimer

Exhibit E        Secretary's Certificate

Exhibit F        Certificate Concerning Tax Withholding

Exhibit K        Notice by NAI of Election to Terminate

2

4
PURCHASE AGREEMENT
(PHASE II - IMPROVEMENTS)

This PURCHASE AGREEMENT (PHASE II - IMPROVEMENTS) (this "AGREEMENT"), by
and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is made and dated as
of May 3, 1999, the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Agreement are intended to have the
meanings assigned to them in the Common Definitions and Provisions Agreement
(Phase I - Improvements) executed by BNPLC and NAI contemporaneously with this
Agreement. By this reference, the Common Definitions and Provisions Agreement
(Phase II - Improvements) is incorporated into and made a part of this Agreement
for all purposes.)

RECITALS

Pursuant to the Existing Contract, which covers the Land described in
Exhibit, BNPLC is acquiring the Land and any appurtenances thereto and the
existing Improvements thereon from Seller contemporaneously with the execution
of this Agreement. Pursuant to the Lease Agreement (Phase II - Improvements)
executed by BNPLC and NAI contemporaneously with this Agreement (the
"IMPROVEMENTS LEASE"), BNPLC is leasing the Improvements on the Land to NAI and
agreeing to provide funding for the construction and completion of Improvements,
all of which will be owned by BNPLC. (All of BNPLC's interests, including those
created by the documents delivered at the closing under the Existing Contract,
in the Improvements and in all other real and personal property from time to
time covered by the Improvements Lease and included within the "Property" as
defined therein are hereinafter collectively referred to as the "PROPERTY". The
Property does not include the Land itself, it being understood that the Other
Purchase Agreement constitutes a separate agreement providing for the possible
sale of the Land and the appurtenances thereto, and only the Land and the
appurtenances thereto, from BNPLC to NAI or a third party designated by NAI.)

NAI and BNPLC have reached agreement upon the terms and conditions upon
which NAI will purchase or arrange for the purchase of the Property, and by this
Agreement they desire to evidence such agreement.

AGREEMENTS

1       NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE.

(A)     Right to Purchase; Right and Obligation to Remarket . Whether or not an
Event of Default shall have occurred and be continuing or the
Improvements Lease shall have been terminated, but subject to Paragraph
below:

(1)     NAI shall have the right (the "PURCHASE OPTION") to purchase or
cause an Affiliate of NAI to purchase the Property and BNPLC's interest
in Escrowed Proceeds, if any, on the Designated Sale Date for a cash
price equal to the Break Even Price (as defined below).

(2)     If neither NAI nor an Affiliate of NAI purchases the Property
and BNPLC's interest in any Escrowed Proceeds on the Designated Sale
Date as provided in the preceding subparagraph 1(A)(1), then NAI shall
have the following rights and obligations (collectively, "NAI'S INITIAL
REMARKETING RIGHTS AND OBLIGATIONS"):

(a)     First, NAI shall have the right (but not the obligation)
to cause an Applicable Purchaser who is not an Affiliate of NAI
to purchase the Property and BNPLC's interest in any Escrowed
Proceeds on the Designated Sale Date for a cash purchase price
(the "THIRD PARTY PRICE") determined as provided below. If,
however, the Break Even Price exceeds the sum of any Third Party
Price tendered or to be tendered to BNPLC by an 

3

5
Applicable Purchaser and any Supplemental Payment paid by NAI as
described below, then BNPLC may affirmatively elect to decline
such tender from the Applicable Purchaser and to keep the
Property and any Escrowed Proceeds rather than sell to the
Applicable Purchaser pursuant to this subparagraph (a "VOLUNTARY
RETENTION OF THE PROPERTY").

(b)     Second, if the Third Party Price actually paid by an
Applicable Purchaser to BNPLC on the Designated Sale Date
exceeds the Break Even Price, NAI shall be entitled to such
excess, subject, however, to BNPLC's right to offset against
such excess any and all sums that are then due from NAI to BNPLC
under the other Operative Documents.

(c)     Third, if for any reason whatsoever (including a
Voluntary Retention of the Property or a decision by NAI not to
exercise its right to purchase or cause an Applicable Purchaser
to purchase from BNPLC as described above) neither NAI nor an
Applicable Purchaser pays a net cash price to BNPLC on the
Designated Sale Date equal to or in excess of the Break Even
Price in connection with a sale of the Property and BNPLC's
interest in any Escrowed Proceeds pursuant to this Agreement,
then NAI shall have the obligation to pay to BNPLC on the
Designated Sale Date a supplemental payment (the "SUPPLEMENTAL
PAYMENT") equal to the lesser of (1) the amount by which the
Break Even Price exceeds such net cash price (if any) actually
received by BNPLC on the Designated Sale Date (such excess being
hereinafter called a "DEFICIENCY") or (2) the Maximum
Remarketing Obligation. As used herein, the "MAXIMUM REMARKETING
OBLIGATION" means a dollar amount determined in accordance with
the following provisions:

1)      The "MAXIMUM REMARKETING OBLIGATION" will equal
the product of (i) Stipulated Loss Value on the
Designated Sale Date, times (ii) 100% minus the Residual
Risk Percentage, provided that both of the following
conditions are satisfied:

(x) NAI shall not have elected to
accelerate the Designated Sale Date as provided
in clause (2) of the definition of Designated
Sale Date in the Common Definitions and
Provisions Agreement (Phase II - Improvements).

(y) No Event of Default, other than an
Issue 97-1 Non-performance-related Subjective
Event of Default, shall occur on or be
continuing on the Designated Sale Date.

2)      If either of the conditions listed in
subparagraph 1) preceding are not satisfied, the
"MAXIMUM REMARKETING OBLIGATION" will equal the Break
Even Price.

2

6
If any Supplemental Payment or other amount payable to BNPLC pursuant to this
subparagraph is not actually paid to BNPLC on the Designated Sale Date, NAI
shall pay interest on the past due amount computed at the Default Rate from the
Designated Sale Date.

(B)     Determinations Concerning Price .

(1)     Determination of the Break Even Price. As used herein, "BREAK
EVEN PRICE" means an amount equal, on the Designated Sale Date, to
Stipulated Loss Value, plus all out-of-pocket costs and expenses
(including appraisal costs, withholding taxes (if any) not constituting
Excluded Taxes, and Attorneys' Fees) incurred by BNPLC in connection
with any sale of BNPLC's interests in the Property under this Agreement
or in connection with collecting payments due hereunder, and plus an
amount equal to the Balance of Unpaid Construction-Period Indemnity
Payments, but less the aggregate amounts (if any) of Direct Payments to
Participants and Deposit Taker Losses (other than Excluded Deposit Taker
Losses). As used herein, the "BALANCE OF UNPAID CONSTRUCTION-PERIOD
INDEMNITY PAYMENTS" means an amount equal to the sum of
Construction-Period Indemnity Payments, if any, that NAI declined to pay
pursuant to subparagraph 5(d)(ii) of the Improvements Lease, plus
interest accruing at the Default Rate, compounded annually, on each such
payment from the date such payment would have become due but for NAI's
right to decline to pay it as described in subparagraph 5(d)(ii) of the
Improvements Lease. If, however, Losses for which NAI has so declined to
pay any Construction-Period Indemnity Payment consist of claims against
BNPLC or another Interested Party that have not been liquidated prior to
the Designated Sale Date (and, thus, such Losses have yet to be fixed in
amount as of the Designated Sale Date), then NAI may elect to exclude
any Construction-Period Indemnity Payment attributable to such Losses by
providing to BNPLC, for the benefit of BNPLC and other Interested
Parties, a written agreement to indemnify and defend BNPLC and other
Interested Parties against such Losses. To be effective hereunder for
purposes of reducing the Balance of Unpaid Construction-Period Indemnity
Payments (and, thus, the Break Even Price), any such written indemnity
must be fully executed and delivered by NAI on or prior to the
Designated Sale Date, must include provisions comparable to
subparagraphs 5(c)(ii), (iii), (iv) and (v) of the Improvements Lease
and otherwise must be in form and substance satisfactory to BNPLC.

(2)     Determination of Third Party Price. The Third Party Price
required of any Applicable Purchaser purchasing from BNPLC under
subparagraph will be determined as follows:

(a)     NAI may give a notice (a "REMARKETING NOTICE") to BNPLC
and to each of the Participants no earlier than one hundred
twenty days before the Designated Sale Date and no later than
ninety days before the Designated Sale Date, specifying an
amount as the Third Party Price that NAI believes in good faith
to constitute reasonably equivalent value for the Property and
any Escrowed Proceeds. Once given, a Remarketing Notice shall
not be rescinded or modified without BNPLC's written consent.

(b)     If BNPLC believes in good faith that the Third Party
Price specified by NAI in a Remarketing Notice does not
constitute reasonably equivalent value for the Property and any
Escrowed Proceeds, BNPLC may at any time before sixty days prior
to the Designated Sale Date respond to the Remarketing Notice
with a notice back to NAI, objecting to the Third Party Price so
specified by NAI. If BNPLC receives a Remarketing Notice, yet
does not respond with an objection as provided in the preceding
sentence, the Third Party Price suggested by NAI in the
Remarketing Notice will be the Third Party Price for purposes of
this Agreement. If, however, BNPLC does respond with an
objection as provided in this subparagraph, and if NAI and BNPLC
do not otherwise agree in writing upon a Third Party Price, then
the Third Party Price will be the lesser of (I) fair market
value of the Property, plus the amount of any Escrowed Proceeds,
as determined by a professional independent appraiser
satisfactory to BNPLC, or (II) the Break Even Price.

(c)     If for any reason, including an acceleration of the
Designated Sale Date as provided in the definition thereof in
the Common Definitions and Provisions Agreement (Phase II -
Improvements), NAI does not deliver a Remarketing Notice to
BNPLC within the time period specified above, then the Third
Party Price will be an amount determined in good faith by BNPLC
as constituting reasonably equivalent value for the Property and
any Escrowed Proceeds, but in no event more than the Break Even
Price.

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If any payment to BNPLC by an Applicable Purchaser hereunder is held to
constitute a preference or a voidable transfer under Applicable Law, or
must for any other reason be refunded by BNPLC to the Applicable
Purchaser or to another Person, and if such payment to BNPLC reduced or
had the effect of reducing a Supplemental Payment or increased or had
the effect of increasing any excess sale proceeds paid to NAI pursuant
to subparagraph 1(A)(2)(b) or pursuant to subparagraph 2(b), then NAI
shall pay to BNPLC upon demand an amount equal to the reduction of the
Supplemental Payment or to the increase of the excess sale proceeds paid
to NAI, as applicable, and this Agreement shall continue to be effective
or shall be reinstated as necessary to permit BNPLC to enforce its right
to collect such amount from NAI.

(C)     Designation of the Purchaser. To give BNPLC the opportunity before the
Designated Sale Date to prepare the deed and other documents that BNPLC must
tender pursuant to Paragraph (collectively, the "SALE CLOSING DOCUMENTS"), NAI
must, by a notice to BNPLC given at least seven days prior to the Designated
Sale Date, specify irrevocably, unequivocally and with particularity the party
who will purchase the Property in order to satisfy the obligations of NAI set
forth in subparagraph 1(A). If for any reason NAI fails to so specify a party
who will in accordance with the terms and conditions set forth herein purchase
the Property (be it NAI itself, an Affiliate of NAI or another Applicable
Purchaser), BNPLC shall be entitled to postpone the tender of the Sale Closing
Documents until a date after the Designated Sale Date and not more than twenty
days after NAI finally does so specify a party, but such postponement will not
relieve or postpone the obligation of NAI to make a Supplemental Payment on the
Designated Sale Date as provided in Paragraph 1(A)(2)(c).

(D)     Effect of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations on Subsequent Title Encumbrances. Any conveyance of the Property to
NAI or any Applicable Purchaser pursuant to this Paragraph 1(A) shall cut off
and terminate any interest in the Improvements or other Property claimed by,
through or under BNPLC, including any interest claimed by the Participants and
including any Liens Removable by BNPLC (such as, but not limited to, any
judgment liens established against the Property because of a judgment rendered
against BNPLC and any leasehold or other interests conveyed by BNPLC in the
ordinary course of BNPLC's business), but not including personal obligations of
NAI to BNPLC under the Improvements Lease or other Operative Documents
(including obligations arising under the indemnities therein). Anyone accepting
or taking any interest in the Property by or through BNPLC after the date of
this Agreement shall acquire such interest subject to the Purchase Option and
NAI's Initial Remarketing Rights and Obligations. Further, NAI and any
Applicable Purchaser shall be entitled to pay any payment required by this
Agreement for the purchase of the Property directly to BNPLC notwithstanding any
prior conveyance or assignment by BNPLC, voluntary or otherwise, of any right or
interest in this Agreement or the Property, and neither NAI nor any Applicable
Purchaser shall be responsible for the proper distribution or application of any
such payments by BNPLC; and any such payment to BNPLC shall discharge the
obligation of NAI to cause such payment to all Persons claiming an interest in
such payment. Contemporaneously with the execution of this Agreement, the
parties shall record a memorandum of this Agreement for purposes of effecting
constructive notice to all Persons of NAI's rights under this Agreement,
including its rights under this subparagraph.

(E)     Security for the Purchase Option and NAI's Initial Remarketing Rights
and Obligations. To secure BNPLC's obligation to sell the Property pursuant to
this Paragraph 1(A) and to pay any damages to NAI caused by a breach of such
obligations, including any such breach caused by a rejection or termination of
this Agreement in any bankruptcy or insolvency proceeding instituted by or
against BNPLC, as debtor, BNPLC does hereby grant to NAI a lien and security
interest against all rights, title and interests of BNPLC from time to time in
and to the Improvements and other Property. NAI may enforce such lien and
security interest judicially after any such breach by BNPLC, but not otherwise.
Contemporaneously with the execution of this Agreement, NAI and BNPLC will
execute a memorandum of this Agreement which is in recordable form and which
specifically references the lien granted in this subparagraph, and NAI shall be
entitled to record such memorandum at any time prior to the Designated Sale
Date.

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(F)     Delivery of Books and Records If BNPLC Retains the Property . Unless NAI
or its Affiliate or another Applicable Purchaser purchases the Property pursuant
to Paragraph 1(A), promptly after the Designated Sale Date NAI shall deliver to
BNPLC copies of all plans and specifications for the Property prepared in
connection with the construction contemplated by the Construction Management
Agreement and the Improvements Lease, together with all other books and records
of NAI which will be necessary or useful to any future owner's or occupant's use
of the Property in the manner permitted by the Improvements Lease.

2       NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE.

(A)     NAI's Extended Right to Remarket . During the two years following the
Designated Sale Date ("NAI'S EXTENDED REMARKETING PERIOD"), NAI shall have the
right ("NAI'S EXTENDED REMARKETING RIGHT") to cause an Applicable Purchaser who
is not an Affiliate of NAI to purchase the Property for a cash purchase price
not below the lesser of (I) the Minimum Extended Remarketing Price (as defined
below), or (II) if applicable, the Third Party Target Price (as defined below)
specified in any Third Party Sale Notice (as defined below) given by BNPLC
pursuant to subparagraph 2(C)(2) within the ninety days prior to the date (the
"FINAL SALE DATE") upon which BNPLC receives such purchase price from the
Applicable Purchaser. NAI's Extended Remarketing Right shall, however, be
subject to all of the following conditions:

(1)     The Property and BNPLC's interest in Escrowed Proceeds, if any,
shall not have been sold on the Designated Sale Date as provided in
Paragraph 1.

(2)     No Voluntary Retention of the Property shall have occurred as
described in subparagraph 1(a)(2)(a).

(3)     NAI's Extended Remarketing Right shall not have been terminated
pursuant to subparagraph 4(D) below because of NAI's failure to make any
Supplemental Payment required on the Designated Sale Date.

(4)     NAI's Extended Remarketing Right shall not have been terminated
by BNPLC pursuant to subparagraph 4(E) below to facilitate BNPLC's sale
of the Property to a third party in accordance with subparagraph 2(C).

(5)     At least thirty days prior to the Final Sale Date, NAI shall
have notified BNPLC of (x) the date proposed by NAI as the Final Sale
Date (which must be a Business Day), (y) the full legal name of the
Applicable Purchaser and such other information as will be required to
prepare the Sale Closing Documents, and (z) the amount of the purchase
price that the Applicable Purchaser will pay (consistent with the
minimum required pursuant to the other provisions of this subparagraph
2(A)) for the Property.

(B)     Definition of Minimum Extended Remarketing Price . As used herein,
"MINIMUM EXTENDED REMARKETING PRICE" means an amount equal to the sum of the
following:

(1)     the amount by which the Break Even Price computed on the
Designated Sale Date exceeds any Supplemental Payment actually paid to
BNPLC on the Designated Sale Date, together with interest on such excess
computed at the Default Rate from the period commencing on the
Designated Sale Date and ending on the Final Sale Date, plus

(2)     all out-of-pocket costs and expenses (including withholding
taxes [if any], other than Excluded Taxes, and Attorneys' Fees) incurred
by BNPLC in connection with the sale to the Applicable Purchaser, to the
extent not already included in the computation of Break Even Price, and
plus

(3)     the sum of all Impositions, insurance premiums and other Losses
of every kind suffered or incurred by BNPLC or any other Interested
Party with respect to the ownership, operation or maintenance of the
Property on or after the Designated Sale Date (except to the extent
already reimbursed by any lessee of the Property after the Designated
Sale Date), together with interest on such Impositions, insurance
premiums and other Losses computed at the Default Rate from the date
paid or incurred to the Final Sale Date.

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If, however, Losses described in the preceding clause (3) consist of claims
against BNPLC or another Interested Party that have not been liquidated prior to
the Final Sale Date (and, thus, such Losses have yet to be fixed in amount as of
the Final Sale Date), then NAI may elect to exclude any such Losses from the
computation of the Minimum Extended Remarketing Price by providing to BNPLC, for
the benefit of BNPLC and other Interested Parties, a written agreement to
indemnify and defend BNPLC and other Interested Parties against such Losses. To
be effective hereunder for purposes of reducing the Minimum Extended Remarketing
Price (and, thus, the Break Even Price), any such written indemnity must be
fully executed and delivered by NAI on or prior to the Final Sale Date, must
include provisions comparable to subparagraphs 5(c)(ii), (iii), (iv) and (v) of
the Improvements Lease and otherwise must be in form and substance satisfactory
to BNPLC.

(C)     BNPLC's Right to Sell . After the Designated Sale Date, if the Property
has not already been sold by BNPLC pursuant to Paragraph 1 or this Paragraph 2,
BNPLC shall have the right to sell the Property or offer the Property for sale
to any third party on any terms believed to be appropriate by BNPLC in its sole
good faith business judgment; provided, however, that so long as the conditions
to NAI's Extended Remarketing Rights specified in subparagraph 2(A) continue to
be satisfied: 

(1)     BNPLC shall not sell the Property to an Affiliate of BNPLC on
terms less favorable than those which BNPLC would require from a
prospective purchaser not an Affiliate of BNPLC;

(2)     If BNPLC receives or desires to make a written proposal (whether
in the form of a "letter of intent" or other nonbinding expression of
interest or in the form of a more definitive purchase and sale
agreement) for a sale of the Property to a prospective purchaser (a
"THIRD PARTY SALE PROPOSAL"), and if on the basis of such Third Party
Sale Proposal BNPLC expects to enter into or to pursue negotiations for
a definitive purchase and sale agreement with the prospective purchaser,
then prior to executing any such definitive agreement, BNPLC shall
submit the Third Party Sale Proposal to NAI with a notice (the "THIRD
PARTY SALE NOTICE") explaining that (A) BNPLC is then prepared to accept
a price not below an amount specified in such Third Party Sale Notice
(the "THIRD PARTY TARGET PRICE") if BNPLC and the prospective purchaser
reach agreement on other terms and conditions to be incorporated into a
definitive purchase and sale agreement, and (B) NAI's Extended
Remarketing Right may be terminated pursuant to subparagraph 4(E) of
this Agreement unless NAI causes an Applicable Purchaser to consummate a
purchase of the Property pursuant to this Paragraph 2 within ninety days
after the date of such Third Party Sale Notice.

(D)     NAI's Right to Excess Sales Proceeds . If the cash price actually paid
by any third party purchasing the Property from BNPLC during NAI's Extended
Remarketing Period, including any price paid by an Applicable Purchaser
purchasing from BNPLC pursuant to this Paragraph 2, exceeds the Minimum Extended
Remarketing Price, then NAI shall be entitled to the excess; provided, that
BNPLC may offset and retain from the excess any and all sums that are then due
and unpaid from NAI to BNPLC under any of the Operative Documents.

(E)     Permitted Transfers During NAI's Extended Remarketing Period . Any
"Permitted Transfer" described in clause (6) of the definition thereof in the
Common Definitions and Provisions Agreement (Phase II - Improvements) to an
Affiliate of BNPLC or that covers BNPLC's entire interest in the Improvements
will be subject to NAI's Extended Remarketing Right if, at the time of the
Permitted Transfer, NAI's Extended Remarketing Right has not expired or been
terminated as provided herein. Any other Permitted Transfer described in clause
(6) of the definition thereof, however, will not be subject to NAI's Extended
Remarketing Right. Thus, for example, BNPLC's conveyance of a utility easement
or space lease more than thirty days after the Designated Sale Date to a Person
not an Affiliate of BNPLC shall not be subject to NAI's Extended Remarketing
Right, though following the conveyance of the lesser estate, NAI's Extended
Remarketing Right may continue to apply to BNPLC's remaining interest in the
Improvements and any Personal Property.

3       TERMS OF CONVEYANCE UPON PURCHASE. As necessary to consummate any sale
of the Property to NAI or an Applicable Purchaser pursuant to this Agreement,
BNPLC must, subject to any postponement permitted by subparagraph 1(C), promptly
after the tender of the purchase price and any other payments to BNPLC required
pursuant to Paragraph 1 or Paragraph 2, as applicable, convey all of BNPLC's
right, title and interest in the Improvements and other Property to NAI or the
Applicable Purchaser, as the case may be, by BNPLC's execution, acknowledgment
(where appropriate) and delivery of the Sale Closing Documents. Such conveyance
by BNPLC will be subject only to the Permitted Encumbrances and any other
encumbrances that do not constitute Liens Removable by BNPLC. However, such
conveyance shall not include the rights of 

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BNPLC or other Interested Parties under the indemnities provided in the
Operative Documents, including rights to any payments then due from NAI under
the indemnities or that may become due thereafter because of any expense or
liability incurred by BNPLC or another Interested Party resulting in whole or in
part from events or circumstances occurring or alleged to have occurred before
such conveyance. All costs, both foreseen and unforeseen, of any purchase by NAI
or an Applicable Purchaser hereunder shall be the responsibility of the
purchaser. The Sale Closing Documents used to accomplish such conveyance shall
consist of the following: (1) a Corporation Grant Deed in the form attached as
Exhibit B-1 or Exhibit B-2 or Exhibit B-3, as required by Exhibit B, (2) a Bill
of Sale and Assignment in the form attached as Exhibit C, (3) an Acknowledgment
of Disclaimer of Representations and Warranties, in the form attached as 
Exhibit D, which NAI or the Applicable Purchaser must execute and return to
BNPLC, (4) a Secretary's Certificate in the form attached as Exhibit E, and (5)
a certificate concerning tax withholding in the form attached as Exhibit F. If
for any reason BNPLC fails to tender the Sale Closing Documents as required by
this Paragraph 3, BNPLC may cure such refusal at any time before thirty days
after receipt of a demand for such cure from NAI. 

4       SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC.

(A)     Status of this Agreement Generally . Except as expressly provided
herein, this Agreement shall not terminate; nor shall NAI have any right to
terminate this Agreement; nor shall NAI be entitled to any reduction of the
Break Even Price, any Deficiency, the Maximum Remarketing Obligation, any
Supplemental Payment or the Minimum Extended Remarketing Price hereunder; nor
shall the obligations of NAI to BNPLC under Paragraph be affected, by reason of
(i) any damage to or the destruction of all or any part of the Property from
whatever cause (though it is understood that NAI will receive any remaining
Escrowed Proceeds yet to be applied as provided in the Improvements Lease that
may result from such damage if NAI purchases the Property and the Escrowed
Proceeds as herein provided), (ii) the taking of or damage to the Property or
any portion thereof by eminent domain or otherwise for any reason (though it is
understood that NAI will receive any remaining Escrowed Proceeds yet to be
applied as provided in the Improvements Lease that may result from such taking
or damage if NAI purchases the Property and the Escrowed Proceeds as herein
provided), (iii) the prohibition, limitation or restriction of NAI's use of all
or any portion of the Property or any interference with such use by governmental
action or otherwise, (iv) any eviction of NAI or any party claiming under NAI by
paramount title or otherwise, (v) NAI's prior acquisition or ownership of any
interest in the Property, (vi) any default on the part of BNPLC under this
Agreement, the Improvements Lease or any other agreement to which BNPLC is a
party, or (vii) any other cause, whether similar or dissimilar to the foregoing,
any existing or future law to the contrary notwithstanding. It is the intention
of the parties hereto that the obligations of NAI to make payment to BNPLC
hereunder shall be separate and independent covenants and agreements from
BNPLC's obligations under this Agreement or any other agreement between BNPLC
and NAI; provided, however, that nothing in this subparagraph shall excuse BNPLC
from its obligation to tender the Sale Closing Documents in substantially the
form attached hereto as exhibits when required by Paragraph . Further, nothing
in this subparagraph shall be construed as a waiver by NAI of any right NAI may
have at law or in equity to the following remedies, whether because of BNPLC's
failure to remove a Lien Removable by BNPLC or because of any other default by
BNPLC under this Agreement: (i) the recovery of monetary damages, (ii)
injunctive relief in case of the violation, or attempted or threatened
violation, by BNPLC of any of the express covenants, agreements, conditions or
provisions of this Agreement which are binding upon BNPLC, or (iii) a decree
compelling performance by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Agreement which are binding upon BNPLC.

(B)     Election by NAI to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Prior to the Base Rent Commencement Date . At
any time prior to the Base Rent Commencement Date, NAI may elect to terminate
both the Purchase Option and NAI's Initial Remarketing Rights and Obligations,
subject to the following conditions:

(1)     To be effective, any such election to terminate must be made
prior to the Base Rent Commencement Date and must be made after (x) NAI
shall have given Notice of NAI's Election to Terminate pursuant to
Paragraph 5(D) of the Construction Management Agreement, (y) BNPLC shall
have given any FOCB Notice as provided in Paragraph 5(E) of the
Construction Management Agreement, or (z) BNPLC shall have given notice
of its election to accelerate the Designated Sale Date when an Event of
Default has occurred and is continuing as provided in clause (5) of the
definition Designated Sale Date in the Common Definitions and Provisions
Agreement (Phase II - Improvements).

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(2)     To be effective, any such election to terminate must be made by
giving BNPLC and the Participants a notice thereof in the form attached
as Exhibit F prior to the Base Rent Commencement Date.

(3)     No termination pursuant to this subparagraph 4(B) shall be
effective, notwithstanding any notice NAI may have given as described in
the preceding clause (2), unless contemporaneously with the giving of
the notice (and in any event prior to the Base Rent Commencement Date)
NAI shall deliver to BNPLC an Issue 97-10 Prepayment.

(4)     If for any reason whatsoever, including any bona fide dispute
over the amount of any required Issue 97-10 Prepayment, BNPLC does not
receive both the notice described in the preceding clause (2) and a full
Issue 97-10 Prepayment as described in the preceding clause (3) prior to
the Base Rent Commencement Date, then without any notice or other action
by the parties to this Agreement NAI shall cease to have any option to
terminate pursuant to this subparagraph 4(B).

(C)     Election by BNPLC to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations. By notice to NAI BNPLC shall be entitled to
terminate both the Purchase Option and NAI's Initial Remarketing Rights and
Obligations, as BNPLC deems appropriate in its sole and absolute discretion, at
any time after receiving a notice given by NAI to make or attempt to make any
Issue 97-10 Election. Upon any such termination by BNPLC, NAI shall become
immediately obligated to pay BNPLC an Issue 97-10 Prepayment. 

(D)     Automatic Termination of NAI's Rights. Without limiting BNPLC's right to
enforce NAI's obligation to pay any Supplemental Payment or other amounts
required by this Agreement, the rights of NAI (to be distinguished from the
obligations of NAI) included in NAI's Initial Remarketing Rights and
Obligations, the Purchase Option and NAI's Extended Remarketing Rights shall all
terminate automatically if NAI shall fail to pay the full amount of any
Supplemental Payment required by subparagraph 1(A)(2)(c)on the Designated Sale
Date or if BNPLC shall elect a Voluntary Retention of the Property as provided
in subparagraph 1(A)(2)(a). If, however, NAI's Initial Remarketing Rights and
Obligations are effectively terminated pursuant to subparagraph 4(B) or 4(C)
prior to the Designated Sale Date, thereby excusing NAI from the obligation to
make any Supplemental Payment pursuant to subparagraph 1(A)(2)(c) and precluding
any Voluntary Retention of the Property pursuant to subparagraph 1(A)(2)(a),
then NAI's Extended Remarketing Rights will not automatically terminate pursuant
to this subparagraph. Further, notwithstanding anything in this subparagraph to
the contrary, even after a failure to pay any required Supplemental Payment on
the Designated Sale Date, NAI may nonetheless tender to BNPLC the full Break
Even Price and all amounts then due under the Operative Documents, together with
interest on the total Break Even Price computed at the Default Rate from the
Designated Sale Date to the date of tender, on any Business Day within thirty
days after the Designated Sale Date, and if presented with such a tender within
thirty days after the Designated Sale Date, BNPLC must accept it and promptly
thereafter deliver any Escrowed Proceeds and the Sale Closing Documents listed
in Paragraph to NAI.

(E)     Termination of NAI's Extended Remarketing Rights to Permit a Sale by
BNPLC. At any time more than ninety days after BNPLC has delivered a Third Party
Sale Notice to NAI as described in subparagraph 2(C)(2), BNPLC may terminate
NAI's Extended Remarketing Rights contemporaneously with the consummation of a
sale of the Property by BNPLC to any third party (be it the prospective
purchaser named in the Third Party Sale Notice or another third party) at a
price equal to or in excess of the Third Party Target Price specified in the
Third Party Sale Notice, so as to permit the sale of the Property unencumbered
by NAI's Extended Remarketing Rights.

(F)     Payment Only to BNPLC. All amounts payable under this Agreement by NAI
and, if applicable, by an Applicable Purchaser must be paid directly to BNPLC,
and no payment to any other party shall be effective for the purposes of this
Agreement. In addition to the payments required under subparagraph, on the
Designated Sale Date NAI must pay all amounts then due to BNPLC under the
Improvements Lease or other Operative Documents.

(G)     Remedies Under the Other Operative Documents. No repossession of or
re-entering upon the Property or exercise of any other remedies available to
BNPLC under the Improvements Lease or other Operative Documents shall terminate
NAI's rights or obligations hereunder, all of which shall survive BNPLC's
exercise of remedies under the other Operative Documents. NAI acknowledges that
the consideration for this Agreement is separate and independent of the
consideration for the Improvements Lease, the Construction Management Agreement
and the Closing Certificate, and NAI's 

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obligations hereunder shall not be affected or impaired by any event or
circumstance that would excuse NAI from performance of its obligations under
such other Operative Documents.

(H)     Occupancy by NAI Prior to Closing of a Sale . Prior to the closing of
any sale of the Property to NAI or an Applicable Purchaser hereunder, NAI's
occupancy of the Improvements and its use of the Property shall continue to be
subject to the terms and conditions of the Improvements Lease, including the
terms setting forth NAI's obligation to pay rent, prior to any termination or
expiration of the Improvements Lease pursuant to its express terms and
conditions.

5       SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS. NAI's obligations under
this Agreement are secured by the Pledge Agreement, reference to which is hereby
made for a description of the Collateral covered thereby and the rights and
remedies provided to BNPLC thereby. Although the collateral agent appointed for
BNPLC as provided in the Pledge Agreement shall be entitled to hold all
Collateral as security for the full and faithful performance by NAI of NAI's
covenants and obligations under this Agreement, the Collateral shall not be
considered an advance payment of the Break Even Price or any Supplemental
Payment or a measure of BNPLC's damages should NAI breach this Agreement. If NAI
does breach this Agreement and fails to cure the same within any time specified
herein for the cure, BNPLC may, from time to time, without prejudice to any
other remedy and without notice to NAI, require the collateral agent to
immediately apply the proceeds of any disposition of the Collateral (and any
cash included in the Collateral) to amounts then due hereunder from NAI. If by a
Permitted Transfer BNPLC conveys its interest in the Property before the
Designated Sale Date, BNPLC may also assign BNPLC's interest in the Collateral
to the transferee. BNPLC shall be entitled to return any Collateral not sold or
used to satisfy the obligations secured by the Pledge Agreement directly to NAI
notwithstanding any prior actual or attempted conveyance or assignment by NAI,
voluntary or otherwise, of any right to receive the same; neither BNPLC nor the
collateral agent named in the Pledge Agreement shall be responsible for the
proper distribution or application by NAI of any such Collateral returned to
NAI; and any such return of Collateral to NAI shall discharge any obligation of
BNPLC to deliver such Collateral to all Persons claiming an interest in the
Collateral. Further, BNPLC shall be entitled to deliver any Escrowed Proceeds it
holds on the Designated Sale Date directly to NAI or to any Applicable Purchaser
purchasing BNPLC's interest in the Property and the Escrowed Proceeds pursuant
to this Agreement notwithstanding any prior actual or attempted conveyance or
assignment by NAI, voluntary or otherwise, of any right to receive the same;
BNPLC shall not be responsible for the proper distribution or application by NAI
or any Applicable Purchaser of any such Escrowed Proceeds paid over to NAI or
the Applicable Purchaser; and any such payment of Escrowed Proceeds to NAI or an
Applicable Purchaser shall discharge any obligation of BNPLC to deliver the same
to all Persons claiming an interest therein.

6       CERTAIN REMEDIES CUMULATIVE. No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy BNPLC
has with respect to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute. In addition to other
remedies available under this Agreement, either party shall be entitled, to the
extent permitted by applicable law, to a decree compelling performance of any of
the other party's agreements hereunder.

7       ATTORNEYS' FEES AND LEGAL EXPENSES. If either party to this Agreement
commences any legal action or other proceeding to enforce any of the terms of
this Agreement, or because of any breach by the other party or dispute
hereunder, the party prevailing in such action or proceeding shall be entitled
to recover from the other party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is prosecuted to a
final judgment. Any such Attorneys' Fees incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
such judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment. 

8       ESTOPPEL CERTIFICATE. Upon request by BNPLC, NAI shall execute,
acknowledge and deliver a written statement certifying that this Agreement is
unmodified and in full effect (or, if there have been modifications, that this
Agreement is in full effect as modified, and setting forth such modification)
and either stating that no default exists hereunder or specifying each such
default of which NAI has knowledge. Any such statement may be relied upon by any
Participant or prospective purchaser or assignee of BNPLC with respect to the
Property.

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9       SUCCESSORS AND ASSIGNS. The terms, provisions, covenants and conditions
hereof shall be binding upon NAI and BNPLC and their respective permitted
successors and assigns and shall inure to the benefit of NAI and BNPLC and all
permitted transferees, mortgagees, successors and assignees of NAI and BNPLC
with respect to the Property; provided, that (A) the rights of BNPLC hereunder
shall not pass to NAI or any Applicable Purchaser or any subsequent owner
claiming through NAI or an Applicable Purchaser, (B) BNPLC shall not assign this
Agreement or any rights hereunder except pursuant to a Permitted Transfer, and
(C) NAI shall not assign this Agreement or any rights hereunder without the
prior written consent of BNPLC. 

[Signature pages follow.]

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be
executed as of May 3, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:____________________________________
Title:___________________________________

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[Continuation of signature pages to Purchase Agreement (Phase II - Improvements)
dated to be effective May 3, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Lloyd G. Cox, Vice President

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EXHIBIT A

LEGAL DESCRIPTION

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows: All that certain Real Property in the City of
Sunnyvale, County of Santa Clara, State of California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

1

17
EXHIBIT B

REQUIREMENTS RE: FORM OF GRANT DEED

The form of deed to be used to convey BNPLC's interest in the Improvements to
NAI or an Applicable Purchaser will depend upon whether BNPLC's interest in the
Land has been or is being conveyed at the same time to the same party.

If BNPLC's interests in BOTH the Land and the Improvements are to be conveyed to
NAI or an Applicable Purchaser at the same time, because a sale under this
Purchase Agreement and a sale under the Other Purchase Agreement (covering the
Land) are being consummated at the same time and to the same party, then the one
deed in form attached as Exhibit B-1 will be used to convey both.

If, however, a sale of BNPLC's interest in the Land pursuant to the Other
Purchase Agreement has not been consummated before, and is not being consummated
contemporaneously with the sale of BNPLC's interest in the Improvements under
this Agreement, then BNPLC's interest in the Improvements will be conveyed by a
deed in the from attached as Exhibit B-2.

Finally, BNPLC's interest in the Improvements will be conveyed by a deed in the
from attached as Exhibit B-3 if BNPLC's interest in the Land has been sold
pursuant to the Other Purchase Agreement before a sale of BNPLC's interest in
the Improvements under this Agreement, or if BNPLC's interest in the
Improvements is being sold contemporaneously with a sale of BNPLC's interest in
the Land, but the purchaser of the Improvements is not the same as the purchaser
of the Land.

2

18
EXHIBIT B-1

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Land and Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof and all improvements on such land, together with the
any other right, title and interest of Grantor in and to any easements,
rights-of-way, privileges and other rights appurtenant to such land or the
improvements thereon; provided, however, that this grant is subject to the
encumbrances described on Annex B (the "Permitted Encumbrances"). Grantee hereby
assumes the obligations (including any personal obligations) of Grantor, if any,
created by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the land
or improvements conveyed by this deed.

Exhibit - Page 2

19
BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature________________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature________________________________

EXHIBIT B-1 - PAGE 2

20
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

EXHIBIT B-1 - PAGE 3

21
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.  TAXES for the fiscal year [current year], a lien not yet due or payable.

2.  General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:            110-32-004
Code No.:                  09-059
First Installment:         $34,099.75 Paid
Second Installment:        $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:         None
Homeowners Exemption:      None

3.  Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:      110-32-004-71
First Installment:         Paid
Second Installment:        $4,217.87, Payable, but not yet due

4.  Supplemental Taxes for the fiscal year 1998-99 assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

Assessors Parcel No.:      110-32-004-72
First Installment:         Paid
Second Installment:        $16,226.03, Payable, but not yet due

5.  The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code
of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

6.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Slope Easement

EXHIBIT B-1 - PAGE 4

22
Recorded:                  October 9, 1964, in Book 6695 at Page 430, 
Official Records
Affects:                   The Southeasterly 18 feet of Said Land

7.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Public Utilities
Recorded:                  October 9, 1964, in Book 6695 at Page 450,
Official Records
Affects:                   The Southeasterly 7 feet of Said Land

8.  Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:               Moffett Park Associates, A Partnership
Recorded:                  December 23, 1971 in Book 9640 at Page 443 of
Official Records

An Assignment and Assumption

Executed by:               Moffett Park Associates, A Partnership
To:                        The Prudential Insurance Company of America,
a New Jersey Corporation
Recorded:                  February 8, 1977 in Book C583 at Page 685 of
Official Records

9.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Moffett Park Associates, A Partnership
For:                       Private and Public Utility Purposes
Recorded:                  November 29, 1974, in Book B190, page 398, as
Instrument No. 4903681, Official Records
Affects:                   The Northerly 5 feet of Said Land

10. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Paul Enterprises, A Partnership, and
Northwest Poultry and
Dairy Products Co., an Oregon Corporation
For:                       5 Foot Wide Storm Drain Easement
Recorded:                  June 17, 1975, in Book B467, page 167, as
Instrument No. 5032895, Official Records
Affects:                   As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974, in Book 345
of Maps at Page 20, records of Santa Clara County,

EXHIBIT B-1 - PAGE 5

23

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing pipe and the True Point of Beginning of this description;

Thence South 75 deg 07' 58" East parallel with and istant 2.50 feet
Northerly measured at right angles, from the Southerly line of siad Parcel
"A' and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in Book
345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and continuing along a center line of an
existing 6 inch Storm Drain Pipe, a distance of 35.00 feet to a point on the
Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged or
shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

11. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
a New Jersey Corporation
For:                       A 5 foot wide Storm Drain Easement
Recorded:                  June 17, 1975 in Book B467, page 173, as
Instrument No. 5032896 Official Records
Affects:                   As follows:

PARCEL ONE

EXHIBIT B-1 - PAGE 6

24
A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing storm drain pipe running along the Southerly line of said
Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the said
True Point of Beginning of this description to point 2.50 feet North of an
existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50 feet
North of an existing storm drain inlet structure.

PARCEL THREE

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

EXHIBIT B-1 - PAGE 7

25
Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

12. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
new Jersey Corporation
For:                       A pedestrian and motor vehicle Right-of-Way
for the purposes of Ingress and Egress from 
motor vehicle parking spaces
Recorded:                  June 17, 1975, in Book B467, page 178, as
Instrument No. 5032897 Official Records
Affects:                   As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast corner
also being a point on the Westerly line of Crossman Road (90.00 feet wide);

Thence North 75 deg 7' 58" West along the Southerly line of said Parcel "A",
a distance of 40.00 feet to the True Point of Beginning of this description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A", a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

13. Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

EXHIBIT B-1 - PAGE 8

26
(A) the fact that the landscaping area, patio and walkways located along the
northwesterly boundary is for the common use of the adjoining property lying
to the northwest of said land.

(B) the fact that the driveway located near the most northerly corner along
the northeasterly boundary is for the common use of the adjoining property
lying to the northeast of said land.

(C) the fact that the fence along the northwesterly boundary and across the
most northerly corner encroaches onto the adjoining properties lying to the
northwest and northeast of said land.

(D) the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E) the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility easement
(6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430); onto the
5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and B467-OR-173);
and onto the 5.00 foot Public Utility easement (B190-OR-398).

14. Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

EXHIBIT B-1 - PAGE 9

27
EXHIBIT B-2

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Improvements but not the Land under the Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the
buildings and other improvements (the "Improvements") on the land situated in
Sunnyvale, California, described on Annex A attached hereto and hereby made a
part hereof (the "Land"), together with the any other right, title and interest
of Grantor in and to any easements, rights-of-way, privileges and other rights
appurtenant to the Improvements; provided, however, that this grant is subject
to the encumbrances described on Annex B (the "Permitted Encumbrances") and any
reservations or qualifications set forth below. Grantee hereby assumes the
obligations (including any personal obligations) of Grantor, if any, created by
or under, and agrees to be bound by the terms and conditions of, the Permitted
Encumbrances to the extent that the same concern or apply to the Improvements.

Although this deed conveys Grantor's interest in the Improvements, this deed
does not convey any interest in the Land under the Improvements or any rights or
easements appurtenant to Improvements. Grantor retains and reserves all right,
title and interest of Grantor in and to the Land and any rights and easements
appurtenant to Land. Further, this deed does not convey any right of access over
or right to use the Land, it being understood that the right of Grantee or its
successors and assigns to maintain or use the improvements conveyed hereby shall
be on and subject to the terms and conditions of any separate ground lease or
deed that Grantee may from time to time obtain from the owner of the Land. If
Grantee does not obtain a separate deed or ground lease giving Grantee the
authority to maintain the Improvements on the Land, Grantee shall remove or
abandon the Improvements promptly upon request of the owner of the Land. Nothing
herein or in the agreements pursuant to which this deed is being delivered shall
be construed as an obligation on the part of Grantor to deliver or cooperate
reasonably in obtaining for Grantee any deed or ground lease covering the Land
described on Annex A.

28
BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_____________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_____________________________

EXHIBIT B-2 - PAGE 2

29
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

EXHIBIT B-2 - PAGE 3

30
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1. TAXES for the fiscal year [current year], a lien not yet due or payable.

2. General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:            110-32-004
Code No.:                  09-059
First Installment:         $34,099.75 Paid
Second Installment:        $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:         None
Homeowners Exemption:      None

3.  The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code
of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

4.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:  Pacific Gas and Electric Company, a California Corporation
For:          A Line of Poles

EXHIBIT B-2 - PAGE 4

31
Recorded:                  February 6, 1951, in Book 2147 at Page 279,
Official Records
Affects:                   A Strip of land 5 feet in width over the
portion of Said Land lying within the North
1/2 of Lot 6, Crossman Sub. No. 2

5.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Slope Easement
Recorded:                  October 9, 1964, in Book 6695 at Page 430, 
Official Records
Affects:                   The Southeasterly 18 feet of Said Land

6.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Public Utilities
Recorded:                  October 9, 1964, in Book 6695 at Page 450, 
Official Records
Affects:                   The Southeasterly 7 feet of Said Land

7.  Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:               Moffett Park Associates, A Partnership
Recorded:                  December 23, 1971 in Book 9640 at Page 443 of
Official Records

An Assignment and Assumption

Executed by:               Moffett Park Associates, A Partnership
To:                        The Prudential Insurance Company of America,
a New Jersey Corporation
Recorded:                  February 8, 1977 in Book C583 at Page 685 of
Official Records

8.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Moffett Park Associates, A Partnership
For:                       Private and Public Utility Purposes
Recorded:                  November 29, 1974, in Book B190, page 398, as
Instrument No. 4903681, Official Records
Affects:                   The Northerly 5 feet of Said Land

9.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Paul Enterprises, A Partnership, and
Northwest Poultry and Dairy Products Co., an 
Oregon Corporation
For:                       5 Foot Wide Storm Drain Easement
Recorded:                  June 17, 1975, in Book B467, page 167, as
Instrument No. 5032895, Official Records
Affects:                   As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974, in Book 345
of Maps at Page 20, records of Santa Clara County,

EXHIBIT B-2 - PAGE 5

32
Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing pipe and the True Point of Beginning of this description;

Thence South 75 deg 07' 58" East parallel with and istant 2.50 feet
Northerly measured at right angles, from the Southerly line of siad Parcel
"A' and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in Book
345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and continuing along a center line of an
existing 6 inch Storm Drain Pipe, a distance of 35.00 feet to a point on the
Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged or
shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

10. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
a New Jersey Corporation
For:                       A 5 foot wide Storm Drain Easement
Recorded:                  June 17, 1975 in Book B467, page 173, as
Instrument No. 5032896 Official Records
Affects:                   As follows:

PARCEL ONE

EXHIBIT B-2 - PAGE 6

33
A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing storm drain pipe running along the Southerly line of said
Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the said
True Point of Beginning of this description to point 2.50 feet North of an
existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50 feet
North of an existing storm drain inlet structure.

PARCEL THREE

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

EXHIBIT B-2 - PAGE 7

34
Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

11. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
new Jersey Corporation
For:                       A pedestrian and motor vehicle Right-of-Way
for the purposes of Ingress and Egress from 
motor vehicle parking spaces
Recorded:                  June 17, 1975, in Book B467, page 178, as
Instrument No. 5032897 Official Records
Affects:                   As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast corner
also being a point on the Westerly line of Crossman Road (90.00 feet wide);

Thence North 75 deg 7' 58" West along the Southerly line of said Parcel "A",
a distance of 40.00 feet to the True Point of Beginning of this description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A", a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

12. Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

EXHIBIT B-2 - PAGE 8

35
(A) the fact that the landscaping area, patio and walkways located along the
northwesterly boundary is for the common use of the adjoining property lying
to the northwest of said land.

(B) the fact that the driveway located near the most northerly corner along
the northeasterly boundary is for the common use of the adjoining property
lying to the northeast of said land.

(C) the fact that the fence along the northwesterly boundary and across the
most northerly corner encroaches onto the adjoining properties lying to the
northwest and northeast of said land.

(D) the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E) the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility easement
(6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430); onto the
5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and B467-OR-173);
and onto the 5.00 foot Public Utility easement (B190-OR-398).

13. Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

EXHIBIT B-2 - PAGE 9

36
EXHIBIT B-3

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Improvements but not Land under the Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the
buildings and other improvements (the "Improvements") on the land situated in
Sunnyvale, California, described on Annex A attached hereto and hereby made a
part hereof (the "Land"), together with the any other right, title and interest
of Grantor in and to any easements, rights-of-way, privileges and other rights
appurtenant to the Improvements; provided, however, that this grant is subject
to the encumbrances described on Annex B (the "Permitted Encumbrances") and any
reservations or qualifications set forth below. Grantee hereby assumes the
obligations (including any personal obligations) of Grantor, if any, created by
or under, and agrees to be bound by the terms and conditions of, the Permitted
Encumbrances to the extent that the same concern or apply to the Improvements.

Although this deed conveys Grantor's interest in the Improvements on the Land,
this deed does not convey any interest in the Land itself or any rights or
easements appurtenant to Land. Prior to or contemporaneously with the delivery
of this deed, Grantor has conveyed or is conveying the Land and appurtenant
rights and easements to another party, subject to the terms and conditions of a
Ground Lease dated ________, filed or to be filed for record in the Santa Clara
County records. Grantor is assigning it's rights as lessee under the Ground
Lease to Grantee by a separate instrument dated of even date herewith.

EXHIBIT B-2 - PAGE 10

37
BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________

Its:__________________________________

Attest:__________________________________

Its:__________________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature___________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

EXHIBIT B-3 - PAGE 2

38
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

EXHIBIT B-3 - PAGE 3

39
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase II - Land) incorporated by reference into the Lease Agreement
(Phase II - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.  TAXES for the fiscal year [current year], a lien not yet due or payable.

2.  General and Special Taxes and Assessments, if any, for the fiscal year
1998-99.

Assessment No.:            110-32-004
Code No.:                  09-059
First Installment:         $34,099.75 Paid
Second Installment:        $34,099.75 Payable, but not yet due
Assessed Valuation of
Personal Property:         None
Homeowners Exemption:      None

3.  The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions
of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code
of the State of California, resulting from changes of ownership or
completion of construction on or after the date of this policy.

4.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Pacific Gas and Electric Company,
a California corporation
For:                       A Line of Poles
Recorded:                  February 6, 1951, in Book 2147 at Page 279,
Official Records
Affects:                   A strip of land 5 feet in width over the
portion of Said Land lying within the North
1/2 of Lot 6, Crossman Sub. No. 2 

5.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Slope Easement

EXHIBIT B-3 - PAGE 4

40
Recorded:                  October 9, 1964, in Book 6695 at Page 430, 
Official Records
Affects:                   The Southeasterly 18 feet of Said Land

6.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               City of Sunnyvale, A Municipal Corporation
For:                       Public Utilities
Recorded:                  October 9, 1964, in Book 6695 at Page 450,
Official Records
Affects:                   The Southeasterly 7 feet of Said Land

7.  Covenants, Conditions and Restrictions in the Declaration of Restrictions;
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 or 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) relates to
handicap but does not discriminate against handicapped persons.

Executed By:               Moffett Park Associates, A Partnership
Recorded:                  December 23, 1971 in Book 9640 at Page 443 of
Official Records

An Assignment and Assumption

Executed by:               Moffett Park Associates, A Partnership
To:                        The Prudential Insurance Company of America,
a New Jersey Corporation
Recorded:                  February 8, 1977 in Book C583 at Page 685 of
Official Records

8.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Moffett Park Associates, A Partnership
For:                       Private and Public Utility Purposes
Recorded:                  November 29, 1974, in Book B190, page 398, as
Instrument No. 4903681, Official Records
Affects:                   The Northerly 5 feet of Said Land

9.  An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               Paul Enterprises, A Partnership, and
Northwest Poultry and Dairy Products Co., an 
Oregon Corporation
For:                       5 Foot Wide Storm Drain Easement
Recorded:                  June 17, 1975, in Book B467, page 167, as
Instrument No. 5032895, Official Records
Affects:                   As follows:

PARCEL ONE

A 5.00 Foot Wide Storm Drain easement 2.50 feet on each side of the center
line of an existing Storm Drain Pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974, in Book 345
of Maps at Page 20, records of Santa Clara County,

EXHIBIT B-3 - PAGE 5

41
Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing pipe and the True Point of Beginning of this description;

Thence South 75 deg 07' 58" East parallel with and istant 2.50 feet
Northerly measured at right angles, from the Southerly line of siad Parcel
"A' and along said existing pipe, a distance of 407.55 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly measured at right angles from the Easterly line of said Parcel "A"
and along said existing pipe, a distance of 215 feet to an existing catch
basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

PARCEL TWO

A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southwestern corner of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974 in Book
345 of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing Storm Drain Pipe described in Parcel 1 above;

Thence South 75 deg 07' 58" East along the center line of said pipe
described in said Parcel 1, a distance of 35.00 feet to the Point of
Intersection of the center line of an existing 12 inch Storm Drain Pipe and
the True Point of Beginning of this description;

Thence North 14 deg 51' 33" East along the center line of said existing 12
inch pipe, a distance of 87.00 feet;

Thence North 75 deg 07' 58" West and continuing along a center line of an
existing 6 inch Storm Drain Pipe, a distance of 35.00 feet to a point on the
Westerly line of said Parcel "A".

The sidelines of said 5.00 Easement as described above shall be prolonged or
shortened so as to form a continuous 5.00 foot Right-of-Way from the
Northerly side of the pipe described in Parcel 1 above to the Westerly line
of said Parcel "A".

10. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
a New Jersey Corporation
For:                       A 5 foot wide Storm Drain Easement
Recorded:                  June 17, 1975 in Book B467, page 173, as
Instrument No. 5032896 Official Records
Affects:                   As follows:

PARCEL ONE

EXHIBIT B-3 - PAGE 6

42
A 5.00 foot wide Storm Drain Easement 2.50 feet on each side of the center
line of an existing 12 inch Storm Drain Pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps at Page 20, records of Santa Clara County,

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A",
a distance of 2.50 feet to the Point of Intersection of said center line of
said existing storm drain pipe running along the Southerly line of said
Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of Parcel "A" a distance of 156.00 feet to
the Point of Intersection of the center line of an existing 12 inch storm
drain pipe and the True Point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe a distance of 15.00 feet.

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot Right-of-Way from the said
True Point of Beginning of this description to point 2.50 feet North of an
existing storm drain inlet structure.

PARCEL TWO

A 5.00 foot wide storm drain easement, 2.50 feet on each side of the center
line of an existing 12 inch storm drain pipe, said center line of said pipe
being described as follows:

Commencing at the Southeast corner of Parcel "A" a said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

Thence North 14 deg 52' 02" East along the Easterly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing storm drain pipe running thence along the Southerly line of
said Parcel "A";

Thence North 75 deg 07' 58" West along the center line of last said pipe
running along the Southerly line of said Parcel "A", a distance of 289.00
feet to the Point of Intersection of the center line of an existing 12 inch
storm drain pipe and the True point of Beginning of this description;

Thence North 14 deg 52' 02" East along the center line of said existing 12
inch pipe, a distance of 15.00 feet.

The side lines of said 5.00 foot easement as described above shall be
prolonged or shortened so as to form a continuous 5.00 foot Right-of-Way
from the said True Point of Beginning of this description to point 2.50 feet
North of an existing storm drain inlet structure.

PARCEL THREE

A 5.00 foot storm drain easement, 2.50 feet on each side of the center line
of an existing storm drain pipe, said center line of said pipe being
described as follows:

Commencing at the Southwest corner of Parcel "A" as said Parcel "A" is shown
on that certain Parcel Map filed for record on August 28, 1974 in Book 345
of Maps, at Page 20, records of Santa Clara County;

EXHIBIT B-3 - PAGE 7

43
Thence North 14 deg 51' 33" East along the Westerly line of said Parcel "A"
a distance of 2.50 feet to the Point of Intersection of the center line of
the existing pipe;

Thence South 75 deg 07'58" East parallel with and distant 2.50 feet
Northerly, measured at right angles, from the Southerly line of said Parcel
"A" and along said existing pipe, a distance of 161.05 feet and the True
Point of Beginning of this description;

Thence again South 75 deg k07' 58" East continuing along said existing pipe
a distance of 246.50 feet;

Thence North 14 deg 52' 02" East parallel with and distant 42.50 feet
Westerly, measured at right angles, from the Easterly line of said Parcel
"A" and along said existing pipe, a distance of 215 feet to an existing
catch basin;

Thence South 75 deg 07' 58" East on a line that is perpendicular to the
Easterly line of said Parcel "A" and along said existing pipe, a distance of
42.50 feet to a point on the Easterly line of said Parcel "A".

The side lines of said 5.00 Easement as described above shall be prolonged
or shortened so as to form a continuous 5.00 foot right of way from said
Westerly line of said Parcel "A" to said Easterly line of said Parcel "A".

11. An easement affecting the portion of said land and for the purposes stated
herein, and incidental purposes,

In Favor Of:               The Prudential Insurance Company of America,
new Jersey Corporation
For:                       A pedestrian and motor vehicle Right-of-Way
for the purposes of Ingress and Egress from 
motor vehicle parking spaces
Recorded:                  June 17, 1975, in Book B467, page 178, as
Instrument No. 5032897 Official Records
Affects:                   As follows:

An 11 foot strip of land over a portion of Parcel "A" as said Parcel "A" is
shown on that certain Parcel Map filed for record on August 28, 1974, in
Book 345 of Maps, at Page 20, records of Santa Clara County and being more
particularly described as follows:

Commencing at the Southeast corner of said Parcel "A", said Southeast corner
also being a point on the Westerly line of Crossman Road (90.00 feet wide);

Thence North 75 deg 7' 58" West along the Southerly line of said Parcel "A",
a distance of 40.00 feet to the True Point of Beginning of this description;

Thence continuing along said Southerly line North 75 deg 07' 58" West, a
distance of 322.50 feet;

Thence North 14 deg 52' 02" East, a distance of 11.00 feet;

Thence South 75 deg 07' 58" East parallel with and distant Northerly 11.00
feet measured at right angles from said Southerly line of said Parcel "A", a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of
11.00 feet to the True Point of Beginning.

12. Any rights, Interests or Claims which may exist or arise by reason of the
following facts shown by a survey made by Kier & Wright, dated March 18,
1999, as Job No. 96214-2 and inspections of said land:

EXHIBIT B-3 - PAGE 8

44

(A) the fact that the landscaping area, patio and walkways located along the
northwesterly boundary is for the common use of the adjoining property lying
to the northwest of said land.

(B) the fact that the driveway located near the most northerly corner along
the northeasterly boundary is for the common use of the adjoining property
lying to the northeast of said land.

(C) the fact that the fence along the northwesterly boundary and across the
most northerly corner encroaches onto the adjoining properties lying to the
northwest and northeast of said land.

(D) the fact that the fence located near the southwesterly corner on the
southwesterly boundary encroaches onto the adjoining property lying to the
southwest of said land.

(E) the fact that the concrete curbs located along the northeasterly and
southeasterly boundaries encroach onto the 7.00 foot Public Utility easement
(6695-OR-450); onto the 18.00 foot Slope easement (6695-OR-430); onto the
5.00 foot Storm Drain easement (9790-OR-380, B467-OR-167 and B467-OR-173);
and onto the 5.00 foot Public Utility easement (B190-OR-398).

13. Lease Agreement (Phase II - Land) dated May 3, 1999, by and between BNP
Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee, and
Lease Agreement (Phase II - Improvements) dated May 3, 1999, by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee.

EXHIBIT B-3 - PAGE 9

45
EXHIBIT C

BILL OF SALE AND ASSIGNMENT

Reference is made to: (1) that certain Purchase Agreement (Phase II -
Improvements) between BNP Leasing Corporation ("ASSIGNOR") and Network
Appliance, Inc., dated as of May 3, 1999, (the "PURCHASE AGREEMENT") and (2)
that certain Lease Agreement (Phase II Improvements) between Assignor, as
landlord, and Network Appliance, Inc., as tenant, dated as of May 3, 1999 (the
"IMPROVEMENTS LEASE"). (Capitalized terms used and not otherwise defined in this
document are intended to have the meanings assigned to them in the Common
Definitions and Provisions Agreement (Phase II - Improvements) incorporated by
reference into both the Purchase Agreement and Improvements Lease.)

As contemplated by the Purchase Agreement, Assignor hereby sells,
transfers and assigns unto [NAI OR THE APPLICABLE PURCHASER, AS THE CASE MAY
BE], a _____________ ("ASSIGNEE"), all of Assignor's right, title and interest
in and to the following property, if any, to the extent such property is
assignable:

(a) the Improvements Lease [DRAFTING NOTE: THE FOLLOWING WILL BE ADDED
ONLY IF APPLICABLE BECAUSE OF THE SIMULTANEOUS DELIVERY OF A GRANT DEED IN THE
FORM OF EXHIBIT B-3: and the Ground Lease dated _________, between _________, as
lessor, and Assignor, as lessee, filed for record on in ___________ of Santa
Clara County records (the "GROUND LEASE")];

(b) any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property; and

(c) all other property included within the definition of "Property" as
set forth in the Purchase Agreement, including but not limited to any of the
following transferred to Assignor by the tenant pursuant to Paragraph 7 of the
Improvements Lease or otherwise acquired by Assignor, at the time of the
execution and delivery of the Improvements Lease and Purchase Agreement or
thereafter, by reason of Assignor's status as the owner of any interest in the
Property: (1) any goods, equipment, furnishings, furniture, chattels and
tangible personal property of whatever nature that are located on the Property
and all renewals or replacements of or substitutions for any of the foregoing;
(ii) the rights of Assignor, existing at the time of the execution of the
Improvements Lease and Purchase Agreement or thereafter arising, under Permitted
Encumbrances or Development Documents (both as defined in the Improvements
Lease); and (iii) any other permits, licenses, franchises, certificates, and
other rights and privileges related to the Property that Assignee would have
acquired if Assignee had itself acquired the Improvements covered by the
Improvements Lease and constructed the Improvements included in the Property.

Provided, however, excluded from this conveyance and reserved to Assignor are
any rights or privileges of Assignor under the following ("EXCLUDED RIGHTS"):
(1) the indemnities set forth in the Improvements Lease, whether such rights are
presently known or unknown, including rights of the Assignor to be indemnified
against environmental claims of third parties as provided in the Improvements
Lease which may not presently be known, (2) provisions in the Improvements Lease
that establish the right of Assignor to recover any accrued unpaid rent under
the Improvements Lease which may be outstanding as of the date hereof, (3)
agreements between Assignor and "BNPLC's Parent" or any "Participant," both as
defined in the Improvements Lease, or any modification or extension thereof, or
(4) any other instrument being delivered to Assignor contemporaneously herewith
pursuant to the Purchase Agreement. To the extent that this conveyance does
include any rights to receive future payments under the Improvements Lease, such
rights ("INCLUDED RIGHTS") shall be subordinate to Assignor's Excluded Rights,
and Assignee hereby waives any rights to enforce Included Rights until such time
as Assignor has received all payments to which it remains entitled by reason of
Excluded Rights. If any amount shall be paid to Assignee on account of any
Included Rights at any time before Assignor has received all payments to which
it is entitled because of Excluded Rights, such amount shall be held in trust by
Assignee for the benefit of Assignor, shall be segregated from the other funds
of Assignee and 

EXHIBIT - PAGE 1

46

shall forthwith be paid over to Assignor to be held by Assignor as collateral
for, or then or at any time thereafter applied in whole or in part by Assignor
against, the payments due to Assignor because of Excluded Rights, whether
matured or unmatured, in such order as Assignor shall elect.

Assignor does for itself and its successors covenant and agree to
warrant and defend the title to the property assigned herein against the just
and lawful claims and demands of any person claiming under or through a Lien
Removable by BNPLC, but not otherwise.

Assignee hereby assumes and agrees to keep, perform and fulfill
Assignor's obligations, if any, relating to any permits or contracts, under
which Assignor has rights being assigned herein.

IN WITNESS WHEREOF, the parties have executed this instrument as of
_______________, _____.

ASSIGNOR:

BNP LEASING CORPORATION a Delaware
corporation

By:______________________________________
Its:_____________________________________

ASSIGNEE:

[NAI or the Applicable Purchaser], a
________________________

By:______________________________________
Its:_____________________________________

EXHIBIT C - PAGE 2

47
STATE OF ____________     )
)      SS
COUNTY OF ___________     )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

STATE OF ____________     )
)      SS
COUNTY OF ___________     )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

EXHIBIT C - PAGE 3

48
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE OTHER LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DOCUMENT TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows: All that certain Real Property in the City of
Sunnyvale, County of Santa Clara, State of California, described as follows:

PARCEL ONE

All of Parcel "A" as said Parcel is shown upon that certain Parcel Map entitled
"For: Moffett Park Association, being a Redivision of Parcel "B" of Parcel Map
recorded in Book 292 of Maps in Page 41", which Map was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California, on
August 28, 1974 in Book 345 of Map, at Page 20.

PARCEL TWO

An Easement for pedestrian and motor vehicle Right-of-Way for the purpose of
ingress over a portion of land more particularly described as follows:

A 15 foot strip of land over a portion of "Parcel "A", as said Parcel "A" is
shown on that certain Parcel Map filed for record on October 25, 1966 in Book
216 of Maps, at Page 2, records of Santa Clara County, and being more
particularly described as follows:

Commencing at the Northeast corner of said Parcel "A", said Northeast corner
also being a point on the center line of Crossman Road (90.00 feet wide); thence
North 75 deg 07' 58" West along the Northerly line of said parcel "A", a
distance of 85.00 feet to the True Point of Beginning of this description;
thence continuing along said Northerly line North 75 deg 07' 58" West, a
distance of 322.50 feet; thence South 14 deg 52' 02" West, a distance of 15.00
feet; thence South 75 deg 07' 58" East parallel with and distance 15.00 feet
Southerly measured at right angles from the Northerly line of said Parcel "A" a
distance of 322.50 feet; thence North 14 deg 52' 02" East, a distance of 15.00
feet to the True Point of Beginning.

EXHIBIT C - PAGE 4

49
EXHIBIT D

ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "CERTIFICATE") is made as of ___________________, ____, by [NAI or the
Applicable Purchaser, as the case may be], a ___________________ ("GRANTEE").

Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNPLC"), is executing and delivering to
Grantee (1) a corporate grant deed and (2) a Bill of Sale and Assignment (the
foregoing documents and any other documents to be executed in connection
therewith are herein called the "CONVEYANCING DOCUMENTS" and any of the
properties, rights or other matters assigned, transferred or conveyed pursuant
thereto are herein collectively called the "SUBJECT PROPERTY").

NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS TO
THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNPLC MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees that
warranties of merchantability and fitness for a particular purpose are excluded
from the transaction contemplated by the Conveyancing Documents, as are any
warranties arising from a course of dealing or usage of trade. Grantee hereby
assumes all risk and liability (and agrees that BNPLC shall not be liable for
any special, direct, indirect, consequential, or other damages) resulting or
arising from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property, except for damages
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of BNPLC. As used in the
preceding sentence, "ESTABLISHED MISCONDUCT" is intended to have, and be limited
to, the meaning given to it in the Common Definitions and Provisions Agreement
(Phase II - Improvements) incorporated by reference into the Purchase Agreement
between BNPLC and Network Appliance, Inc. dated May 3, 1999, pursuant to which
Purchase Agreement BNPLC is delivering the Conveyancing Documents.

The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNPLC is entitled to rely and is relying on this
Certificate.

EXECUTED as of ________________, ____.

[NAI or the Applicable Purchaser]
By:______________________________________
Name:_________________________________
Title:________________________________

50
EXHIBIT E

SECRETARY'S CERTIFICATE

The undersigned, [Secretary or Assistant Secretary] of BNP Leasing
Corporation, a Delaware corporation (the "Corporation"), hereby certifies as
follows:

1. That he is the duly, elected, qualified and acting Secretary [or
Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.

2. That the following named persons have been properly designated,
elected and assigned to the office in the Corporation as indicated below; that
such persons hold such office at this time and that the specimen signature
appearing beside the name of such officer is his or her true and correct
signature.

[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER SALE CLOSING DOCUMENTS ON BEHALF
OF THE CORPORATION.]

Name                          Title                         Signature
----                          -----                         ---------

----------------              ----------------              ----------------

----------------              ----------------              ----------------

3. That the resolutions attached hereto and made a part hereof were duly
adopted by the Board of Directors of the Corporation in accordance with the
Corporation's Articles of Incorporation and Bylaws. Such resolutions have not
been amended, modified or rescinded and remain in full force and effect.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this ____, day of __________, ____.

_________________________________________
[signature and title]

51
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION

WHEREAS, pursuant to that certain Purchase Agreement (Phase II -
Improvements) (herein called the "Purchase Agreement") dated as of May 3, 1999,
by and between BNP Leasing Corporation (the "Corporation") and [NAI OR THE
APPLICABLE PURCHASER AS THE CASE MAY BE] ("Purchaser"), the Corporation agreed
to sell and Purchaser agreed to purchase or cause the Applicable Purchaser (as
defined in the Purchase Agreement) to purchase the Corporation's interest in the
property (the "Property") located in Sunnyvale, California more particularly
described therein.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of the
Corporation and its shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed in the name and on behalf of the
Corporation to cause the Corporation to fulfill its obligations under the
Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed to take or cause to be taken any and
all actions and to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.

EXHIBIT E - PAGE 2

52
EXHIBIT F

FIRPTA STATEMENT

Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of a
California real property interest must withhold income tax if the transferor is
a nonresident seller.

To inform [NAI OR THE APPLICABLE PURCHASER] (the "Transferee") that
withholding of tax is not required upon the disposition of a California real
property interest by transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the Seller:

1. The Seller is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);

2. The United States employer identification number for the Seller is
_____________________;

3.The office address of the Seller is ______________
_________________________ _________________.

4. The Seller is qualified to do business in California.

The Seller understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

The Seller understands that the Transferee is relying on this affidavit
in determining whether withholding is required upon said transfer.

Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of the Seller.

Dated: ___________, ____.

By:______________________________________
Name:_________________________________
Title:________________________________

53
Exhibit K

NOTICE OF ELECTION TO TERMINATE THE PURCHASE OPTION AND
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Purchase Agreement (Phase II - Improvements) dated as of May 3, 1999
(the "PURCHASE AGREEMENT"), between Network Appliance, Inc. ("NAI") and BNP
Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Purchase Agreement referenced above. This letter shall
constitute a notice, given before the Base Rent Commencement Date pursuant to
subparagraph of the Purchase Agreement, of NAI's election to terminate the
Purchase Option and NAI's Initial Remarketing Rights and Obligations. NAI
irrevocably elects to terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations effective immediately, subject only to the
conditions described below.

NAI ACKNOWLEDGES THAT THE ELECTION MADE BY NAI DESCRIBED ABOVE
CONSTITUTES AN ISSUE 97-10 ELECTION UNDER AND AS DEFINED IN THE OPERATIVE
DOCUMENTS.

NAI also acknowledges that its right to terminate the Purchase Option
and NAI's Initial Remarketing Rights and Obligations is subject to the condition
precedent that (x) NAI shall have given Notice of NAI's Election to Terminate
pursuant to Paragraph 5(D) of the Construction Management Agreement, or (y)
BNPLC shall have given any FOCB Notice as provided in Paragraph 5(E) of the
Construction Management Agreement, or (z) BNPLC shall have given notice of its
election to accelerate the Designated Sale Date when an Event of Default has
occurred and is continuing as provided in clause (5) of the definition
Designated Sale Date in the Common Definitions and Provisions Agreement (Phase
II - Improvements). Accordingly, if none of the notices described in the
preceding sentence have been given, the Purchase Option and NAI's Initial
Remarketing Rights and Obligations shall not terminate by reason of this notice.

NAI further acknowledges that no termination of the Purchase Option and
NAI's Initial Remarketing Rights and Obligations by NAI pursuant to this notice
shall be effective, unless contemporaneously with the giving of this notice NAI
shall deliver to BNPLC a full Issue 97-10 Prepayment. NAI hereby covenants to
pay, if NAI has not already done so, a full Issue 97-10 Prepayment to BNPLC.

Finally, NAI acknowledges that a termination of the Purchase Option and
NAI's Initial Remarketing Rights and Obligations pursuant to this notice shall
cause the Improvements Lease to terminate as of the Base Rent Commencement Date
pursuant to subparagraph 1(b) of the Improvements Lease.

54
Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:____________________________________
Title:___________________________________

[cc all Participants]

EXHIBIT - PAGE 2

1
Exhibit 10.34

================================================================================

CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE III - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

JUNE 16, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page

RECITALS                                                                         1

CONSENT AND AUTHORIZATION                                                        1

GENERAL TERMS AND CONDITIONS                                                     1

1.   CONSTRUCTION BY NAI                                                         1
(A)   The Construction Project                                              1
(1)   Construction Approvals by BNPLC                                 1
(a)    Preconstruction Approvals by BNPLC                       1
(b)    Definition of Scope Change                               2
(c)    Approval of Scope Changes                                2
(2)   NAI's Right to Control and Responsibility for Construction      2
(a)    Performance of the Work                                  2
(b)    Third Party Contracts                                    3
(c)    Third Party Estoppels                                    4
(d)    Adequacy of Drawings, Specifications and Budgets         4
(e)    Existing Condition of the Land and Improvements          4
(f)    Correction of Defective Work                             4
(g)    Clean Up.                                                4
(h)    No Damage for Delays                                     5
(i)    No Fee For Construction Management                       5
(3)   Quality of Work                                                 5
(B)   Completion Notice                                                     5

2.   CONSTRUCTION ADVANCES                                                       5
(A)   Costs Subject to Reimbursement Through Construction Advances          5
(B)   Exclusions From Reimbursable Construction-Period Costs                6
(C)   Conditions to NAI's Right to Receive Construction Advances            7
(1)   Construction Advance Requests                                   7
(2)   Amount of the Advances                                          7
(a) Limit Dependent Upon the Maximum Construction

Allowance     7
(b) Limit Dependent Upon Costs Previously Incurred by NAI       7
(c) Limit During CMA Suspension Period                          8
(d) Restrictions Imposed for Administrative Convenience         9
(3)   No Advances After Certain Dates                                 9
(D)   Breakage Costs for Construction Advances Requested But Not Taken      9
(E)   No Third Party Beneficiaries                                          9
(F)   No Waiver                                                             9
(G)   Funding by Participants                                               9

3.   NORMAL TENANT IMPROVEMENTS                                                 11
(A)   Definition of Normal Tenant Improvements                             11
(B)   Advances for Normal Tenant Improvements                              11

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Page

(C)   Tenant's Obligation to Construct Normal Tenant Improvements          11

4.   COST OVERRUNS                                                              11
(A)   Definition of Projected Cost Overruns                                11
(B)   Notice of Projected Cost Overruns                                    11
(C)   Election to Make a Voluntary NAI Construction Contribution           12

5.   SUSPENSION AND TERMINATION                                                 12
(A)   CMA Suspension Events                                                12
(1)   Projection of Cost Overruns                                    12
(2)   Interruption of Construction                                   12
(3)   Failure of NAI to Correct Defective Work                       13
(4)   Failure of NAI to Provide Evidence of Costs and Expenses       13
(B)   FOCB Notices, Preemptive Notices and CMA Termination Events          13
(C)   Rights and Obligations of NAI During a CMA Suspension Period         14
(D)   Election by NAI to Terminate                                         14
(E)   BNPLC's Right to Terminate                                           14
(F)   Rights and Obligations Surviving Termination                         14
(G)   Cooperation by NAI Following any Termination                         15

EXHIBITS

Exhibit A Legal Description

Exhibit B Description of the Construction Project 
(With Site Plan Attached)

Exhibit C Form of Contractor Estoppel

Exhibit D Form of Design Professional Estoppel

Exhibit E Notice Requesting Advance to Cover Insurance 
Deductible

Exhibit F Construction Advance Request Form

Exhibit G Notice of Voluntary NAI Funding Commitment

Exhibit H Preemptive Notice by NAI

Exhibit I Notice of Termination by NAI

(2)

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CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE III - IMPROVEMENTS)

This CONSTRUCTION MANAGEMENT AGREEMENT (Phase III - IMPROVEMENTS) (this
"AGREEMENT"), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
made and dated as of June 16, 1999, the Effective Date. ("EFFECTIVE DATE" and
other capitalized terms used and not otherwise defined in this Agreement are
intended to have the meanings assigned to them in the Common Definitions and
Provisions Agreement (Phase III - Improvements) executed by BNPLC and NAI
contemporaneously with this Agreement. By this reference, the Common Definitions
and Provisions Agreement (Phase III - Improvements) is incorporated into and
made a part of this Agreement for all purposes.)

RECITALS

Pursuant to the Lease Agreement (Phase III - Improvements) executed by
BNPLC and NAI contemporaneously the this Agreement (the "IMPROVEMENTS LEASE"),
which covers the Improvements on the Land described in Exhibit A, BNPLC is
leasing the Improvements and any appurtenances thereto to NAI.

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

CONSENT AND AUTHORIZATION

Subject to the terms and conditions set forth in this Agreement and in the
Improvements Lease, BNPLC does hereby grant its consent and authorization to NAI
for the construction by NAI of the Construction Project on the Land and for the
management by NAI of such construction; provided, however, all rights of NAI
against BNPLC hereunder are expressly made subject and subordinate to the
Permitted Encumbrances and to any other claims or encumbrances affecting the
Land or the Property that may be asserted by third parties and that do not
constitute Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

(3)

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1    CONSTRUCTION BY NAI.

(A)  The Construction Project.

(1)  Construction Approvals by BNPLC.

(a) Preconstruction Approvals by BNPLC. NAI submitted and obtained
BNPLC's approval of the site plan and descriptions of the Construction
Project referenced in Exhibit B. Also set forth in Exhibit B is a
general description of the Construction Project. The Construction
Project, as constructed by NAI pursuant to this Agreement, and all
construction contracts and other agreements executed or adopted by NAI
in connection therewith, shall be not materially inconsistent with the
plans or other items referenced in Exhibit B, except to the extent
otherwise provided by any Scope Change (as defined below) approved by
BNPLC and except as otherwise provided in subparagraph 6(d) of the
Improvements Lease if BNPLC should make a Landlord's Election to
Continue Construction after any termination of this Agreement.

(b) Definition of Scope Change. As used herein, "SCOPE CHANGE" means a
change to the Construction Project that, if implemented, will make the
quality, function or capacity of the Improvements "materially
different" (as defined below in this subparagraph) than as described
or inferred by site plan, plans and renderings referenced in Exhibit
B. The term "SCOPE CHANGE" is not intended to include the mere
refinement, correction or detailing of the site plan, plans or
renderings submitted to BNPLC by NAI. As used in this subparagraph, a
"material difference" means a difference that could reasonably be
expected to (a) after completion of the Construction Project and the
funding of all Construction Advances required in connection therewith,
significantly reduce any excess of the market value of the Property
over Stipulated Loss Value or significantly increase any excess of
Stipulated Loss Value over the market value of the Property, (b)
change the general character of the Improvements from that needed to
accommodate the uses permitted by subparagraph 2(a) of the
Improvements Lease, or (c) result in Projected Cost Overruns (as
defined below). 

(c) Approval of Scope Changes. Before making a Scope Change, NAI shall
provide to BNPLC a reasonably detailed written description of the
Scope Change, a revised construction budget for the Construction
Project and a copy of any changes to the drawings, plans and
specifications for the Improvements required in connection therewith,
all of which must be approved in writing by BNPLC (or by any
inspecting architect appointed by BNPLC from time to time) before the
Scope Change is implemented. BNPLC's approval shall not in any event
constitute a waiver of subparagraph 1(A)(3) or of any other provision
of this Agreement or the Improvements Lease.

(2) NAI's Right to Control and Responsibility for Construction. Subject to
the terms and conditions set forth in this Agreement and in the
Improvements Lease, and prior to any termination of this Agreement as
provided in subparagraphs 5(D) and 5(E), NAI shall have the sole right to
control and the sole responsibility for the design and construction of the
Construction Project, including the means, methods, sequences and
procedures implemented to accomplish such design and construction. Although
title to all Improvements will pass directly to BNPLC (as more particularly
provided in Paragraph 7 of the Improvements Lease), BNPLC's obligation with
respect to the Construction Project shall be limited to the making of
advances under and subject to the conditions set forth in this Agreement
and in Paragraph 6 of the Improvements Lease. Without limiting the
foregoing, NAI acknowledges and agrees that:

(a) Performance of the Work. Except as provided in subparagraphs 5(C)
and 5(F) NAI must, using its best skill and judgment and in an
expeditious and economical manner not inconsistent with the interests
of BNPLC, perform or cause to be performed all work required, and will
provide or cause to be provided all supplies and materials 

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required, to design and complete construction of the Construction
Project (collectively "WORK"). The Work will include obtaining all
necessary building permits and other governmental approvals required
in connection with the design and construction of the Construction
Project, including the design and construction of Normal Tenant
Improvements (as defined below), or required in connection with the
use and occupancy thereof (e.g., final certificates of occupancy). The
Work will also include any repairs or restoration required because of
damage to Improvements by fire or other casualty prior to the Base
Rent Commencement Date (a "PRE-COMMENCEMENT CASUALTY"); however, the
cost of any such repairs or restoration will be subject to
reimbursement not only through Construction Advances made on and
subject to the terms and conditions of this Agreement, but also
through the application of Escrowed Proceeds as provided in the
Improvements Lease. NAI will carefully schedule and supervise all
Work, will check all materials and services used in connection with
all Work and will keep full and detailed accounts as may be necessary
to document expenditures made or expenses incurred for the Work.
Subject to delays beyond the reasonable control of NAI, NAI shall
cause all Work to be completed on or before the first Business Day of
October, 2000.

(b) Third Party Contracts.

1) NAI shall not enter into any construction contract or other
agreement with a third party concerning the Work or the
Construction Project (a "THIRD PARTY CONTRACT") in the name of
BNPLC or otherwise purport to bind BNPLC to any obligation to any
third party.

2) In any Third Party Contract between NAI and any of its
Affiliates (an "AFFILIATE'S CONTRACT") NAI shall reserve the
right to terminate the contract at any time, without cause, and
without subjecting NAI to liability for any Termination Fee (as
defined below). Further, NAI shall not enter into any Affiliate's
Contract that obligates NAI to pay more than would be required
under an arms-length contract or that would require NAI to pay
its Affiliate any amount in excess of the sum of actual,
out-of-pocket direct costs and internal labor costs incurred by
the Affiliate to perform such contract.

3) As necessary to limit the total Reimbursable Third Party
Contract Termination Fees (as defined below) for which BNPLC may
be required to provide Construction Advances to no more than
$4,000,000 (the "MAXIMUM PERMITTED TERMINATION FEES"), NAI shall
reserve in every significant Third Party Contract an absolute
express right to terminate such contract at any time, without
cause. Although any Third Party Contract (other than an
Affiliate's Contract) may require NAI to pay a specified
Termination Fee in the event of such a termination, the specified
Termination Fee must not exceed the difference computed by
subtracting (I) the aggregate of all Termination Fees that have
been paid or would become payable by NAI if NAI terminated all
other Third Party Contracts, from (II) the Maximum Permitted
Termination Fees. Without limiting the foregoing, NAI will manage
and administer all Third Party Contracts as necessary to ensure
that, at any point in time, NAI can terminate all such contracts
without becoming liable for Termination Fees in excess of the
Maximum Permitted Termination Fees.

4) As used in this Agreement, "TERMINATION FEE" means any amount,
however denominated, for which NAI will be obligated under a
Third Party Contract as a result of any election or decision by
NAI to terminate such Third Party Contract, including
demobilization costs; provided, however, amounts payable for
Prior Work [as defined below] as of the date any such termination
are not intended to be characterized as Termination Fees for
purposes of this Agreement. If, as described in the preceding
paragraph, NAI reserves an absolute express right in a Third
Party Contract to terminate such contract at any time, without
cause, for a specified dollar amount, such dollar amount will
constitute a Termination Fee. If no such right is reserved
in a Third Party Contract, the Termination Fee applicable 

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to such contract for purposes of this Agreement will be the
amount of damages that NAI could be required to pay (in addition
to payments required for Prior Work) upon an anticipatory
repudiation of the Third Party Contract by NAI.

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

(d) Adequacy of Drawings, Specifications and Budgets. BNPLC has made
and will make no representations as to the adequacy of any budgets,
site plans, renderings, plans, drawings or specifications for the
Construction Project, and no modification of any such budgets, site
plans, renderings, plans, drawings or specifications that may be
required from time to time will entitle NAI to any adjustment in the
Construction Allowance.

(e) Existing Condition of the Land and Improvements. NAI is familiar
with the conditions of the Land and any existing Improvements on the
Land. NAI shall have no claim for damages against BNPLC or for an
increase in the Construction Allowance by reason of any condition
(concealed or otherwise) of or affecting the Land or Improvements.

(f) Correction of Defective Work. NAI will promptly correct all Work
performed prior to any termination of this Agreement that does not
comply with the requirements of this Agreement or that is otherwise
defective (in either case, "DEFECTIVE WORK") at NAI's sole expense. If
NAI fails to correct any Defective Work or fails to carry out Work in
accordance with this Agreement, BNPLC may (but will not be required
to) order NAI to stop all Work until the cause for such failure has
been eliminated.

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

(h) No Damage for Delays. NAI shall have no claim for damages against
BNPLC or for an increase in the Construction Allowance by reason of
any delay in the performance of any Work.

(i) No Fee For Construction Management. NAI shall have no claim for
any fee or other compensation or for any reimbursement of internal
administrative or overhead expenses of NAI under this Agreement, it
being understood that NAI is executing this Agreement in consideration
of the rights expressly granted to it herein and in the Improvements
Lease.

(3) Quality of Work. NAI shall cause the Work undertaken and administered
by it pursuant to this Agreement to be performed (a) in a safe and good and
workmanlike manner, (b) in accordance with Applicable Laws, (c) in
compliance with (i) the provisions of this Agreement and the Improvements
Lease, (ii) the material provisions of the Permitted Encumbrances and (iii)
the material provisions of the Development Documents, and (d) in a manner
that, taken as a whole, enhances the value of the Property commensurate
with any Construction Advances and Carrying Costs added to the Outstanding
Construction Allowance in connection therewith.

(B)  Completion Notice. NAI shall provide a notice (a "COMPLETION NOTICE") to
BNPLC promptly after construction of the Construction Project is substantially
complete, advising BNPLC of the substantial completion.

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2    CONSTRUCTION ADVANCES.

(A)  Costs Subject to Reimbursement Through Construction Advances. Subject to
the terms and conditions set forth herein, NAI shall be entitled to a
Construction Allowance, from which BNPLC will make Construction Advances on
Advance Dates from time to time to pay or reimburse NAI for the following costs
("REIMBURSABLE CONSTRUCTION-PERIOD COSTS") to the extent the following costs are
not already included in Transaction Expenses paid by BNPLC from the Initial
Funding Advance:

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

(2) the cost of title insurance or other out of pocket expenses described
in subparagraph 5(c)(iii) of the Improvements Lease or of the Other Lease
Agreement to the extent paid by NAI prior to the Base Rent Commencement
Date;

(3)  Commitment Fees;

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

o    soft costs, such as architectural fees, engineering
fees and fees and costs paid in connection with
obtaining project permits and approvals required by
governmental authorities or the Development Documents,

o    site preparation costs, and

o    costs of offsite and other public improvements required
as conditions of governmental approvals for the
Construction Project;

(5) the cost of maintaining insurance required by (and consistent with the
requirements of) the Improvements Lease and the Other Lease Agreement prior
to the Base Rent Commencement Date, and costs of repairing any damage to
the Improvements caused by a Pre-commencement Casualty to the extent such
costs are not covered by Escrowed Proceeds made available to NAI as
provided in the Improvements Lease and the Other Lease Agreement prior to
the Base Rent Commencement Date ("REIMBURSABLE RESTORATION COSTS");

(6) Impositions that accrue or become due under the Improvements Lease or
the Other Lease Agreement prior to the Base Rent Commencement Date; and

(7) except as otherwise provided in subparagraph 2(B) below, Termination
Fees payable by NAI in connection with any Third Party Contract between NAI
and a Person not an Affiliate of NAI because of any election by NAI to
cancel or terminate such contract during a CMA Suspension Period (as
defined below).

In addition to other Construction Advances required by this subparagraph 2(A),
but subject to the other terms and conditions hereof, a Construction Advance
will be provided by BNPLC on the Base Rent Commencement Date in the form of
additional Escrowed Proceeds (to be held and applied like other Escrowed
Proceeds pursuant to the Improvements Lease) equal to any reduction in property
insurance proceeds paid or payable with respect to the Property because of a
property insurance deductible permitted by Exhibit B attached to the
Improvements Lease, if:

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(I) damage to the Improvements has been caused by a Pre-commencement
Casualty and, despite the exercise of reasonable diligence by NAI, NAI has
been unable to complete the repair of such damage sufficiently in advance
of the Base Rent Commencement Date to allow the reimbursement to NAI
hereunder of all Reimbursable Restoration Costs attributable to such
property insurance deductible; and

(II) at least five Business Days before the Base Rent Commencement
Date, NAI has requested such additional Construction Advance by a notice in
the form attached hereto as Exhibit E.

(B)  Exclusions From Reimbursable Construction-Period Costs. Notwithstanding
anything herein to the contrary, BNPLC shall not be required to make any
Construction Advance to pay or to reimburse or compensate NAI for any of the
following or any Absolute NAI Construction Obligations required because of or in
connection with or arising out of any of the following: 

(1) Environmental Losses;

(2) Losses that would not have been incurred but for any act or omission of
NAI or of any NAI's contractors or subcontractors, which act or omission is
contrary in any material respect to the other terms and conditions of this
Agreement or to the terms and conditions of the other Operative Documents,
during the period that this Agreement remains in force or during any other
period that NAI remains in possession or control of the Construction
Project pursuant to the Improvements Lease or otherwise;

(3) Losses that would not have been incurred but for any fraud,
misapplication of Construction Advances or other funds, illegal acts, or
willful misconduct on the part of the NAI or its employees or agents or any
other party for whom NAI is responsible;

(4) Losses that would not have been incurred but for any bankruptcy
proceeding involving NAI; and

(5) costs of Normal Tenant Improvements (as defined below), except to the
extent that BNPLC agrees to allow the reimbursement of such costs from the
Construction Allowance as provided in subparagraph 3(B).

For purposes of this subparagraph, "acts and omissions" described in clause (2)
preceding shall include (i) any decision by NAI to make any Scope Change without
the prior approval of BNPLC, (ii) any failure of NAI to maintain insurance
required by the Improvements Lease, the Other Lease Agreement or this Agreement,
(iii) any decision of NAI not to continue or complete Work because of a change
in NAI's facility needs or in NAI's plans to meet its facility needs (such as,
for example, a decision by NAI to lease or acquire another less expensive
facility as an alternative to the Improvements), (iv) any failure by NAI to
reserve termination rights in Third Party Contracts as required by subparagraph
1(A)(2)(b), and (v) any other material breach by NAI of this Agreement.

(C) Conditions to NAI's Right to Receive Construction Advances. BNPLC's
obligation to provide Construction Advances to NAI from time to time under this
Agreement shall be subject to the following terms and conditions, all of which
terms and conditions are intended for the sole benefit of BNPLC, and none of
which terms and conditions shall limit in any way the right of BNPLC to treat
costs or expenditures incurred or paid by or on behalf of it as Construction
Advances pursuant to subparagraph 6(d) of the Improvements Lease: 

(1) Construction Advance Requests. NAI must make a written request (a
"CONSTRUCTION ADVANCE REQUEST") for any Construction Advance, specifying
the amount of such advance, at least five Business Days prior to the
Advance Date upon which the advance is to be paid. To be effective for
purposes of this Agreement, a Construction Advance Request

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must be in substantially the form attached as Exhibit F. NAI shall not
submit more than one Construction Advance Request in any calendar month.

(2) Amount of the Advances.

(a) Limit Dependent Upon the Maximum Construction Allowance. NAI
shall not be entitled to require any Construction Advance that would
cause the Funded Construction Allowance to exceed the Maximum
Construction Allowance.

(b) Limit Dependent Upon Costs Previously Incurred by NAI. NAI shall
not be entitled to require any Construction Advance - other than a
final additional Construction Advance required on the Base Rent
Commencement Date because of a permitted property insurance deductible
related to a Pre-commencement Casualty as described in subparagraph
2(A) above - that would cause the aggregate of all Construction
Advances to exceed the sum of:

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

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

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

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(c) Limit During CMA Suspension Period. Without limiting the other
terms and conditions imposed by this Agreement for the benefit of
BNPLC with respect all Construction Advances, BNPLC shall have no
obligation to make any Construction Advance during any CMA Suspension
Period (as defined below) that would cause the aggregate of all
Construction Advances to exceed the sum of:

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

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

For purposes of computing the limits described in this subparagraph
2(C)(2)(C), Reimbursable Construction-Period Costs "other than for
Work" shall include Termination Fees that qualify as Reimbursable
Construction-Period Costs pursuant to subparagraph 2(A)(7)
("REIMBURSABLE THIRD PARTY CONTRACT TERMINATION FEES"). NAI
acknowledges, however, that Termination Fees will not exceed the
Maximum Permitted Termination Fees, so long as NAI complies with the
requirements of subparagraph 1(A)(2)(b). That is, but for an "act or
omission of NAI" as such phrase is used in subparagraph 2(B)(2), the
aggregate of all Termination Fees shall not exceed the Maximum
Permitted Termination Fees. Accordingly, if the aggregate of any
Termination Fees do exceed the Maximum Permitted Termination Fees, the
excess shall not qualify as Reimbursable Third Party Contract
Termination Fees.

(d) Restrictions Imposed for Administrative Convenience. NAI shall
not request any Construction Advance (other than the final
Construction Advance NAI intends to request) for an amount less than
$500,000.

(3) No Advances After Certain Dates. BNPLC shall have no obligation to make
any Construction Advance (x) after the Base Rent Commencement Date, (y) on
or after the Designated Sale Date, or (z) on or after the date of any
termination of this Agreement pursuant to subparagraph 5(D) or subparagraph
5(E).

(D)  Breakage Costs for Construction Advances Requested But Not Taken. If NAI
requests but thereafter declines to accept any Construction Advance, or if NAI
requests a Construction Advance that it is not permitted to take because of its
failure to satisfy any of the conditions specified in subparagraph 2(c), NAI
shall pay upon demand any resulting Breakage Costs. 

(E)  No Third Party Beneficiaries. No contractor or other third party shall be
entitled to require BNPLC to make advances as a third party beneficiary of this
Agreement or of the Improvements Lease or otherwise.

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

(G)  Funding by Participants. NAI acknowledges that, as provided in the
Participation Agreement, each Participant has agreed to pay to BNPLC a
Percentage (under and as defined in the Participation Agreement) of the
Construction Advances required by this Agreement. NAI also acknowledges that
BNPLC will not be responsible to NAI for any failure of any Participant to
provide advances required by the Participation Agreement. So long as any
Participant fails to provide its Percentage of any requested Construction
Advance, then the amount of the Construction Advance for which BNPLC shall be
obligated hereunder shall be reduced by the amount that the Participant should
have provided, but failed to provide, in accordance with the Participation
Agreement. No such reduction, however, of BNPLC's obligation hereunder shall
release or impair the obligation of the Participant directly to NAI, created by
NAI's status as a third party beneficiary of the Participant's commitment under
the Participation Agreement to provide the Participant's Percentage of
Construction Advances. Further, any such failure shall excuse BNPLC's obligation
to provide the requested Construction Advance only to the extent of the funds
that the applicable Participant or Participants should have advanced (but did
not advance) to BNPLC, and in the event of any such failure:

(1) BNPLC will immediately notify NAI, but BNPLC will not in any event be
liable to NAI for BNPLC's failure to do so.

(2) BNPLC will to the extent possible postpone reductions of Construction
Advances because of the failure by any one or more Participants
("DEFAULTING PARTICIPANTS") to make required advances under the
Participation Agreement (a "PARTICIPANT DEFAULT") by adjusting (and
readjusting from time to time, as required) the funding "Percentages" of
other Participants, and by requesting the other Participants to make
advances to BNPLC on the basis of such adjusted Percentages, in each case
as provided in the Participation Agreement; however, so long as a
Participant Default continues, no Construction Advance shall be required
that would cause the Outstanding Construction Allowance to exceed (1) the
Maximum Construction Allowance available under this Agreement, less (2) all
amounts that should have been, but because of a continuing Participant
Default have not been, advanced by any one or more of the Participants to
BNPLC under the Participation Agreement with respect to Construction
Advances.

(3) Further, after a Participant Default, and so long as no CMA Termination
Event (as defined below) has occurred and no Event of Default has occurred
and is continuing, BNPLC shall do the following as reasonably requested by
NAI, provided that nothing in this provision shall require BNPLC to take
any action that would violate Applicable Laws, that would constitute a
breach of BNPLC's obligations under the Participation Agreement, or that
would require BNPLC to waive any rights or remedies it has under this
Agreement or other Operative Documents:

(a) BNPLC shall promptly make a written demand upon the Defaulting
Participants for the cure of the Participant Default, and

(b) BNPLC shall not unreasonably withhold its approval for the substitution
of any new participant proposed by NAI for Defaulting Participants, if (A)
the proposed substitution does not require BNPLC to waive rights against
the Defaulting Participants, (B) the new participant will agree (by
executing supplement to the Participation Agreement as provided in the
Participation Agreement) to provide funds to replace the payments that
would otherwise be required of the Defaulting Participants with respect to
future Construction Advances, (C) the new participant (or NAI) provides the
funds (if any) needed to terminate the Defaulting Participants' rights to
receive payments of "Net Cash Flow" (as defined in the Participation
Agreement) that BNPLC will be required to pay the new participant under the
terms of the substitution reasonably proposed by NAI, (D) the new
participant (or NAI) provides and agrees in writing to provide funds needed
to reimburse BNPLC for any and all Losses incurred by BNPLC in connection
with or because of the substitution of the new participant for the
Defaulting Participants, including any cost of defending and paying any
claim asserted by Defaulting Participants because of the 

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substitution (but not including any liability of BNPLC to the Defaulting
Participants for damages caused by BNPLC's bad faith or gross negligence in
the performance of BNPLC's obligations to the Defaulting Participants), (E)
the obligations of BNPLC to the new participant per dollar of the new
participant's "investment" (it being understood that such investment will
be computed in a manner consistent with the examples set forth in Exhibit A
to the Participation Agreement, but net of reimbursements to BNPLC under
clause (D) preceding) shall not exceed the obligations per dollar of
investment by the Defaulting Participants that BNPLC would have had to the
Defaulting Participants if there had been no Participant Default, and (F)
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).

3    NORMAL TENANT IMPROVEMENTS. 

(A)  Definition of Normal Tenant Improvements. As used herein, "NORMAL TENANT
IMPROVEMENTS" shall mean any "below-ceiling" interior finishes and special
fixtures or equipment to be constructed for NAI within the Improvements as part
of the Construction Project, BUT WILL NOT INCLUDE (1) costs of structural
elements of the Construction Project, or (2) equipment that would be necessary
for the use of the Improvements by any lessee (e.g., HVAC equipment, elevators,
standard electrical wiring).

(B) Advances for Normal Tenant Improvements. Nothing herein shall be construed
as a commitment or an agreement by BNPLC to pay for Normal Tenant Improvements,
other than Normal Tenant Improvements contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto. BNPLC
does, however, acknowledge that incorporated into the total Construction
Allowance is an amount for contingencies (e.g., cost overruns related to
structural components of Improvements, HVAC equipment, elevators, etc.), for
which BNPLC shall be obligated to provide Construction Advances on and subject
to the terms and conditions set forth in Paragraph 2. To the extent, if any,
that NAI does not exhaust the Construction Allowance by using Construction
Advances for other costs (e.g., the actual costs incurred for structural
components of Improvements, HVAC equipment, elevators, etc.), BNPLC will allow
NAI to reimburse itself through Construction Advances funded on and subject to
the terms and conditions of Paragraph 2 for the costs of any Normal Tenant
Improvements in addition to those contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto.
Otherwise, any such additional Normal Tenant Improvements will be paid for by
NAI.

(C) Tenant's Obligation to Construct Normal Tenant Improvements. NAI shall
construct all Normal Tenant Improvements in a good and workmanlike manner and in
accordance with the same standards and requirements imposed by this Agreement
for other Work.

4 COST OVERRUNS. 

(A) Definition of Projected Cost Overruns. As used in this Agreement, "PROJECTED
COST OVERRUNS" shall mean the excess (if any), calculated as of the date of each
Construction Advance Request, of (1) the total of projected Reimbursable
Construction-Period Costs yet to be incurred or for which NAI has yet to be
reimbursed hereunder (including projected Reimbursable Construction-Period Costs
for Future Work), over (2) the sum of a) any Voluntary Construction Contribution
NAI has committed to pay as provided in subparagraph 4(c), but has yet to pay,
plus b) the balance of the remaining Construction Allowance then projected to be
available to cover such costs. The balance of the remaining Construction
Allowance then projected to be available will equal (i) the amount (if any) by
which the Maximum Construction Allowance exceeds the Funded Construction
Allowance, less (ii) the sum of (a) projected future Carrying Costs, plus (b)
any funds that should have been but were not advanced to BNPLC by any Defaulting
Participants under (and as defined in) the Participation Agreement.

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(B) Notice of Projected Cost Overruns. If for any reason (including any damage
to the Property by fire or other casualty or any taking of any part of the
Property by condemnation) NAI believes (after taking into account any Voluntary
NAI Construction Contributions NAI has made or committed to make as provided in
subparagraph 4(C)) that Projected Cost Overruns are more likely than not at the
time NAI submits any Construction Advance Request, NAI shall state such belief
in the Construction Advance Request and, if NAI can reasonably do so, NAI will
estimate the approximate amount of such Projected Cost Overruns.

(C) Election to Make a Voluntary NAI Construction Contribution. As used in this
Agreement, "VOLUNTARY NAI CONSTRUCTION CONTRIBUTION" shall mean a voluntary,
nonrefundable payment made to BNPLC by NAI prior to the Base Rent Commencement
Date and delivered with or pursuant to a notice in the form of Exhibit G,
confirming that a Voluntary NAI Construction Contribution is being paid or will
be paid pursuant to this subparagraph. To prevent the occurrence of or to cure
any CMA Suspension Event described in subparagraph 5(A)(1), NAI shall be
entitled (but not obligated) to make or commit to make a Voluntary NAI
Construction Contribution in addition to (and, except as provided in the
definition of Issue 97-10 Prepayment in the Common Definitions and Provisions
Agreement (Phase III - Improvements), without reducing or excusing) any other
amounts then due from NAI to BNPLC pursuant to the Operative Documents. Like
other Qualified Prepayments, any Voluntary NAI Construction Contribution will
reduce the Outstanding Construction Allowance as described in the definition
thereof in the Common Definitions and Provisions Agreement (Phase III -
Improvements). In contrast, however, to other Qualified Prepayments, Voluntary
NAI Construction Contributions will be subtracted for purposes of calculating
the Funded Construction Allowance and, thus, will effectively increase the
subsequent Construction Advances available under the limit established by
subparagraph 2(C)(2)(a).

5 SUSPENSION AND TERMINATION. 

(A) CMA Suspension Events. Each of the following events shall be a "CMA
SUSPENSION EVENT" under this Agreement:

(1) Projection of Cost Overruns. Either (a) BNPLC shall receive any
Construction Advance Request stating that NAI believes Projected Cost
Overruns are more likely than not, as provided in subparagraph 4(B), or (b)
(i) BNPLC shall otherwise determine in good faith that significant
Projected Cost Overruns are likely (taking into account any failure of a
Defaulting Participant to provide funds to BNPLC as required by the
Participation Agreement and any prior Voluntary NAI Construction
Contributions NAI has made or committed to make as provided in subparagraph
4(C)), (ii) BNPLC shall notify NAI of such determination and the basis
therefor, and (iii) NAI shall fail to give any notice pursuant to
subparagraph 4(C) that, by committing NAI to make or increase Voluntary NAI
Construction Contributions, effectively eliminates the likelihood of the
Projected Cost Overruns on or before five Business Days after BNPLC's
notice to NAI of such determination.

(2) Interruption of Construction. The Construction Project shall, for any
reason after Work commences (including any damage to the Property by fire
or other casualty or any taking of any part of the Property by
condemnation), no longer be substantially progressing (and shall not have
progressed in any substantial way during the preceding forty-five days), in
a good and workmanlike manner and substantially in accordance with
Applicable Laws, with Permitted Encumbrances, with Development Documents
and with the requirements of this Agreement.

(3) Failure of NAI to Correct Defective Work. NAI shall fail to diligently
pursue the correction of any Defective Work of which NAI has received
notice.

(4) Failure of NAI to Provide Evidence of Costs and Expenses. BNPLC shall
have requested, and NAI shall have failed to provide within ten Business
Days after receipt of the request, with respect to any Construction
Advance: (1) invoices, requests for payment from contractors and other
evidence reasonably establishing that the costs and expenses for which NAI
has requested or is requesting reimbursement constitute actual Reimbursable
Construction-Period Costs, and (2) 

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canceled checks, lien waivers and other evidence reasonably establishing
that all prior Construction Advances have been used by NAI to pay, and only
to pay, the Reimbursable Construction-Period Costs for which the prior
advances were requested and made.

(B) FOCB Notices, Preemptive Notices and CMA Termination Events.

(1) As used herein, "FOCB NOTICE" means a notice from BNPLC to NAI that
BNPLC is considering a termination of this Agreement pursuant to
subparagraph below, provided that the notice is given prior to BNPLC's
receipt from NAI of a Completion Notice and is given when:

(a)  any Event of Default has occurred and is continuing; or

(b) any CMA Suspension Event shall have occurred, NAI shall have
received notice of such CMA Suspension Event (a "CMA SUSPENSION
NOTICE") and the CMA Suspension Event shall have continued for thirty
days after NAI's receipt of such notice; or

(c) NAI shall have failed to maintain the following insurance, or to
provide insurance certificates to BNPLC as required by the
Improvements Lease with respect to the following insurance, and such
failure shall have continued for a period of five Business Days after
any notice to NAI thereof:

1) property insurance as required by the Improvements Lease,
including builder's completed value risk insurance as BNPLC may
require to protect BNPLC's and NAI's interests in the
Improvements under construction against risks of physical loss,
such insurance to be maintained by NAI at all times until
completion of the Construction Project; and

2) commercial general liability insurance as required by the
Improvements Lease.

(2) As used herein, "PREEMPTIVE NOTICE" means a notice from NAI to BNPLC in
the form attached hereto as Exhibit , given after BNPLC has given any FOCB
Notice, but before NAI has made any Issue 97-10 Election, that is
sufficient and effective under clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase III -
Improvements) to accelerate the Designated Sale Date to a date that is less
than ninety days after the date of BNPLC's FOCB Notice.

(3) For purposes of this Agreement and the other Operative Documents, "CMA
TERMINATION EVENT" shall mean:

(a) BNPLC's receipt of a Notice of NAI's Intent to Terminate (as
defined below); or

(b) A failure of NAI for any reason whatsoever to deliver a duly
executed, effective Preemptive Notice within thirty days after NAI's
receipt of an FOCB Notice.

(C) Rights and Obligations of NAI During a CMA Suspension Period. As used
herein, "CMA SUSPENSION PERIOD" shall mean any period (1) beginning with the
date of any CMA Suspension Notice, FOCB Notice or Notice of NAI's Intent to
Terminate, and (2) ending on the earlier of (a) the first date upon which (i) no
CMA Suspension Events shall be continuing, and (ii) no CMA Termination Events
shall have occurred, or (b) the effective date of any termination of this
Agreement as described in subparagraph 5(D) or 5(E) subparagraph. During any CMA
Suspension Period, NAI shall have the right to suspend the

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Work; provided, however, the obligations of NAI which are to survive any
termination of this Agreement shall also continue and survive during any such
suspension of the Work.

(D) Election by NAI to Terminate. NAI may elect to terminate this Agreement at
any time prior to the Base Rent Commencement Date when NAI has determined that
(1) the Construction Advances to be provided to it hereunder will not be
sufficient to cover all Reimbursable Construction-Period Costs, whether because
the cost of the Work exceeds budgeted expectations (resulting in Projected Cost
Overruns), because of damage to the Property by fire or other casualty (other
than damage that would not have occurred, or been uninsured or under-insured,
but for an act or omission of NAI), because of a taking of any part of the
Property by condemnation, or because NAI can no longer satisfy conditions to
BNPLC's obligation to provide Construction Advances herein, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of this Agreement. To
be effective, however, any such election to terminate this Agreement must be
made by giving BNPLC and the Participants a notice thereof prior to the Base
Rent Commencement Date in the form of Exhibit I (a "NOTICE OF NAI'S INTENT TO
Terminate"), stating that NAI intends to terminate this Agreement pursuant to
this subparagraph on a date specified therein, which date is not less than
thirty days after the date of such notice. Unless terminated sooner pursuant to
subparagraph 5(E), this Agreement will automatically terminate on the effective
date so specified in any Notice of NAI's Intent to Terminate.

(E) BNPLC's Right to Terminate. BNPLC shall be entitled to terminate this
Agreement at any time (x) more than ninety days after BNPLC has given an FOCB
Notice as described in subparagraph (regardless of whether at the time of such
termination by BNPLC an Event of Default or other event or circumstance
described in subparagraph is continuing), provided that BNPLC shall not have
received an effective Preemptive Notice within thirty days after its delivery of
the FOCB Notice to NAI, (y) after the Designated Sale Date, or (z) after BNPLC's
receipt of a Notice of NAI's Intent to Terminate.

(F) Rights and Obligations Surviving Termination. Following any termination of
this Agreement as provided in subparagraph 5(D) or in 5(E), NAI shall have no
obligation to continue or complete any Work; provided, however, no termination
of this Agreement shall reduce or excuse the following rights and obligations of
the parties, it being intended that all such rights and obligations shall
survive and continue after any such termination: 

(1) the rights and obligations of NAI and BNPLC under the other Operative
Documents, including Absolute NAI Construction Obligations imposed upon NAI
by the Improvements Lease; and

(2) NAI's obligations described in the next subparagraph 5(G).

(G) Cooperation by NAI Following any Termination. After any termination of this
Agreement as provided in subparagraph 5(D) or subparagraph 5(E), NAI shall
comply with the following terms and conditions, all of which shall survive any
such termination:

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

(2) Promptly after any request from BNPLC made with respect to any Third
Party Contract, NAI shall deliver a letter confirming: (i) that NAI has not
performed any act or executed any other instrument which invalidates or
modifies such contract in whole or in part (or, if so, the nature of such
modification); (ii) the extent to which such contract is valid and

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subsisting and in full force and effect; (iii) that there are no defaults
or events of default then existing under such contract and, to NAI's
knowledge, no event has occurred which with the passage of time or the
giving of notice, or both, would constitute such a default or event of
default (or, if there is a default, the nature of such default in detail);
(iv) that the services and construction contemplated by such contract is
proceeding in a satisfactory manner in all material respects (or if not, a
detailed description of all significant problems with the progress of the
services or construction); (v) in reasonable detail the then critical dates
projected by NAI for work and deliveries required by such contract; (vi)
the total amount received by the other party to such contract for work or
services provided by the other party through the date of the letter; (vii)
the estimated total cost of completing the services and work contemplated
under such contract as of the date of the letter, together with any current
draw or payment schedule for the contract; and (viii) any other information
BNPLC may reasonably request to allow it to decide what steps it should
take concerning the contract within BNPLC's rights under this Agreement and
the other Operative Documents.

(3) NAI will make every reasonable effort, as and to the extent requested
by BNPLC, to secure the cancellation of any then existing Third Party
Contract upon terms satisfactory to BNPLC. NAI shall bear any cancellation
fees or other Losses resulting from any cancellation of a Third Party
Contract after the effective date of a termination of this Agreement.

(4) NAI will make every reasonable effort, as and to the extent requested
by BNPLC, to secure any required consents or approvals for an assignment of
any then existing Third Party Contract to BNPLC or its designee, upon terms
satisfactory to BNPLC. To the extent assignable, any Third Party Contract
will be assigned by NAI to BNPLC upon request.

(5) If NAI has canceled any Third Party Contract before and in anticipation
of a termination of this Agreement, NAI shall make every reasonable effort,
as and to the extent requested by BNPLC, to secure a reinstatement of such
Third Party Contract in favor of BNPLC and upon terms satisfactory to
BNPLC.

(6) For a period not to exceed ten days after the termination, NAI shall
take such steps as are reasonably necessary to preserve and protect Work
completed and in progress and to protect materials, equipment, and supplies
at the Property or in transit.

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be executed
as of June 16, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By: 
----------------------------------
Name: 
--------------------------------
Title:  
--------------------------

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[Continuation of signature pages to Construction Management Agreement (Phase III
- Improvements) dated to be effective June 16, 1999]

"BNPLC"

BNP LEASING CORPORATION

By: 
----------------------------------
Henry Setina, Vice President

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Exhibit A

LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14(degrees) 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38(degrees)
52' 02" East 134.85 feet; thence North 51(degrees) 07' 58" West 49.68; thence
North 38(degrees) 52' 02" East 87.23 feet to the Northerly line of last said
Parcel A; thence along said Northerly line North 75(degrees) 07' 58" West 44.97
feet to the point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14(degrees) 51' 33" West 186.10 feet to a point on the Northeasterly line of
that parcel of land described in the deed to Santa Clara Valley Transit
District, recorded October 24, 1997 as Instrument No. 13912192, Official Records
in said Office of the Recorder of the County of Santa Clara, said point being on
a non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45(degrees) 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04(degrees) 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38(degrees) 52'
02" East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.

PARCEL TWO:

Exhibit - Page 1

21
2

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North
45(degrees) 01' 56" East, through a central angle of 4(degrees) 20' 28" for an
arc length of 75.92 feet to the true point of beginning; thence North
38(degrees) 52' 02" East 82.92 feet; thence Southeasterly along a non-tangent
curve to the left with a radius of 78.00 feet, from which a radial line bears
South 38(degrees) 52' 02" West, through a central angle of 28(degrees) 09' 05"
for an arc length of 38.32 feet; thence North 38(degrees) 52' 02" East 177.73
feet; thence Northwesterly along a curve to the left with a radius of 17.00 feet
through a central angle of 90(degrees) 00' 00" for an arc length of 26.70 feet;
thence North 51(degrees) 07' 58" West 19.80 feet; thence the following three
courses: North 38(degrees) 52' 02" East 12.69 feet North 51(degrees) 07' 58"
West 49.68 feet; North 38(degrees) 52' 02" East 87.23 feet to the Northeasterly
line of said Parcel A, as shown upon that certain Parcel Map filed for record in
Book 216 at Page 2; thence South 75(degrees) 07' 58" East 13.45 feet along said
Northeasterly line; thence South 38(degrees) 52' 02" West 74.94 feet; thence
Southerly along a non-tangent curve to the left with a radius of 14.00 feet,
from which a radial line bears North 88(degrees) 46' 22" West, through a central
angle of 52(degrees) 21' 36" for an arc length of 12.79 feet; thence South
51(degrees) 07' 58" East 85.87 feet; thence South 38(degrees) 52' 02" West
252.96 feet; North 51(degrees) 07' 58" West 41.72 feet; thence Southwesterly
along a non-tangent curve to the left with a radius of 20.00 feet, from which a
radial line bears North 10(degrees) 35' 40" West, through a central angle of
40(degrees) 32' 18" for an arc length of 14.15 feet; thence South 38(degrees)
52' 02" West 29.48 feet; thence Southerly along a tangent curve to the left with
a radius of 20.00 feet, through a central angle of 60(degrees) 45' 15" for an
arc length 21.21 feet to a point on said Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District; 

Exhibit - Page 2

22
3

thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North
42(degrees) 01' 23" East, through a central angle of 1(degree) 19' 55" for an
arc length of 23.29 feet to the True Point of Beginning.

APN: 110-32-010
ARB: 110-03-x066

Exhibit - Page 3

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Exhibit B

DESCRIPTION OF THE CONSTRUCTION PROJECT

Subject to future Scope Changes, the Construction Project will be
substantially consistent with the following general description and with the
Site Plan attached to this Exhibit.

In addition to the site plan, attached to and made a part of this Exhibit
are excerpts from an appraisal prepared for BNPLC, which describe the
Construction Project.

Exhibit - Page 1

24
1

Exhibit C

ESTOPPEL FROM CONTRACTOR

_________, 199__

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Assignment of Construction Contract

Ladies and Gentlemen:

The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:

1 The undersigned has entered into that certain [Construction Contract] (the
"CONSTRUCTION CONTRACT") by and between the undersigned and Network Appliance,
Inc. ("NAI") dated , ____ for the construction of the improvements to be
constructed as part of NAI's Sunnyvale campus leased by NAI (the "IMPROVEMENTS")
on the land described in the Improvements Lease Documents described below (the
"LAND" and, together with the Improvements and any other improvements now on or
constructed in the future on the Land, the "PROJECT").

2 The undersigned has been advised that, by a Lease Agreement (Phase II -
Improvements) and a Construction Management Agreement (Phase II - Improvements),
both dated as of June 16, 1999 (collectively, the "IMPROVEMENTS LEASE
DOCUMENTS"), BNPLC is leasing the Project to NAI and has agreed, subject to the
terms and conditions of the Improvements Lease Documents, to provide a
construction allowance for the design and construction of the Improvements. The
undersigned has also been advised that the Improvements Lease Documents
expressly provide that third parties (including the undersigned) are not
intended as beneficiaries of the Improvements Lease Documents and, thus, will
have no standing to enforce any obligations of NAI or BNPLC under the
Improvements Lease Documents, including any such obligation that BNPLC may have
to provide the construction allowance. The undersigned understands that the
Improvements Lease Documents expressly provide that NAI is not authorized to
enter into any construction contract or other agreement with any third party in
the name of BNPLC or to otherwise bind BNPLC to any contract with a third party.

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

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

Exhibit - Page 1

25
BNP Leasing Corporation
______________, 199__

Page 2

The undersigned acknowledges and agrees that:

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

b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Construction Contract, cure any defaults by NAI thereunder
and enforce the Construction Contract and all rights of NAI thereunder. Within
ten days of receiving notice from BNPLC that NAI's right to possession has been
terminated, the undersigned shall send to BNPLC a written estoppel letter
stating: (i) that the undersigned has not performed any act or executed any
other instrument which invalidates or modifies the Construction Contract in
whole or in part (or, if so, the nature of such modification); (ii) that the
Construction Contract is valid and subsisting and in full force and effect;
(iii) that there are no defaults or events of default then existing under the
Construction Contract and no event has occurred which with the passage of time
or the giving of notice, or both, would constitute such a default or event of
default (or, if there is a default, the nature of such default in detail); (iv)
that the construction contemplated by the Construction Contract is proceeding in
a satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of construction); (v)
a reasonably detailed report of the then critical dates projected by the
undersigned for work and deliveries required to complete the Project; (vi) the
total amount received by the undersigned for construction through the date of
the letter; (vii) the estimated total cost of completing the undersigned's work
as of the date of the letter, together with a current draw schedule; and (viii)
any other information BNPLC may request to allow it to decide whether to assume
the Construction Contract. BNPLC shall have seven days from receipt of such
written certificate containing all such requested information to decide whether
to assume the Construction Contract. If BNPLC fails to assume the Construction
Contract within such time, the undersigned agrees that BNPLC shall not be liable
(and the undersigned shall not assert or bring any action against BNPLC, except
to enforce statutory lien rights, if any, of the undersigned against the Land or
improvements on the Land) for any damages or other amounts resulting from the
breach or termination of the Construction Contract or under any other theory of
liability of any kind or nature, but rather the undersigned shall look solely to
NAI (and statutory lien rights, if any, of the undersigned against the Land and
any improvements thereon) for the recovery of any such damages or other amounts.

c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Construction Contract pursuant to the preceding paragraph following the
termination of NAI's right to possession of the Project under the Improvements
Lease Documents, the undersigned shall immediately discontinue the work under
the Construction Contract and remove its personnel from the Project, and BNPLC
shall be entitled to take exclusive possession of the Project. The undersigned
shall also, upon request by BNPLC, deliver and assign to BNPLC all plans and
specifications and other contract documents previously delivered to the
undersigned (except that the undersigned may keep an original set of the
Construction Contract and other contract documents executed by NAI), all other
material relating to the work which belongs to BNPLC or NAI, and all 

Exhibit - Page 2

26
BNP Leasing Corporation
______________, 199__

Page 3

papers and documents relating to governmental permits, orders placed, bills and
invoices, lien releases and financial management under the Construction
Contract. Notwithstanding the undersigned's receipt of any notice from BNPLC
that BNPLC declines to assume the Construction Contract, the undersigned shall
for a period not to exceed fifteen days after receipt of such notice take such
steps, at BNPLC's expense, as are reasonably necessary to preserve and protect
work completed and in progress and to protect materials, equipment and supplies
at the site or in transit.

d) If the Construction Contract is terminated by NAI before BNPLC is given
the opportunity to elect whether or not to assume the Construction Contract as
provided herein, BNPLC shall nonetheless have the right hereunder to assume the
Construction Contract, as if it had not been terminated, upon any termination of
NAI's right to possession of the Project under the Improvements Lease Documents;
provided, however, that if the work of the undersigned under the Construction
Contract has been disrupted because of NAI's termination of the Construction
Contract, the undersigned shall be entitled to an equitable adjustment to the
price of the Construction Contract, following any assumption thereof by BNPLC,
for the additional costs incurred by the undersigned attributable to the
disruption; and, provided further, that if BNPLC does assume the Construction
Contract, BNPLC shall receive a credit against the price of the Construction
Contract for any consideration paid to the undersigned by NAI because of NAI's
prior termination of the Construction Contract (whether such consideration is
designated a termination fee, settlement payment or otherwise).

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

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

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

To the undersigned:
----------------------------
-----------------------------
-----------------------------
Telecopy: (___) ___-_____

Exhibit - Page 3

27
BNP Leasing Corporation
______________, 199__

Page 4

To BNPLC:                      BNP Leasing Corporation
--------
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

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

Network Appliance, Inc.
Attn: Corporate Secretary
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (___) ___-____

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

Very truly yours,

-------------------------------------

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

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

Network Appliance, Inc.

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

Exhibit - Page 4

28
1

BNP Leasing Corporation
_______________, 199___
Page 1

Exhibit D

ESTOPPEL FROM DESIGN PROFESSIONALS

_________, 199__

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

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

Ladies and Gentlemen:

The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:

1 The undersigned has entered into that certain [Architect's
Agreement/Engineering Contract] (the "AGREEMENT") by and between the undersigned
and Network Appliance, Inc. ("NAI") dated , ____ for the [design/engineering] of
the improvements to be constructed as part of NAI's Sunnyvale campus leased by
NAI (the "IMPROVEMENTS") on the land described in the Improvements Lease
Documents described below (the "LAND" and, together with the Improvements and
any other improvements now on or constructed in the future on the Land, the
"PROJECT").

2 The undersigned has been advised that, by a Lease Agreement (Phase III -
Improvements) and a Construction Management Agreement (Phase III -
Improvements), both dated as of June 16, 1999 (collectively, the "IMPROVEMENTS
LEASE DOCUMENTS"), BNPLC is leasing the Project to NAI and has agreed, subject
to the terms and conditions of the Improvements Lease Documents, to provide a
construction allowance for the design and construction of the Improvements. The
undersigned has also been advised that the Improvements Lease Documents
expressly provide that third parties (including the undersigned) are not
intended as beneficiaries of the Improvements Lease Documents and, thus, will
have no standing to enforce any obligations of NAI or BNPLC under the
Improvements Lease Documents, including any such obligation that BNPLC may have
to provide the construction allowance. The undersigned understands that the
Improvements Lease Documents expressly provide that NAI is not authorized to
enter into any Agreement or other agreement with any third party in the name of
BNPLC or to otherwise bind BNPLC to any contract with a third party.

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

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

Exhibit - Page 2

29
BNP Leasing Corporation
_______________, 199___
Page 2

The undersigned acknowledges and agrees that:

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

b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Agreement, cure any defaults by NAI thereunder and enforce
the Agreement and all rights of NAI thereunder. Within ten days of receiving
notice from BNPLC that NAI's right to possession has been terminated, the
undersigned shall send to BNPLC a written estoppel letter stating: (i) that the
undersigned has not performed any act or executed any other instrument which
invalidates or modifies the Agreement in whole or in part (or, if so, the nature
of such modification); (ii) that the Agreement is valid and subsisting and in
full force and effect; (iii) that there are no defaults or events of default
then existing under the Agreement and no event has occurred which with the
passage of time or the giving of notice, or both, would constitute such a
default or event of default (or, if there is a default, the nature of such
default in detail); (iv) that the services contemplated by the Agreement are
proceeding in a satisfactory manner in all material respects (or if not, a
detailed description of all significant problems with the progress of services);
(v) a reasonably detailed report of the then critical dates projected by the
undersigned for services required to complete the Project; (vi) the total amount
received by the undersigned for services through the date of the letter; (vii)
the estimated total cost of completing such services as of the date of the
letter, together with a current payment schedule; and (viii) any other
information BNPLC may request to allow it to decide whether to assume the
Agreement. BNPLC shall have seven days from receipt of such written certificate
containing all such requested information to decide whether to assume the
Agreement. If BNPLC fails to assume the Agreement within such time, the
undersigned agrees that BNPLC shall not be liable (and the undersigned shall not
assert or bring any action against BNPLC or, except to enforce statutory lien
rights, if any, of the undersigned against the Land or improvements on the Land)
for any damages or other amounts resulting from the breach or termination of the
Agreement or under any other theory of liability of any kind or nature, but
rather the undersigned shall look solely to NAI (and statutory lien rights, if
any, of the undersigned against the Land and any improvements thereon) for the
recovery of any such damages or other amounts.

c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Agreement pursuant to the preceding paragraph following the termination of NAI's
right to possession of the Project under the Improvements Lease Documents, the
undersigned shall immediately deliver and assign to BNPLC the following: (1)
copies of all plans and specifications for the Project or any component thereof
previously generated by or delivered to the undersigned, (2) any other contract
documents previously delivered to the undersigned (except that the undersigned
may keep an original set of the Agreement and other contract documents executed
by NAI), (3) any other material relating to the services provided under the
Agreement, and (4) to the extent available to the undersigned all papers and
documents relating to governmental permits, orders placed, bills and invoices,
lien releases and financial management under the Agreement. Notwithstanding the
undersigned's receipt of any notice from BNPLC that BNPLC declines to assume the
Agreement, the undersigned shall for a period not to exceed thirty 

Exhibit - Page 2

30
BNP Leasing Corporation
_______________, 199___
Page 3

days after receipt of such notice take such steps, at BNPLC's expense, as are
reasonably necessary to preserve the utility and value of services completed and
in progress and to protect plans and specifications and other materials
described in the preceding sentence.

d) If the Agreement is terminated by NAI before BNPLC is given the
opportunity to elect whether or not to assume the Agreement as provided herein,
BNPLC shall nonetheless have the right hereunder to assume the Agreement, as if
it had not been terminated, upon any termination of NAI's right to possession of
the Project under the Improvements Lease Documents; provided, however, that if
the services of the undersigned under the Agreement has been disrupted because
of NAI's termination of the Agreement, the undersigned shall be entitled to an
equitable adjustment to the price of the Agreement, following any assumption
thereof by BNPLC, for the additional costs incurred by the undersigned
attributable to the disruption; and, provided further, that if BNPLC does assume
the Agreement, BNPLC shall receive a credit against the price of the Agreement
for any consideration paid to the undersigned by NAI because of NAI's prior
termination of the Agreement (whether such consideration is designated a
termination fee, settlement payment or otherwise).

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

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

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

To the undersigned: 

By:
----------------------------------

-----------------------------

----------------------------

Telecopy: (___) ___-_____

Exhibit - Page 3

31
BNP Leasing Corporation
_______________, 199___
Page 4

To BNPLC:                      BNP Leasing Corporation
--------
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

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

Network Appliance, Inc.
Attn: Corporate Secretary
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (___) ___-____

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

Very truly yours,

-------------------------------------

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

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

Network Appliance, Inc.

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

Exhibit - Page 4

32
1

Exhibit E

NOTICE REQUESTING ADVANCE TO COVER PROPERTY INSURANCE DEDUCTIBLE

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter shall constitute a request
made pursuant to subparagraph 2(A) of the Construction Management Agreement for
a final additional Construction Advance in the form of an addition to Escrowed
Proceeds equal to:

$____________________,

on the Base Rent Commencement Date, which will occur on:

_____________, 199 .

To induce BNPLC to make such Construction Advance, NAI represents and
warrants as follows: (x) the dollar amount specified above equals the property
insurance deductible permitted under the insurance requirements set forth in the
Lease, (y) a Pre-commencement Casualty has resulted in damage to the
Improvements, for which the cost of repairs will - because of such deductible -
exceed the Escrowed Proceeds paid or payable in connection with such damage
under the property insurance maintained by NAI in accordance with the insurance
requirements in the Improvements Lease, and (z) NAI has not and will not
otherwise receive a Construction Advance to reimburse such excess costs prior to
the expiration of BNPLC's obligation to make further Construction Advances as
provided in subparagraph 2(C)(3) of the Construction Management Agreement.

NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:
-----------------------------
Title:
----------------------------
[cc all Participants]

Exhibit - Page 1

33
2
Exhibit F

CONSTRUCTION ADVANCE REQUEST FORM

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized  terms used in this letter are  intended  to have the  meanings
assigned  to them in the  Construction  Management  Agreement  or in the  Common
Definitions and Provisions  Agreement  (Phase III - Improvements)  referenced in
the  Construction   Management   Agreement.   This  letter  shall  constitute  a
Construction Advance Request, requesting a Construction Advance of:

$____________________,

on the Advance Date that will occur on:

________________, 199_.

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

I.   CALCULATION OF LIMIT IMPOSED BY SUBPARAGRAPH 2(C)(2)(b)OF THE CONSTRUCTION
MANAGEMENT AGREEMENT:

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

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

(3) NAI has received prior Construction Advances of no more than
$________________

LIMIT (1 + 2  - 3)    $________________

Exhibit - Page 1

34
2

II.  PROJECTED COST OVERRUNS:

NAI [CHECK ONE: _ DOES / _ DOES NOT] believe that Projected Construction
Overruns are more likely than not. [If NAI does believe that Projected Cost
Overruns are more likely than not, and if NAI believes that the amount of such
Projected Construction Overruns can be reasonably estimated, NAI estimates the
same at $___________.]

NOTE: The Construction Management Agreement defines Projected Construction
Overruns as the excess, if any, of (1) the total of projected Reimbursable
Construction-Period Costs yet to be incurred or for which NAI has yet to be
reimbursed hereunder (including projected Reimbursable Construction-Period Costs
for Future Work), over (2) the balance of the remaining Construction Allowance
projected to be available to cover such costs.

III. ABSENCE OF CERTAIN CMA SUSPENSION EVENTS:

A. The Construction Project is progressing without significant interruption
in a good and workmanlike manner and substantially in accordance with Applicable
Laws, with Permitted Encumbrances, with Development Documents and with the
requirements of the Construction Management Agreement, except as follows: (IF
THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")

-----------
-----------
-----------
-----------

B. If NAI has received notice of any Defective Work, NAI has promptly
corrected or is diligently pursuing the correction of such Defective Work,
except as follows: (IF THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")

-----------
-----------
-----------
-----------

NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:   
----------------------------
Title:  
---------------------------
[cc all Participants]

Exhibit - Page 2

35
1

Exhibit G

NOTICE OF VOLUNTARY NAI CONSTRUCTION CONTRIBUTION

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter shall constitute notice,
given as described in subparagraph 4(c) of the Construction Management
Agreement, that NAI is paying with this letter, or unconditionally and
irrevocably committing to pay as described below, a Voluntary NAI Construction
Contribution in the amount of $_____________________.

Such payment by NAI will be in addition to any Voluntary NAI Construction
Contributions required by other notices given by NAI as described in
subparagraph 4(c) of the Construction Management Agreement.

Further, if the Voluntary NAI Construction Contribution required by this
letter is not being delivered to BNPLC by NAI contemporaneously with this
letter, then at such time as BNPLC's obligation to fund additional Construction
Advances is excused by any of the terms and conditions set forth in the
Construction Management Agreement, NAI shall be obligated to deliver such
Voluntary NAI Construction Contribution as required to eliminate (or reduce to
the maximum extent possible) Projected Cost Overruns, including any Projected
Cost Overruns caused by the accrual of Carrying Costs under and as described in
the Improvements Lease referenced in the Construction Management Agreement.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:   
----------------------------
Title:  
---------------------------
[cc all Participants]

Exhibit - Page 1

36
1

Exhibit H

PREEMPTIVE NOTICE BY NAI

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter is intended to constitute a
Preemptive Notice, given as described in subparagraph 5(B) of the Construction
Management Agreement. As provided in clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase III -
Improvements), this letter shall constitute notice, given in accordance with
clause (2) of the definition of Common Definitions and Provisions Agreement
(Phase III - Improvements), that NAI designates the following date as the
Designated Sale Date:

----------------, ----.

NAI acknowledges, however, that this notice will not be effective as a
Preemptive Notice if (1) such date is sooner than thirty days after the date of
this notice or later than ninety days after the date of any FOCB Notice
previously given by BNPLC under the Construction Management Agreement, or (2)
NAI has previously made any Issue 97-10 Election.

NAI hereby unconditionally, unequivocally and irrevocably: (1) waives any
right to make any Issue 97-10 Election under any of the Operative Documents, and
(2) acknowledges and agrees that for purposes of calculating the Supplemental
Payment required by the Purchase Agreement, the Maximum Remarketing Obligation
will equal the Break Even Price under the Purchase Agreement.

Executed this _____ day of ______________, 19___.

Network Appliance, Inc.

Name:   
-----------------------
Title:  
----------------------
[cc all Participants]

Exhibit - Page 1

37
1

Exhibit I

NOTICE OF TERMINATION BY NAI

BNP Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement referenced above or in
the Common Definitions and Provisions Agreement (Phase III - Improvements)
referenced in the Construction Management Agreement.

NAI has determined that (1) the Construction Advances to be provided to it
under the Construction Management Agreement will not be sufficient to cover all
Construction-Period Reimbursable Costs, whether because the cost of the Work
exceeds budgeted expectations (resulting in Projected Cost Overruns) or because
NAI can no longer satisfy conditions to BNPLC's obligation to provide
Construction Advances in the Construction Management Agreement, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of the Construction
Management Agreement. Accordingly, this letter shall constitute a Notice of
NAI's Election to Terminate the Construction Management Agreement, given as
provided in subparagraph 5(D) of the Construction Management Agreement.

NAI irrevocably and unconditionally elects to terminate the Construction
Management Agreement effective as of the following date (which, as required by
subparagraph 5(D) thereof is a date not less than thirty days after the date
this notice is given):

_________, 199__

NAI ACKNOWLEDGES THAT THE ELECTION MADE BY NAI DESCRIBED ABOVE CONSTITUTES
AN ISSUE 97-10 ELECTION UNDER AND AS DEFINED IN THE OPERATIVE DOCUMENTS.

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:   
--------------------------------
Title:
-------------------------------

[cc all Participants]

Exhibit - Page 1

1
Exhibit 10.35

================================================================================

LEASE AGREEMENT
(PHASE III - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

JUNE 16, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page

1.   TERM                                                                           2
(a)  Scheduled Term                                                            2
(b)  Automatic Termination as of the Base Rent Commencement Date Resulting
From an Election by NAI to Terminate the Purchase Option and NAI's
Initial Remarketing Rights and Obligations                                2
(c)  Election by BNPLC to Terminate After an Issue 97-10 Election              2
(d)  Election by NAI to Terminate After Accelerating the Designated Sale
Date                                                                      3
(e)  Extension of the Term                                                     3

2.   USE AND CONDITION OF THE PROPERTY                                              4
(a)   Use                                                                      4
(b)   Condition of the Property                                                4
(c)   Consideration for and Scope of Waiver                                    4

3.   RENT                                                                           5
(a)   Base Rent Generally                                                      5
(b)   Impact of Collateral Upon Formulas                                       5
(c)   Calculation of and Due Dates for Base Rent                               5
(i)    Amount Payable On the Base Rent Commencement Date                 5
(ii)   Determination of Payment Due Dates, After the Base Rent 
Commencement Date, Generally                                      5
(iii)  Special Adjustments to Base Rent Payment Dates and Periods        6
(iv)   Base Rent Formula for Periods  During Which The Collateral
Percentage is 100%                                                6
(v)    Base Rent Formula for Periods During Which The Collateral
Percentage is Greater Than Zero and Less Than

100%                7
(vi)   Base Rent Formula for Periods During Which The Collateral
Percentage is Zero                                                8

(d)  Additional Rent                                                           8
(e)  Arrangement Fee                                                           8
(f)  Commitment Fees                                                           8
(g)  Administrative Agency Fees                                                9
(h)  Underwriting Fee                                                          9
(i)  Issue 97-10 Prepayments                                                   9
(j)  No Demand or Setoff                                                       9
(k)  Default Interest and Order of Application                                 9

4.   NATURE OF THIS AGREEMENT                                                      10
(a)  "Net" Lease Generally                                                    10
(b)  No Termination                                                           10
(c)  Tax Reporting                                                            11
(d)  Characterization of this Improvements Lease                              11

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Page

5.   PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY                 12
(a)  Impositions                                                              12
(b)  Increased Costs; Capital Adequacy Charges                                12
(c)  NAI's Payment of Other Losses; General Indemnification                   13
(d)  Exceptions and Qualifications to Indemnities                             14

6.   CONSTRUCTION                                                                  16
(a)  Construction Advances; Outstanding Construction Allowance                16
(b)  Calculation of Carrying Costs                                            17
(c)  Limits on the Amount of Carrying Costs                                   17
(d)  NAI's Right to Control the Construction Project                          17
(e)  Landlord's Election to Continue Construction                             18
(i)    Take Control of the Property                                      18
(ii)   Continuation of Construction                                      18
(iii)  Arrange for Turnkey Construction                                  19
(iv)   Suspension or Termination of Construction                         19
(f)  Powers Coupled With an Interest                                          20
(g)  Completion Notice                                                        20

7.   STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC                      20

8.   ENVIRONMENTAL                                                                 20
(a)  Environmental Covenants by NAI                                           20
(b)  Right of BNPLC to do Remedial Work Not Performed by NAI                  21
(c)  Environmental Inspections and Reviews                                    21
(d)  Communications Regarding Environmental Matters                           21

9.   INSURANCE REQUIRED AND CONDEMNATION                                           22
(a)  Liability Insurance                                                      22
(b)  Property Insurance                                                       22
(c)  Failure to Obtain Insurance                                              23
(d)  Condemnation                                                             23
(e)  Waiver of Subrogation                                                    23

10.  APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS                            24
(a)  Collection and Application of Insurance and Condemnation 
Proceeds Generally                                                       24
(b)  Advances of Escrowed Proceeds to NAI                                     24
(c)  Application of Escrowed Proceeds as a Qualified Prepayment               24
(d)  Special Provisions Applicable After a CMA Termination Event or 
Event of Default                                                         25
(e)  NAI's Obligation to Restore                                              25
(f)  Takings of All or Substantially All of the Property  on or
after the Base Rent Commencement Date                                    25

11.  ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI 
CONCERNING THE PROPERTY                                                       26
(a)  Compliance with Covenants and Laws                                       26
(b)  Operation of the Property                                                26
(c)  Debts for Construction, Maintenance, Operation or Development            27

2

4

Page

(d)  Repair, Maintenance, Alterations and Additions                           27
(e)  Permitted Encumbrances and Development Documents                         28
(f)  Books and Records Concerning the Property                                28

12.  FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE
TO SCHEDULE 1                                                                 28

13.  FINANCIAL STATEMENTS AND OTHER REPORTS                                        28
(a)  Financial Statements; Required Notices; Certificates                     28

14.  ASSIGNMENT AND SUBLETTING BY NAI                                              30
(a)  BNPLC's Consent Required                                                 30
(b)  Standard for BNPLC's Consent to Assignments and Certain Other Matters    30
(c)  Consent Not a Waiver                                                     30

15.  ASSIGNMENT BY BNPLC                                                           31
(a)  Restrictions on Transfers                                                31
(b)  Effect of Permitted Transfer or other Assignment by BNPLC                31

16.  BNPLC'S RIGHT OF ACCESS                                                       31

17.  EVENTS OF DEFAULT                                                             32

18.  REMEDIES                                                                      33
(a)  Basic Remedies                                                           33
(b)  Notice Required So Long As the Purchase Option and NAI's 
Initial Remarketing Rights and Obligations Continue Under the 
Purchase Agreement                                                       35
(c)  Enforceability                                                           35
(d)  Remedies Cumulative                                                      35

19.  DEFAULT BY BNPLC                                                              36

20.  QUIET ENJOYMENT                                                               36

21.  SURRENDER UPON TERMINATION                                                    36

22.  HOLDING OVER BY NAI                                                           37

23.  INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS            37

EXHIBITS AND SCHEDULES

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Exhibit A Legal Description

Exhibit B Insurance Requirements

Exhibit C LIBOR Period Election Form

Schedule 1        Financial Covenants and Other Requirements

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6

LEASE AGREEMENT
(PHASE III - IMPROVEMENTS)

This LEASE AGREEMENT (PHASE III- IMPROVEMENTS) (this "IMPROVEMENTS LEASE"),
by and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is made and dated as
of June 16, 1999, the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Improvements Lease are intended to
have the meanings assigned to them in the Common Definitions and Provisions
Agreement (Phase III - Improvements) executed by BNPLC and NAI contemporaneously
with this Improvements Lease. By this reference, the Common Definitions and
Provisions Agreement (Phase III - Improvements) is incorporated into and made a
part of this Improvements Lease for all purposes.)

RECITALS

Pursuant to the Existing Contracts, which cover the Land described in
Exhibit A, NAI is leasing the Land and any appurtenances thereto from Seller.

In anticipation of BNPLC's lease of Improvements to be constructed on the
Land and subsequent acquisition of the Land and lease thereof to NAI pursuant to
the Agreement to Lease, BNPLC and NAI have reached agreement as to the terms and
conditions upon which BNPLC is willing to lease the Improvements to be
constructed on the Land as hereinafter provided, and by this Improvements Lease
BNPLC and NAI desire to evidence such agreement.

GRANTING CLAUSES

BNPLC does hereby LEASE, DEMISE and LET unto NAI for the term hereinafter
set forth all right, title and interest of BNPLC, now owned or hereafter
acquired, in and to:

1.   any and all Improvements; and

2.   all easements and other rights appurtenant to the Improvements,
whether now owned or hereafter acquired by BNPLC.

BNPLC's interest in all property described in clauses (1) and (2) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include the Land itself, it being understood that when executed
pursuant to the Agreement to Lease, the Other Lease Agreement will constitute a
separate lease of the Land and the appurtenances thereto, and only the Land and
the appurtenances thereto, from BNPLC to NAI.

To the extent, but only to the extent, that assignable rights or interests
in, to or under the following have been or will be acquired by BNPLC under the
Existing Contracts or acquired by BNPLC pursuant to Paragraph 7 below, BNPLC
also hereby grants and assigns to NAI for the term of this Improvements Lease
the right to use and enjoy (and, in the case of contract rights, to enforce)
such rights or interests of BNPLC:

(a) any goods, equipment, furnishings, furniture and other tangible
personal property of whatever nature that are located on the Land and all
renewals or replacements of or substitutions for any of the foregoing;

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7

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

(c) any permits, licenses, franchises, certificates, and other rights
and privileges against third parties related to the Real Property.

Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."

However, the leasehold estate conveyed hereby and NAI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Improvements Lease, to the Permitted Encumbrances, and to any other claims or
encumbrances not constituting Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

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

1.   TERM.

A.   Scheduled Term. The term of this Improvements Lease (the "TERM") shall
commence on and include the Effective Date, and end on the first Business
Day of July, 2004, unless sooner terminated as expressly herein provided.

B.   Automatic Termination as of the Base Rent Commencement Date Resulting From
an Election by NAI to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations. If NAI terminates the Purchase Option and
NAI's Initial Remarketing Rights and Obligations prior to the Base Rent
Commencement Date pursuant to subparagraph 4(B) of the Purchase Agreement, then
this Improvements Lease shall terminate automatically on the Base Rent
Commencement Date. Just as any such termination of the Purchase Option and NAI's
Initial Remarketing Rights and Obligations shall be subject to the condition
(set forth in subparagraph 4(B) of the Purchase Agreement) that NAI pay an Issue
97-10 Prepayment to BNPLC, so too will the termination of this Improvements
Lease pursuant to this subparagraph be subject the condition that NAI make the
Issue 97-10 Prepayment to BNPLC.

C.   Election by BNPLC to Terminate After an Issue 97-10 Election. By notice to
NAI BNPLC shall be entitled to terminate this Improvements Lease, as BNPLC deems
appropriate in its sole and absolute discretion, at any time after receiving a
notice given by NAI to make any Issue 97-10 Election. Upon any termination of
this Improvements Lease by BNPLC pursuant to this subparagraph, NAI shall become
obligated to pay to BNPLC an Issue 97-10 Prepayment, which obligation will
survive the termination of this Improvements Lease.

D.   Election by NAI to Terminate After Accelerating the Designated Sale Date.
Provided NAI has not made any Issue 97-10 Election, NAI shall be entitled to
accelerate the Designated Sale Date (and thus accelerate the purchase of BNPLC's
interest in the Property by NAI or by an Applicable Purchaser pursuant to the
Purchase Agreement) by sending a notice to BNPLC as provided in clause (2) of
the definition of" Designated Sale Date" in the Common Definitions and
Provisions Agreement (Phase III - Improvements). In the event, because of NAI's
election to so accelerate the Designated Sale Date or for any other reason, the
Designated Sale Date occurs before the end of the scheduled Term, NAI may
terminate this Improvements Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI must have
done the following prior to the termination: 

2

8

(i)   purchased or caused an Applicable Purchaser to purchase the Property
pursuant to the Purchase Agreement and satisfied all of NAI's other
obligations under the Purchase Agreement;

(ii)  paid to BNPLC all Base Rent, all Commitment Fees and all other Rent
due on or before or accrued through the Designated Sale Date; and

(iii) paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to the Purchase Agreement.

E.   Extension of the Term. The Term may be extended at the option of NAI for
two successive periods of five years each; provided, however, that prior to any
such extension the following conditions must have been satisfied: (A) at least
ninety days prior to the commencement of any such extension, BNPLC and NAI must
have agreed in writing upon, and received the consent and approval of BNPLC's
Parent and all other Participants to (1) a corresponding extension not only to
the date for the expiration of the Term specified above in this Section, but
also to the date specified in clause (1) of the definition of Designated Sale
Date in the Common Definitions and Provisions Agreement (Phase III -
Improvements), and (2) an adjustment to the Rent that NAI will be required to
pay for the extension, it being expected that the Rent for the extension may be
different than the Rent required for the original Term, and it being understood
that the Rent for any extension must in all events be satisfactory to both BNPLC
and NAI, each in its sole and absolute discretion; (B) no Event of Default shall
have occurred and be continuing at the time of NAI's exercise of its option to
extend; (C) prior to any such extension, NAI must have completed the
Construction Project in accordance with the Construction Management Agreement
and must not have made any Issue 97-10 Election; and (D) immediately prior to
any such extension, this Improvements Lease must remain in effect. With respect
to the condition that BNPLC and NAI must have agreed upon the Rent required for
any extension of the Term, neither NAI nor BNPLC is willing to submit itself to
a risk of liability or loss of rights hereunder for being judged unreasonable.
Accordingly, both NAI and BNPLC hereby disclaim any obligation express or
implied to be reasonable in negotiating the Rent for any such extension. Subject
to the changes to the Rent payable during any extension of the Term as provided
in this Paragraph, if NAI exercises its option to extend the Term as provided in
this Paragraph, this Improvements Lease shall continue in full force and effect,
and the leasehold estate hereby granted to NAI shall continue without
interruption and without any loss of priority over other interests in or claims
against the Property that may be created or arise after the date hereof and
before the extension.

2.   USE AND CONDITION OF THE PROPERTY.

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

(i)   construction and development of the Construction Project;

(ii)  administrative and office space;

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

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

(v)   other lawful purposes (including NAI's research and development or
production of products that are not of substantially the same type and
character as those regularly sold by NAI in the ordinary course of its
business as of the Effective Date) approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after 

3

9

completion of the Construction Project (but NAI acknowledges that BNPLC's
withholding of such approval shall be reasonable if BNPLC determines in
good faith that (1) giving the approval may materially increase BNPLC's
risk of liability for any existing or future environmental problem, or (2)
giving the approval is likely to substantially increase BNPLC's
administrative burden of complying with or monitoring NAI's compliance with
the requirements of this Improvements Lease or other Operative Documents).

B.   Condition of the Property.

NAI ACKNOWLEDGES THAT IT HAS CAREFULLY AND FULLY INSPECTED THE PROPERTY AND
ACCEPTS THE PROPERTY IN ITS PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO
THE USE WHICH MAY BE MADE THEREOF. NAI ALSO ACCEPTS THE PROPERTY WITHOUT ANY
COVENANT, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS
AFFILIATES REGARDING THE TITLE THERETO OR THE RIGHTS OF ANY PARTIES IN
POSSESSION OF ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 20.
BNPLC SHALL NOT BE RESPONSIBLE FOR ANY LATENT OR OTHER DEFECT OR CHANGE OF
CONDITION IN THE LAND OR IN IMPROVEMENTS, FIXTURES AND PERSONAL PROPERTY FORMING
A PART OF THE PROPERTY OR FOR ANY VIOLATIONS WITH RESPECT THERETO OF APPLICABLE
LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES ANY FACILITIES OR
SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT AND LEASE OF
PERSONAL PROPERTY SET FORTH ON PAGE 2 OF THIS IMPROVEMENTS LEASE, BNPLC SHALL
NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY KIND,
INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER.

C.   Consideration for and Scope of Waiver. The provisions of subparagraph
above have been negotiated by BNPLC and NAI after due consideration for the Rent
payable hereunder and are intended to be a complete exclusion and negation of
any representations or warranties of BNPLC or its Affiliates, express or
implied, with respect to the Property that may arise pursuant to any law now or
hereafter in effect or otherwise, except as expressly set forth herein.

However, such exclusion of representations and warranties by BNPLC is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to NAI during the Term because of the definition of
Personal Property and Property above.

3.   RENT.

A.   Base Rent Generally. On the Base Rent Commencement Date and on each Base
Rent Date through the end of the Term, NAI shall pay BNPLC rent ("BASE RENT").
Each payment of Base Rent must be received by BNPLC no later than 10:00 a.m.
(Pacific time) on the date it becomes due; if received after 10:00 a.m. (Pacific
time) it will be considered for purposes of this Improvements Lease as received
on the next following Business Day. At least five days prior to any Base Rent
Commencement Date or Base Rent Date upon which an installment of Base Rent shall
become due, BNPLC shall notify NAI in writing of the amount of each installment,
calculated as provided below. Any failure by BNPLC to so notify NAI, however,
shall not constitute a waiver of BNPLC's right to payment, but absent such
notice NAI shall not be in default hereunder for any underpayment resulting
therefrom if NAI, in good faith, reasonably estimates the payment required,
makes a timely payment of the amount so estimated and corrects any underpayment
within three Business Days after being notified by BNPLC of the underpayment.

B. Impact of Collateral Upon Formulas. To ease the administrative burden of this
Improvements Lease and the Pledge Agreement, the formulas for calculating Base
Rent set out below in subparagraph 3.(c) reflect a reduction in the Base Rent
equal to the interest that would accrue on any Collateral provided in accordance
with the requirements of the Pledge Agreement from time to time if the Accounts
(as defined in the Pledge Agreement) bore interest at the Effective Rate. BNPLC
has agreed to such reduction to provide NAI with the economic equivalent of
interest on such Collateral, and in return NAI has agreed to the provisions of
the Pledge Agreement that excuse the actual payment of interest on the Accounts.
By incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in the 

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Pledge Agreement, the parties will avoid an unnecessary and cumbersome periodic
exchange of equal payments. It is not, however, the intent of BNPLC or NAI to
understate Base Rent or interest for financial reporting purposes. Accordingly,
for purposes of any financial reports that this Improvements Lease requires of
NAI from time to time, NAI may report Base Rent as if there had been no such
reduction and as if the Collateral from time to time provided in accordance with
the requirements of the Pledge Agreement had been maintained in Accounts bearing
interest at the Effective Rate.

C.   Calculation of and Due Dates for Base Rent. Payments of Base Rent shall be
calculated and become due as follows:

(i)   Amount Payable On the Base Rent Commencement Date. The Base Rent
payable on the Base Rent Commencement Date shall equal the difference (if
any) between (a) the total amount that would have been added to the
Outstanding Construction Allowance as Carrying Costs on such date if not
for the limit set forth in subparagraph 6.(c), and (b) the Carrying Costs
actually added on such date to the Outstanding Construction Allowance.

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

(iii)  Special Adjustments to Base Rent Payment Dates and Periods.
Notwithstanding the foregoing:

a)   Any Base Rent Period that begins before, and does not otherwise
end before, a Failed Collateral Test Date shall end upon but not
include such Failed Collateral Test Date, and such Failed Collateral
Test Date shall constitute a Base Rent Date, upon which NAI must pay
all accrued, unpaid Base Rent for the Base Rent Period just ended.

b)   Consistent with clause (3) of the definition of LIBOR Period
Election in the Common Definitions and Provisions Agreement (Phase III
- Improvements), each successive Base Rent Date after any such Failed
Collateral Test Date shall be the first Business Day of the first
calendar month following the calendar month which includes the
preceding Base Rent Date, so long as any Mandatory Collateral Period
shall continue.

c)   In addition to Base Rent due on a Failed Collateral Test Date,
NAI must pay the Breakage Costs, if any, resulting from any early
ending of a Base Rent Period on the Failed Collateral Test Date
pursuant to the preceding clause 3.(c)(iii)a).

d)   If NAI or any Applicable Purchaser purchases BNPLC's interest in
the Property pursuant to the Purchase Agreement, any accrued unpaid
Base Rent and all outstanding Additional Rent shall be due on the date
of purchase in addition to the purchase price and other sums due BNPLC
under the Purchase Agreement.

(iv)   Base Rent Formula for Periods During Which The Collateral Percentage
is 100%. Each installment of Base Rent payable for any Base Rent Period
during which the Collateral Percentage is one hundred percent (100%) shall
equal:

o    Stipulated Loss Value on the first day of such Base Rent Period,
times

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o    the Secured Spread for the period from and including the
preceding Base Rent Date to but not including the Base Rent Date
upon which the installment is due, times

o    the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by

o    three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent
(100%); that prior to the first day of such Base Rent Period the
Construction Allowance has been fully funded, but Qualified Prepayments
have been received by BNPLC, leaving a Stipulated Loss Value of
$20,000,000; that the Secured Spread is thirty basis points (30/100 of 1%);
and that such Base Rent Period contains exactly thirty days. Under such
assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:

$20,000,000 x .30% x 30/360 = $5,000

(v)  Base Rent Formula for Periods During Which The Collateral Percentage
is Greater Than Zero and Less Than 100% . Each installment of Base Rent
payable for any Base Rent Period during which the Collateral Percentage is
greater than zero and less than one hundred percent (100%) shall equal:

o    Stipulated Loss Value on the first day of such Base Rent Period,
times

o    the sum of:

(A)  the product of:

(1)  the Collateral Percentage for such Base Rent Period,
times

(2)  the Secured Spread for the period from and including
the preceding Base Rent Date to but not including the
Base Rent Date upon which the installment is due, plus

(B)  the product of:

(1)  one minus the Collateral Percentage for such Base Rent
Period, times

(2)  the sum of (a) the Effective Rate with respect to such
Base Rent Period, plus (b) the Unsecured Spread for the
period from and including the preceding Base Rent Date
to but not including the Base Rent Date upon which the
installment is due, times

o    the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by

o    three hundred sixty.

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Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is forty percent (40%); that
prior to the first day of such Base Rent Period the Construction Allowance
has been fully funded, but Qualified Prepayments have been received by
BNPLC, leaving a Stipulated Loss Value of $20,000,000; that the Effective
Rate for the Base Rent Period is 6%; that the Secured Spread is thirty
basis points (30/100 of 1%); that upon the commencement of such Base Rent
Period the Unsecured Spread is one hundred fifty basis points (150/100 of
1%); and that such Base Rent Period contains exactly thirty days. Under
such assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:

$20,000,000 x {(40% x .30%) + ([1 - 40%] x [6% + 1.50%])} x 30/360 = $77,000

(vi)  Base Rent Formula for Periods During Which The Collateral Percentage
is Zero . Each installment of Base Rent payable for any Base Rent Period
during which the Collateral Percentage is zero shall equal:

o    Stipulated Loss Value on the first day of such Base Rent Period,
times

o    the sum of (a) the Effective Rate with respect to such Base Rent
Period, plus (b) the Unsecured Spread for the period from and
including the preceding Base Rent Date to but not including the
Base Rent Date upon which the installment is due, times

o    the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by

o    three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is zero percent (0%); that
prior to the first day of such Base Rent Period the Construction Allowance
has been fully funded, but a total Qualified Prepayments have been received
by BNPLC, leaving a Stipulated Loss Value of $20,000,000; that the
Effective Rate for the Base Rent Period is 6%; that the Unsecured Spread is
one hundred fifty basis points (150/100 of 1%) upon the commencement of
such Base Rent Period; and that such Base Rent Period contains exactly
thirty days. Under such assumptions, the Base Rent for the hypothetical
Base Rent Period will equal:

$20,000,000 x (6% + 1.50%) x 30/360 = $125,000

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

E.   Arrangement Fee . Upon execution and delivery of this Improvements Lease by
BNPLC, an Arrangement Fee (the "ARRANGEMENT FEE") will be paid to BNPLC from the
Initial Funding Advance (and thus be included in Stipulated Loss Value) in the
amount provided in the letter dated as of June 2, 1999 from BNPLC to NAI.

F.   Commitment Fees . For each Construction Period NAI shall pay BNPLC a fee (a
"COMMITMENT FEE") from Construction Advances made pursuant to the Construction
Management Agreement equal to: 

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

(i)  the Maximum Construction Allowance, less

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

o    the number of days in such Construction Period; divided by

o    three hundred sixty.

NAI shall pay Commitment Fees in arrears on the first Business Day of May,
August, November and February of each calendar year, beginning with the first
Business Day of August, 1999 and continuing regularly throughout the Term so
long as Commitment Fees have accrued and remain unpaid. However, if any
Commitment Fees shall have accrued and remain unpaid on the Designated Sale
Date, such accrued unpaid Commitment Fees shall be due on the Designated Sale
Date.

G.   Administrative Agency Fees . Upon execution and delivery of this
Improvements Lease by BNPLC, an administrative agency fee (an "ADMINISTRATIVE
AGENCY FEE") will be paid to BNPLC from the Initial Funding Advance (and thus be
included in Stipulated Loss Value) in the amount provided in the letter dated as
of June 2, 1999 from BNPLC to NAI. Also, on each anniversary of the date hereof,
NAI shall pay to BNPLC an administrative agency fee (also, an "ADMINISTRATIVE
AGENCY FEE") in the amount set forth in the letter agreement dated as of June 2,
1999 from BNPLC to NAI. 

H.   Underwriting Fee . Upon execution and delivery of this Improvements Lease
by BNPLC, an Underwriting Fee (the "UNDERWRITING FEE") will be paid to BNPLC
from the Initial Funding Advance (and thus be included in Stipulated Loss Value)
in the amount provided in the letter dated as of June 2, 1999 from BNPLC to NAI.

I.   Issue 97-10 Prepayments . Following any Issue 97-10 Election or any CMA
Termination Event under (and as defined in) the Construction Management
Agreement, NAI shall make an Issue 97-10 Prepayment to BNPLC within three
Business Days after receipt of any demand for such a payment. BNPLC may demand
an Issue 97-10 Prepayment pursuant to this subparagraph at any time and from
time to time (as Project Costs increase) after any Issue 97-10 Election or CMA
Termination Event.

J.   No Demand or Setoff . Except as expressly provided herein, NAI shall pay
all Rent without notice or demand and without counterclaim, deduction, setoff or
defense.

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

4.   NATURE OF THIS AGREEMENT.

(a).   "Net" Lease Generally . Subject only to the exceptions listed in
subparagraph below, it is the intention of BNPLC and NAI that Base Rent, the
Arrangement Fees, the Upfront Syndication Fees, the Underwriting Fee,
Administrative Agency Fees, Commitment Fees and other payments herein specified
shall be absolutely net to BNPLC and that NAI shall pay all costs, expenses and
obligations of every kind relating to the Property or this Improvements Lease
which may arise or become due, including: (i) any taxes payable by virtue of
BNPLC's receipt of amounts paid to or on behalf of BNPLC in accordance with
Paragraph 5; (ii) any amount for which BNPLC is or becomes liable with respect
to the Permitted Encumbrances or the Development Documents; and (iii) any costs
incurred by BNPLC (including Attorneys' Fees) because of BNPLC's acquisition or
ownership of any interest in the Property or because of this Improvements Lease
or the transactions contemplated herein.

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However, neither this subparagraph 4.(a) nor the indemnity in this
subparagraph 5(c)(i) shall be construed to make NAI liable for (I) an allocation
of general overhead or internal administrative expenses of BNPLC or any other
Interested Party or (II) any duplicate payment of the same Loss to both BNPLC
and another Interested Party. (If, for example, BNPLC were required to make a
$10 fine because of a failure of the Property to comply with Applicable Laws,
and a Participant were required by the Participation Agreement to reimburse
BNPLC for 20% of the $10, NAI would not be required by this subparagraph 4(a) or
by subparagraph 5.(c)(i) to pay both $10 to BNPLC and $2 to the Participant on
account of the fine.)

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

However, nothing in this subparagraph 4.(b) shall be construed as a waiver
by NAI of any right NAI may have at law or in equity to the following remedies,
whether because of BNPLC's failure to remove a Lien Removable by BNPLC or
because of any other default by BNPLC under this Improvements Lease that
continues beyond the period for cure provided in Paragraph 19: (i) the recovery
of monetary damages, (ii) injunctive relief in case of the violation, or
attempted or threatened violation, by BNPLC of any of the express covenants,
agreements, conditions or provisions of this Improvements Lease which are
binding upon BNPLC (including the confidentiality provisions set forth in
subparagraph 16.(c) below), or (iii) a decree compelling performance by BNPLC of
any of the express covenants, agreements, conditions or provisions of this
Improvements Lease which are binding upon BNPLC.

(c).   Tax Reporting . BNPLC and NAI shall report this Improvements Lease and
the Purchase Agreement for federal income tax purposes as a conditional sale
unless prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Improvements
Lease and the Purchase Agreement as a conditional sale for federal income tax
reporting purposes, BNPLC shall notify NAI in writing of such challenge and
consider in good faith any reasonable suggestions by NAI about an appropriate
response. In any event, NAI shall (subject only to the limitations set forth in
this subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the 

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recharacterization. If BNPLC receives a written notice of any challenge by the
Internal Revenue Service that BNPLC believes will be covered by this Paragraph,
then BNPLC shall promptly furnish a copy of such notice to NAI. The failure to
so provide a copy of the notice to NAI shall not excuse NAI from its obligations
under this Paragraph; provided, that if none of the officers of NAI and none of
the employees of NAI responsible for tax matters are aware of the challenge
described in the notice and such failure by BNPLC renders unavailable defenses
that NAI might otherwise assert, or precludes actions that NAI might otherwise
take, to minimize its obligations hereunder, then NAI shall be excused from its
obligation to indemnify BNPLC against liabilities, costs, additional taxes and
other expenses, if any, which would not have been incurred but for such failure.
For example, if BNPLC fails to provide NAI with a copy of a notice of a
challenge by the Internal Revenue Service covered by the indemnities set out in
this Improvements Lease and NAI is not otherwise already aware of such
challenge, and if as a result of such failure BNPLC becomes liable for penalties
and interest covered by the indemnities in excess of the penalties and interest
that would have accrued if NAI had been promptly provided with a copy of the
notice, then NAI will be excused from any obligation to BNPLC to pay the excess.

(d).   Characterization of this Improvements Lease . For purposes of determining
the appropriate financial accounting for this Improvements Lease and for
purposes of determining their respective rights and remedies under state law,
BNPLC and NAI believe and intend that (i) this Improvements Lease constitutes a
true lease, not a mere financing arrangement, enforceable in accordance with its
express terms, and the preceding subparagraph is not intended to affect the
enforcement of any other provisions of this Improvements Lease or the Purchase
Agreement, and (ii) the Purchase Agreement shall constitute a separate and
independent contract, enforceable in accordance with the express terms and
conditions set forth therein. In this regard, NAI acknowledges that NAI asked
BNPLC to participate in the transactions evidenced by this Improvements Lease
and the Purchase Agreement as a landlord and owner of the Property, not as a
lender. Although other transactions might have been used to accomplish similar
results, NAI expects to receive certain material accounting and other advantages
through the use of a lease transaction. Accordingly, and notwithstanding the
reporting for income tax purposes described in the preceding subparagraph, NAI
cannot equitably deny that this Improvements Lease and the Purchase Agreement
should be construed and enforced in accordance with their respective terms,
rather than as a mortgage or other security device, in any action brought by
BNPLC to enforce this Improvements Lease or the Purchase Agreement.

5.  PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.

(a).   Impositions . Subject only to the exceptions listed in subparagraph 
below, NAI shall pay or cause to be paid prior to delinquency all ad valorem
taxes assessed against the Property and other Impositions. If requested by BNPLC
from time to time, NAI shall furnish BNPLC with receipts showing payment of all
Impositions prior to the applicable delinquency date therefor. 

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

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made by NAI pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case
of a purchase by an Applicable Purchaser) equal to the Break Even Price.

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

(i)     If after the Effective Date there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then NAI shall from time to
time, pay to BNPLC for the account of BNPLC's Parent or such other
Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of reserve
requirements applicable to Collateral held from time to time by BNPLC's
Parent or other Participants pursuant to the Pledge Agreement would be an
increase covered by the preceding sentence. A certificate as to the
amount of such increased cost, submitted to BNPLC and NAI by BNPLC's
Parent or the other Participant, shall be conclusive and binding upon
NAI, absent clear and demonstrable error.

(ii)    BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount
of capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made
to BNPLC to permit BNPLC to maintain BNPLC's investment in the Property
or to make Construction Advances. To the extent that BNPLC's Parent or
another Participant demands Capital Adequacy Charges as compensation for
the additional capital requirements reasonably allocable to such
investment or advances, NAI shall pay to BNPLC for the account of BNPLC's
Parent or the other Participant, as the case may be, the amount so
demanded. Without limiting the foregoing, BNPLC and NAI hereby
acknowledge and agree that the provisions for calculating Base Rent set
forth herein reflect the assumption that the Pledge Agreement will cause
a zero percent (0%) risk weight to be assigned to a percentage (equal to
the Collateral Percentage) of the collective investment of BNPLC and the
Participants in the Property pursuant to 12 Code of Federal Regulations,
part 225, as from time to time supplemented or amended, or pursuant to
any other similar or successor statute or regulation applicable to BNPLC
and the Participants. If and so long as such risk weight is increased the
assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of
return to BNPLC, BNPLC's Parent and any other Participants (net of their
costs of maintaining required capital) that they would have enjoyed from
this Improvements Lease absent such increase.

(iii)   Any amount required to be paid by NAI under this subparagraph
5.(b) shall be due ten days after a demand for such payment is received
by NAI.

(c).   NAI's Payment of Other Losses; General Indemnification . Subject only to
the exceptions listed in subparagraph below:

(i)    All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time and
from time to time by reason of, in connection with or arising out of (A)
their ownership or alleged ownership of any interest in the Property or
the Rents, (B) the use and operation of the Property, (C) the
negotiation, administration or enforcement of the Operative Documents,
(D) the making of Funding Advances, (E) the Construction Project, (F) the
breach by NAI of this Improvements Lease or any other document executed
by NAI in connection herewith, (G) any failure of the Property or NAI
itself to comply with Applicable Laws, (H) Permitted Encumbrances, (I)
Hazardous Substance Activities, including those occurring prior to
Effective Date, (J) any obligations under the Existing Contracts that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property

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damage occurring in or upon or in the vicinity of the Property through any
cause whatsoever, shall be paid by NAI, and NAI shall indemnify and defend
BNPLC and other Interested Parties from and against all such Losses.

(ii)    THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF
BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN
THE PRECEDING SUBPARAGRAPH , SHALL APPLY EVEN IF AND WHEN THE SUBJECT
MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED PARTY.
FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF INSURANCE
OBTAINED BY NAI OR REQUIRED OF NAI BY THIS IMPROVEMENTS LEASE OR OTHER
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
THE INDEMNITIES AND RELEASES ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS IMPROVEMENTS LEASE OR
OTHER OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH
INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE IS
INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES AGAINST
WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO INDEMNIFICATION BY
THIS IMPROVEMENTS LEASE.

(iii)   Costs and expenses for which NAI shall be responsible pursuant to
this subparagraph will include appraisal fees, filing and recording fees,
inspection fees, survey fees, taxes, brokerage fees and commissions,
abstract fees, title policy fees, Uniform Commercial Code search fees,
escrow fees and Attorneys' Fees incurred by BNPLC with respect to the
Property, whether such costs and expenses are incurred at the time of
execution of this Improvements Lease or at any time during the Term. Such
costs and expenses will also include Attorneys' Fees or other costs
incurred to evaluate lien releases and other information submitted by NAI
with requests for Construction Advances.

(iv)   NAI's obligations under this subparagraph 5.(c) shall survive the
termination or expiration of this Improvements Lease. Any amount to be paid
by NAI under this subparagraph 5.(c) shall be due ten days after a demand
for such payment is received by NAI.

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(v)   If an Interested Party notifies NAI of any claim or proceeding
included in, or any investigation or allegation concerning, Losses for
which NAI is responsible pursuant to this subparagraph 5.(c), NAI shall
assume on behalf of the Interested Party and conduct with due diligence and
in good faith the investigation and defense thereof and the response
thereto with counsel selected by NAI, but satisfactory to the Interested
Party; provided, that the Interested Party shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both NAI and the Interested Party and
the Interested Party shall have reasonably concluded that there are legal
defenses available to it which are inconsistent with or in addition to
those available to NAI, then the Interested Party shall have the right to
select separate counsel to participate in the investigation and defense of
and response to such claim, proceeding, investigation or allegation on its
own behalf, and NAI shall pay or reimburse the Interested Party for all
Attorney's Fees incurred by the Interested Party because of the selection
of such separate counsel. If NAI fails to assume promptly (and in any event
within fifteen days after being notified of the applicable claim,
proceeding, investigation or allegation) the defense of the Interested
Party, then the Interested Party may contest (or settle, with the prior
consent of NAI, which consent will not be unreasonably withheld) the claim,
proceeding, investigation or allegation at NAI's expense using counsel
selected by the Interested Party. Moreover, if any such failure by NAI
continues for forty-five days or more after NAI is notified of any such
claim, proceeding, investigation or allegation, the Interested Party may
elect not to contest or continue contesting the same and instead, in
accordance with the written advice of counsel, settle (or pay in full) all
claims related thereto without NAI's consent and without releasing NAI from
any obligations to the Interested Party under this subparagraph .

(d)  Exceptions and Qualifications to Indemnities .

i.   BNPLC acknowledges and agrees that nothing in subparagraph 4.(a) or
the preceding subparagraphs of this Paragraph 5 shall be construed to
require NAI to pay or reimburse an Interested Party for (w) any costs or
expenses incurred by BNPLC or any transferee to accomplish any Permitted
Transfers described in clauses (2), (3), (4), (6) or (7) of the definition
thereof in the Common Definitions and Provisions Agreement (Phase III -
Improvements), (x) Excluded Taxes, (y) Losses incurred or suffered by such
Interested Party that are proximately caused by (and attributed by any
applicable principles of comparative fault to) the Established Misconduct
of that Interested Party, or (z) Losses incurred or suffered by
Participants in connection with their negotiation or execution of the
Participation Agreement or Pledge Agreement (or supplements making them
parties thereto) or in connection with any due diligence they may undertake
before entering into the Participation Agreement or Pledge Agreement.
Further, without limiting BNPLC's rights (as provided in other provisions
of this Improvements Lease and other Operative Documents) to include the
following in the calculation of the Outstanding Construction Allowance,
Stipulated Loss Value, the Break Even Price and the Maximum Permitted
Prepayment (as applicable) or to collect Base Rent, Issue 97-10
Prepayments, a Supplemental Payment and other amounts, the calculation of
which depends upon the Outstanding Construction Allowance, Stipulated Loss
Value, the Break Even Price and the Maximum Permitted Prepayment, BNPLC
acknowledges and agrees that nothing in subparagraph 4.(a) or the preceding
subparagraphs of this Paragraph 5 shall be construed to require NAI to pay
or reimburse an Interested Party for:

a)   costs paid by BNPLC with the proceeds of the Initial Funding
Advance as part of the Transaction Expenses; or

b)   Construction Advances, including costs and expenditures incurred
or paid by or on behalf of BNPLC after any Landlord's Election to
Continue Construction, to the extent that such costs and expenditures
are considered to be Construction Advances pursuant to subparagraph
6.(e).

Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in subparagraph
5.(c)(i), then such Interested Party will be expected to promptly furnish a
copy of such notice to NAI. The failure to so provide a copy of the notice
to NAI shall not excuse NAI from its obligations under subparagraph
5.(c)(i);

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provided, that if NAI is unaware of the matters described in the notice and
such failure renders unavailable defenses that NAI might otherwise assert,
or precludes actions that NAI might otherwise take, to minimize its
obligations, then NAI shall be excused from its obligation to indemnify
such Interested Party (and any Affiliate of such Interested Party) against
the Losses, if any, which would not have been incurred or suffered but for
such failure. For example, if BNPLC fails to provide NAI with a copy of a
notice of an obligation covered by the indemnity set out in subparagraph
5.(c)(i) and NAI is not otherwise already aware of such obligation, and if
as a result of such failure BNPLC becomes liable for penalties and interest
covered by the indemnity in excess of the penalties and interest that would
have accrued if NAI had been promptly provided with a copy of the notice,
then NAI will be excused from any obligation to BNPLC (or any Affiliate of
BNPLC) to pay the excess.

(ii)  Notwithstanding anything to the contrary in subparagraph 4.(a) or the
preceding subparagraphs of this Paragraph 5, NAI's liability for payments
required by the preceding subparagraphs of this Paragraph 5, and not
excused by the preceding subparagraph 5.(d)(i), prior to substantial
completion of the Construction Project ("CONSTRUCTION-PERIOD INDEMNITY
PAYMENTS") shall be subject to the following provisions: 

a) NAI may decline to pay any Construction-Period Indemnity Payments
other than the following (it being understood that NAI's payment of
the following Construction-Period Indemnity Payments shall not be
subject to any abatement or deferral by anything contained in this
subparagraph 5.(d)(ii)):

(1)  Construction-Period Indemnity Payments eligible for
reimbursement to NAI under the terms and conditions of the
Construction Management Agreement; and

(2)  Construction-Period Indemnity Payments that constitute
Absolute NAI Construction Obligations.

b)   Any Construction-Period Indemnity Payment NAI is excused from
paying by this subparagraph 5.(d)(ii), together with interest thereon
at the Default Rate, will be included in the calculation of the Break
Even Price under (and as defined in) the Purchase Agreement.

6.   CONSTRUCTION.

(a)  Construction Advances; Outstanding Construction Allowance . The
Construction Management Agreement entitles NAI to receive from BNPLC - subject
to the terms and conditions set forth in the Construction Management Agreement -
Construction Advances on Advance Dates from time to time to pay or reimburse NAI
for the costs of the Construction Project and certain other costs described in
the Construction Management Agreement. In addition, BNPLC may from time to time
make expenditures or incur costs constituting Construction Advances after a
Landlord's Election to Continue Construction as described in subparagraph 6.(e).
As used herein, references to the" OUTSTANDING CONSTRUCTION ALLOWANCE" mean the
difference on the date in question (but not less than zero) of (A) the total
Construction Advances made by or on behalf of BNPLC on or prior to the date in
question, plus (B) all Carrying Costs added on or prior to the date in question,
less (C) any funds received and applied as Qualified Prepayments on or prior to
the date in question. Charges ("CARRYING COSTS") shall accrue as described below
for each Construction Period and will be added to (and thereafter be included
in) the Outstanding Construction Allowance on the last day of such Construction
Period (i.e., generally on the Advance Date upon which such Construction Period
ends). However, if for any reason Stipulated Loss Value (and thus the
Outstanding Construction Allowance included as a component thereof) must be
determined as of any date between Advance Dates, the Outstanding Construction
Allowance determined on such date shall include not only Carrying Costs added on
or before the immediately preceding Advance Date computed as described below,
but also Carrying Costs accruing on and after such preceding Advance Date to but
not including the date in question.

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(b)   Calculation of Carrying Costs. Carrying Costs accruing for any
Construction Period shall equal:

o    the sum on the first day of such Construction Period of (i) Stipulated
Loss Value under (and as defined in) the Common Definitions and
Provisions Agreement (Phase III - Improvements) and (ii) after the
execution and effective date of the Other Lease Agreement and the
Other Purchase Agreement, Stipulated Loss Value under (and as defined
in) the Other Common Definitions and Provisions Agreement, times

o    the sum of (a) the Effective Rate with respect to such Construction
Period, plus (b) the Unsecured Spread for such Construction Period,
times

o    the number of days in the period from and including the preceding
Advance Date to but not including the Advance Date upon which the
period ends, divided by

o    three hundred sixty.

Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Construction Period is zero percent (0%);
that on the first day of such Construction Period Combined Stipulated Loss
Value is $15,000,000; that the Effective Rate for the Construction Period
is 6%; that the Unsecured Spread for such Construction Period is one
hundred fifty basis points (150/100 of 1%); and that such Construction
Period contains exactly thirty days. Under such assumptions, the Carrying
Costs for the hypothetical Construction Period will equal:

$15,000,000 x (6% + 1.50%) x 30/360 = $93,750

If the date that the Other Lease Agreement and the Other Purchase
Agreement are executed and become effective falls within, but not on the
first date of, a Construction Period, then Carrying Costs will accrue
during such Construction Period on the Stipulated Loss Value under the
Other Lease Agreement, but such accrual will not commence until the date
upon which the Other Lease Agreement and Other Purchase Agreement are
executed and become effective. (Prior to that date, interest under the
Agreement to Lease will continue to accrue.)

(c)   Limits on the Amount of Carrying Costs. Notwithstanding the foregoing,
because the Construction Allowance available to NAI under the Construction
Management Agreement is limited in amount to the Maximum Construction Allowance,
and because Carrying Costs are to be charged against the Construction Allowance,
Carrying Costs added to the Outstanding Construction Allowance on the Base Rent
Commencement Date shall not exceed the amount that can be added without causing
the Funded Construction Allowance to exceed the Maximum Construction Allowance.
If, because of an extension of the Base Rent Commencement Date by BNPLC (as
described in the definition thereof in the Common Definitions and Provisions
Agreement (Phase III - Improvements)) or because of any Landlord's Election to
Continue Construction, the Funded Construction Allowance already exceeds the
Maximum Construction Allowance, then no Carrying Costs will be added to the
Outstanding Construction Allowance on the Base Rent Commencement Date. 

(d)   NAI's Right to Control the Construction Project. Subject to BNPLC's rights
under subparagraph 6.(e) of this Improvements Lease, the Construction Management
Agreement grants to NAI the sole right and responsibility for designing and
constructing the Construction Project, it being understood that although title
to all Improvements will pass directly to BNPLC (as more particularly provided
in Paragraph 7), BNPLC's obligation with respect to the Construction Project
shall be limited to the making of advances under and subject to the conditions
set forth in the Construction Management Agreement. No contractor or other third
party shall be entitled to require BNPLC to make advances as a third party
beneficiary of this Improvements Lease or of the Construction Management
Agreement or otherwise.

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(e)   Landlord's Election to Continue Construction. Without limiting BNPLC's
other rights and remedies under this Improvements Lease, and without terminating
this Improvements Lease or NAI's obligations hereunder or under any of the other
documents referenced herein, in the event of any termination of the Construction
Management Agreement as provided in subparagraph 5(D) or subparagraph 5(E)
thereof, BNPLC shall be entitled (but not obligated) to take whatever action it
deems necessary or appropriate by the use of legal proceedings or otherwise to
continue or complete the Construction Project in a manner substantially
consistent (to the extent practicable under Applicable Laws) with the general
description of the Construction Project set forth in Exhibit B to the
Construction Management Agreement and with the permitted use of the Property set
forth in subparagraph 2.(a). (As used herein, "LANDLORD'S ELECTION TO CONTINUE
CONSTRUCTION" means any election by BNPLC to continue or complete the
Construction Project pursuant to the preceding sentence.) After any Landlord's
Election to Continue Construction, BNPLC may do any one or more of the following
pursuant to this subparagraph without further notice and regardless of whether
any Event of Default is then continuing: 

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

(ii)  Continuation of Construction. BNPLC may perform or cause to be
performed any work to complete or continue the construction of the
Construction Project. In this regard, so long as work ordered or undertaken
by BNPLC is substantially consistent (to the extent practicable under
Applicable Laws) with the general description of the Construction Project
set forth in Exhibit B to the Construction Management Agreement and the
permitted use of the Property set forth in subparagraph 2.(a), BNPLC shall 
have complete discretion to:

a)   proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;

b)   establish and extend construction deadlines as BNPLC from time to
time deems appropriate, without obligation to adhere to the deadlines
for Construction Milestones set forth in the Construction Management
Agreement;

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

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

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

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

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

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

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

(iv)  Suspension or Termination of Construction. Notwithstanding any
Landlord's Election to Continue Construction, BNPLC may subsequently elect
at any time to suspend or terminate further construction without obligation
to NAI.

For purposes of this Improvements Lease and other Operative Documents (including
the determination of the Outstanding Construction Allowance, Stipulated Loss
Value, the Break Even Price and the Maximum Permitted Prepayment), after any
Landlord's Election to Continue Construction, all costs and expenditures
incurred or paid by or on behalf of BNPLC to complete or continue construction
as provided in this subparagraph shall be considered Construction Advances and
Project Costs, regardless of whether they cause the Funded Construction
Allowance to exceed the Maximum Construction Allowance. Further, as used in the
preceding sentence," costs incurred" by BNPLC will include costs that BNPLC has
become obligated to pay to any third party that is not an Affiliate of BNPLC
(including any contractor), even if the payments for which BNPLC has become so
obligated will constitute prepayments for work or services to be rendered after
payment and notwithstanding that BNPLC's obligations for the payments may be
conditioned upon matters beyond BNPLC's control. For example, even if a
construction contract between BNPLC and a contractor excused BNPLC from making
further progress payments to the contractor upon NAI's failure to make any
required Issue 97-10 Prepayment hereunder, the obligation to make a progress
payment would nonetheless be" incurred" by BNPLC, for purposes of determining
whether BNPLC has incurred costs considered to be Project Costs and Construction
Advances, when BNPLC's obligation to pay it became subject only to NAI's payment
of an Issue 97-10 Prepayment or other conditions beyond BNPLC's control. If and
to the extent, however, BNPLC does incur costs considered as Construction
Advances under this subparagraph, but (1) BNPLC does not actually pay the costs
and after incurring them BNPLC is fully and finally excused from the obligation
to pay them for any reason other than a breach by NAI of this Improvements Lease
or other Operative Documents, or (2) BNPLC receives a refund of such costs, then
the costs BNPLC is excused from paying or refunded to BNPLC shall be considered
Qualified Prepayments.

(f)  Powers Coupled With an Interest. BNPLC's rights under subparagraph 6.(e)
are intended to constitute powers coupled with an interest which cannot be
revoked.

(g)  Completion Notice. After any Landlord's Election to Continue Construction,
BNPLC may provide a notice (a "COMPLETION NOTICE") to NAI, advising NAI that
construction of the Construction Project is substantially complete or that BNPLC
no longer intends to continue such construction at that time.

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7.   STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. All Improvements
constructed during the term of this Improvements Lease shall be owned by BNPLC
and shall constitute" Property" covered by this Improvements Lease. Further, to
the extent heretofore or hereafter acquired (in whole or in part) with any
portion of the Initial Funding Advance or with any Construction Advances or with
other funds for which NAI has received or hereafter receives reimbursement from
the Initial Funding Advance or Construction Advances, all furnishings,
furniture, chattels, permits, licenses, franchises, certificates and other
personal property of whatever nature shall have been acquired on behalf of BNPLC
by NAI, shall be owned by BNPLC and shall constitute" Property" covered by this
Improvements Lease, as shall all renewals or replacements of or substitutions
for any such Property. NAI shall not authorize or permit the transfer of title
to the Improvements or to any other such Property to pass through NAI or NAI's
Affiliates before it is transferred to BNPLC from contractors, suppliers,
vendors or other third Persons. Nothing herein shall constitute authorization of
NAI by BNPLC to bind BNPLC to any construction contract or other agreement with
a third Person, but any construction contract or other agreement executed by NAI
for the acquisition or construction of Improvements or other components of the
Property may provide for the transfer of title as required by the preceding
sentence. Upon request of BNPLC, but not more often than once in any period of
twelve consecutive months, NAI shall deliver to BNPLC an inventory describing
all significant items of Personal Property (and, in the case of tangible
personal property, showing the make, model, serial number and location thereof)
other than Improvements, with a certification by NAI that such inventory is true
and complete and that all items specified in the inventory are covered by this
Improvements Lease free and clear of any Lien other than the Permitted
Encumbrances or Liens Removable by BNPLC.

8.   ENVIRONMENTAL.

(a)  Environmental Covenants by NAI. NAI covenants that:

(i)   NAI shall not conduct or permit others to conduct Hazardous Substance
Activities, except Permitted Hazardous Substance Use and Remedial Work.

(ii)  NAI shall not discharge or permit the discharge of anything on or
from the Property that would require any permit under applicable
Environmental Laws, other than (1) storm water runoff, (2) waste water
discharges through a publicly owned treatment works, (3) discharges that
are a necessary part of any Remedial Work, and (4) other similar discharges
consistent with the definition herein of Permitted Hazardous Substance Use,
in each case in strict compliance with Environmental Laws.

(iii) Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions of
this Improvements Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict compliance
with Environmental Laws.

(iv)  If requested by BNPLC in connection with any Remedial Work required
by this subparagraph, NAI shall retain independent environmental
consultants acceptable to BNPLC to evaluate any significant new information
generated during NAI's implementation of the Remedial Work and to discuss
with NAI whether such new information indicates the need for any additional
measures that NAI should take to protect the health and safety of persons
(including employees, contractors and subcontractors and their employees)
or to protect the environment. NAI shall implement any such additional
measures to the extent required with respect to the Property by
Environmental Laws or otherwise believed by BNPLC to be reasonably required
and to the extent not inconsistent with the other provisions of this
Improvements Lease.

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(b)  Right of BNPLC to do Remedial Work Not Performed by NAI. If NAI's failure
to cure any breach of the covenants set forth in subparagraph 8.(a) continues
beyond the Environmental Cure Period (as defined below), BNPLC may, in addition
to any other remedies available to it, conduct all or any part of the Remedial
Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.

(c)  Environmental Inspections and Reviews. BNPLC reserves the right to retain
environmental consultants to review any report prepared by NAI or to conduct
BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph. NAI grants to BNPLC and to BNPLC's agents,
employees, consultants and contractors the right to enter upon the Property at
any time to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. NAI shall
promptly reimburse BNPLC for the fees of its environmental consultants and the
costs of any such inspections and tests.

(d)  Communications Regarding Environmental Matters .

(i)   NAI shall immediately advise BNPLC of (1) any discovery of any event
or circumstance which would render any of the representations of NAI herein
or in the Closing Certificate concerning environmental matters materially
inaccurate or misleading if made at the time of such discovery and assuming
that NAI was aware of all relevant facts, (2) any Remedial Work (or change
in Remedial Work) required or undertaken by NAI or its Affiliates in
response to any (A) discovery of any Hazardous Substances on, under or
about the Property other than Permitted Hazardous Substances or (B) any
claim for damages resulting from Hazardous Substance Activities, (3) NAI's
discovery of any occurrence or condition on any real property adjoining or
in the vicinity of the Property which could cause the Property or any part
thereof to be subject to any ownership, occupancy, transferability or use
restrictions under Environmental Laws, or (4) any investigation or inquiry
of any failure or alleged failure by NAI to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, NAI shall deliver to BNPLC
within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action that
NAI proposes to take with respect thereto, if any, to bring the Property
into compliance with Environmental Laws or to correct any breach by NAI of
this Paragraph , including any proposed Remedial Work, the estimated cost
and time of completion, the name of the contractor and a copy of the
construction contract, if any, and such additional data, instruments,
documents, agreements or other materials or information as BNPLC may
request.

(ii)  NAI shall provide BNPLC with copies of all material written
communications with federal, state and local governments, or agencies
relating to the matters listed in the preceding clause (i). NAI shall also
provide BNPLC with copies of any correspondence from third Persons which
threaten litigation over any significant failure or alleged significant
failure of NAI to maintain or operate the Property in accordance with
Environmental Laws.

(iii) Prior to NAI's submission of a Material Environmental Communication
to any governmental or regulatory agency or third party, NAI shall, to the
extent practicable, deliver to BNPLC a draft of the proposed submission
(together with the proposed date of submission), and in good faith assess
and consider any comments of BNPLC 

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regarding the same. Promptly after BNPLC's request, NAI shall meet with
BNPLC to discuss the submission, shall provide any additional information
requested by BNPLC and shall provide a written explanation to BNPLC
addressing the issues raised by comments (if any) of BNPLC regarding the
submission, including a reasoned analysis supporting any decision by NAI
not to modify the submission in accordance with comments of BNPLC.

9.   INSURANCE REQUIRED AND CONDEMNATION.

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

(b)  Property Insurance. Throughout the Term NAI will keep all Improvements
(including all alterations, additions and changes made to the Improvements)
insured against fire and other casualty under one or more property insurance
policies that satisfy the requirements set forth in Exhibit B. NAI shall deliver
and maintain with BNPLC for each property insurance policy required by this
Improvements Lease written confirmation of the policy and the scope of the
coverage provided thereby issued by the applicable insurer or its authorized
agent, which confirmation must also satisfy the requirements set forth in
Exhibit B. If any of the Property is destroyed or damaged by fire, explosion,
windstorm, hail or by any other casualty against which insurance shall have been
required hereunder, (i) BNPLC may, but shall not be obligated to, make proof of
loss if not made promptly by NAI after notice from BNPLC, (ii) each insurance
company concerned is hereby authorized and directed to make payment for such
loss directly to BNPLC for application as required by Paragraph , and (iii)
BNPLC may settle, adjust or compromise any and all claims for loss, damage or
destruction under any policy or policies of insurance (provided, that if any
such claim is for less than $500,000, if no CMA Termination Event shall have
occurred and no Event of Default shall have occurred and be continuing, NAI
shall have the right to settle, adjust or compromise the claim as NAI deems
appropriate; and, provided further, that so long as no CMA Termination Event
shall have occurred and no Event of Default shall have occurred and be
continuing, BNPLC must provide NAI with at least forty-five days notice of
BNPLC's intention to settle any such claim before settling it unless NAI shall
already have approved of the settlement by BNPLC). If any casualty shall result
in damage to or loss or destruction of the Property, NAI shall give immediate
notice thereof to BNPLC and Paragraph 10 shall apply.

(c)  Failure to Obtain Insurance. If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Improvements
Lease, BNPLC shall be entitled (but not required) to obtain the insurance that
NAI has failed to obtain or for which NAI has not provided the required
confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require NAI to reimburse BNPLC for the cost of such
insurance and to pay interest thereon computed at the Default Rate from the date
such cost was paid by BNPLC until the date of reimbursement by NAI (provided,
however, that any such insurance cost paid by BNPLC prior to the Base Rent
Commencement Date will be charged against the Construction Allowance under the
Construction Management Agreement as if it had been paid by NAI).

(d)  Condemnation. Immediately upon obtaining knowledge of the institution of
any proceedings for the condemnation of the Property or any portion thereof, or
any other similar governmental or quasi-governmental proceedings arising out of
injury or damage to the Property or any portion thereof, each party shall notify
the other (provided, however, BNPLC shall have no liability for its failure to
provide such notice) of the pendency of such proceedings. NAI shall, at its
expense, diligently prosecute any such proceedings and shall consult with BNPLC,
its attorneys and experts and cooperate with them as requested in the carrying
on or defense of any such proceedings. All proceeds of condemnation awards or
proceeds of sale in lieu of condemnation with respect to the Property and all
judgments, decrees and awards for injury or damage to the Property shall be paid
to BNPLC as Escrowed Proceeds, and all such proceeds will be applied as provided
in

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Paragraph 10. BNPLC is hereby authorized, in the name of NAI, at any time after
a CMA Termination Event or when an Event of Default shall have occurred and be
continuing, or otherwise with NAI's prior consent, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award
concerning condemnation of any of the Property. BNPLC shall not be in any event
or circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.

(e)  Waiver of Subrogation. NAI, for itself and for any Person claiming through
it (including any insurance company claiming by way of subrogation), waives any
and every claim which arises or may arise in its favor against BNPLC or any
other Interested Party and the officers, directors, and employees of the
Interested Parties for any and all Losses, to the extent that NAI is compensated
by insurance or would be compensated by the insurance policies contemplated in
this Improvements Lease, but for any deductible or self-insured retention
maintained under such insurance or but for a failure of NAI to maintain the
insurance as required by this Improvements Lease. NAI agrees to have such
insurance policies properly endorsed so as to make them valid notwithstanding
this waiver, if such endorsement is required to prevent a loss of insurance.

10.  APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.

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

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

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

(b)  Advances of Escrowed Proceeds to NAI. Except as otherwise provided below
in this Paragraph 10, BNPLC shall advance all Remaining Proceeds held by it as
Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to NAI of
repairing or restoring the Property in accordance with the requirements of this
Improvements Lease and the other Operative Documents as the applicable repair or
restoration progresses and upon compliance by NAI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC. In no event, however,
shall BNPLC be required to pay Escrowed Proceeds to NAI in excess of the actual
out-of-pocket cost to NAI of the applicable repair or restoration, as evidenced
by invoices or other documentation satisfactory to BNPLC, it being understood
that BNPLC may retain and apply any such excess as a Qualified Prepayment.

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(c)  Application of Escrowed Proceeds as a Qualified Prepayment. Provided NAI
has completed the Construction Project pursuant to the Construction Management
Agreement and no Event of Default shall have occurred and be continuing, BNPLC
shall apply any Remaining Proceeds paid to it (or other amounts available for
application as a Qualified Prepayment) as a Qualified Prepayment on any date
that BNPLC is directed to do so by a notice from NAI; however, if such a notice
from NAI specifies an effective date for a Qualified Prepayment that is less
than five Business Days after BNPLC's actual receipt of the notice, BNPLC may
postpone the date of the Qualified Prepayment to any date not later than five
Business Days after BNPLC's receipt of the notice. In any event, except when
BNPLC is required by the preceding sentence to apply Remaining Proceeds or other
amounts as a Qualified Prepayment on an Advance Date or Base Rent Date, BNPLC
may deduct Breakage Costs incurred in connection with any Qualified Prepayment
from the Remaining Proceeds or other amounts available for application as the
Qualified Prepayment, and NAI will reimburse BNPLC upon request for any such
Breakage Costs that BNPLC incurs but does not deduct.

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

(e)  NAI's Obligation to Restore. Regardless of the adequacy of any Remaining
Proceeds available to NAI hereunder, and notwithstanding other provisions of
this Improvements Lease to the contrary: 

(1) If, prior to the Base Rent Commencement Date, the Property is
damaged by fire or other casualty or any part of the Property is taken by
condemnation, NAI shall to the maximum extent possible, as part of the Work
contemplated in the Construction Management Agreement, restore the Property
or the remainder thereof and continue construction of the Construction
Project on and subject to the terms and conditions set forth in the
Construction Management Agreement. However, any additional costs required
to complete the Construction Project resulting from such a casualty or
taking prior to the Base Rent Commencement Date shall, to the extent not
covered by Remaining Proceeds paid to NAI as provided in this Improvements
Lease, be subject to reimbursement by BNPLC under the Construction
Management Agreement on the same terms and conditions that apply to
reimbursements of other costs of the Work thereunder.

(2) If, on or after the Base Rent Commencement Date, the Property is
damaged by fire or other casualty or less than all or substantially all of
the Property is taken by condemnation, NAI must:

A) increase the value of the Property or the remainder thereof by
restoring or improving the same (in a manner consistent with the
requirements and limitations imposed by this Improvements Lease and
the other Operative Documents or otherwise acceptable to BNPLC), or
decrease Stipulated Loss Value by tendering a payment to BNPLC for
application as a Qualified Prepayment, as necessary to cause Current
AS IS Market Value to be not less than sixty percent (60%) of
Stipulated Loss Value; and

B) restore the Property or the remainder thereof to a reasonably
safe and sightly condition.

(f)  Takings of All or Substantially All of the Property on or after the Base
Rent Commencement Date. In the event of any taking of all or substantially all
of the Property on or after the Base Rent Commencement Date, BNPLC shall be

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entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such condemnation, then BNPLC shall be
entitled to recover the excess from NAI upon demand as an additional Qualified
Prepayment, whereupon this Improvements Lease shall terminate. Any taking of so
much of the Real Property as, in BNPLC's reasonable good faith judgment, makes
it impracticable to restore or improve the remainder thereof as required by part
(2) of the preceding subparagraph shall be considered a taking of substantially
all the Property for purposes of this Paragraph 10.

11.  ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING THE
PROPERTY. NAI represents, warrants and covenants as follows:

(a)   Compliance with Covenants and Laws. The use of the Property permitted by
this Improvements Lease complies, or will comply after NAI obtains available
permits as the tenant under this Improvements Lease, in all material respects
with all Applicable Laws. NAI has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for the
construction contemplated herein and the use of the Property permitted by this
Improvements Lease.

(b)   Operation of the Property. During the Term, NAI shall operate the Property
in a good and workmanlike manner and substantially in compliance with all
Applicable Laws and will pay or cause to be paid all fees or charges of any kind
in connection therewith. (If NAI does not promptly correct any failure of the
Property to comply with Applicable Laws that is the subject of a written notice
given to NAI or BNPLC by any governmental authority, then for purposes of the
preceding sentence, NAI shall be considered not to have maintained the Property
"substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under the Construction Management
Agreement or materially and adversely affect the value of the Property or NAI's
use, occupancy or operations on the Property, NAI shall not, without BNPLC's
prior consent: (i) initiate or permit any zoning reclassification of the
Property; (ii) seek any variance under existing zoning ordinances applicable to
the Property; (iii) use or permit the use of the Property in a manner that would
result in such use becoming a nonconforming use under applicable zoning
ordinances or similar laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Property; or (v) consent to the annexation of the
Property to any municipality. If (A) a change in the zoning or other Applicable
Laws affecting the permitted use or development of the Property shall occur
after the Base Rent Commencement Date that reduces the value of the Property, or
(B) conditions or circumstances on or about the Property are discovered after
the Base Rent Commencement Date (such as the presence of an endangered species)
which substantially impede development and thereby reduce the value of the
Property, and if after any such reduction under clause (A) or (B) preceding the
Current AS IS Market Value of the Property is less than sixty percent (60%) of
Stipulated Loss Value, then NAI shall pay BNPLC upon request the amount by which
Current AS IS Market Value is less than sixty percent (60%) of Stipulated Loss
Value, for application as a Qualified Prepayment. During the Term, NAI shall not
cause or permit any drilling or exploration for, or extraction, removal or
production of, minerals from the surface or subsurface of the Property, and NAI
shall not do any act whereby the market value of the Property may reasonably be
expected to be materially lessened. During the Term, if NAI receives a written
notice or claim from any federal, state or other governmental entity that the
Property is not in compliance in any material respect with any Applicable Law,
or that any action may be taken against the owner of the Property because the
Property does not comply with Applicable Law, NAI shall promptly furnish a copy
of such notice or claim to BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and 

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any claims asserted against BNPLC or the Property because of such violation must
be paid by NAI, all prior to the earlier of (i) the date that any criminal
prosecution is instituted or overtly threatened against BNPLC or any of its
directors, officers or employees because of such violation, (ii) the date that
any action is taken by any governmental authority against BNPLC or any property
owned by BNPLC (including the Property) because of such violation, or (iii) a
Designated Sale Date upon which, for any reason, NAI or an Affiliate of NAI or
any Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a price to BNPLC (when taken together
with any additional payments made by NAI pursuant to Paragraph 1(A)(2) of the
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to the Break Even Price.

(c)   Debts for Construction, Maintenance, Operation or Development. NAI shall
cause all debts and liabilities incurred in the construction, maintenance,
operation or development of the Property, including all debts and liabilities
for labor, material and equipment and all debts and charges for utilities
servicing the Property, to be promptly paid; provided, that nothing in this
subparagraph will be construed to require NAI to remove Liens Removable by
BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest NAI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, NAI bonds over to BNPLC's
reasonable satisfaction all such contested liens against the Property alleged to
secure an amount in excess of $500,000 (individually or in the aggregate), (2)
NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (3) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final; provided, however,
that in any event each such contest shall be concluded and the lien, interest
and costs must be paid by NAI prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPLC or its
directors, officers or employees because of the nonpayment thereof, (ii) the
date that any writ or order is issued under which the Property or any other
property in which BNPLC has an interest may be seized or sold or any other
action is taken against BNPLC or any property in which BNPLC has an interest
because of the nonpayment thereof, or (iii) a Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

(d)  Repair, Maintenance, Alterations and Additions. NAI shall keep the
Property in good order, operating condition and appearance and shall cause all
necessary repairs, renewals and replacements to be promptly made. NAI will not
allow any of the Property to be materially misused, abused or wasted, and NAI
shall promptly replace any worn-out fixtures and Personal Property with fixtures
and Personal Property comparable to the replaced items when new. NAI shall not,
without the prior consent of BNPLC, (i) remove from the Property any fixture or
Personal Property having significant value except such as are replaced by NAI by
fixtures or Personal Property of equal suitability and value, free and clear of
any lien or security interest (and for purposes of this clause" significant
value" will mean any fixture or Personal Property that has a value of more than
$100,000 or that, when considered together with all other fixtures and Personal
Property removed and not replaced by NAI by items of equal suitability and
value, has an aggregate value of $500,000 or more) or (ii) make material new
Improvements or alter Improvements in any material respect, except as part of
the Work performed in accordance with the Construction Management Agreement.
Without limiting the foregoing, NAI will notify BNPLC before making any
significant alterations to the Improvements after the completion of the
Construction Project. Nothing in this subparagraph, however, is intended to
limit NAI's rights and obligations under other express provisions of this
Improvements Lease and the Construction Management Agreement with respect to the
Construction Project.

(e)  Permitted Encumbrances and Development Documents. NAI shall during the
Term comply with and will cause to be performed all of the covenants, agreements
and obligations imposed upon the owner of any interest in the

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Property by the Permitted Encumbrances or the Development Documents. Without
limiting the foregoing, NAI shall cause all amounts to be paid when due, the
payment of which is secured by any Lien against the Property created by the
Permitted Encumbrances. Without the prior consent of BNPLC, NAI shall not enter
into, initiate, approve or consent to any modification of any Permitted
Encumbrance or Development Document that would create or expand or purport to
create or expand obligations or restrictions which would encumber BNPLC's
interest in the Property. (Whether BNPLC must give any such consent requested by
NAI during the Term of this Improvements Lease shall be governed by subparagraph
3(A) of the Closing Certificate and Agreement.)

(f)  Books and Records Concerning the Property. NAI shall keep books and records
that are accurate and complete in all material respects for the Property and,
subject to Paragraph 16.(c), will permit all such books and records (including
all contracts, statements, invoices, bills and claims for labor, materials and
services supplied for the construction and operation of any Improvements) to be
inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.

12.  FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1. Throughout the Term of this Improvements Lease, NAI shall comply
with the requirements of Schedule 1 attached hereto.

13. FINANCIAL STATEMENTS AND OTHER REPORTS.

(a)   Financial Statements; Required Notices; Certificates. Throughout the Term
of this Improvements Lease, NAI shall deliver to BNPLC and to each Participant:

(i)   as soon as available and in any event within one hundred twenty days
after the end of each fiscal year of NAI, a consolidated balance sheet of
NAI and its Consolidated Subsidiaries as of the end of such fiscal year and
a consolidated income statement and statement of cash flows of NAI and its
Consolidated Subsidiaries for such fiscal year, all in reasonable detail
and all prepared in accordance with GAAP and accompanied by a report and
opinion of accountants of national standing selected by NAI, which report
and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any qualifications or
exceptions as to the scope of the audit nor to any qualification or
exception which BNPLC determines, in BNPLC's reasonable discretion, is
unacceptable;

(ii)  as soon as available and in any event within sixty days after the end
of each of the first three quarters of each fiscal year of NAI, the
consolidated balance sheet of NAI and its Consolidated Subsidiaries as of
the end of such quarter and the consolidated income statement and the
consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and
all prepared in accordance with GAAP and certified by the chief financial
officer or controller of NAI (subject to year-end adjustments);

(iii)  together with the financial statements furnished in accordance with
subparagraph 13.(a)(i) and 13.(a)(ii), a certificate of the chief financial
officer or controller of NAI: (i) certifying that to the knowledge of NAI
no Default or Event of Default under this Improvements Lease has occurred
and is continuing or, if a Default or Event of Default has occurred and is
continuing, a brief statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, (ii) certifying that the
representations of NAI set forth in the Operative Documents are true and
correct in all material respects as of the date thereof as though made on
and as of the date thereof or, if not then true and correct, a brief
statement as to why such representations are no longer true and correct,
and (iii) with computations demonstrating compliance with the financial
covenants contained in Schedule 1; 

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(iv)  within five days after the end of each calendar month, a certificate
of the chief financial officer or controller of NAI certifying that at the
end of the preceding calendar month, NAI had sufficient cash and other
assets described in Paragraph 1 of Part III of Schedule 1 to comply with
the requirements of that paragraph;

(v)  promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which NAI sends to NAI's
stockholders, and copies of all regular, periodic and special reports, and
all registration statements (other than registration statements on Form S-8
or any form substituted therefor) which NAI files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange;

(vi)  upon request by BNPLC, 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 the dates to which the
Base Rent has been paid and either stating that to the knowledge of NAI no
Default or Event of Default under this Improvements Lease has occurred and
is continuing or, if a Default or Event of Default under this Improvements
Lease has occurred and is continuing, a brief statement as to the nature
thereof; it being intended that any such statement by NAI may be relied
upon by any prospective purchaser or mortgagee of the Property and by the
Participants

(vii)  as soon as possible after, and in any event within ten days after
NAI becomes aware that, any of the following has occurred, with respect to
which the potential aggregate liability to NAI relating thereto is $500,000
or more, a notice signed by a senior financial officer of NAI setting forth
details of the following and the response, if any, which NAI or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC by NAI or an ERISA
Affiliate with respect to any of the following or the events or conditions
leading up to the following): (A) the assertion, to secure any Unfunded
Benefit Liabilities, of any Lien against the assets of NAI, against the
assets of any Plan or Multiemployer Plan or against any interest of BNPLC
or NAI in the Property, or (B) the taking of any action by the PBGC or any
other governmental authority against NAI to terminate any Plan of NAI or
any ERISA Affiliate of NAI or to cause the appointment of a trustee or
receiver to administer any such Plan ; and

(viii)  such other information respecting the condition or operations,
financial or otherwise, of NAI, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC may from time to time
reasonably request.

BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.

14.   ASSIGNMENT AND SUBLETTING BY NAI.

(a)  BNPLC's Consent Required. Without the prior consent of BNPLC, NAI shall
not assign, transfer, mortgage, pledge or hypothecate this Improvements Lease or
any interest of NAI hereunder and shall not sublet all or any part of the
Property, by operation of law or otherwise; provided, that subject to
subparagraph 14.(c) below, if (and after) NAI completes the Construction Project
pursuant to the Construction Management Agreement and so long as no Event of
Default has occurred and is continuing: (1) NAI shall be entitled to sublet no
more than forty-nine percent (49%) (computed on the basis of square footage) of
the useable space in then existing and completed building Improvements, if any,
so long as (i) any sublease by NAI is made expressly subject and subordinate to
the terms hereof, and (ii) such sublease has a term equal to or less than the
remainder of the then effective Term of this Improvements Lease; and (2) NAI
shall be entitled to assign or transfer this Improvements Lease or any interest
of NAI hereunder to an Affiliate of NAI if both NAI and its Affiliate confirm
their joint and several liability hereunder by written notice given to BNPLC.

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(b)  Standard for BNPLC's Consent to Assignments and Certain Other Matters.
Consents and approvals of BNPLC which are required by this Paragraph 14 will not
be unreasonably withheld or delayed, but NAI acknowledges that BNPLC's
withholding of such consent or approval shall be reasonable if BNPLC determines
in good faith that (1) giving the approval may materially increase BNPLC's risk
of liability for any existing or future environmental problem, or (2) giving the
approval is likely to increase BNPLC's administrative burden of complying with
or monitoring NAI's compliance with the requirements of this Improvements Lease.

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

15.  ASSIGNMENT BY BNPLC.

(a)  Restrictions on Transfers. Except by a Permitted Transfer, BNPLC shall not
assign, transfer, mortgage, pledge, encumber or hypothecate this Improvements
Lease or the other Operative Documents or any interest of BNPLC in and to the
Property during the Term without the prior consent of NAI, which consent NAI may
withhold in its sole discretion. Further, notwithstanding anything to the
contrary herein contained, if withholding taxes are imposed on the rents and
other amounts payable to BNPLC hereunder because of BNPLC's assignment of this
Improvements Lease to any citizen of, or any corporation or other entity formed
under the laws of, a country other than the United States, NAI shall not be
required to compensate BNPLC or any such assignee for the withholding tax. If,
in breach of this subparagraph, BNPLC transfer the Property or any part thereof
by a conveyance or that does not constitute a Permitted Transfer, with the
result that additional transfer taxes or other Impositions are assessed against
the Property or the owner thereof, BNPLC shall be required to pay such
additional transfer taxes or other Impositions.

(b)  Effect of Permitted Transfer or other Assignment by BNPLC. If, without
breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the Property
and assigns all of its rights under this Improvements Lease and the other
Operative Documents, then BNPLC shall thereby be released from any obligations
arising after such assumption under this Improvements Lease or the other
Operative Documents (other than any liability for a breach of any continuing
obligation to provide Construction Advances under the Construction Management
Agreement), and NAI shall look solely to each successor in interest of BNPLC for
performance of such obligations.

16.   BNPLC'S RIGHT OF ACCESS.

(a)   During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraph 16.(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Improvements Lease or the other Operative Documents.

(b)   If NAI fails to perform any act or to take any action required of it by
this Improvements Lease or the Closing Certificate, or to pay any money which
NAI is required by this Improvements Lease or the Closing Certificate to pay,
and if such failure or action constitutes an Event of Default or renders BNPLC
or any director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing

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herein shall imply any duty upon the part of BNPLC to do any work which under
any provision of this Improvements Lease NAI may be required to perform, and the
performance thereof by BNPLC shall not constitute a waiver of NAI's default.
BNPLC may during the progress of any such work permitted by BNPLC hereunder on
or in the Property keep and store upon the Property all necessary materials,
tools, and equipment. BNPLC shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business, or other damage to NAI or the
subtenants or invitees of NAI by reason of making such repairs or the
performance of any such work on or in the Property, or on account of bringing
materials, supplies and equipment into or through the Property during the course
of such work (except for any liability in excess of the liability insurance
limits established in Exhibit B resulting from death or injury or damage to the
property of third parties caused by the Established Misconduct of BNPLC or its
officers, employees, or agents in connection therewith), and the obligations of
NAI under this Improvements Lease shall not thereby be excused in any manner.

(c)  NAI shall have no obligation to provide proprietary information (as defined
in the next sentence) to BNPLC, except and to the extent that (1) BNPLC
reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Improvements Lease and the other Operative
Documents without evaluating such information. For purposes of this Improvements
Lease "PROPRIETARY INFORMATION" includes NAI's intellectual property, trade
secrets and other confidential information of value to NAI about, among other
things, NAI's manufacturing processes, products, marketing and corporate
strategies, but in no event will" proprietary information" include any
disclosure of substances and materials (and their chemical composition) which
are or previously have been present in, on or under the Property at the time of
any inspections by BNPLC, nor will" proprietary information" include any
additional disclosures reasonably required to permit BNPLC to determine whether
the presence of such substances and materials has constituted a violation of
Environmental Laws. In addition, under no circumstances shall NAI have any
obligation to disclose to BNPLC or any other party any proprietary information
of NAI (including, without limitation, any pending applications for patents or
trademarks, any research and design and any trade secrets) except if and to the
limited extent reasonably necessary to comply with the express provisions of
this Improvements Lease or the other Operative Documents.

17.  EVENTS OF DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" by NAI under this Improvements Lease:

(a)  NAI shall fail to pay when due any installment of Rent due hereunder and
such failure shall continue for three (3) Business Days after NAI is notified in
writing thereof.

(b)  NAI shall fail to cause any representation or warranty of NAI contained
herein or in the Construction Management Agreement or the Closing Certificate
that was false or misleading in any material respect when made to be made true
and not misleading (other than as described in the other clauses of this
Paragraph 17), or NAI shall fail to comply with any term, provision or covenant
of this Improvements Lease or of the Construction Management Agreement or the
Closing Certificate (other than as described in the other clauses of this
Paragraph 17), and in either case shall not cure such failure prior to the
earlier of (A) thirty days after written notice thereof is sent to NAI or (B)
the date any writ or order is issued for the levy or sale of any property owned
by BNPLC (including the Property) or any criminal prosecution is instituted or
overtly threatened against BNPLC or any of its directors, officers or employees
because of such failure; provided, however, that so long as no such writ or
order is issued and no such criminal prosecution is instituted or overtly
threatened, the period within which such failure may be cured by NAI shall be
extended for a further period (not to exceed an additional sixty days) as shall
be necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI shall promptly have commenced to cure
such failure and shall thereafter continuously prosecute the curing thereof with
reasonable diligence and (z) the extension of the period for cure will not, in
any event, cause the period for cure to extend beyond five days prior to the
expiration of this Improvements Lease.

(c)  NAI shall abandon the Property.

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(d)  NAI or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of NAI described in the next sentence
when due (taking into consideration the time NAI may have to cure such failure,
if any, under the documents governing such Debt). As used in this clause
14(a)(v), "DEBT" shall include only Debt (as defined in the Common Definitions
and Provisions Agreement (Phase III - Improvements) of NAI or any of its
Subsidiaries now existing or arising in the future (a) payable to BNPLC or any
Affiliate of BNPLC, or (B) payable to any other Person and with respect to which
$3,000,000 or more is actually due and payable because of acceleration or
otherwise.

(e)  NAI: (a) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have had any such petition or application
filed against it; or (e) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty days or more.

(f)  One or more final judgments, decrees or orders for the payment of money in
excess of $3,000,000 in the aggregate shall be rendered against NAI and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty consecutive days without NAI's having obtained an agreement (or
after the expiration or termination of an agreement) of the Persons entitled to
enforce such judgment, decrees or orders not to enforce the same pending
negotiations with NAI concerning the satisfaction or other discharge of the
same.

(g)  NAI shall breach the requirements of Paragraph 12, which by reference to
Schedule 1 establishes certain financial covenants and other requirements.

(h)  as of the effective date of this Improvements Lease, any of the
representations or warranties of NAI contained in subparagraphs 2(A) - (J) of
the Closing Certificate shall be false or misleading in any material respect.

(i)  NAI shall fail to pay the full amount of any Supplemental Payment required
by the Purchase Agreement on the Designated Sale Date or shall fail to provide
Collateral as and when due pursuant to the Pledge Agreement Documents. 

(j)  NAI shall fail to comply with any term, provision or condition of the
Pledge Agreements after the expiration of any applicable notice and cure period
set forth in the Pledge Agreement.

18.  REMEDIES.

(a)  Basic Remedies. At any time after an Event of Default and after BNPLC has
given any notice required by subparagraph 18.(b), BNPLC shall be entitled at
BNPLC's option (and without limiting BNPLC in the exercise of any other right or
remedy BNPLC may have, and without any further demand or notice except as
expressly described in this subparagraph 18.(a)), to exercise any one or more of
the following remedies:

(i)  By notice to NAI, BNPLC may terminate NAI's right to possession of the
Property. A notice given in connection with unlawful detainer proceedings
specifying a time within which to cure a default shall terminate NAI's
right to possession if NAI fails to cure the default within the time
specified in the notice.

(ii) Upon termination of NAI's right to possession and without further
demand or notice, BNPLC may re-enter the Property in any manner not
prohibited by Applicable Law and take possession of all improvements,
additions, 

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alterations, equipment and fixtures thereon and remove any persons in
possession thereof. Any property in the Improvements may be removed and
stored in a warehouse or elsewhere at the expense and risk of and for the
account of NAI.

(iii) Upon termination of NAI's right to possession, this Improvements
Lease shall terminate and BNPLC may recover from NAI:

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

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

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

d)   Any other amount necessary to compensate BNPLC for all the
detriment proximately caused by NAI's failure to perform NAI's
obligations under this Improvements Lease or which in the ordinary
course of things would be likely to result therefrom, including the
costs and expenses (including Attorneys' Fees, advertising costs and
brokers' commissions) of recovering possession of the Property,
removing persons or property therefrom, placing the Property in good
order, condition, and repair, preparing and altering the Property for
reletting, all other costs and expenses of reletting, and any loss
incurred by BNPLC as a result of NAI's failure to perform NAI's
obligations under the other Operative Documents.

The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)c) and subparagraph 18.(a)(iii)b) shall be
computed by allowing interest at the Default Rate. The "WORTH AT THE
TIME OF AWARD" of the amount referred to in subparagraph 18.(a)(iii)c)
shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus
one percent (1%).

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

(iv)  BNPLC shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in force even after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable limitations).
Accordingly, even if NAI has breached this Improvements Lease and abandoned
the Property, this Improvements Lease shall continue in effect for so long
as BNPLC does not terminate NAI's right to possession, and BNPLC may
enforce all of BNPLC's rights and remedies under this Improvements Lease,
including the right to recover the Rent as it becomes due under this
Improvements Lease. NAI's right to possession shall not be deemed to have
been terminated by BNPLC except pursuant to subparagraph hereof. The
following shall not constitute a termination of NAI's right to possession:

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

b)   The appointment of a receiver upon the initiative of BNPLC to
protect BNPLC's interest under this Improvements Lease; or

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

(b)  Notice Required So Long As the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Continue Under the Purchase Agreement. So
long as NAI remains in possession of the Property and there has been no
termination of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations as provided Paragraph 4 of the Purchase Agreement, BNPLC's right to
exercise remedies provided in subparagraph 18.(a) will be subject to the
condition precedent that BNPLC shall have notified NAI, at a time when an Event
of Default shall have occurred and be continuing, of BNPLC's intent to exercise
remedies provided in subparagraph 18.(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing Rights
and Obligations before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPLC may proceed immediately to exercise remedies provided in subparagraph
18.(a) at any time after the earlier of (i) sixty days after BNPLC has given
such a notice to NAI, (ii) any date upon which NAI relinquishes possession of
the Property, or (iii) any termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.

(c)  Enforceability. This Paragraph shall be enforceable to the maximum extent
not prohibited by Applicable Law, and the unenforceability of any provision in
this Paragraph shall not render any other provision unenforceable.

(d)  Remedies Cumulative. No right or remedy herein conferred upon or reserved
to BNPLC is intended to be exclusive of any other right or remedy, and each and
every such right and remedy shall be cumulative and in addition to any other
right or remedy given to BNPLC hereunder or now or hereafter existing in favor
of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Improvements Lease, BNPLC shall be entitled, to the extent
permitted by Applicable Law or in equity, to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the covenants,
agreements, conditions or provisions of this Improvements Lease, or to a decree
compelling performance of any of the other covenants, agreements, conditions or
provisions of this Improvements Lease to be performed by NAI, or to any other
remedy allowed to BNPLC at law or in equity. Nothing contained in this
Improvements Lease shall limit or prejudice the right of BNPLC to prove for and
obtain in proceedings for bankruptcy or insolvency of NAI by reason of the
termination of this Improvements Lease, an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount be
greater, equal to, or less than the amount of the loss or damages referred to
above. Without limiting the generality of the foregoing, nothing contained
herein shall modify, limit or impair any of the rights and remedies of BNPLC
under the Purchase Documents, and BNPLC shall not be required to give the sixty
day notice described in subparagraph 18.(b) as a condition precedent to any
acceleration of the Designated Sale Date or to taking any action to enforce the
Purchase Documents.

19.  DEFAULT BY BNPLC. If BNPLC should default in the performance of any of its
obligations under this Improvements Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.

Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.

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

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

22.  HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title and 
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Improvements Lease
without BNPLC's consent, whether such termination occurs by lapse of time or
otherwise, such holding over shall constitute and be construed as a tenancy from
day to day only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the
day in question, times (ii) the Default Rate for such day; divided by (iii)
three hundred and sixty; subject, however, to all of the terms, provisions,
covenants and agreements on the part of NAI hereunder. No payments of money by
NAI to BNPLC after the termination of this Improvements Lease shall reinstate,
continue or extend the Term of this Improvements Lease and no extension of this
Improvements Lease after the termination thereof shall be valid unless and until
the same shall be reduced to writing and signed by both BNPLC and NAI.

23.  INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS. NAI
acknowledges and agrees that nothing contained in this Improvements Lease shall
limit, modify or otherwise affect any of NAI's obligations under the other
Operative Documents, which obligations are intended to be separate, independent
and in addition to, and not in lieu of, the obligations set forth herein. In the
event of any inconsistency between the express terms and provisions of the
Purchase Documents and the express terms and provisions of this Improvements
Lease, the express terms and provisions of the Purchase Documents shall control.
In the event of any inconsistency between the express terms and provisions of
the Construction Management Agreement or the Closing Certificate and the express
terms and provisions of this Improvements Lease, the express terms and
provisions of this Improvements Lease shall control; provided, nothing herein
will limit or impair NAI's obligations under the Closing Certificate following
any expiration of termination of this Improvements Lease.

[The signature pages follow.]

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38

IN WITNESS WHEREOF,  NAI and BNPLC have caused this Improvements  Lease
Agreement to be executed as of June 16, 1999.

" NAI"

NETWORK APPLIANCE, INC.

By:
-----------------------------
Name:
------------------------
Title:
-------------------

33

39

[Continuation of signature pages to Lease Agreement dated to be effective June
16, 1999]

" BNPLC"

BNP LEASING CORPORATION

By:
-------------------------------
Henry Setina, Vice President

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Exhibit A

LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point" X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point" X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38 degrees 52'
02" East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.

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PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" West, through a central angle of 52 degrees
21' 36" for an arc length of 12.79 feet; thence South 51 degrees 07' 58" East
85.87 feet; thence South 38 degrees 52' 02" West 252.96 feet; North 51 degrees
07' 58" West 41.72 feet; thence Southwesterly along a non-tangent curve to the
left with a radius of 20.00 feet, from which a radial line bears North 10
degrees 35' 40" West, through a central angle of 40 degrees 32' 18" for an arc
length of 14.15 feet; thence South 38 degrees 52' 02" West 29.48 feet; thence
Southerly along a tangent curve to the left with a radius of 20.00 feet, through
a central angle of 60 degrees 45' 15" for an arc length 21.21 feet to a point on

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42
said Northeasterly line of said parcel of land described in the deed to Santa
Clara Valley Transit District; thence Northwesterly along said Northeasterly
line along a non-tangent curve to the left with a radius of 1002.05 feet, from
which a radial line bears North 42 degrees 01' 23" East, through a central angle
of 1 degree 19' 55" for an arc length of 23.29 feet to the True Point of
Beginning.

APN: 110-32-010
ARB: 110-03-x066

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Exhibit B

INSURANCE REQUIREMENTS

I.   LIABILITY INSURANCE:

A.   NAI must maintain commercial general liability ("CGL") insurance on an
occurrence basis, affording immediate protection to the limit of not less than
$20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Improvements Lease (though such coverage
or the amount thereof shall in no way limit such indemnifications).

B.   Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election. After the expiration of NAI's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by NAI, NAI may increase any deductible or self-insured retention
applicable to such insurance, but not to an amount in excess of $500,000.

C.   The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Improvements Lease, and the insurance
company or companies providing the CGL insurance, must be acceptable to BNPLC.
BNPLC shall have the right from time to time and at any time to review and
approve such policy forms (including endorsements) and the insurance company or
companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until NAI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:

(1)  Forms: CGL Insurance must be provided on Insurance Services
Office ("ISO") forms CG 0001 1093 or CG 0001 0196 or equivalent
substitute forms providing the same or greater coverage.

(2)  Rating Requirements: Insurance must be provided through insurance
or reinsurance companies rated by the A.M. Best Company of Oldwick,
New Jersey as having a policyholder's rating of A or better and a
reported financial information rating of X or better.

(3)  Required Endorsements: CGL Insurance must be endorsed to provide
or include:

(a)  in any policy containing a general aggregate limit, ISO form
amendment" Aggregate Limits of Insurance Per Location" CG 2504
1185 or equivalent substitute form;

(b)  a waiver of subrogation, using ISO form CG 2404 1093 or
equivalent substitute form (and under the commercial umbrella, if
any), in favor of" BNP Leasing Corporation and other Interested
Parties (as defined in the Common Definitions and Provisions
Agreement (Phase III - Improvements) between Network Appliance,
Inc. and BNP Leasing Corporation dated June 16, 1999)";

(c)  ISO additional insured form CG 2026 1185 or equivalent
substitute form, without modification (and under the commercial
umbrella, if any), designating as additional insureds" BNPLC and
other Interested Parties, as defined in the Common Definitions
and Provisions Agreement 

1

44

(Phase III - Improvements) between Network Appliance, Inc. and
BNP Leasing Corporation dated June 16, 1999)"; and

(d)  provisions entitling BNPLC to 30 days' notice from the
insurer prior to any cancellation, nonrenewal or material
modification to the CGL coverage.

(4)  Other Insurance: Each policy to contain standard CGL" other
insurance" wording, unmodified in any way that would make it excess
over or contributory with the additional insured's own commercial
general liability coverage.

II.  PROPERTY INSURANCE: From and after the commencement of any construction of
Improvements on or about the Land or the delivery of any materials in
anticipation of such construction:

A.   NAI must maintain property insurance in" special form" (including
theft) or against" all risks," providing the broadest available coverage for all
Improvements (as defined in the Common Provisions and Definitions Agreement but
excluding those Improvements to be demolished by NAI prior to the commencement
of construction contemplated in the Construction Management Agreement) and
equipment included in the Property, on a blanket basis if multiple buildings are
involved, with no exclusions for vandalism, malicious mischief, or sprinkler
leakage, and including coverage against earthquake and all coverage perils
normally included within the definitions of extended coverage, vandalism,
malicious mischief and, if the Property is in a flood zone, flood. In addition,
boiler and machinery coverage must be maintained at all times by endorsement to
the property insurance policy or by separate policy. Also, during any period of
significant construction on any Improvements, the property insurance must
include builder's completed value risk insurance for such Improvements, with no
protective safeguard endorsement, and (without limiting the other requirements
of this Exhibit) builder's completed value risk insurance must provide the
following coverages:

(1)  materials and supplies at other locations awaiting installation;

(2)  materials and supplies in transit to the worksite for installation;

(3)  loss of use or consequential loss;

(4)  pollutant cleanup and removal;

(5)  freezing;

(6)  collapse during construction, resulting from fault, defect, error or
omission in design, plan, specification or workmanship;

(7)  construction ordinance or law; (8) mechanical or electrical breakdown;

(9)  debris removal additional limit;

(10) preservation of property;

(11) fire department service charge;

(12) additional interest on construction loan due to delays in the
completion of construction;

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45

(13) loss of rental income;

(14) legal/professional fees (in the amount of no less than $1,500,000) and
other soft costs as reasonably determined by NAI, subject to BNPLC's
approval.

B.   The property insurance required hereby must provide coverage in the
amount no less than replacement value (exclusive of land, foundation, footings,
excavations and grading) with endorsements for contingent liability from
operation of building laws, increased cost of construction and demolition costs
which may be necessary to comply with building laws. Subject to the approval of
BNPLC, NAI will be responsible for determining the amount of property insurance
to be maintained from time to time, but NAI must maintain such coverage on an
agreed value basis to eliminate the effects of coinsurance.

C.   Any deductible or self-insured retention applicable to the property
insurance shall not exceed $50,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election; provided, that with respect to earthquake
coverage the deductible may be as high as five percent of the value of the
Improvements. After the expiration of NAI's right to exercise any Issue 97-10
Election, and provided no Issue 97-10 Election has been exercised by NAI, NAI
may increase any deductible or self-insured retention applicable to such
insurance, provided the increased amount shall not exceed (1) $500,000 for all
coverages other than earthquake coverage, and (2) for earthquake coverage only,
five percent of the aggregate amount of the property insurance required to
satisfy this Improvements Lease, calculated as described in the preceding
paragraph.

D.   The property insurance shall cover not only the value of NAI's
interest in the Improvements, but also the interest of BNPLC, with BNPLC shown
as an insured as its interests may appear.

E.   The forms of insurance policies (including endorsements) used to
provide the property insurance required by this Improvements Lease, and the
insurance company or companies providing the property insurance, must be
acceptable to BNPLC. BNPLC shall have the right from time to time and at any
time to review and approve such policy forms (including endorsements) and the
insurance company or companies providing such insurance. Without limiting the
generality of the foregoing, BNPLC may reasonably require (and unless and until
NAI is otherwise notified by BNPLC, BNPLC does require) that such insurance be
provided under forms and by companies consistent with the following:

(1)  Rating Requirements: Insurance to be provided through insurance
or reinsurance companies rated by the A.M. Best Company of Oldwick, New
Jersey as having (a) a policyholder's rating of A or better, (b) a reported
financial information rating of no less than X, and (c) in the case of each
insurance or reinsurance company, a reported financial information rating
which indicates an adjusted policyholders' surplus equal to or greater than
the underwriting exposure that such company has under the insurance or
reinsurance it is providing for the Property.

(2)  Required Endorsements: NAI's property insurance must be endorsed
to provide or include:

(a)  a waiver of subrogation in favor of" BNPLC and other Interested
Parties, as defined in the Common Definitions and Provisions
Agreement (Phase III - Improvements) between Network Appliance,
Inc. and BNP Leasing Corporation dated June 16, 1999)";

(b)  that NAI's insurance is primary, with any policies of BNPLC or
other Interested Parties being excess, secondary and
noncontributing;

(c)  that the protection afforded to BNPLC by such insurance shall not
be reduced or impaired by acts or omissions of NAI or any other
beneficiary or insured; and

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46

(d)  that BNPLC must be notified at least thirty days prior to any
cancellation, nonrenewal or reduction of insurance coverage.

III. OTHER INSURANCE RELATED REQUIREMENTS:

A.   BNPLC must be notified in writing immediately by NAI of claims against
NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.

B.   NAI's property insurance must be evidenced by ACORD form 27" Evidence
of Property Insurance" completed and interlineated in a manner satisfactory to
BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the property insurance must be attached to such form.

C.   NAI's CGL insurance must be evidenced by ACORD form 25" Certificate of
Insurance" completed and interlineated in a manner satisfactory to BNPLC to show
compliance with the requirements of this Exhibit. Copies of endorsements to the
CGL insurance must be attached to such form.

D.   Such evidence of required insurance must be delivered upon execution
of this Improvements Lease and new certificate or evidence of insurance must be
delivered no later than 10 days prior to expiration of existing policy.

E.   NAI shall not cancel, fail to renew, or make or permit any material
reduction in any of the policies or certificates described in this Exhibit
without the prior written consent of BNPLC. The certificates (ACORD forms 27 and
25) described in this Exhibit must contain the following express provision:

"This is to certify that the policies of insurance described herein have been
issued to the insured Network Appliance, Inc. for whom this certificate is
executed and are in force at this time. In the event of cancellation,
non-renewal, or material reduction in coverage affecting the certificate holder,
at least sixty days prior notice shall be given to the certificate holder."

F.   The limits of liability under the liability insurance required by this
Improvements Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.

G.   NAI shall provide copies, certified as complete and correct by an
authorized agent of the applicable insurer, of all insurance policies required
by this Exhibit within ten days after receipt of a request for such copies from
BNPLC.

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Exhibit C

NOTICE OF LIBOR PERIOD ELECTION

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re:  Lease Agreement (Phase III - Improvements) and Lease Agreement (Phase
III - Land), both dated as of June 16, 1999, and both between Network
Appliance, Inc., as tenant, and BNP Leasing Corporation, as landlord

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements shall be:

________________ month(s),

beginning with the first Base Rent Period that commences on or after:

--------------, ----.

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

Executed this _____ day of ______________, 19___.

Network Appliance, Inc.

Name:    
----------------------------
Title:   
---------------------------
[cc all Participants]

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Schedule 1

FINANCIAL COVENANTS

This Schedule 1 is attached to and made a part of (a) the Lease Agreement
(Phase III - Improvements) (the" IMPROVEMENTS LEASE") dated to be effective as
of June 16, 1999 (the" EFFECTIVE DATE"), between BNP Leasing Corporation, a
Delaware corporation ("BNPLC") and Network Appliance, Inc., a California
corporation ("NAI"), (b) the Lease Agreement (Phase III - 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 III Improvements) (the" PLEDGE AGREEMENT (IMPROVEMENTS)") dated
to be effective as of the Effective Date, among BNPLC, NAI, and Banque Nationale
de Paris, as a Participant and as agent for any financial institutions that
become Participants thereunder from time to time, and (d) the Pledge Agreement
(Phase III - Land) (collectively with the Pledge Agreement (Improvements), the
"PLEDGE AGREEMENTS") dated to be effective as of the Effective Date, among
BNPLC, NAI, and Banque Nationale de Paris, 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.

"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and the earlier of
the following dates after each fiscal quarter of NAI that ends after the Base
Rent Commencement Date : (1) the seventh Business Day after the release by NAI
of its financial statements for the fiscal quarter; or (2) the first Business
Day of the third calendar month following the end of the fiscal quarter.

"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
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 

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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).

"MANDATORY COLLATERAL PERIOD" means any period during which, notwithstanding any
contrary designation of a Collateral Percentage by NAI under the Pledge
Agreements, the Collateral Percentage for purposes of the Pledge Agreements
shall be one hundred percent (100%), determined as set forth in Part III of this
Schedule 1.

"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 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.

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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 - TESTS FOR MANDATORY COLLATERAL PERIODS

If, as of the end of the latest fiscal quarter of NAI ending before any
Collateral Test Date, NAI shall have both:

(A) failed to maintain a ratio of (1) the sum (without duplication of any
item) of Collateral delivered and pledged under the Pledge Agreements in
accordance with the requirements thereof (if any), unencumbered 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 (2) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis), of at least 1.5 to 1.00; and

(B) failed to maintain a ratio of (i) all Debt of NAI and its Subsidiaries
(determined on a consolidated basis) to (ii) Consolidated Tangible Net Worth of
NAI, of no more than 0.45 to 1.00;

such Collateral Test Date shall constitute a "FAILED COLLATERAL TEST DATE" for
purposes of the determination of Mandatory Collateral Periods. A Mandatory
Collateral Period shall commence on each Failed Collateral Test, and such
Mandatory Collateral Period shall continue until the second of any two
subsequent CONSECUTIVE Collateral Test Dates, neither of which constitutes a
Failed Collateral Test Date.

For purposes of illustration only, assume that the following dates are
consecutive Collateral Test Dates, some of which are Failed Collateral Test
Dates and some of which are not, as indicated opposite each date:

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Date                    Failed Collateral Test Date?

February 15, 2001                  Yes
May 12, 2001                       No
August 16, 2001                    Yes
November 11, 2001                  No
February 18, 2002                  No
May 14, 2002                       Yes
August 18, 2002                    Yes
November 18, 2002                  No
February 15, 2003                  No

Under these assumptions, the entire period from February 15, 2001 to February
18, 2002 falls within one or more Mandatory Collateral Periods. Also, the entire
period commencing May 14, 2002 and ending February 15, 2003 falls within one or
more Mandatory Collateral Periods. The period from February 18, 2002 to May 14,
2002 does not constitute Mandatory Collateral Period.

PART IV - 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:

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;

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52

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 (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 , 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.

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. 

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53

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 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. 

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54

COMMON DEFINITIONS AND PROVISIONS AGREEMENT

(PHASE III - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

AND

NETWORK APPLIANCE, INC.

DATED AS OF JUNE 16, 1999

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TABLE OF CONTENTS

Page

ARTICLE I - LIST OF DEFINED TERMS:

ABSOLUTE NAI CONSTRUCTION OBLIGATIONS.........................................   1
ACTIVE NEGLIGENCE ............................................................   2
ADDITIONAL RENT ..............................................................   3
ADMINISTRATIVE AGENCY FEE ....................................................   3
ADJUSTED EBIT ................................................................   3
ADVANCE DATE .................................................................   3
AFFILIATE ....................................................................   3
AGREEMENT TO LEASE ...........................................................   3
APPLICABLE LAWS ..............................................................   3
APPLICABLE PURCHASER .........................................................   3
ARRANGEMENT FEE ..............................................................   3
ATTORNEYS' FEES ..............................................................   3
BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS......................   4
BANKING RULES CHANGE .........................................................   4
BASE RATE ....................................................................   4
BASE RENT ....................................................................   4
BASE RENT COMMENCEMENT DATE...................................................   4
BASE RENT DATE ...............................................................   4
BASE RENT PERIOD .............................................................   5
BNPLC ........................................................................   6
BNPLC'S PARENT ...............................................................   6
BREAKAGE COSTS ...............................................................   6
BREAK EVEN PRICE .............................................................   6
BUSINESS DAY .................................................................   6
CAPITAL ADEQUACY CHARGES .....................................................   6
CAPITAL LEASE ................................................................   6
CARRYING COSTS ...............................................................   6
CLOSING CERTIFICATE ..........................................................   7
CMA SUSPENSION EVENT .........................................................   7
CMA SUSPENSION NOTICE ........................................................   7
CMA SUSPENSION PERIOD ........................................................   7
CMA TERMINATION EVENT ........................................................   7
CODE .........................................................................   7
COLLATERAL ...................................................................   7
COLLATERAL PERCENTAGE ........................................................   7
COMMITMENT FEE RATE ..........................................................   7
COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE III - IMPROVEMENTS)........   8
COMPLETION NOTICE ............................................................   8
CONSTRUCTION ADVANCES ........................................................   8
CONSTRUCTION ADVANCE REQUEST..................................................   8
CONSTRUCTION ALLOWANCE .......................................................   9

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CONSTRUCTION MANAGEMENT AGREEMENT.............................................    9
CONSTRUCTION MILESTONE .......................................................    9
CONSTRUCTION PERIOD ..........................................................    9
CONSTRUCTION-PERIOD INDEMNITY PAYMENTS........................................    9
CONSTRUCTION PROJECT .........................................................    9
CURRENT AS IS MARKET VALUE....................................................    9
DEBT .........................................................................   10
DEFAULT ......................................................................   10
DEFAULT RATE .................................................................   10
DEFAULTING PARTICIPANT .......................................................   11
DEFECTIVE WORK ...............................................................   11
DEPOSIT TAKER ................................................................   11
DEPOSIT TAKER LOSSES .........................................................   11
DESIGNATED SALE DATE .........................................................   11
DEVELOPMENT DOCUMENTS ........................................................   11
DIRECT PAYMENTS TO PARTICIPANTS...............................................   12
EFFECTIVE DATE ...............................................................   12
EFFECTIVE RATE ...............................................................   12
ENVIRONMENTAL LAWS ...........................................................   12
ENVIRONMENTAL CUTOFF DATE ....................................................   12
ENVIRONMENTAL LOSSES .........................................................   12
ENVIRONMENTAL REPORTS ........................................................   13
ERISA ........................................................................   13
ERISA AFFILIATE ..............................................................   13
ESCROWED PROCEEDS ............................................................   13
ESTABLISHED MISCONDUCT .......................................................   14
EUROCURRENCY LIABILITIES .....................................................   14
EURODOLLAR RATE RESERVE PERCENTAGE............................................   14
EVENT OF DEFAULT..............................................................   14
EXCLUDED TAXES ...............................................................   14
EXISTING CONTRACTS ...........................................................   15
FAILED COLLATERAL TEST DATE...................................................   15
FED FUNDS RATE ...............................................................   15
FOCB NOTICE ..................................................................   15
FUNDED CONSTRUCTION ALLOWANCE.................................................   15
FUNDING ADVANCES .............................................................   15
FUTURE WORK ..................................................................   15
GAAP .........................................................................   15
HAZARDOUS SUBSTANCE ..........................................................   15
HAZARDOUS SUBSTANCE ACTIVITY..................................................   16
IMPOSITIONS ..................................................................   16
IMPROVEMENTS .................................................................   16
IMPROVEMENTS LEASE ...........................................................   16
INITIAL FUNDING ADVANCE ......................................................   16
INTERESTED PARTY .............................................................   17
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT................   17
ISSUE 97-10 ELECTION .........................................................   17

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Page

ISSUE 97-10 PREPAYMENT .......................................................   17
LAND .........................................................................   18
LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION..................................   18
LIBOR ........................................................................   18
LIBOR PERIOD ELECTION ........................................................   18
LIEN .........................................................................   19
LIENS REMOVABLE BY BNPLC .....................................................   19
LOSSES .......................................................................   19
MANDATORY COLLATERAL PERIOD...................................................   19
MATERIAL ENVIRONMENTAL COMMUNICATION..........................................   20
MAXIMUM CONSTRUCTION ALLOWANCE................................................   20
MAXIMUM PERMITTED TERMINATION FEES............................................   20
MAXIMUM PERMITTED PREPAYMENT..................................................   20
MAXIMUM REMARKETING OBLIGATION................................................   20
MINIMUM EXTENDED REMARKETING PRICE............................................   20
MULTIEMPLOYER PLAN ...........................................................   20
NAI ..........................................................................   21
NAI'S EXTENDED REMARKETING PERIOD.............................................   21
NAI'S EXTENDED REMARKETING RIGHT..............................................   21
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS..............................   21
NORMAL TENANT IMPROVEMENTS....................................................   21
NOTICE OF NAI'S INTENT TO TERMINATE...........................................   21
OPERATIVE DOCUMENTS ..........................................................   21
OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT.............................   21
OTHER LEASE AGREEMENT ........................................................   21
OTHER PURCHASE AGREEMENT .....................................................   21
OUTSTANDING CONSTRUCTION ALLOWANCE............................................   22
PARTICIPANT ..................................................................   22
PARTICIPATION AGREEMENT ......................................................   22
PBGC .........................................................................   22
PERIOD .......................................................................   22
PERMITTED ENCUMBRANCES .......................................................   22
PERMITTED HAZARDOUS SUBSTANCE USE.............................................   22
PERMITTED HAZARDOUS SUBSTANCES................................................   23
PERMITTED TRANSFER ...........................................................   23
PERSON .......................................................................   23
PERSONAL PROPERTY ............................................................   24
PLAN .........................................................................   24
PLEDGE AGREEMENT .............................................................   24
PRE-COMMENCEMENT CASUALTY ....................................................   24
PREEMPTIVE NOTICE ............................................................   24
PRIME RATE ...................................................................   24
PRIOR WORK ...................................................................   24
PROJECT COSTS ................................................................   24
PROJECTED COST OVERRUNS ......................................................   25
PROPERTY .....................................................................   25
PURCHASE AGREEMENT ...........................................................   25

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PURCHASE DOCUMENTS ...........................................................   25
PURCHASE OPTION ..............................................................   25
QUALIFIED AFFILIATE ..........................................................   26
QUALIFIED PREPAYMENTS ........................................................   26
REAL PROPERTY ................................................................   26
REIMBURSABLE CONSTRUCTION-PERIOD COSTS........................................   26
REMEDIAL WORK ................................................................   26
RENT .........................................................................   26
RESIDUAL RISK PERCENTAGE .....................................................   26
RESPONSIBLE FINANCIAL OFFICER.................................................   27
SALE CLOSING DOCUMENTS .......................................................   27
SCOPE CHANGE .................................................................   27
SECURED SPREAD ...............................................................   27
SELLER .......................................................................   27
STIPULATED LOSS VALUE ........................................................   27
SUBSIDIARY ...................................................................   27
SUPPLEMENTAL PAYMENT .........................................................   27
TERM .........................................................................   27
THIRD PARTY CONTRACT .........................................................   27
THIRD PARTY PRICE ............................................................   27
THIRD PARTY SALE NOTICE ......................................................   27
THIRD PARTY SALE PROPOSAL ....................................................   27
THIRD PARTY TARGET PRICE .....................................................   27
TRANSACTION EXPENSES .........................................................   28
UNDERWRITING FEE .............................................................   28
UNFUNDED BENEFIT LIABILITIES..................................................   28
UNSECURED SPREAD .............................................................   28
UPFRONT SYNDICATION FEES .....................................................   29
VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS......................................   29
VOLUNTARY RETENTION OF THE PROPERTY...........................................   29
WORK..........................................................................   29

Page

ARTICLE II - PROVISIONS USED IN COMMON:
1.  NOTICES ...................................................................  30
2.  SEVERABILITY ..............................................................  31
3.  NO MERGER .................................................................  31
4.  NO IMPLIED WAIVER .........................................................  32
5.  ENTIRE AND ONLY AGREEMENTS.................................................  32
6.  BINDING EFFECT ............................................................  32
7.  TIME IS OF THE ESSENCE.....................................................  32
8.  GOVERNING LAW .............................................................  32
9.  PARAGRAPH HEADINGS ........................................................  32
10. NEGOTIATED DOCUMENTS ......................................................  33
11. TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT.......................  33

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Page

12. OTHER TERMS AND REFERENCES.................................................  33
13. EXECUTION IN COUNTERPARTS..................................................  33
14. NOT A PARTNERSHIP, ETC.....................................................  33

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60

COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE III - IMPROVEMENTS)

This Common Definitions and Provisions Agreement (Phase III -
Improvements), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
dated as of June 16, 1999, the Effective Date.

RECITALS

Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase III - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Improvements Lease (as defined below), the Construction Management
Agreement (as defined below), and the Purchase Agreement (as defined below), all
of which concern the Property (as defined below). Each of the Closing
Certificate, the Improvements Lease, the Construction Management Agreement and
the Purchase Agreement (together with this Common Definitions and Provisions
Agreement (Phase III - Improvements) and the Pledge Agreement [as defined
below], the "OPERATIVE DOCUMENTS") are intended to create separate and
independent obligations upon the parties thereto. However, NAI and BNPLC intend
that all of the Operative Documents share certain consistent definitions and
other miscellaneous provisions. To that end, the parties are executing this
Common Definitions and Provisions Agreement (Phase III - Improvements) and
incorporating it by reference into each of the other Operative Documents.

AGREEMENTS

ARTICLE I - LIST OF DEFINED TERMS

UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL HAVE
THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:

"ABSOLUTE NAI CONSTRUCTION OBLIGATIONS"  means the following:

(1) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Environmental Losses incurred or suffered
by any Interested Party;

(2) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
BNPLC would not have incurred or suffered but for any act or any omission
of NAI or of any NAI's contractors or subcontractors during the period that
the Construction Management Agreement remains in force or during any other
period that NAI remains in possession or control of the Construction
Project (excluding, however, as described below certain Losses consisting
of claims related to any failure by NAI to complete the Construction
Project);

(3) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any fraud, misapplication of funds
(including

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 1

61
Construction Advances), illegal acts, or willful misconduct on the part of
the NAI or its employees or agents or any other party for whom NAI is
responsible; and

(4)  Construction-Period  Indemnity  Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any  bankruptcy  proceeding  involving
NAI.

For purposes of clause (2) of this definition," acts and omissions of NAI" shall
include (i) any decision by NAI to make a Scope Change without the prior
approval of BNPLC, (ii) any failure of NAI to maintain insurance required by the
Improvements Lease or the Construction Management Agreement, (iii) any decision
not to continue or complete Work under the Construction Management Agreement
because of a change in NAI's facility needs or in NAI's plans to meet its
facility needs (such as, for example, a decision by NAI to lease or acquire
another less expensive facility as an alternative to the Improvements), (iv) any
failure by NAI to reserve termination rights in Third Party Contracts as
required by subparagraph 1(A)(2)(b) of the Construction Management Agreement,
and (v) any other breach by NAI of the Construction Management Agreement.

Thus, for example, if a third party asserts a claim for damages against BNPLC
because of injuries the third party sustained while on the Land as a result of
NAI's breach of its obligation under the Construction Management Agreement to
keep the Land and the Improvements thereon in a reasonably safe condition as
Work progresses under NAI's direction and control, then any Construction-Period
Indemnity Payment required because of such third party claim will constitute an
Absolute NAI Construction Obligation under clause (2) of this definition.
Similarly, if a claim against BNPLC by a third party injured on the Land during
the progress of the Work is uninsured or under-insured only because of NAI's
failure to obtain liability insurance in accordance with the requirements of the
Improvements Lease (the premiums for which insurance are reimbursable from
Construction Advances as provided in the Construction Management Agreement),
then Construction-Period Indemnity Payments to BNPLC for the uninsured or
under-insured Losses arising out of the third party claim will constitute
Absolute NAI Construction Obligations under clause (2) of this definition.

It is understood, however, that a failure of NAI to complete construction of the
Construction Project will not necessarily constitute a breach of the
Construction Management Agreement, given that NAI may elect to terminate the
Construction Management Agreement as provided in subparagraph 5(D) thereof. In
the event the Construction Management Agreement is terminated by NAI pursuant to
subparagraph 5(D) thereof or by BNPLC pursuant to subparagraph 5(E) thereof,
clause (2) of this definition will not be construed to include
Construction-Period Indemnity Payments, the sole reason for which are Losses
suffered by BNPLC consisting of claims related to NAI's failure to complete the
Construction Project.

"ACTIVE NEGLIGENCE"  of any Person (including BNPLC) means, and is limited
to, the negligent conduct on the Property (and not mere omissions) by such
Person or by others acting and authorized to act on such Person's behalf in a
manner that proximately causes actual bodily injury or property damage for which
NAI does not carry (and is not obligated by the Improvements Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Land, the Improvements or any interest in any other
Property or as a party to the transactions described in the Improvements Lease
or the other Operative Documents or in the Agreement to Lease, the Other Lease
Agreement or the Other Purchase Agreement, (2) any negligent failure of any
other Interested Party to act when the duty to act would not have been imposed
but for such party's contractual or other relationship to BNPLC or participation
or facilitation in any manner, directly or indirectly, of the transactions
described in the Improvements Lease or other Operative Documents or in the
Agreement to Lease, the Other Lease Agreement or Other Purchase Agreement, or
(3) the exercise in a lawful manner by BNPLC (or any party lawfully claiming
through or under BNPLC) of any right or remedy provided in or under the
Improvements Lease or the other Operative Documents or in the Agreement to
Lease, the Other Lease Agreement or Other Purchase Agreement.

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62

"ADDITIONAL RENT"  shall have the meaning assigned to it in subparagraph
3.(d) of the Improvements Lease.

"ADMINISTRATIVE AGENCY FEE"  shall have the meaning assigned to it in
subparagraph 9 of the Improvements Lease.

"ADJUSTED EBIT"  shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Improvements Lease and to the Pledge Agreement.

"ADVANCE DATE"  means, regardless of whether any Construction Advance shall
actually be made thereon, the first Business Day of every calendar month,
beginning with the first Business Day in May, 1999 and continuing regularly
thereafter to and including the Base Rent Commencement Date.

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

"AGREEMENT TO LEASE"  shall mean the Agreement to Lease dated as of June
16, 1999 between BNPLC and NAI, pursuant to which BNPLC has agreed to provide
funds for the acquisition of the Land and NAI has agreed to cause Seller to
convey the fee interest in the Land to BNPLC, subject only to Permitted
Encumbrances.

"APPLICABLE LAWS"  means any or all of the following, to the extent
applicable to NAI or the Property or the Improvements Lease or the other
Operative Documents: restrictive covenants; zoning ordinances and building
codes; flood disaster laws; health, safety and environmental laws and
regulations; the Americans with Disabilities Act and other laws pertaining to
disabled persons; and other laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions.

"APPLICABLE PURCHASER"  means any third party designated by NAI to purchase
BNPLC's interest in the Property and in any Escrowed Proceeds as provided in the
Purchase Agreement.

"ARRANGEMENT FEE"  shall have the meaning assigned to it in subparagraph
3.(e) of the Improvements Lease.

"ATTORNEYS' FEES"  means the expenses and reasonable fees of counsel to the
parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.

"BALANCE OF UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS"  shall have the
meaning assigned to it in subparagraph 1(B)(1) of the Purchase Agreement.

"BANKING RULES CHANGE"  means either: (1) the introduction of or any change
in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending 

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63

community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).

"BASE RATE"  for any Construction Period or Base Rent Period means a rate
equal to the higher of (1) the Prime Rate in effect on the first day of such
period, or (2) the rate which is fifty basis points (50/100 of 1%) above the Fed
Funds Rate for that period.

"BASE RENT"  means the rent payable by NAI pursuant to subparagraph 3.(a) 
of the Improvements Lease.

"BASE RENT COMMENCEMENT DATE"  means the earlier of (1) the first Business
Day of October, 2000, (2) the first Business Day of the first calendar month to
follow by twenty days or more the day upon which any Completion Notice is given,
or (3) the first Business Day of the first calendar month upon which the Funded
Construction Allowance shall equal or exceed the Maximum Construction Allowance.
For example, if on the first Business Day of November, 1999 construction of the
Construction Project is continuing, the Funded Construction Allowance
is $22,065,000 (before adding any Carrying Costs for the preceding month) and
the Maximum Construction Allowance is $22,055,000, and if Carrying Costs of
$17,500 would be added to the Funded Construction Allowance on such day if the
Construction Allowance were not limited to the Maximum Construction Allowance,
then (absent an extension by BNPLC as described below) such day shall be the
Base Rent Commencement Date and on such day $10,000 will be added to the Funded
Construction Allowance as Carrying Cost and $7,500 will be payable as Base Rent
pursuant to subparagraph 3.(c)(i) of the Improvements Lease. Notwithstanding the
forgoing, if for any reason (including a termination of the Construction
Management Agreement) NAI has not completed the Construction Project thirty days
in advance of the scheduled Base Rent Commencement Date determined pursuant to
the first sentence of this definition, BNPLC shall be entitled (but not
obligated) to extend the Base Rent Commencement Date one or more times and at
any time before the Construction Project actually is complete and ready for
occupancy. To so extend the Base Rent Commencement Date, BNPLC shall notify NAI
thereof and of the date to which the Base Rent Commencement Date is extended,
which may be the first Business Day of any calendar month designated by BNPLC in
the notice of extension, provided that BNPLC will not so designate any date more
than sixty days after the date upon which the Construction Project is expected
by BNPLC (at the time of the designation) to be complete.

"BASE RENT DATE"  means a date upon which Base Rent must be paid under the
Improvements Lease, all of which dates shall be the first Business Day of a
calendar month. The first Base Rent Date shall be determined as follows:

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

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

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

(1) If a LIBOR Period Election of one month is in effect on a
Base Rent Date, then the first Business Day of the first calendar
month following such Base Rent Date shall be the next following Base
Rent Date.

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64

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

Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of September, 1999 and a LIBOR Period Election of two months
commences on the Base Rent Commencement Date, then the first Base Rent Date
shall be the first Business Day of November, 1999.

"BASE RENT PERIOD"  means a period for which Base Rent must be paid under
the Improvements Lease, each of which periods shall correspond to the LIBOR
Period Election for such period. The first Base Rent Period shall begin on and
include the Base Rent Commencement Date, and each successive Base Rent Period
shall begin on and include the Base Rent Date upon which the preceding Base Rent
Period ends. Each Base Rent Period, including the first Base Rent Period, shall
end on but not include the first or second Base Rent Date after the Base Rent
Date upon which such period began, determined as follows:

(1) If the LIBOR Period Election for a Base Rent Period is one
month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
began.

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

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

1) If NAI makes a LIBOR Period Election of three months for a
hypothetical Base Rent Period beginning on the first Business Day in
January, 2001, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent
Period will end on the first Business Day in April, 2001, the third
calendar month after January, 2001.

2) If, however, NAI makes a LIBOR Period Election of six months
for the hypothetical Base Rent Period beginning the first Business Day
in January, 2001, then such Base Rent Period will end on but not
include the second Base Rent Date after it begins; that is, the first
Business Day in July, 2001.

"BNPLC" means BNP Leasing Corporation, a Delaware corporation.

"BNPLC'S PARENT" means BNPLC's Affiliate, Banque Nationale de Paris, a bank
organized and existing under the laws of France and any successors of such bank.

"BREAKAGE COSTS" means any and all costs, losses or expenses incurred or
sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:

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

Common Definitions and Provisions Agreement
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65

(2) reserved to provide a Construction Advance that NAI requests,
but thereafter declines to take for any reason, or that NAI requests
but is not permitted to take because of its failure to satisfy any of
the conditions specified in the Construction Management Agreement; or

(3) used to make or maintain Funding Advances upon the
acceleration of the end of any Base Rent Period pursuant subparagraph
3.(c)(iii) of the Improvements Lease.

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

"BREAK EVEN PRICE"  shall have the meaning assigned to it in subparagraph
1(B)(1) of the Purchase Agreement.

"BUSINESS DAY" means any day that is (1) not a Saturday, Sunday or day on
which commercial banks are generally closed or required to be closed in New York
City, New York or San Francisco, California, and (2) a day on which dealings in
deposits of dollars are transacted in the London interbank market; provided that
if such dealings are suspended indefinitely for any reason," Business Day" shall
mean any day described in clause (1).

"CAPITAL ADEQUACY CHARGES" means any additional amounts BNPLC's Parent or
any other Participant requests BNPLC to pay as compensation for an increase in
required capital as provided in subparagraph 5.(b)(ii) of the Improvements
Lease.

"CAPITAL LEASE" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP or for federal income tax
purposes.

"CARRYING COSTS" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Base Rent
Commencement Date pursuant to and as more particularly described in subparagraph
6.(a) of the Improvements Lease.

"CLOSING CERTIFICATE" means the Closing Certificate and Agreement dated as
of June 16, 1999 executed by NAI in favor of BNPLC, as such Closing Certificate
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms. (Upon execution of the Amended and
Restated Closing Certificate pursuant to and as defined in the Agreement to
Lease, references in the Operative Documents to the Closing Certificate shall
constitute references to the Amended and Restated Closing Certificate.)

"CMA SUSPENSION EVENT" shall have the meaning assigned to it in
subparagraph 5(A) of the Construction Management Agreement.

"CMA SUSPENSION NOTICE" shall have the meaning assigned to it in
subparagraph 5(B)(1) of the Construction Management Agreement.

"CMA SUSPENSION PERIOD" shall have the meaning assigned to it in
subparagraph 5(C) of the Construction Management Agreement.

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66

"CMA TERMINATION EVENT" shall have the meaning assigned to it in
subparagraph 5(B)(3) of the Construction Management Agreement.

"CODE"  means the Internal Revenue Code of 1986, as amended.

"COLLATERAL"  shall have the meaning assigned to it in the Pledge
Agreement.

"COLLATERAL PERCENTAGE" for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Improvements Lease, the
Collateral Percentage for any Base Rent Period shall not exceed a fraction; the
numerator of which fraction shall equal the value (determined as provided in the
Pledge Agreement) of all Collateral (a) that is, on the first day of such
period, held by the Deposit Takers under (and as defined in) the Pledge
Agreement subject to a Qualifying Security Interest (as defined below), (b) that
is free from claims or security interests held or asserted by any third party,
and (c) that is not in excess of Stipulated Loss Value; and the denominator of
which fraction shall equal the Stipulated Loss Value on the first day of such
period." QUALIFYING SECURITY INTEREST" means a first priority perfected security
interest under the Pledge Agreement.

"COMMITMENT FEE RATE" means, for each Construction Period, the amount
established as described below in this definition on the date (in this
definition, the" CFR TEST DATE") that is two Business Days prior to such
Construction Period by reference to the ratio calculated be dividing (1)
Adjusted EBIT for the then latest Rolling Four Quarters Period that ended prior
to (and for which NAI has reported earnings as necessary to compute Adjusted
EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined on a
consolidated basis) as of the end of such Rolling Four Quarters Period. The
Commitment Fee Rate shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:

(a) for any Construction Period commencing on or prior to the first
Business Day of June, 1999, the Commitment Fee Rate will be the amount
indicated for Level II in the pricing grid below;

(b) promptly after earnings are reported by NAI for the latest quarter
in any Rolling Four Quarters Period, NAI must notify BNPLC of any resulting
change in the Commitment Fee Rate under this definition, and no reduction
in the Commitment Fee Rate from one period to the next will be effective
for purposes of the Operative Documents unless, prior to the CFR Test Date
for the next period, NAI shall have provided BNPLC with a written notice
setting forth and certifying the calculation under this definition that
justifies the reduction; and

(c) notwithstanding anything to the contrary in this definition, on
any date when an Event of Default has occurred and is continuing, the
Commitment Fee Rate shall equal the amount indicated for Level V in the
pricing grid below.

================================================================================
LEVELS       RATIO OF TOTAL DEBT TO ADJUSTED EBIT           COMMITMENT FEE RATE
--------------------------------------------------------------------------------
Level I                 less than 0.50                        25.0 basis points
--------------------------------------------------------------------------------
Level II  greater than or equal to 0.50, but less than 1.0    25.0 basis points
--------------------------------------------------------------------------------
Level III greater than or equal to 1.0, but less than 1.5     32.5 basis points
--------------------------------------------------------------------------------
Level IV  greater than or equal to 1.5, but less than 2.0     50.0 basis points
--------------------------------------------------------------------------------
Level V          greater than or equal to 2.0                 50.0 basis points
================================================================================

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67

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

"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE III - IMPROVEMENTS)"
means this Agreement, which is incorporated by reference into each of the other
Operative Documents.

"COMPLETION NOTICE" means (1) a notice required by subparagraph 1(B) of the
Construction Management Agreement from NAI to BNPLC, advising BNPLC when
construction of the Construction Project is substantially complete, or (2) a
notice permitted by subparagraph 6(g) of the Improvements Lease from BNPLC to
NAI, advising NAI after any Landlord's Election to Complete Construction when
construction of the Construction Project is substantially complete or that BNPLC
no longer intends to continue such construction.

"CONSTRUCTION ADVANCES" means (1) actual advances of funds made by or on
behalf of BNPLC to or on behalf of NAI pursuant to Paragraph 2 of the
Construction Management Agreement, and (2) amounts considered as Construction
Advances pursuant to subparagraph 6.(e) of the Improvements Lease.

"CONSTRUCTION ADVANCE REQUEST" shall have the meaning assigned to it in
subparagraph 2(C)(1) of the Construction Management Agreement.

"CONSTRUCTION ALLOWANCE" means the allowance, consisting of Construction
Advances and Carrying Costs, which is to be provided for the Construction
Project as more particularly described in the Construction Management Agreement
and Paragraph 6 of the Improvements Lease.

"CONSTRUCTION MANAGEMENT AGREEMENT" means the Construction Management
Agreement dated as of June 16, 1999 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"CONSTRUCTION MILESTONE" shall have the meaning assigned to it in
subparagraph 5(B)(2) of the Construction Management Agreement.

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

"CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" shall have the meaning assigned to
it in subparagraph 5.(d)(ii) of the Improvements Lease.

"CONSTRUCTION PROJECT" means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.

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68

"CURRENT AS IS MARKET VALUE" means an amount equal to the fair market value
of BNPLC's interest in the Property (or any applicable portion thereof), AS IS,
WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a determination
of Current AS IS Market Value is required by the express terms of any Operative
Document, it will be determined accordance with the following procedure unless
BNPLC and NAI have otherwise agreed in writing upon a Current AS IS Market Value
at that time:

(A)  BNPLC and NAI shall each, within ten days after written notice from
either to the other, select an appraiser. If either BNPLC or NAI fails
to select an appraiser within the required period, then the appraiser
who has been timely selected shall conclusively determine the fair
market value of the Property (or applicable portion thereof) in
accordance with this definition within forty-five days after his or
her selection.

(B)  Upon the selection of the two appraisers as provided above, such
appraisers shall proceed to determine the fair market value of BNPLC's
interest in the Property (or applicable portion thereof) in accordance
with this clause (v). Such appraisals shall be submitted in writing no
later than forty-five days after selection of the second appraiser. If
the fair market value as determined by such appraisers is identical,
such sum shall be Current AS IS Market Value. If the fair market value
indicated by the lower appraisal differs from the fair market value
indicated by the higher appraisal by less than five percent (5%) of
the fair market value indicated by the higher appraisal, then Current
AS IS Market Value shall be the sum of the two appraisal figures
divided by two (2). If either appraiser fails to timely submit his or
her appraisal, the timely submitted appraisal shall be determinative
of Current AS IS Market Value.

(C)  If the fair market value indicated by the lower appraisal differs from
the fair market value indicated by the higher appraisal by more than
five percent (5%) of the fair market value indicated by the higher
appraisal, then the two appraisers previously selected shall select a
third appraiser. The name of such appraiser shall be submitted at the
same time the written appraisals are due. Such third appraiser shall
then review the previously submitted appraisals and select the one
that, in his professional opinion, more closely reflects the fair
market value of BNPLC's interest in the Property (or applicable
portion thereof), such selection to be submitted in writing no later
than ten days after selection of the third appraiser. Such selection
shall be determinative of Current AS IS Market Value.

(D)  In making any such determination of fair market value, the appraisers
shall assume that any improvements then located on the Property (or
applicable portion thereof) or under construction thereon constitute
the highest and best use, and that neither the Improvements Lease nor
the Purchase Agreement add any value to the Property. Each appraiser
selected hereunder shall be an independent MAI-designated appraiser
with not less than ten years' experience in commercial real estate
appraisal in Sunnyvale, California and surrounding areas.

"DEBT" of any Person means (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
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 

Common Definitions and Provisions Agreement
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69

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.

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

"DEFAULT RATE" means, for any period prior to the Designated Sale Date, a
floating per annum rate equal to two percent (2%) above the Prime Rate, and for
any period commencing on or after the Designated Sale Date, Default Rate shall
mean a floating per annum rate equal to five percent (5%) above the Prime Rate.
However, in no event will the"Default Rate" at any time exceed the maximum
interest rate permitted by law.

"DEFAULTING PARTICIPANT" shall have the meaning assigned to it in Section 1
of the Participation Agreement.

"DEFECTIVE WORK" shall have the meaning assigned to it in subparagraph
1(A)(2)(f) of the Construction Management Agreement.

"DEPOSIT TAKER" shall have the meaning assigned to it in the Pledge
Agreement.

"DEPOSIT TAKER LOSSES" shall have the meaning assigned to it in the Pledge
Agreement.

"DESIGNATED SALE DATE" means the earlier of:

(1) the first Business Day of May, 2004; or

(2) any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC before NAI has made an Issue
97-10 Election; provided, that to be effective for purposes of this
definition, any such notice from NAI to BNPLC must designate a Business Day
that is more than thirty days after the date of such notice; and provided,
further, to be effective for purposes of this definition, the notice must
include an express, unconditional, unequivocal and irrevocable (A) waiver
by NAI of any remaining right NAI may have under any of the Operative
Documents to make any Issue 97-10 Election, and (B) acknowledgment by NAI
that because of NAI's election to accelerate the Designated Sale Date, the
Maximum Remarketing Obligation will equal the Break Even Price under the
Purchase Agreement; or

(3) any Business Day designated as such in a notice given by BNPLC to
NAI after the effective date of any termination of the Construction
Management Agreement as provided in subparagraphs 5(D) or 5(E) thereof;
provided, that to be effective for purposes of this definition, any such
notice from BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice; or

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70
(4) the first Business Date after any termination by NAI of the
Purchase Option and NAI's Initial Remarketing Rights and Obligations as
provided in subparagraph 4(B) of the Purchase Agreement; or

(5) any Business Day designated as such in a notice given by BNPLC to
NAI when any Event of Default has occurred and is continuing; provided,
that to be effective for purposes of this definition, any such notice from
BNPLC to NAI must designate a Business Day that is more than thirty days
after the date of such notice.

"DEVELOPMENT DOCUMENTS" means the contracts, ordinances and other documents
described in Exhibit C attached to the Closing Certificate, as the same may be
modified from time to time in accordance with the Improvements Lease and the
Closing Certificate, and any applications, permits or certificates concerning or
affecting the use or development of the Property that may be submitted, issued
or executed from time to time as contemplated in such contracts, ordinances and
other documents or that BNPLC may hereafter execute, approve or consent to at
the request of NAI.

"DIRECT PAYMENTS TO PARTICIPANTS" means the amounts paid or required to be
paid directly to Participants on the Designated Sale Date as provided in Section
6.2 of the Pledge Agreement at the direction of and for NAI by the collateral
agent appointed pursuant to the Pledge Agreement from all or any part of the
Collateral described therein.

"EFFECTIVE DATE" means June 16, 1999.

"EFFECTIVE RATE" means for each Construction Period and for each Base Rent
Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, then the Effective Rate shall be automatically
increased or decreased as of the date of such change, as the case may be,
without prior notice to NAI. If for any reason BNPLC determines that it is
impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the foregoing, then the" EFFECTIVE RATE" for that Construction Period or Base
Rent Period shall equal any published index or per annum interest rate
determined in good faith by BNPLC's Parent to be comparable to LIBOR at the
beginning of the first day of that period. A comparable interest rate might be,
for example, the then existing yield on short term United States Treasury
obligations (as compiled by and published in the then most recently published
United States Federal Reserve Statistical Release H.15(519) or its successor
publication), plus or minus a fixed adjustment based on BNPLC's Parent's
comparison of past eurodollar market rates to past yields on such Treasury
obligations. Any determination by BNPLC of the Effective Rate under this
definition shall, in the absence of clear and demonstrable error, be conclusive
and binding upon NAI.

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

"ENVIRONMENTAL CUTOFF DATE" means the later of the dates upon which (i) the
Improvements Lease terminates, or (ii) NAI surrenders possession and control of
the Property and ceases to have interest in the Land or Improvements or rights
with respect thereto under any of the Operative Documents.

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

"ENVIRONMENTAL REPORTS" means collectively the following reports (whether
one or more), which were provided by NAI to BNPLC prior to the Effective Date:
Phase I dated March 1997 by Hygeienetics Environmental Services, Inc.; Phase I
dated June 1998 by Dames & Moore; and, an Asbestos Containing Material Survey
conducted in 1989 by Vesar, Inc.

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

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

"ESCROWED PROCEEDS" means, subject to the exclusions specified in the next
sentence, any money that is received by BNPLC from time to time during the Term
(and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Escrowed Proceeds" there shall be deducted all expenses and costs of every
type, kind and nature (including Attorneys' Fees) incurred by BNPLC to collect
such proceeds. Notwithstanding the foregoing,"Escrowed Proceeds" will not
include (A) any payment to BNPLC by a Participant or an Affiliate of BNPLC that
is made to compensate BNPLC for the Participant's or Affiliate's share of any
Losses BNPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4), (B) any money or proceeds that have been
applied as a Qualified Prepayment or to pay any Breakage Costs or other costs
incurred in connection with a Qualified Prepayment, (C) any money or proceeds
that, after no less than ten days notice to NAI, BNPLC returns or pays to a
third party because of BNPLC's good faith belief that such return or payment is
required by law, (D) any money or proceeds paid by BNPLC to NAI or offset
against any amount owed by NAI, or (E) any money or proceeds used by BNPLC in
accordance with the Improvements Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph of the Improvements
Lease, transferred to a purchaser under the Purchase Agreement as therein
provided or applied as a Qualified 

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Prepayment or as otherwise described in the preceding sentence, BNPLC shall keep
the same deposited in one or more interest bearing accounts, and all interest
earned on such account shall be added to and made a part of Escrowed Proceeds.

"ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if the
Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition,"conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent environmental
consultant engaged by that Person), but only to the extent that the agent is, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, (x) acting
within the scope of the authority granted to him by such Person, (y) not acting
with the consent or approval of or under the direction of NAI or NAI's
Affiliates, employees or agents, and (z) not acting in good faith to mitigate
Losses that such Person may suffer because of a breach or repudiation by NAI of
the Improvements Lease or the Purchase Documents.

"EUROCURRENCY LIABILITIES" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

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

"EVENT OF DEFAULT" shall have the meaning assigned to it in subparagraph 17
of the Improvements Lease.

"EXCLUDED TAXES" means (1) all federal, state and local income taxes upon
Base Rent, Administrative Agency Fees, the Underwriting Fee, Commitment Fees,
any interest paid to BNPLC or any Participant pursuant to subparagraph 3.(j) of
the Improvements Lease, and any additional compensation claimed by BNPLC
pursuant to subparagraph 5.(b)(ii) of the Improvements Lease; (2) any transfer
or change of ownership taxes assessed because of BNPLC's transfer or conveyance
to any third party of any rights or interest in the Improvements Lease, the
Purchase Agreement or the Property (other than any such taxes assessed because
of any Permitted Transfer under clauses (1), (3), (4), (5), (6) or (7) of the
definition of Permitted Transfer in this Agreement), (3) all federal, state and
local income taxes upon any amounts paid as reimbursement for or to satisfy
Losses incurred by BNPLC or any Participant to the extent such taxes are offset
by a corresponding reduction of BNPLC's or the applicable Participant's income
taxes because of BNPLC's or such Participant's deduction of the reimbursed
Losses from its taxable income or because of any tax credits attributable
thereto. If, however, a change in Applicable Laws after the Effective Date
results in an increase in such taxes for any reason other than an increase in
the applicable tax rates (e.g., a disallowance of deductions that would
otherwise be available against payments described in clause (A) of this
definition), then for purposes of the Operative Documents, the term" Excluded
Taxes" will not include the increase in such taxes attributable to the change.

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73

"EXISTING CONTRACTS" means the Option Agreement and Ground Lease covering
the Land between NAI and Seller, both dated June 11, 1998.

"FAILED COLLATERAL TEST DATE"  shall have the meaning indicated in Part
III of Schedule 1 attached to the Improvements Lease.

"FED FUNDS RATE" means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon NAI.

"FOCB NOTICE" shall have the meaning assigned to it in subparagraph 5(B)(1)
of the Construction Management Agreement.

"FUNDED CONSTRUCTION ALLOWANCE" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Prepayments deducted on or prior to
that day in the calculation of such Outstanding Construction Allowance, less any
Voluntary NAI Construction Contributions added on or prior to that day in the
calculation of such Qualified Prepayments.

"FUNDING ADVANCES" means (1) the Initial Funding Advance and (2) all future
advances made by BNPLC's Parent or any other Participant to or on behalf of
BNPLC to allow BNPLC to provide the Construction Allowance.

"FUTURE WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.

"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in
subparagraph 13.(a) of the Improvements Lease (except for changes with which
NAI's independent public accountants concur).

"HAZARDOUS SUBSTANCE" means (i) any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a "hazardous
substance,""hazardous material,""hazardous waste,""extremely hazardous waste or
substance,""infectious waste,"" toxic substance,""toxic pollutant," or any other
formulation intended to define, list or classify substances by reason of
deleterious properties, including ignitability, corrosiveness, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic
gas usable for fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos containing material; and
(v) any other material that, because of its

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74

quantity, concentration or physical or chemical characteristics, poses a
significant present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment.

"HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property."HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property.

"IMPOSITIONS" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Improvements Lease or which are imposed upon BNPLC or the
Property because of the ownership, leasing, occupancy, sale or operation of the
Property, or any part thereof or interest therein, or relating to or required to
be paid by any of the Permitted Encumbrances or the Development Documents,
excluding only Excluded Taxes."IMPOSITIONS" shall include real estate taxes
imposed because of a change of use or ownership of the Property on or prior to
the date of any sale by BNPLC pursuant to the Purchase Agreement.

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

"IMPROVEMENTS LEASE" means the Lease Agreement (Phase III - Improvements")
dated as of June 16, 1999 between BNPLC, as landlord, and NAI, as tenant,
pursuant to which NAI has agreed to lease BNPLC's interest in the Property, as
such Lease Agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.

"INITIAL FUNDING ADVANCE" means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate closing certificate executed by NAI as of the Effective Date. To the
extent that BNPLC does not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC, the remainder thereof will be advanced
to NAI, with the understanding that NAI shall use any such amount advanced for
one or more of the following purposes: (1) the payment or reimbursement of
Transaction Expenses incurred by NAI; (2) the payment or reimbursement of
expenses incurred by NAI in connection with the Construction Project, including
the planning, design, engineering, construction and permitting of thereof; (3)
the maintenance of the Property; or (4) the payment of Rents next due.

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75

"INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.

"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT" means an
Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph 17.(e) of the
Improvements Lease, the occurrence of which event cannot be objectively
determined. For example, an Event of Default under subparagraph 17.(e) of the
Improvements Lease resulting solely from a failure of NAI to"generally" pay its
debts as such debts become due (in contrast to a failure of NAI to pay Rent to
BNPLC as it becomes due under the Improvements Lease) would constitute an Issue
97-1 Non-performance-related Subjective Event of Default. In no event, however,
will the term"Issue 97-1 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of NAI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by NAI of
the provisions set forth in Schedule 1 attached to the Improvements Lease (which
set forth financial covenants), (3) any failure of NAI to use, maintain and
insure the Property in accordance with the requirements of the Improvements
Lease, or (4) any failure of NAI to pay the full amount of any Supplemental
Payment on the Designated Sale Date as required by the Purchase Agreement.
Except as provided in subparagraph 1(A)(2)(c)(i) of the Purchase Agreement, the
characterization of any Event of Default as an Issue 97-1
Non-performance-related Subjective Event of Default will not affect the rights
or remedies available to BNPLC because of the Event of Default.

"ISSUE 97-10 ELECTION" means any of the following elections by NAI: (1) an
election to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof; and (2) an election to terminate NAI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B) of the
Purchase Agreement.

"ISSUE 97-10 PREPAYMENT" means a payment to BNPLC, required by subparagraph
3.(h) of the Improvements Lease or by subparagraphs 4(B) or 4(C) of the Purchase
Agreement, equal in each case to (A) the Maximum Permitted Prepayment, computed
as of the date on which the payment becomes due, less (B) the accreted value of
any prior payments actually received by BNPLC from NAI constituting Issue 97-10
Prepayments or Voluntary NAI Construction Contributions. For purposes of the
preceding sentence," accreted value" of a payment shall mean the amount of the
payment plus an amount equal to the interest that would have accrued on the
payment if it bore interest at the Effective Rate.

"LAND" means the land covered by the land described in Exhibit A attached
to the Closing Certificate, the Improvements Lease and the Purchase Agreement.

"LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(e) of the Improvements Lease.

"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC's Parent
to be the average rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars are offered or
available to BNPLC's Parent in the London interbank 

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market at approximately 11:00 a.m. (London time) on the second Business Day
preceding the first day of such period. BNPLC shall instruct BNPLC's Parent to
consider deposits, for purposes of making the determination described in the
preceding sentence, that are offered: (i) for delivery on the first day of such
Construction Period or Base Rent Period, as the case may be, (ii) in an amount
equal or comparable to the total (projected on the applicable date of
determination by BNPLC's Parent) Stipulated Loss Value on the first day of such
period, and (iii) for a time equal or comparable to the length of such period.
If BNPLC's Parent so chooses, it may determine LIBOR for any period by reference
to the rate reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason BNPLC's
Parent determines that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Construction Period or Base Rent Period in
accordance with the foregoing, or if BNPLC's Parent shall determine that it is
unlawful (or any central bank or governmental authority shall assert that it is
unlawful) for BNPLC, BNPLC's Parent or any Participant to provide or maintain
Funding Advances during any Construction Period or Base Rent Period for which
Carrying Costs or Base Rent is computed by reference to LIBOR, then"LIBOR" for
that period shall equal the Base Rate for that period. All determinations of
LIBOR by BNPLC's Parent shall, in the absence of clear and demonstrable error,
be binding and conclusive upon NAI.

"LIBOR PERIOD ELECTION" for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit C attached to the Improvements Lease. (For purposes
of the Improvements Lease a LIBOR Period Election for any Base Rent Period shall
also be considered the LIBOR Period Election in effect on the Base Rent
Commencement Date or Base Rent Date upon which such Base Rent Period begins.)
Any LIBOR Period Election so designated by NAI shall remain in effect for the
entire Base Rent Period specified in NAI's notice to BNPLC (provided such Base
Rent Period commences at least ten Business Days after BNPLC's receipt of the
notice) and for all subsequent Base Rent Periods until a new designation becomes
effective in accordance with the provisions set forth in this definition.
Notwithstanding the foregoing, however: (1) NAI shall not be entitled to
designate a LIBOR Period Election that would cause a Base Rent Period to extend
beyond the end of the scheduled Term; (2) changes in the LIBOR Period Election
shall become effective only upon the commencement of a new Base Rent Period; (3)
for each Base Rent Period that occurs within any Mandatory Collateral Period,
the LIBOR Period Election shall be one month; (4) no LIBOR Period Election
designated by NAI hereunder shall be different than the LIBOR Period Election
specified under (and as defined in) the Other Common Definitions and Provisions
Agreement; and (5) if NAI fails to make a LIBOR Period Election consistent with
the foregoing requirements for any Base Rent Period, or if an Event of Default
shall have occurred and be continuing on the third Business Day preceding the
commencement of any Base Rent Period, the LIBOR Period Election for such Base
Rent Period shall be deemed to be one month.

"LIEN" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part IV of
Schedule 1 attached to the Improvements Lease,"Lien" includes any Liens under
ERISA relating to Unfunded Benefit Liabilities of which NAI is required to
notify BNPLC under subparagraph of the Improvements Lease (irrespective of
whether NAI actually notifies BNPLC as required thereunder).

"LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering the
Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPLC itself, (2) by third parties lawfully claiming through or
under BNPLC (which for purposes of the Improvements Lease shall include any
judgment liens established against the Property because of a judgment rendered
against BNPLC and shall also include any liens established against the Property
to secure 

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past due Excluded Taxes), or (3) by third parties lawfully claiming under a deed
or other instrument duly executed by BNPLC; provided, however, Liens Removable
by BNPLC shall not include (A) any Permitted Encumbrances or Development
Documents (regardless of whether claimed through or under BNPLC), (B) the
Operative Documents or any other document executed by BNPLC with the knowledge
of (and without objection by) NAI's counsel contemporaneously with the execution
and delivery of the Operative Documents, (C) Liens which are neither lawfully
claimed through or under BNPLC (as described above) nor claimed under a deed or
other instrument duly executed by BNPLC, (D) Liens claimed by NAI or claimed
through or under a conveyance made by NAI, (E) Liens arising because of BNPLC's
compliance with Applicable Law, the Operative Documents, Permitted Encumbrances,
the Development Documents or any written request made by NAI, (F) Liens securing
the payment of property taxes or other amounts assessed against the Property by
any governmental authority, other than to secure the payment of past due
Excluded Taxes or to secure damages caused by (and attributed by any applicable
principles of comparative fault to) BNPLC's own Established Misconduct, (G)
Liens resulting from or arising in connection with any breach by NAI of the
Operative Documents; or (H) Liens resulting from or arising in connection with
any Permitted Transfer that occurs more than thirty days after any Designated
Sale Date upon which, for any reason, NAI or an Affiliate of NAI or any
Applicable Purchaser shall not purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement for a cash price to BNPLC (when taken
together with any Supplemental Payment made by NAI pursuant to Paragraph 1(A)(2)
of the Purchase Agreement, in the case of a purchase by an Applicable Purchaser)
equal to the Break Even Price.

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

"MANDATORY COLLATERAL PERIOD" shall have the meaning assigned to it in Part
I of Schedule 1 attached to the Improvements Lease and to the Pledge Agreement.

"MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between NAI or
its agents and a regulatory agency or third party, which causes, or potentially
could cause (whether by implementation of or response to said communication), a
material change in the scope, duration, or nature of any Remedial Work.

"MAXIMUM CONSTRUCTION ALLOWANCE" means an amount computed as follows:

(1) Prior to any Advance Date that occurs after BNPLC's acquisition of
the fee interest in the Land as provided in the Agreement to Lease and
after BNPLC and NAI execute the Other Lease and all other Phase III Land
Documents under and as defined in the Agreement to Lease, the Maximum
Construction Allowance will equal to $48,000,000, less the sum of the Total
Land Commitment under and defined in the Agreement to Lease and the Initial
Funding Advance under and as defined in this Agreement.

(2) On and after any Advance Date that occurs after BNPLC's
acquisition of the fee interest in the Land as provided in the Agreement to
Lease and after BNPLC and NAI execute the Other Lease and all other Phase
III Land Documents under and as defined in the Agreement to Lease, the
Maximum Construction Allowance will equal to $48,000,000, less the sum of
the Initial Funding Advance under and defined in the Other Common
Definitions and Provisions Agreement and the Initial Funding Advance under
and as defined in this Agreement.

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"MAXIMUM PERMITTED TERMINATION FEES" shall have the meaning indicated in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.

"MAXIMUM PERMITTED PREPAYMENT" as of any date means the amount equal to the
lesser of the following:

(1) eighty-nine and nine-tenths of one percent (89.9%) of the
aggregate of (i) all Project Costs paid or incurred on or prior to such
date, plus (ii) ninety-seven percent (97%) of (a) Carrying Costs added to
the Outstanding Construction Allowance on or prior to such date, and (b)
Commitment Fees reimbursed pursuant to the Construction Management
Agreement on or prior to such date, plus (iii) any Upfront Syndication Fees
paid to Participants pursuant to the Closing Certificate and Agreement and
reimbursed pursuant to the Construction Management Agreement on or prior to
such date; or

(2) eighty-nine and nine-tenths of one percent (89.9%) of Stipulated
Loss Value on such date.

"MAXIMUM REMARKETING OBLIGATION" shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"MINIMUM EXTENDED REMARKETING PRICE" shall have the meaning assigned to it
in subparagraph 2(B) of the Purchase Agreement.

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

"NAI" means Network Appliance, Inc., a California corporation.

"NAI'S EXTENDED REMARKETING PERIOD" shall have the meaning assigned to it
in subparagraph 2(A) of the Purchase Agreement.

"NAI'S EXTENDED REMARKETING RIGHT" shall have the meaning assigned to it in
subparagraph 2(A) of the Purchase Agreement.

"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS" shall have the meaning
assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.

"NORMAL TENANT IMPROVEMENTS" shall have the meaning assigned to it in
subparagraph 3(A) of the Construction Management Agreement.

"NOTICE OF NAI'S INTENT TO TERMINATE" shall have the meaning assigned to it
in subparagraph 5(D) of the Construction Management Agreement.

"OPERATIVE DOCUMENTS" means the Closing Certificate, the Improvements
Lease, the Construction Management Agreement, the Purchase Agreement, the Pledge
Agreement and this Common Definitions and Provisions Agreement (Phase III -
Improvements).

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79

"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT" means the Common
Definitions and Provisions Agreement (Phase III - Land), to be executed as
described in the Agreement to Lease, between BNPLC and NAI, as such Common
Definitions and Provisions Agreement may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms.
(For purposes of the Operative Documents, until the Other Common Definitions and
Provisions Agreement is executed as provided in the Agreement to Lease, all
references to the Other Common Definitions and Provisions Agreement in the
Operative Documents will be deemed references to the form of Common Definitions
and Provisions Agreement (Phase III - Land) attached the Agreement to Lease,
except when a contrary intent is indicated by the context of the reference.)

"OTHER LEASE AGREEMENT" means the Lease Agreement (Phase III - Land), to be
executed as described in the Agreement to Lease, between BNPLC and NAI, as such
Lease Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms. (For purposes of the
Operative Documents, until the Other Lease Agreement is executed as provided in
the Agreement to Lease, all references to the Other Lease Agreement in the
Operative Documents will be deemed references to the form of Lease Agreement
(Phase III - Land) attached the Agreement to Lease, except when a contrary
intent is indicated by the context of the reference.)

"OTHER PURCHASE AGREEMENT" means the Purchase Agreement (Phase III - Land),
to be executed as described in the Agreement to Lease, between BNPLC and NAI, as
such Purchase Agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms. (For purposes
of the Operative Documents, until the Other Purchase Agreement is executed as
provided in the Agreement to Lease, all references to the Other Purchase
Agreement in the Operative Documents will be deemed references to the form of
Purchase Agreement (Phase III - Land) attached the Agreement to Lease, except
when a contrary intent is indicated by the context of the reference.)

"OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to it
in subparagraph of the Improvements Lease.

"PARTICIPANT" means BNPLC's Parent and any other Person that, upon becoming
a party to the Participation Agreement and the Pledge Agreement by executing
supplements as contemplated therein, agrees from time to time to participate in
all or some of the risks and rewards to BNPLC of the Improvements Lease and the
Purchase Documents. As of the Effective Date, the only Participant is BNPLC's
Parent, but BNPLC may agree after the Effective Date to share in risks and
rewards of the Improvements Lease and the Purchase Documents with other
Participants. However, no Person other than BNPLC's Parent and its Affiliates
shall qualify as a Participant for purposes of the Operative Documents or other
agreements concerning the Property to which NAI is a party unless such Person,
during the continuance of an Event of Default or otherwise with NAI's prior
written approval (which approval will not be unreasonably withheld), became a
party to the Pledge Agreement and to the Participation Agreement by executing
supplements to those agreements as contemplated therein.

"PARTICIPATION AGREEMENT" means the Participation Agreement between BNPLC
and BNPLC's Parent dated as of the Effective Date, pursuant to which BNPLC's
Parent has agreed to participate in the risks and rewards to BNPLC of the
Improvements Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms. It is understood, however, that
because the Participation Agreement expressly makes NAI a third party
beneficiary of the Participant's obligations thereunder to make advances to
BNPLC in connection with Construction Advances under the Construction Management
Agreement, NAI's consent will be required to any amendment of the Participation
Agreement that purports to limit or excuse such obligations.

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80

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

"PERIOD" means a Construction Period or a Base Rent Period, as the context
requires.

"PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Agreement to Lease or the Other
Purchase Agreement), (iii) any ground lease executed pursuant to the Other
Purchase Agreement, (iv) any Liens securing the payment of Impositions which are
not delinquent or claimed to be delinquent or which are being contested in
accordance with subparagraph 5.(a) of the Improvements Lease, and (iv)
mechanics' and materialmen's liens for amounts not past due or claimed to be
past due or which are being contested in accordance with subparagraph 11.(c) of
the Improvements Lease.

"PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, storage and
offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:

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

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

Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.

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

"PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in 

Common Definitions and Provisions Agreement
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81

the Land and the Property; (3) any assignment or conveyance by BNPLC or its
permitted successors or assigns to any present or future Participant of any lien
or security interest against the Property (in contrast to a conveyance of
BNPLC's fee estate in the Land and Improvements) or of any interest in Rent,
payments required by or under the Purchase Documents or payments to be generated
from the Property after the Term, provided that such assignment or conveyance is
made expressly subject to the rights of NAI under the Operative Documents; (4)
any agreement to exercise or refrain from exercising rights or remedies under
the Operative Documents made by BNPLC with any present or future Participant;
(5) any assignment or conveyance by BNPLC requested by NAI or required by any
Permitted Encumbrance, by the Purchase Agreement, by the Existing Contract, by
any other Development Contract or by Applicable Laws; or (6) any assignment or
conveyance after a Designated Sale Date on which NAI shall not have purchased or
caused an Applicable Purchaser to purchase BNPLC's interest in the Property and,
if applicable, after the expiration of the thirty day cure period specified in
Paragraph 4(D) of the Purchase Agreement.

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

"PERSONAL PROPERTY" shall have the meaning assigned to it on page 2 of the
Improvements Lease.

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

"PLEDGE AGREEMENT" means the Pledge Agreement (Phase III - Improvements)
dated as of the date hereof between BNPLC and NAI, pursuant to which NAI may
pledge certificates of deposit as security for NAI's obligations under the
Purchase Agreement (and for the corresponding obligations of BNPLC to the
Participants under the Participation Agreement), as such Pledge Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.

"PRE-COMMENCEMENT CASUALTY" shall have the meaning assigned to it in
subparagraph 1(A)(2)(a) of the Construction Management Agreement.

"PREEMPTIVE NOTICE" shall have the meaning assigned to it in subparagraph
5(B)(2) of the Construction Management Agreement.

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

"PRIOR WORK" shall have the meaning assigned to it in subparagraph
2(C)(2)(b) of the Construction Management Agreement.

Common Definitions and Provisions Agreement
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82
"PROJECT COSTS" means the following:

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

o    soft costs, such as architectural fees, engineering fees and fees
and costs paid in connection with obtaining project permits and
approvals required by governmental authorities or the Development
Documents,

o    site preparation costs, and

o    costs of offsite and other public improvements required as
conditions of governmental approvals for the Construction
Project;

(b) costs incurred to maintain insurance required by (and consistent
with the requirements of) the Improvements Lease prior to the Base Rent
Commencement Date, and costs of repairing any damage to the Improvements by
fire or other casualty prior to the Base Rent Commencement Date, to the
extent such cost is not covered by insurance proceeds made available to NAI
as provided in the Improvements Lease;

(c) a fraction of the cost of any title insurance policy or binder
provided to BNPLC in connection with its acquisition of the Land and
Improvements, the numerator of which fraction is the difference computed by
subtracting the price paid by BNPLC for the Land from the maximum dollar
amount of coverage provided by the title insurance, and the denominator of
which fraction is equal to such maximum dollar amount of coverage;

(d) Impositions that have accrued or become due under the Improvements
Lease prior to the Base Rent Commencement Date; and

(e) cancellation or termination fees or other compensation payable by
NAI or BNPLC pursuant to any contract concerning the Construction Project
made by NAI or BNPLC with any general contractor, architect, engineer or
other third party because of any election by NAI or BNPLC to cancel or
terminate such contract.

Project Costs will include costs incurred by BNPLC to continue or complete
the Construction Project after any Landlord's Election to Continue Construction
as provided in subparagraph 6.(e) of the Improvements Lease.

"PROJECTED COST OVERRUNS" shall have the meaning assigned to it in
subparagraph 4(A) of the Construction Management Agreement.

"PROPERTY" means the Personal Property and the Real Property, collectively.
The fee interest in the Land itself will not be included in the Property.
However, prior to a Closing under and as defined in the Agreement to Lease, when
the Other Lease Agreement is executed and all right, title and interest of BNPLC
in the Land shall be encompassed within the term" Property" as used in the Other
Lease Agreement and the Other Purchase Agreement, if BNPLC should acquire any
right, title and interest in and to the Land (for example, a option to purchase
the Land by the acceptance of an assignment of the Existing Contracts from NAI
under the Agreement to Lease) such right, title and interest of BNPLC shall be
encompassed within the term" Property" as such term is used in the Operative
Documents.

Common Definitions and Provisions Agreement
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83

"PURCHASE AGREEMENT" means the Purchase Agreement (Phase III -
Improvements) dated as of May 3, 1999 between BNPLC and NAI, as such Purchase
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"PURCHASE DOCUMENTS" means collectively (1) the Purchase Agreement, (2) the
Memorandum of Purchase Agreement executed by BNPLC and NAI as of the Effective
Date and recorded to provide notice of the Purchase Agreement; and (3) the
Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.

"PURCHASE OPTION" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.

"QUALIFIED AFFILIATE" means any Person that is one hundred percent (100%)
owned, directly or indirectly, by Banque Nationale de Paris or any successor of
such bank; provided, that such Person can make (and has in writing made) the
same representations to NAI that BNPLC has made in Paragraphs 3(D) and 3(E) of
the Closing Certificate; and, provided, further, that such Person is not
insolvent.

"QUALIFIED PREPAYMENTS" means (A) any Issue 97-10 Prepayments received by
BNPLC, (B) any Voluntary NAI Construction Contributions received by BNPLC
pursuant to subparagraph 4(C) of the Construction Management Agreement, and (C)
any payments received by BNPLC from time to time during the Term (1) under any
property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction placed upon the use or development of the
Property or for the condemnation of the Property or any portion thereof, (3)
because of any judgment, decree or award for injury or damage to the Property or
(4) under any title insurance policy or otherwise as a result of any title
defect or claimed title defect with respect to the Property; provided, however,
that (x) in determining the amount of" Qualified Prepayments", there shall be
deducted all expenses and costs of every kind, type and nature (including taxes,
Breakage Costs and Attorneys' Fees) incurred by BNPLC with respect to the
collection or application of such payments, (y)" Qualified Prepayments" shall
not include any payment to BNPLC by a Participant or an Affiliate of BNPLC that
is made to compensate BNPLC for the Participant's or Affiliate's share of any
Losses BNPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4) and (z)"Qualified Prepayments" shall not
include any payments received by BNPLC that BNPLC has paid or is obligated to
pay to NAI for the restoration or repair of the Property or that BNPLC is
holding as Escrowed Proceeds pursuant to Paragraph 10 of the Improvements Lease
or any other provision of the Improvements Lease. For purposes of computing the
total Qualified Prepayments (and other amounts dependent upon Qualified
Prepayments, such as Stipulated Loss Value and the Outstanding Construction
Allowance) paid to or received by BNPLC as of any date, payments described in
the preceding clauses (1) through (4) will be considered as Escrowed Proceeds,
not Qualified Prepayments, until they are actually applied as Qualified
Prepayments by BNPLC as provided in the Paragraph 10 of the Improvements Lease.

"REAL PROPERTY" shall have the meaning assigned to it on page 1 of the
Improvements Lease.

"REIMBURSABLE CONSTRUCTION-PERIOD COSTS" shall have the meaning assigned to
it in Paragraph 2 of the Construction Management Agreement.

"REMEDIAL WORK" means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other required remedial plans
that any governmental agency or political subdivision requires or approves (or
could reasonably be expected to require if it 

Common Definitions and Provisions Agreement
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84

was aware of all relevant circumstances concerning the Property), whether by
judicial order or otherwise, because of the presence of or suspected presence of
Hazardous Substances in, on, under or about the Property or because of any prior
Hazardous Substance Activity. Without limiting the generality of the foregoing,
Remedial Work also means any obligations imposed upon or undertaken by NAI
pursuant to Development Documents or any recommendations or proposals made
therein.

"RENT" means the Base Rent and all Additional Rent.

"RESIDUAL RISK PERCENTAGE" means fifteen percent (15%).

"RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.

"SALE CLOSING DOCUMENTS" shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.

"SCOPE CHANGE"  shall have the meaning  assigned to it in  subparagraph
1(A)(1)(b) of the Construction Management Agreement.

"SECURED SPREAD" means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any period
commencing on a Failed Collateral Test Date and continuing through the next
Collateral Test Date (under and as defined in Schedule 1 attached to the Lease)
that does not constitute a Failed Collateral Test Date, the Secured Spread shall
equal one-half of the Unsecured Spread.

"SELLER" means 475 Java Drive Associates, L.P., a California limited
partnership.

"STIPULATED LOSS VALUE" as of any date means the amount equal to the sum of
the Initial Funding Advance, plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
such date, minus all funds actually received by BNPLC and applied as Qualified
Prepayments on or prior to such date. Under no circumstances will any payment of
Base Rent, the Arrangement Fee, the Upfront Syndication Fees, the Underwriting
Fee, Administrative Agency Fees or Commitment Fees reduce Stipulated Loss Value.

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

"SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"TERM" shall have the meaning assigned to it in subparagraph 1.(a) of the
Improvements Lease.

"THIRD PARTY CONTRACT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.

"THIRD PARTY PRICE" shall have the meaning assigned to it in subparagraph
1(A)(2) of the Purchase Agreement.

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85

"THIRD PARTY SALE NOTICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY SALE PROPOSAL" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY TARGET PRICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.

"UNDERWRITING FEE" shall have the meaning assigned to it in subparagraph of
the Improvements Lease.

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

"UNSECURED SPREAD" means, for each Construction Period or any period
beginning on and including the Base Rent Commencement Date or a Base Rent Date
and ending on but not including the next Base Rent Date, the amount established
as described below in this definition on the date (in this definition, the
"SPREAD TEST DATE") that is two Business Days prior to such period by reference
to the ratio calculated by dividing (1) Adjusted EBIT for the then latest
Rolling Four Quarters Period that ended prior to (and for which NAI has reported
earnings as necessary to compute Adjusted EBIT) into (2) the total Debt of NAI
and its Subsidiaries (determined on a consolidated basis) as of the end of such
Rolling Four Quarters Period. The Unsecured Spread shall be established at the
Level in the pricing grid below which corresponds to such ratio; provided, that:

(a) for any period commencing on or prior to the first Business Day of
January, 2000, the Unsecured Spread will be the amount indicated for Level
III in the pricing grid below;

(b) promptly after earnings are reported by NAI for the latest quarter
in any Rolling Four Quarters Period, NAI must notify BNPLC of any resulting
change in the Unsecured Spread under this definition, and no reduction in
the Unsecured Spread from one period to the next will be effective for
purposes of the Operative Documents unless, prior to the Spread Test Date
for the next period, NAI shall have provided BNPLC with a written notice
setting forth and certifying the calculation under this definition that
justifies the reduction; and

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86

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

================================================================================
LEVELS        RATIO OF TOTAL DEBT TO ADJUSTED EBIT            UNSECURED SPREAD
--------------------------------------------------------------------------------
Level I                    less than 0.5                      125.0 basis points
--------------------------------------------------------------------------------
Level II    greater than or equal to 0.5, but less than 1.0   137.5 basis points
--------------------------------------------------------------------------------
Level III   greater than or equal to 1.0, but less than 1.5   150.0 basis points
--------------------------------------------------------------------------------
Level IV    greater than or equal to 1.5, but less than 2.0   175.0 basis points
--------------------------------------------------------------------------------
Level V           greater than or equal to 2.0                200.0 basis points
================================================================================

All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the
Improvements Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.

"UPFRONT SYNDICATION FEES" shall have the meaning assigned to it in
subparagraph 2(M) of the Closing Certificate and Agreement.

"VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS" shall have the meaning assigned
to it in subparagraph 4(C) of the Construction Management Agreement.

"VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election made by
BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase Agreement.

"WORK" shall have the meaning assigned to it in subparagraph 1(A)(2)(a) of
the Construction Management Agreement.

ARTICLE II - RULES OF INTERPRETATION

THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:

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87

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

(i)  All Rent and other amounts required to be paid by NAI to BNPLC shall
be paid to BNPLC in immediately available funds by wire transfer to: 1.

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Improvements Lease

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

(ii)  All Collateral required to be paid by NAI to the Agent shall be paid
in immediately available funds by wire transfer to:

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Payment

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

(iii) All advances paid to NAI by BNPLC under the Construction Management
Agreement or in connection therewith shall be paid to NAI in immediately
available funds at such place and in such manner as NAI may reasonably
designate from time to time by notice to BNPLC signed by a Responsible
Financial Officer of NAI.

(iv)  All notices, demands, approvals, consents and other communications to
be made under any Operative Document to or by the parties thereto must, to
be effective for purpose of such Operative Document, be in writing.
Notices, demands and other communications required or permitted under any
Operative Document are to be sent to the addresses set forth below (or in
the case of communications to Participants, at the addresses set forth in
Schedule 1 to the Participation Agreement) and shall be given by any of the
following means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex, telegram
or telecopying (if confirmed in writing sent by United States first class
mail, return receipt requested); or (C) registered or certified first class
mail, return receipt requested. Such addresses may be changed by notice to
the other parties given in the same manner as provided above. Any notice or
other communication sent pursuant to clause (A) or (B) hereof shall be
deemed received upon such personal service or upon dispatch by electronic
means, and, if sent pursuant to clause (C) shall be deemed received five
days following deposit in the mail.

Address of BNPLC:

Common Definitions and Provisions Agreement
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88

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

With a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Gavin Holles
Telecopy: (415) 296-8954

And for draw requests and funding notices, with a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: George Fung
Telecopy: (415) 296-8954

Address of NAI:

Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452

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

3.   NO MERGER. There shall be no merger of the Improvements Lease or of the
leasehold estate created by the Improvements Lease with any other interest in
the Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Improvements Lease or the leasehold estate created
hereby and any other interest in the Property, unless all Persons with an
interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur. There shall be no
merger of the Purchase Agreement or of the purchase options or obligations
created by the Purchase Agreement with any other interest in the Property by
reason of the

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 29

89

fact that the same person may acquire or hold, directly or indirectly, the
Improvements Lease or the leasehold estate created hereby and any other interest
in the Property, unless all Persons with an interest in the Property that would
be adversely affected by any such merger specifically agree in writing that such
a merger shall occur.

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

5.   ENTIRE AND ONLY AGREEMENTS. The Operative Documents supersede any prior
negotiations and agreements between BNPLC, Agent and NAI concerning the Property
or the Collateral, and no amendment or modification of any Operative Document
shall be binding or valid unless expressed in a writing executed by all parties
to such Operative Document.

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

7.   TIME IS OF THE ESSENCE. Time is of the essence as to all obligations of NAI
and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.

8.   GOVERNING LAW. Each Operative Document shall be governed by and construed
in accordance with the laws of the State of California without regard to
conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the" UCC," as defined in the Pledge
Agreement).

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

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

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 30

90

11.  TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT. As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase III - Improvements), but is
defined in another Operative Document, shall have the meaning ascribed to it in
the other Operative Document.

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

13.  EXECUTION IN COUNTERPARTS. To facilitate execution, each Operative
Document may be executed in as many identical counterparts as may be required.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart. All counterparts, taken together, shall collectively constitute a
single instrument. It shall not be necessary in making proof of any Operative
Document to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages. 

14.  NOT A PARTNERSHIP, ETC. NOTHING IN ANY OPERATIVE DOCUMENT IS INTENDED TO
CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN BNPLC
AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE ADMINISTRATION
THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY OTHER RIGHT, DUTY
OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE DOCUMENT IS INTENDED
TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO NAI. 

[The signature pages follows.]

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 31

91
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions and
Provisions Agreement (Phase III - Improvements) to be executed as of June 16,
1999.

"NAI"

NETWORK APPLIANCE, INC.

By:            
-----------------------------
Name:       
------------------------
Title:  
-------------------

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 32

92

[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase III - Improvements) dated to be effective June 16, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:
----------------------------------
Henry Setina, Vice President

Common Definitions and Provisions Agreement
(Phase III - Improvements) - Page 33

1
Exhibit 10.36

================================================================================

LEASE AGREEMENT
(PHASE III - LAND)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

JUNE 16, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page
----
1.      TERM                                                                   2
(a)    Scheduled Term                                                  2
(b)    Intentionally Deleted                                           2
(c)    Intentionally Deleted                                           2
(d)    Election by NAI to Terminate After Accelerating the 
Designated Sale Date                                            2
(e)    Extension of the Term                                           3

2.      USE AND CONDITION OF THE PROPERTY                                      3
(a)    Use                                                             3
(b)    Condition of the Property                                       3
(c)    Consideration for and Scope of Waiver                           4

3.      RENT                                                                   4
(a)    Base Rent Generally                                             4
(b)    Impact of Collateral Upon Formulas                              4
(c)    Calculation of and Due Dates for Base Rent                      5
(i)    Determination of Payment Due Dates, Generally            5
(ii)   Special Adjustments to Base Rent Payment Dates 
and Periods                                              5
(iii)  Base Rent Formula for Periods During Which 
The Collateral Percentage is 100%                        5
(iv)   Base Rent Formula for Periods During Which The 
Collateral Percentage is Greater Than Zero and 
Less Than 100%                                           6
(v)    Base Rent Formula for Periods During Which The 
Collateral Percentage is Zero                            7
(d)    Additional Rent                                                 7
(e)    Intentionally Deleted                                           8
(f)    Intentionally Deleted                                           8
(g)    Intentionally Deleted                                           8
(h)    Intentionally Deleted                                           8
(i)    No Demand or Setoff                                             8
(j)    Default Interest and Order of Application                       8

4.      NATURE OF THIS AGREEMENT                                               8
(a)    "Net" Lease Generally                                           8
(b)    No Termination                                                  8
(c)    Tax Reporting                                                   9
(d)    Characterization of this Land Lease                            10

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY         10
(a)    Impositions                                                    10
(b)    Increased Costs; Capital Adequacy Charges                      10

3
(c)    NAI's Payment of Other Losses; General Indemnification         11
(d)    Exceptions and Qualifications to Indemnities                   13

6.      INTENTIONALLY DELETED                                                 14

7.      INTENTIONALLY DELETED                                                 14

8.      ENVIRONMENTAL                                                         14
(a)    Environmental Covenants by NAI                                 14
(b)    Right of BNPLC to do Remedial Work Not Performed by NAI        14
(c)    Environmental Inspections and Reviews                          15
(d)    Communications Regarding Environmental Matters                 15

9.      INSURANCE REQUIRED AND CONDEMNATION                                   16
(a)    Liability Insurance                                            16
(b)    Intentionally Deleted                                          16
(c)    Failure to Obtain Insurance                                    16
(d)    Condemnation                                                   16
(e)    Waiver of Subrogation                                          17

10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS                    17
(a)    Collection and Application of Insurance and Condemnation 
Proceeds Generally                                             17
(b)    Advances of Escrowed Proceeds to NAI                           17
(c)    Application of Escrowed Proceeds as a Qualified Prepayment     18
(d)    Special Provisions Applicable After an Event of Default        18
(e)    NAI's Obligation to Restore                                    18
(f)    Takings of All or Substantially All of the Property on or 
after the Base Rent Commencement Date                          18

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI 
CONCERNING THE PROPERTY                                               19
(a)    Compliance with Covenants and Laws                             19
(b)    Operation of the Property                                      19
(c)    Debts for Construction, Maintenance, Operation or Development  20
(d)    Repair, Maintenance, Alterations and Additions                 20
(e)    Permitted Encumbrances and Development Documents               21
(f)    Books and Records Concerning the Property                      21

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE 
TO SCHEDULE 1                                                         21

13.     FINANCIAL STATEMENTS AND OTHER REPORTS                                21
(a)    Financial Statements; Required Notices; Certificates           21

14.     ASSIGNMENT AND SUBLETTING BY NAI                                      23
(a)    BNPLC's Consent Required                                       23
(b)    Standard for BNPLC's Consent to Assignments and Certain 
Other Matters                                                  23
(c)    Consent Not a Waiver                                           23

15.     ASSIGNMENT BY BNPLC                                                   23
(a)    Restrictions on Transfers                                      23

2

4
(b)    Effect of Permitted Transfer or other Assignment by BNPLC      24

16.     BNPLC'S RIGHT OF ACCESS                                               24

17.     EVENTS OF DEFAULT                                                     25

18.     REMEDIES                                                              26
(a)    Basic Remedies                                                 26
(b)    Notice Required So Long As the Purchase Option and NAI's 
Initial Remarketing Rights and Obligations Continue Under 
the Purchase Agreement                                         28
(c)    Enforceability                                                 28
(d)    Remedies Cumulative                                            28

19.     DEFAULT BY BNPLC                                                      28

20.     QUIET ENJOYMENT                                                       29

21.     SURRENDER UPON TERMINATION                                            29

22.     HOLDING OVER BY NAI                                                   29

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS    29

EXHIBITS AND SCHEDULES

Exhibit A   Legal Description

Exhibit B   Insurance Requirements

Exhibit C   LIBOR Period Election Form

Schedule 1     Financial Covenants and Other Requirements

3

5
LEASE AGREEMENT
(PHASE III - LAND)

This LEASE AGREEMENT (PHASE III - LAND) (this "LAND LEASE"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of
[EFFECTIVE DATE], the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Land Lease are intended to have the
meanings assigned to them in the Common Definitions and Provisions Agreement
(Phase III - Land) executed by BNPLC and NAI contemporaneously with this Land
Lease. By this reference, the Common Definitions and Provisions Agreement (Phase
III - Land) is incorporated into and made a part of this Land Lease for all
purposes.)

RECITALS

Pursuant to the Existing Contracts, which covers the Land described in
Exhibit , BNPLC is acquiring the Land and any appurtenances thereto from Seller
contemporaneously with the execution of this Land Lease.

In anticipation of BNPLC's acquisition of the Land under the Existing
Contracts, BNPLC and NAI have reached agreement as to the terms and conditions
upon which BNPLC is willing to lease the Land to NAI, and by this Land Lease
BNPLC and NAI desire to evidence such agreement.

GRANTING CLAUSES

BNPLC does hereby LEASE, DEMISE and LET unto NAI for the term
hereinafter set forth all right, title and interest of BNPLC, now owned or
hereafter acquired, in and to:

(1)     the Land;

(2)     all easements and other rights appurtenant to the Land, whether
now owned or hereafter acquired by BNPLC; and

(3)     (A) any land lying within the right-of-way of any street, open
or proposed, adjoining the Land, (B) any sidewalks and alleys adjacent
to the Land and (C) any strips and gores between the Land and any
abutting land not owned or leased by BNPLC.

BNPLC's interest in all property described in clauses (1) through (3) above are
hereinafter referred to collectively as the "REAL PROPERTY". The Real Property
does not include any Improvements (now existing or those to be constructed as
provided in the Other Lease Agreement and the Construction Management Agreement)
or BNPLC's rights appurtenant to the Improvements, it being understood that the
Other Lease Agreement constitutes a separate lease of the Improvements and the
appurtenances thereto, and only the Improvements and the appurtenances thereto,
from BNPLC to NAI.

To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by BNPLC
under the Existing Contracts or acquired by BNPLC pursuant to Paragraph 7 below,
BNPLC also hereby grants and assigns to NAI for the term of this Land Lease the
right to use and enjoy (and, in the case of contract rights, to enforce) such
rights or interests of BNPLC:

4

6
(a)     the benefits, if any, conferred upon the owner of the Real Property by
the Permitted Encumbrances and Development Documents; and

(b)     any permits, licenses, franchises, certificates, and other rights and
privileges against third parties related to the Real Property.

Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "PERSONAL PROPERTY". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"PROPERTY."

However, the leasehold estate conveyed hereby and NAI's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Land Lease, to the Permitted Encumbrances, and to any other claims or
encumbrances not constituting Liens Removable by BNPLC.

GENERAL TERMS AND CONDITIONS

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

1.      TERM.

(a)     Scheduled Term. The term of this Land Lease (the "TERM") shall commence
on and include the Effective Date, and end on the first Business Day of July,
2004, unless sooner terminated as expressly herein provided.

(b)     Intentionally Deleted.

(c)     Intentionally Deleted.

(d)     Election by NAI to Terminate After Accelerating the Designated Sale
Date.

NAI shall be entitled to accelerate the Designated Sale Date (and thus
accelerate the purchase of BNPLC's interest in the Property by NAI or by an
Applicable Purchaser pursuant to the Purchase Agreement) by sending a notice to
BNPLC as provided in clause (2) of the definition of "Designated Sale Date" in
the Common Definitions and Provisions Agreement (Phase II - Land). In the event,
because of NAI's election to so accelerate the Designated Sale Date or for any
other reason, the Designated Sale Date occurs before the end of the scheduled
Term, NAI may terminate this Land Lease on or after the Designated Sale Date;
provided, however, as a condition to any such termination by NAI, NAI must have
done the following prior to the termination:

(i)     purchased or caused an Applicable Purchaser to purchase the
Property pursuant to the Purchase Agreement and satisfied all of NAI's
other obligations under the Purchase Agreement;

(ii)    paid to BNPLC all Base Rent and all other Rent due on or before
or accrued through the Designated Sale Date; and

(iii)   paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to the Purchase Agreement.

(e)     Extension of the Term . The Term may be extended at the option of NAI
for two successive periods of five years each; provided, however, that prior to
any such extension the following conditions must have been satisfied: (A) at
least ninety days prior to the commencement of any such extension, BNPLC and NAI
must have agreed in writing upon, and received the consent and approval of
BNPLC's Parent and all other Participants to (1) a corresponding extension not
only to 

2

7
the date for the expiration of the Term specified above in this Section, but
also to the date specified in clause (1) of the definition of Designated Sale
Date in the Common Definitions and Provisions Agreement (Phase II - Land), and
(2) an adjustment to the Rent that NAI will be required to pay for the
extension, it being expected that the Rent for the extension may be different
than the Rent required for the original Term, and it being understood that the
Rent for any extension must in all events be satisfactory to both BNPLC and NAI,
each in its sole and absolute discretion; (B) no Event of Default shall have
occurred and be continuing at the time of NAI's exercise of its option to
extend; and (C) immediately prior to any such extension, this Land Lease must
remain in effect. With respect to the condition that BNPLC and NAI must have
agreed upon the Rent required for any extension of the Term, neither NAI nor
BNPLC is willing to submit itself to a risk of liability or loss of rights
hereunder for being judged unreasonable. Accordingly, both NAI and BNPLC hereby
disclaim any obligation express or implied to be reasonable in negotiating the
Rent for any such extension. Subject to the changes to the Rent payable during
any extension of the Term as provided in this Paragraph, if NAI exercises its
option to extend the Term as provided in this Paragraph, this Land Lease shall
continue in full force and effect, and the leasehold estate hereby granted to
NAI shall continue without interruption and without any loss of priority over
other interests in or claims against the Property that may be created or arise
after the date hereof and before the extension.

2.      USE AND CONDITION OF THE PROPERTY.

(a)     Use . Subject to the Permitted Encumbrances, the Development Documents
and the terms hereof, NAI may use and occupy the Property during the Term, but
only for the following purposes.

(i)     constructing, maintaining and using Improvements on the Land for
purposes expressly permitted by and described in Paragraph 2(a) of the
Other Lease Agreement; and

(ii)    other lawful purposes approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion
of the Construction Project (but NAI acknowledges that BNPLC's
withholding of such approval shall be reasonable if BNPLC determines in
good faith that (1) giving the approval may materially increase BNPLC's
risk of liability for any existing or future environmental problem, or
(2) giving the approval is likely to substantially increase BNPLC's
administrative burden of complying with or monitoring NAI's compliance
with the requirements of this Land Lease or other Operative Documents).

(b)     Condition of the Property.

NAI ACKNOWLEDGES THAT IT HAS CAREFULLY AND FULLY INSPECTED THE PROPERTY AND
ACCEPTS THE PROPERTY IN ITS PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO
THE USE WHICH MAY BE MADE THEREOF. NAI ALSO ACCEPTS THE PROPERTY WITHOUT ANY
COVENANT, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS
AFFILIATES REGARDING THE TITLE THERETO OR THE RIGHTS OF ANY PARTIES IN
POSSESSION OF ANY PART THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 20.
BNPLC SHALL NOT BE RESPONSIBLE FOR ANY LATENT OR OTHER DEFECT OR CHANGE OF
CONDITION IN THE PROPERTY OR FOR ANY VIOLATIONS WITH RESPECT THERETO OF
APPLICABLE LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES ANY
FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT AND
LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE 2 OF THIS LAND LEASE, BNPLC SHALL
NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY KIND,
INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER.

(c)     Consideration for and Scope of Waiver . The provisions of subparagraph
2.(b) above have been negotiated by BNPLC and NAI after due consideration for
the Rent payable hereunder and are intended to be a complete exclusion and
negation of any representations or warranties of BNPLC or its Affiliates,
express or implied, with respect to the Property that may arise pursuant to any
law now or hereafter in effect or otherwise, except as expressly set forth
herein.

3

8
However, such exclusion of representations and warranties by BNPLC is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to NAI during the Term because of the definition of
Personal Property and Property above.

3.      RENT.

(a)     Base Rent Generally . On each Base Rent Date through the end of the
Term, NAI shall pay BNPLC rent ("BASE RENT"). Each payment of Base Rent must be
received by BNPLC no later than 10:00 a.m. (Pacific time) on the date it becomes
due; if received after 10:00 a.m. (Pacific time) it will be considered for
purposes of this Land Lease as received on the next following Business Day. At
least five days prior to any Base Rent Date upon which an installment of Base
Rent shall become due, BNPLC shall notify NAI in writing of the amount of each
installment, calculated as provided below. Any failure by BNPLC to so notify
NAI, however, shall not constitute a waiver of BNPLC's right to payment, but
absent such notice NAI shall not be in default hereunder for any underpayment
resulting therefrom if NAI, in good faith, reasonably estimates the payment
required, makes a timely payment of the amount so estimated and corrects any
underpayment within three Business Days after being notified by BNPLC of the
underpayment.

(b)     Impact of Collateral Upon Formulas . To ease the administrative burden
of this Land Lease and the Pledge Agreement, the formulas for calculating Base
Rent set out below in subparagraph 3.(c) reflect a reduction in the Base Rent
equal to the interest that would accrue on any Collateral provided in accordance
with the requirements of the Pledge Agreement from time to time if the Accounts
(as defined in the Pledge Agreement) bore interest at the Effective Rate. BNPLC
has agreed to such reduction to provide NAI with the economic equivalent of
interest on such Collateral, and in return NAI has agreed to the provisions of
the Pledge Agreement that excuse the actual payment of interest on the Accounts.
By incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in the Pledge Agreement, the parties
will avoid an unnecessary and cumbersome periodic exchange of equal payments. It
is not, however, the intent of BNPLC or NAI to understate Base Rent or interest
for financial reporting purposes. Accordingly, for purposes of any financial
reports that this Land Lease requires of NAI from time to time, NAI may report
Base Rent as if there had been no such reduction and as if the Collateral from
time to time provided in accordance with the requirements of the Pledge
Agreement had been maintained in Accounts bearing interest at the Effective
Rate.

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

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

(ii)    Special Adjustments to Base Rent Payment Dates and Periods .
Notwithstanding the foregoing:

a)      Any Base Rent Period that begins before, and does not
otherwise end before, a Failed Collateral Test Date shall end
upon but not include such Failed Collateral Test Date, and such
Failed Collateral Test Date shall constitute a Base Rent Date,
upon which NAI must pay all accrued, unpaid Base Rent for the
Base Rent Period just ended.

4

9
b)      Consistent with clause (3) of the definition of LIBOR
Period Election in the Common Definitions and Provisions
Agreement (Phase II - Land), each successive Base Rent Date
after any such Failed Collateral Test Date shall be the first
Business Day of the first calendar month following the calendar
month which includes the preceding Base Rent Date, so long as
any Mandatory Collateral Period shall continue.

c)      In addition to Base Rent due on a Failed Collateral Test
Date, NAI must pay the Breakage Costs, if any, resulting from
any early ending of a Base Rent Period on the Failed Collateral
Test Date pursuant to the preceding clause .

d)      If NAI or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to the Purchase Agreement, any
accrued unpaid Base Rent and all outstanding Additional Rent
shall be due on the date of purchase in addition to the purchase
price and other sums due BNPLC under the Purchase Agreement.

(iii)   Base Rent Formula for Periods During Which The Collateral
Percentage is 100% . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is one hundred
percent (100%) shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the Secured Spread for the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is one hundred
percent (100%); that prior to the first day of such Base Rent Period
Qualified Prepayments have been received by BNPLC, leaving a Stipulated
Loss Value of $20,000,000; that the Secured Spread is thirty basis
points (30/100 of 1%); and that such Base Rent Period contains exactly
thirty days. Under such assumptions, the Base Rent for the hypothetical
Base Rent Period will equal:

$20,000,000 x .30% x 30/360 = $5,000

(iv)    Base Rent Formula for Periods During Which The Collateral
Percentage is Greater Than Zero and Less Than 100% . Each installment of
Base Rent payable for any Base Rent Period during which the Collateral
Percentage is greater than zero and less than one hundred percent (100%)
shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the sum of:

(A)     the product of:

(1)     the Collateral Percentage for such Base
Rent Period, times

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(2)     the Secured Spread for the period from
and including the preceding Base Rent
Date to but not including the Base Rent
Date upon which the installment is due,
plus

(B)     the product of:

(1)     one minus the Collateral Percentage for
such Base Rent Period, times

(2)     the sum of (a) the Effective Rate with
respect to such Base Rent Period, plus
(b) the Unsecured Spread for the period
from and including the preceding Base
Rent Date to but not including the Base
Rent Date upon which the installment is
due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is forty
percent (40%); that prior to the first day of such Base Rent Period
Qualified Prepayments have been received by BNPLC, leaving a Stipulated
Loss Value of $20,000,000; that the Effective Rate for the Base Rent
Period is 6%; that the Secured Spread is thirty basis points (30/100 of
1%); that upon the commencement of such Base Rent Period the Unsecured
Spread is one hundred fifty basis points (150/100 of 1%); and that such
Base Rent Period contains exactly thirty days. Under such assumptions,
the Base Rent for the hypothetical Base Rent Period will equal:

$20,000,000 x {(40% x .30%) + ([1 - 40%] x [6% + 1.50%])} x 30/360 = $77,000

(v)     Base Rent Formula for Periods During Which The Collateral
Percentage is Zero . Each installment of Base Rent payable for any Base
Rent Period during which the Collateral Percentage is zero shall equal:

o       Stipulated Loss Value on the first day of such Base Rent
Period, times

o       the sum of (a) the Effective Rate with respect to such
Base Rent Period, plus (b) the Unsecured Spread for the
period from and including the preceding Base Rent Date
to but not including the Base Rent Date upon which the
installment is due, times

o       the number of days in the period from and including the
preceding Base Rent Date to but not including the Base
Rent Date upon which the installment is due, divided by

o       three hundred sixty.

Assume, only for the purpose of illustration: that the
Collateral Percentage for a hypothetical Base Rent Period is zero
percent (0%); that prior to the first day of such Base Rent Period
Qualified Prepayments have been received by BNPLC, leaving a Stipulated
Loss Value of $20,000,000; that the Effective Rate for the Base Rent
Period is 6%; that the Unsecured Spread is one hundred fifty basis
points (150/100 of 1%) upon the commencement of such Base Rent Period;

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and that such Base Rent Period contains exactly thirty days. Under such
assumptions, the Base Rent for the hypothetical Base Rent Period will
equal:

$20,000,000 x (6% + 1.50%) x 30/360 = $125,000

(d)     Additional Rent . All amounts which NAI is required to pay to or on
behalf of BNPLC pursuant to this Land Lease, together with every charge,
premium, interest and cost set forth herein which may be added for nonpayment or
late payment thereof, shall constitute rent (all such amounts, other than Base
Rent, are herein called "ADDITIONAL Rent", and together Base Rent and Additional
Rent are herein sometimes called "RENT").

(e)     Intentionally Deleted .

(f)     Intentionally Deleted .

(g)     Intentionally Deleted .

(h)     Intentionally Deleted .

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

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

4.      NATURE OF THIS AGREEMENT.

(a)     "Net" Lease Generally . Subject only to the exceptions listed in
subparagraph 5.(d) below, it is the intention of BNPLC and NAI that Base Rent
and other payments herein specified shall be absolutely net to BNPLC and that
NAI shall pay all costs, expenses and obligations of every kind relating to the
Property or this Land Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Land Lease or the transactions contemplated herein.

However, neither this subparagraph 4.(a) nor the indemnity in this
subparagraph 5.(c)(i) shall be construed to make NAI liable for (I) an
allocation of general overhead or internal administrative expenses of BNPLC or
any other Interested Party or (II) any duplicate payment of the same Loss to
both BNPLC and another Interested Party. (If, for example, BNPLC were required
to make a $10 fine because of a failure of the Property to comply with
Applicable Laws, and a Participant were required by the Participation Agreement
to reimburse BNPLC for 20% of the $10, NAI would not be required by this
subparagraph 4.(a) or by subparagraph 5.(c)(i) to pay both $10 to BNPLC and $2
to the Participant on account of the fine.)

(b)     No Termination . Except as expressly provided in this Land Lease itself,
this Land Lease shall not terminate, nor shall NAI have any right to terminate
this Land Lease, nor shall NAI be entitled to any abatement of the Rent, nor
shall the obligations of NAI under this Land Lease be excused, for any reason
whatsoever, including any of the following: (i) any damage to or the destruction
of all or any part of the Property from whatever cause, (ii) the taking of the
Property or any 

7

12
portion thereof by eminent domain or otherwise for any reason, (iii) the
prohibition, limitation or restriction of NAI's use or development of all or any
portion of the Property or any interference with such use by governmental action
or otherwise, (iv) any eviction of NAI or of anyone claiming through or under
NAI, (v) any default on the part of BNPLC under this Land Lease or under any
other agreement to which BNPLC and NAI are parties, (vi) the inadequacy in any
way whatsoever of the Property (it being understood that BNPLC has not made,
does not make and will not make any representation express or implied as to the
adequacy thereof), (vii) any latent or other defect in the Property or any
change in the condition thereof or the existence with respect to the Property of
any violations of Applicable Laws, or (viii) any other cause whether similar or
dissimilar to the foregoing. It is the intention of the parties hereto that the
obligations of NAI hereunder shall be separate and independent of the covenants
and agreements of BNPLC, that Base Rent and all other sums payable by NAI
hereunder shall continue to be payable in all events and that the obligations of
NAI hereunder shall continue unaffected, unless the requirement to pay or
perform the same shall have been terminated or limited pursuant to an express
provision of this Land Lease. Without limiting the foregoing, NAI waives to the
extent permitted by Applicable Laws, except as otherwise expressly provided
herein, all rights to which NAI may now or hereafter be entitled by law
(including any such rights arising because of any implied "warranty of
suitability" or other warranty under Applicable Laws) (i) to quit, terminate or
surrender this Land Lease or the Property or any part thereof or (ii) to any
abatement, suspension, deferment or reduction of the Rent.

However, nothing in this subparagraph 4.(b) shall be construed as a
waiver by NAI of any right NAI may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Land Lease that continues
beyond the period for cure provided in Paragraph 19: (i) the recovery of
monetary damages, (ii) injunctive relief in case of the violation, or attempted
or threatened violation, by BNPLC of any of the express covenants, agreements,
conditions or provisions of this Land Lease which are binding upon BNPLC
(including the confidentiality provisions set forth in subparagraph 16.(c)
below), or (iii) a decree compelling performance by BNPLC of any of the express
covenants, agreements, conditions or provisions of this Land Lease which are
binding upon BNPLC.

(c)     Tax Reporting . BNPLC and NAI shall report this Land Lease and the
Purchase Agreement for federal income tax purposes as a conditional sale unless
prohibited from doing so by the Internal Revenue Service. If the Internal
Revenue Service shall challenge BNPLC's characterization of this Land Lease and
the Purchase Agreement as a conditional sale for federal income tax reporting
purposes, BNPLC shall notify NAI in writing of such challenge and consider in
good faith any reasonable suggestions by NAI about an appropriate response. In
any event, NAI shall (subject only to the limitations set forth in this
subparagraph) indemnify and hold harmless BNPLC from and against all
liabilities, costs, additional taxes (other than Excluded Taxes) and other
expenses that may arise or become due because of such challenge or because of
any resulting recharacterization required by the Internal Revenue Service,
including any additional taxes that may become due upon any sale under the
Purchase Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to NAI. The failure to so provide a copy of the notice to NAI shall not
excuse NAI from its obligations under this Paragraph; provided, that if none of
the officers of NAI and none of the employees of NAI responsible for tax matters
are aware of the challenge described in the notice and such failure by BNPLC
renders unavailable defenses that NAI might otherwise assert, or precludes
actions that NAI might otherwise take, to minimize its obligations hereunder,
then NAI shall be excused from its obligation to indemnify BNPLC against
liabilities, costs, additional taxes and other expenses, if any, which would not
have been incurred but for such failure. For example, if BNPLC fails to provide
NAI with a copy of a notice of a challenge by the Internal Revenue Service
covered by the indemnities set out in this Land Lease and NAI is not otherwise
already aware of such challenge, and if as a result of such failure BNPLC
becomes liable for penalties and interest covered by the indemnities in excess
of the penalties and interest that would have accrued if NAI had been promptly
provided with a copy of the notice, then NAI will be excused from any obligation
to BNPLC to pay the excess.

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13
(d)     Characterization of this Land Lease . For purposes of determining the
appropriate financial accounting for this Land Lease and for purposes of
determining their respective rights and remedies under state law, BNPLC and NAI
believe and intend that (i) this Land Lease constitutes a true lease, not a mere
financing arrangement, enforceable in accordance with its express terms, and the
preceding subparagraph is not intended to affect the enforcement of any other
provisions of this Land Lease or the Purchase Agreement, and (ii) the Purchase
Agreement shall constitute a separate and independent contract, enforceable in
accordance with the express terms and conditions set forth therein. In this
regard, NAI acknowledges that NAI asked BNPLC to participate in the transactions
evidenced by this Land Lease and the Purchase Agreement as a landlord and owner
of the Property, not as a lender. Although other transactions might have been
used to accomplish similar results, NAI expects to receive certain material
accounting and other advantages through the use of a lease transaction.
Accordingly, and notwithstanding the reporting for income tax purposes described
in the preceding subparagraph, NAI cannot equitably deny that this Land Lease
and the Purchase Agreement should be construed and enforced in accordance with
their respective terms, rather than as a mortgage or other security device, in
any action brought by BNPLC to enforce this Land Lease or the Purchase
Agreement.

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.

(a)     Impositions . Subject only to the exceptions listed in subparagraph
5.(d) below, NAI shall pay or cause to be paid prior to delinquency all ad
valorem taxes assessed against the Property and other Impositions. If requested
by BNPLC from time to time, NAI shall furnish BNPLC with receipts showing
payment of all Impositions prior to the applicable delinquency date therefor.

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

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

(i)     If after the Effective Date there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or
making, funding or maintaining advances to BNPLC in connection with the
Property because of any Banking Rules Change, then NAI shall from time
to time, pay to BNPLC for the account of BNPLC's Parent or such other
Participant, as the case may be, additional amounts sufficient to
compensate BNPLC's Parent or the Participant for such increased cost. An
increase in costs resulting from any imposition or increase of reserve
requirements applicable to Collateral held from time to time by BNPLC's
Parent or other Participants pursuant to the Pledge Agreement would be
an increase covered by the preceding sentence. A certificate as to the
amount of such increased cost, submitted to BNPLC and NAI by BNPLC's
Parent or the other Participant, shall be conclusive and binding upon
NAI, absent clear and demonstrable error.

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(ii)     BNPLC's Parent or any other Participant may demand additional
payments ("CAPITAL ADEQUACY CHARGES") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount
of capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made
to BNPLC to permit BNPLC to maintain BNPLC's investment in the Property.
To the extent that BNPLC's Parent or another Participant demands Capital
Adequacy Charges as compensation for the additional capital requirements
reasonably allocable to such investment or advances, NAI shall pay to
BNPLC for the account of BNPLC's Parent or the other Participant, as the
case may be, the amount so demanded. Without limiting the foregoing,
BNPLC and NAI hereby acknowledge and agree that the provisions for
calculating Base Rent set forth herein reflect the assumption that the
Pledge Agreement will cause a zero percent (0%) risk weight to be
assigned to a percentage (equal to the Collateral Percentage) of the
collective investment of BNPLC and the Participants in the Property
pursuant to 12 Code of Federal Regulations, part 225, as from time to
time supplemented or amended, or pursuant to any other similar or
successor statute or regulation applicable to BNPLC and the
Participants. If and so long as such risk weight is increased the
assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of
return to BNPLC, BNPLC's Parent and any other Participants (net of their
costs of maintaining required capital) that they would have enjoyed from
this Land Lease absent such increase.

(iii)    Any amount required to be paid by NAI under this subparagraph
5.(b) shall be due ten days after a demand for such payment is received
by NAI.

(c)    NAI's Payment of Other Losses; General Indemnification . Subject only to
the exceptions listed in subparagraph 5.(d) below:

(i)     All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time
and from time to time by reason of, in connection with or arising out of
(A) their ownership or alleged ownership of any interest in the Property
or the Rents, (B) the use and operation of the Property, (C) the
negotiation, administration or enforcement of the Operative Documents,
(D) the making of the Initial Funding Advance, (E) the breach by NAI of
this Land Lease or any other document executed by NAI in connection
herewith, (F) any failure of the Property or NAI itself to comply with
Applicable Laws, (G) Permitted Encumbrances, (H) Hazardous Substance
Activities, including those occurring prior to Effective Date, (I) any
obligations under the Existing Contracts related to the Property that
survive the closing thereunder, or (K) any bodily or personal injury or
death or property damage occurring in or upon or in the vicinity of the
Property through any cause whatsoever, shall be paid by NAI, and NAI
shall indemnify and defend BNPLC and other Interested Parties from and
against all such Losses.

(ii)    THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF
BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN
THE PRECEDING SUBPARAGRAPH 5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE
SUBJECT MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE
OUT OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED
PARTY. FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF
INSURANCE OBTAINED BY NAI OR REQUIRED OF NAI BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST OR FOR WHICH
THE INDEMNITIES AND RELEASES ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR
ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS LAND LEASE OR OTHER
OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO LOSSES AGAINST WHICH
INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD THAT SUCH INSURANCE
IS INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES
AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
INDEMNIFICATION BY THIS LAND LEASE.

(iii)   Costs and expenses for which NAI shall be responsible pursuant
to this subparagraph 5.(c) will include appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes, brokerage fees and
commissions, abstract fees, title policy 

10

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fees, Uniform Commercial Code search fees, escrow fees and Attorneys'
Fees incurred by BNPLC with respect to the Property, whether such costs
and expenses are incurred at the time of execution of this Land Lease or
at any time during the Term.

(iv)    NAI's obligations under this subparagraph 5.(c) shall survive
the termination or expiration of this Land Lease. Any amount to be paid
by NAI under this subparagraph 5.(c) shall be due ten days after a
demand for such payment is received by NAI.

(v)     If an Interested Party notifies NAI of any claim or proceeding
included in, or any investigation or allegation concerning, Losses for
which NAI is responsible pursuant to this subparagraph 5.(c), NAI shall
assume on behalf of the Interested Party and conduct with due diligence
and in good faith the investigation and defense thereof and the response
thereto with counsel selected by NAI, but satisfactory to the Interested
Party; provided, that the Interested Party shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both NAI and the Interested Party
and the Interested Party shall have reasonably concluded that there are
legal defenses available to it which are inconsistent with or in
addition to those available to NAI, then the Interested Party shall have
the right to select separate counsel to participate in the investigation
and defense of and response to such claim, proceeding, investigation or
allegation on its own behalf, and NAI shall pay or reimburse the
Interested Party for all Attorney's Fees incurred by the Interested
Party because of the selection of such separate counsel. If NAI fails to
assume promptly (and in any event within fifteen days after being
notified of the applicable claim, proceeding, investigation or
allegation) the defense of the Interested Party, then the Interested
Party may contest (or settle, with the prior consent of NAI, which
consent will not be unreasonably withheld) the claim, proceeding,
investigation or allegation at NAI's expense using counsel selected by
the Interested Party. Moreover, if any such failure by NAI continues for
forty-five days or more after NAI is notified of any such claim,
proceeding, investigation or allegation, the Interested Party may elect
not to contest or continue contesting the same and instead, in
accordance with the written advice of counsel, settle (or pay in full)
all claims related thereto without NAI's consent and without releasing
NAI from any obligations to the Interested Party under this subparagraph
5.(c).

(d)     Exceptions and Qualifications to Indemnities .

(i)     BNPLC acknowledges and agrees that nothing in subparagraph 4.(a)
or the preceding subparagraphs of this Paragraph 5 shall be construed to
require NAI to pay or reimburse an Interested Party for (w) any costs or
expenses incurred by BNPLC or any transferee to accomplish any Permitted
Transfers described in clauses (2), (3), (4), (6) or (7) of the
definition thereof in the Common Definitions and Provisions Agreement
(Phase II - Land), (x) Excluded Taxes, (y) Losses incurred or suffered
by such Interested Party that are proximately caused by (and attributed
by any applicable principles of comparative fault to) the Established
Misconduct of that Interested Party, or (z) Losses incurred or suffered
by Participants in connection with their negotiation or execution of the
Participation Agreement or Pledge Agreement (or supplements making them
parties thereto) or in connection with any due diligence they may
undertake before entering into the Participation Agreement or Pledge
Agreement. Further, without limiting BNPLC's rights (as provided in
other provisions of this Land Lease and other Operative Documents) to
include the following in the calculation of Stipulated Loss Value or the
Break Even Price or collect Base Rent, a Supplemental Payment and other
amounts, the calculation of which depends upon the Stipulated Loss Value
or the Break Even Price, BNPLC acknowledges and agrees that nothing in
subparagraph or the preceding subparagraphs of this Paragraph shall be
construed to require NAI to pay or reimburse an Interested Party for:

a)      costs paid by BNPLC with the proceeds of the Initial
Funding Advance as part of the Transaction Expenses; or

b)      Construction Advances made under (and as defined in) the
Construction Management Agreement or the Other Lease Agreement,
including costs and expenditures incurred or paid by or on
behalf of BNPLC after any 

11

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Landlord's Election to Continue Construction under (and as
defined in) the Other Lease Agreement, to the extent that such
costs and expenditures are considered to be Construction
Advances pursuant to subparagraph 6(e) of the Lease Agreement.

Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in
subparagraph 5.(c)(i), then such Interested Party will be expected to
promptly furnish a copy of such notice to NAI. The failure to so provide
a copy of the notice to NAI shall not excuse NAI from its obligations
under subparagraph 5.(c)(i); provided, that if NAI is unaware of the
matters described in the notice and such failure renders unavailable
defenses that NAI might otherwise assert, or precludes actions that NAI
might otherwise take, to minimize its obligations, then NAI shall be
excused from its obligation to indemnify such Interested Party (and any
Affiliate of such Interested Party) against the Losses, if any, which
would not have been incurred or suffered but for such failure. For
example, if BNPLC fails to provide NAI with a copy of a notice of an
obligation covered by the indemnity set out in subparagraph 5.(c)(i) and
NAI is not otherwise already aware of such obligation, and if as a
result of such failure BNPLC becomes liable for penalties and interest
covered by the indemnity in excess of the penalties and interest that
would have accrued if NAI had been promptly provided with a copy of the
notice, then NAI will be excused from any obligation to BNPLC (or any
Affiliate of BNPLC) to pay the excess.

(ii)     [Intentionally Deleted.].

6.      INTENTIONALLY DELETED.

7.      INTENTIONALLY DELETED.

8.      ENVIRONMENTAL.

(a)     Environmental Covenants by NAI . NAI covenants that:

(i)     NAI shall not conduct or permit others to conduct Hazardous
Substance Activities, except Permitted Hazardous Substance Use and
Remedial Work.

(ii)    NAI shall not discharge or permit the discharge of anything on
or from the Property that would require any permit under applicable
Environmental Laws, other than (1) storm water runoff, (2) waste water
discharges through a publicly owned treatment works, (3) discharges that
are a necessary part of any Remedial Work, and (4) other similar
discharges consistent with the definition herein of Permitted Hazardous
Substance Use, in each case in strict compliance with Environmental
Laws.

(iii)   Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions
of this Land Lease, NAI shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict
compliance with Environmental Laws.

(iv)    If requested by BNPLC in connection with any Remedial Work
required by this subparagraph, NAI shall retain independent
environmental consultants acceptable to BNPLC to evaluate any
significant new information generated during NAI's implementation of the
Remedial Work and to discuss with NAI whether such new information
indicates the need for any additional measures that NAI should take to
protect the health and safety of persons (including employees,
contractors and subcontractors and their employees) or to protect the
environment. NAI shall implement any such additional measures to the
extent required with respect to the Property by Environmental Laws or
otherwise believed by BNPLC to be reasonably required and to the extent
not inconsistent with the other provisions of this Land Lease.

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(b)     Right of BNPLC to do Remedial Work Not Performed by NAI . If NAI's
failure to cure any breach of the covenants set forth in subparagraph 8.(a)
continues beyond the Environmental Cure Period (as defined below), BNPLC may, in
addition to any other remedies available to it, conduct all or any part of the
Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant to the
preceding sentence (including any removal of Hazardous Substances), the cost
thereof shall be a demand obligation owing by NAI to BNPLC. As used in this
subparagraph, "ENVIRONMENTAL CURE PERIOD" means the period ending on the earlier
of: (1) one hundred eighty days after NAI is notified of the breach which must
be cured within such period, (2) the date that any writ or order is issued for
the levy or sale of any property owned by BNPLC (including the Property) because
of such breach, (3) the date that any criminal action is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such breach, or (4) any Designated Sale Date upon which, for any reason, NAI
or an Affiliate of NAI or any Applicable Purchaser shall not purchase BNPLC's
interest in the Property pursuant to the Purchase Agreement for a net price to
BNPLC (when taken together with any Supplemental Payment made by NAI pursuant to
Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to Stipulated Loss Value.

(c)     Environmental Inspections and Reviews . BNPLC reserves the right to
retain environmental consultants to review any report prepared by NAI or to
conduct BNPLC's own investigation to confirm whether NAI is complying with the
requirements of this Paragraph . NAI grants to BNPLC and to BNPLC's agents,
employees, consultants and contractors the right to enter upon the Property at
any time to inspect the Property and to perform such tests as BNPLC deems
necessary or appropriate to review or investigate Hazardous Substances in, on,
under or about the Property or any discharge or suspected discharge of Hazardous
Substances into groundwater or surface water from the Property. NAI shall
promptly reimburse BNPLC for the fees of its environmental consultants and the
costs of any such inspections and tests.

(d)     Communications Regarding Environmental Matters .

(i)     NAI shall immediately advise BNPLC of (1) any discovery of any
event or circumstance which would render any of the representations of
NAI herein or in the Closing Certificate concerning environmental
matters materially inaccurate or misleading if made at the time of such
discovery and assuming that NAI was aware of all relevant facts, (2) any
Remedial Work (or change in Remedial Work) required or undertaken by NAI
or its Affiliates in response to any (A) discovery of any Hazardous
Substances on, under or about the Property other than Permitted
Hazardous Substances or (B) any claim for damages resulting from
Hazardous Substance Activities, (3) NAI's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the
Property which could cause the Property or any part thereof to be
subject to any ownership, occupancy, transferability or use restrictions
under Environmental Laws, or (4) any investigation or inquiry of any
failure or alleged failure by NAI to comply with Environmental Laws
affecting the Property by any governmental authority responsible for
enforcing Environmental Laws. In such event, NAI shall deliver to BNPLC
within thirty days after BNPLC's request, a preliminary written
environmental plan setting forth a general description of the action
that NAI proposes to take with respect thereto, if any, to bring the
Property into compliance with Environmental Laws or to correct any
breach by NAI of this Paragraph , including any proposed Remedial Work,
the estimated cost and time of completion, the name of the contractor
and a copy of the construction contract, if any, and such additional
data, instruments, documents, agreements or other materials or
information as BNPLC may request.

(ii)    NAI shall provide BNPLC with copies of all material written
communications with federal, state and local governments, or agencies
relating to the matters listed in the preceding clause (i). NAI shall
also provide BNPLC with copies of any correspondence from third Persons
which threaten litigation over any significant failure or alleged
significant failure of NAI to maintain or operate the Property in
accordance with Environmental Laws.

(iii)   Prior to NAI's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
NAI shall, to the extent practicable, deliver to BNPLC a draft of the
proposed submission (together 

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with the proposed date of submission), and in good faith assess and
consider any comments of BNPLC regarding the same. Promptly after
BNPLC's request, NAI shall meet with BNPLC to discuss the submission,
shall provide any additional information requested by BNPLC and shall
provide a written explanation to BNPLC addressing the issues raised by
comments (if any) of BNPLC regarding the submission, including a
reasoned analysis supporting any decision by NAI not to modify the
submission in accordance with comments of BNPLC.

9.      INSURANCE REQUIRED AND CONDEMNATION.

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

(b)     Intentionally Deleted .

(c)     Failure to Obtain Insurance . If NAI fails to obtain any insurance or to
provide confirmation of any such insurance as required by this Land Lease, BNPLC
shall be entitled (but not required) to obtain the insurance that NAI has failed
to obtain or for which NAI has not provided the required confirmation and,
without limiting BNPLC's other remedies under the circumstances, BNPLC may
require NAI to reimburse BNPLC for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date such cost was paid
by BNPLC until the date of reimbursement by NAI (provided, however, that any
such insurance cost paid by BNPLC prior to the Base Rent Commencement Date will
be charged against the Construction Allowance under, and as defined in, the
Construction Management Agreement as if it had been paid by NAI).

(d)     Condemnation . Immediately upon obtaining knowledge of the institution
of any proceedings for the condemnation of the Property or any portion thereof,
or any other similar governmental or quasi-governmental proceedings arising out
of injury or damage to the Property or any portion thereof, each party shall
notify the other (provided, however, BNPLC shall have no liability for its
failure to provide such notice) of the pendency of such proceedings. NAI shall,
at its expense, diligently prosecute any such proceedings and shall consult with
BNPLC, its attorneys and experts and cooperate with them as requested in the
carrying on or defense of any such proceedings. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation with respect to the Property
and all judgments, decrees and awards for injury or damage to the Property shall
be paid to BNPLC as Escrowed Proceeds, and all such proceeds will be applied as
provided in Paragraph 10. BNPLC is hereby authorized, in the name of NAI, at any
time when an Event of Default shall have occurred and be continuing, or
otherwise with NAI's prior consent, to execute and deliver valid acquittances
for, and to appeal from, any such judgment, decree or award concerning
condemnation of any of the Property. BNPLC shall not be in any event or
circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.

(e)     Waiver of Subrogation . NAI, for itself and for any Person claiming
through it (including any insurance company claiming by way of subrogation),
waives any and every claim which arises or may arise in its favor against BNPLC
or any other Interested Party and the officers, directors, and employees of the
Interested Parties for any and all Losses, to the extent that NAI is compensated
by insurance or would be compensated by the insurance policies contemplated in
this Land Lease, but for any deductible or self-insured retention maintained
under such insurance or but for a failure of NAI to maintain the insurance as
required by this Land Lease. NAI agrees to have such insurance policies properly
endorsed so as to make them valid notwithstanding this waiver, if such
endorsement is required to prevent a loss of insurance.

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10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.

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

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

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

(b)     Advances of Escrowed Proceeds to NAI . Except as otherwise provided
below in this Paragraph , BNPLC shall advance all Remaining Proceeds held by it
as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket cost to NAI
of repairing or restoring the Property in accordance with the requirements of
this Land Lease and the other Operative Documents as the applicable repair or
restoration progresses and upon compliance by NAI with such terms, conditions
and requirements as may be reasonably imposed by BNPLC. In no event, however,
shall BNPLC be required to pay Escrowed Proceeds to NAI in excess of the actual
out-of-pocket cost to NAI of the applicable repair or restoration, as evidenced
by invoices or other documentation satisfactory to BNPLC, it being understood
that BNPLC may retain and apply any such excess as a Qualified Prepayment.

(c)     Application of Escrowed Proceeds as a Qualified Prepayment . Provided no
Event of Default shall have occurred and be continuing, BNPLC shall apply any
Remaining Proceeds paid to it (or other amounts available for application as a
Qualified Prepayment) as a Qualified Prepayment on any date that BNPLC is
directed to do so by a notice from NAI; however, if such a notice from NAI
specifies an effective date for a Qualified Prepayment that is less than five
Business Days after BNPLC's actual receipt of the notice, BNPLC may postpone the
date of the Qualified Prepayment to any date not later than five Business Days
after BNPLC's receipt of the notice. In any event, except when BNPLC is required
by the preceding sentence to apply Remaining Proceeds or other amounts as a
Qualified Prepayment on an Advance Date or Base Rent Date, BNPLC may deduct
Breakage Costs incurred in connection with any Qualified Prepayment from the
Remaining Proceeds or other amounts available for application as the Qualified
Prepayment, and NAI will reimburse BNPLC upon request for any such Breakage
Costs that BNPLC incurs but does not deduct.

(d)     Special Provisions Applicable After an Event of Default .
Notwithstanding the foregoing, when any Event of Default shall have occurred and
be continuing, BNPLC shall be entitled to receive and collect all insurance,
condemnation or other proceeds governed by this Paragraph 10 and to apply all
Remaining Proceeds, when and to the extent deemed 

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appropriate by BNPLC in its sole discretion, either (A) to the reimbursement of
NAI or BNPLC for the out-of-pocket cost of repairing or restoring the Property,
or (B) as Qualified Prepayments.

(e)     NAI's Obligation to Restore. Regardless of the adequacy of any
Remaining Proceeds available to NAI hereunder, and notwithstanding other
provisions of this Land Lease to the contrary, if the Property is damaged or
less than all or substantially all of the Property is taken by condemnation, NAI
must:

A)      increase the value of the Property or the remainder
thereof by restoring the same (in a manner consistent with the
requirements and limitations imposed by this Land Lease and the
other Operative Documents or otherwise acceptable to BNPLC), or
decrease Stipulated Loss Value by tendering a payment to BNPLC
for application as a Qualified Prepayment, as necessary to cause
Current AS IS Market Value to be not less than sixty percent
(60%) of Stipulated Loss Value; and

B)      restore the Property or the remainder thereof to a
reasonably safe and sightly condition.

(f)     Takings of All or Substantially All of the Property on or after the Base
Rent Commencement Date. In the event of any taking of all or substantially all
of the Property on or after the Base Rent Commencement Date, BNPLC shall be
entitled to apply all Remaining Proceeds as a Qualified Prepayment. In addition,
if Stipulated Loss Value immediately prior to any such taking exceeds the sum of
the Remaining Proceeds resulting from such condemnation, then BNPLC shall be
entitled to recover the excess from NAI upon demand as an additional Qualified
Prepayment, whereupon this Land Lease shall terminate. Any taking of so much of
the Real Property as, in BNPLC's reasonable good faith judgment, makes it
impracticable to restore or improve the remainder thereof as required by part
(2) of the preceding subparagraph shall be considered a taking of substantially
all the Property for purposes of this Paragraph 10.

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING
THE PROPERTY. NAI represents, warrants and covenants as follows:

(a) Compliance with Covenants and Laws. The use of the Property
permitted by this Land Lease complies, or will comply after NAI obtains
available permits as the tenant under this Land Lease, in all material respects
with all Applicable Laws. NAI has obtained or will promptly obtain all utility,
building, health and operating permits as may be required by any governmental
authority or municipality having jurisdiction over the Property for any
construction upon or use of the Property permitted by this Land Lease.

(b) Operation of the Property. During the Term, NAI shall operate the
Property in a good and workmanlike manner and substantially in compliance with
all Applicable Laws and will pay or cause to be paid all fees or charges of any
kind in connection therewith. (If NAI does not promptly correct any failure of
the Property to comply with Applicable Laws that is the subject of a written
notice given to NAI or BNPLC by any governmental authority, then for purposes of
the preceding sentence, NAI shall be considered not to have maintained the
Property "substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any Applicable Law or which constitutes a
public or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the extent
that any of the following would, individually or in the aggregate, increase the
likelihood of a CMA Termination Event under (and as defined in) the Construction
Management Agreement or materially and adversely affect the value of the
Property or NAI's use, occupancy or operations on the Property, NAI shall not,
without BNPLC's prior consent: (i) initiate or permit any zoning
reclassification of the Property; (ii) seek any variance under existing zoning
ordinances applicable to the Property; (iii) use or permit the use of the
Property in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or regulations; (iv)
execute or file any subdivision plat affecting the Property; or (v) consent to
the annexation of the Property to any municipality. If (A) a change in the
zoning or 

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other Applicable Laws affecting the permitted use or development of the Property
shall occur after the Base Rent Commencement Date that reduces the value of the
Property, or (B) conditions or circumstances on or about the Property are
discovered after the Base Rent Commencement Date (such as the presence of an
endangered species) which substantially impede development and thereby reduce
the value of the Property, and if after any such reduction under clause (A) or
(B) preceding the Current AS IS Market Value of the Property is less than sixty
percent (60%) of Stipulated Loss Value, then NAI shall pay BNPLC upon request
the amount by which Current AS IS Market Value is less than sixty percent (60%)
of Stipulated Loss Value, for application as a Qualified Prepayment. During the
Term, NAI shall not cause or permit any drilling or exploration for, or
extraction, removal or production of, minerals from the surface or subsurface of
the Property, and NAI shall not do any act whereby the market value of the
Property may reasonably be expected to be materially lessened. During the Term,
if NAI receives a written notice or claim from any federal, state or other
governmental entity that the Property is not in compliance in any material
respect with any Applicable Law, or that any action may be taken against the
owner of the Property because the Property does not comply with Applicable Law,
NAI shall promptly furnish a copy of such notice or claim to BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPLC or
the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken by any governmental
authority against BNPLC or any property owned by BNPLC (including the Property)
because of such violation, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

(c)     Debts for Construction, Maintenance, Operation or Development . NAI
shall cause all debts and liabilities incurred in the construction, maintenance,
operation or development of the Property, including all debts and liabilities
for labor, material and equipment and all debts and charges for utilities
servicing the Property, to be promptly paid; provided, that nothing in this
subparagraph will be construed to require NAI to remove Liens Removable by
BNPLC.

Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest NAI shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, NAI bonds over to BNPLC's
reasonable satisfaction all such contested liens against the Property alleged to
secure an amount in excess of $500,000 (individually or in the aggregate), (2)
NAI diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and (3) NAI promptly causes to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final; provided, however,
that in any event each such contest shall be concluded and the lien, interest
and costs must be paid by NAI prior to the earlier of (i) the date that any
criminal prosecution is instituted or overtly threatened against BNPLC or its
directors, officers or employees because of the nonpayment thereof, (ii) the
date that any writ or order is issued under which the Property or any other
property in which BNPLC has an interest may be seized or sold or any other
action is taken against BNPLC or any property in which BNPLC has an interest
because of the nonpayment thereof, or (iii) a Designated Sale Date upon which,
for any reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to 

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Paragraph 1(A)(2) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to the Break Even Price.

(d)     Repair, Maintenance, Alterations and Additions . NAI shall keep the
Property in good order, operating condition and appearance and shall cause all
necessary repairs, renewals and replacements to be promptly made. NAI will not
allow any of the Property to be materially misused, abused or wasted. NAI shall
not, without the prior consent of BNPLC, make material new Improvements or alter
Improvements in any material respect, except as part of the work performed in
accordance with the Construction Management Agreement. Without limiting the
foregoing, NAI will notify BNPLC before making any significant alterations to
the Improvements after the completion of the Construction Project. Nothing in
this subparagraph, however, is intended to limit NAI's rights and obligations
under other express provisions of the Other Lease Agreement and the Construction
Management Agreement with respect to the Construction Project.

(e)     Permitted Encumbrances and Development Documents . NAI shall during the
Term comply with and will cause to be performed all of the covenants, agreements
and obligations imposed upon the owner of any interest in the Property by the
Permitted Encumbrances or the Development Documents. Without limiting the
foregoing, NAI shall cause all amounts to be paid when due, the payment of which
is secured by any Lien against the Property created by the Permitted
Encumbrances. Without the prior consent of BNPLC, NAI shall not enter into,
initiate, approve or consent to any modification of any Permitted Encumbrance or
Development Document that would create or expand or purport to create or expand
obligations or restrictions which would encumber BNPLC's interest in the
Property. (Whether BNPLC must give any such consent requested by NAI during the
Term of this Land Lease shall be governed by subparagraph 3(A) of the Closing
Certificate and Agreement.)

(f)     Books and Records Concerning the Property . NAI shall keep books and
records that are accurate and complete in all material respects for the Property
and, subject to Paragraph 16.(c), will permit all such books and records to be
inspected and copied by BNPLC. This subparagraph shall not be construed as
requiring NAI to regularly maintain separate books and records relating
exclusively to the Property; provided, however, that upon request, NAI shall
construct or abstract from its regularly maintained books and records
information required by this subparagraph relating to the Property.

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO
SCHEDULE 1.

Throughout the Term of this Land Lease, NAI shall comply with the
requirements of Schedule 1 attached hereto.

13.     FINANCIAL STATEMENTS AND OTHER REPORTS.

(a)     Financial Statements; Required Notices; Certificates . Throughout the
Term of this Land Lease, NAI shall deliver to BNPLC and to each Participant:

(i)     as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of NAI, a consolidated balance
sheet of NAI and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash
flows of NAI and its Consolidated Subsidiaries for such fiscal year, all
in reasonable detail and all prepared in accordance with GAAP and
accompanied by a report and opinion of accountants of national standing
selected by NAI, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be
subject to any qualifications or exceptions as to the scope of the audit
nor to any qualification or exception which BNPLC determines, in BNPLC's
reasonable discretion, is unacceptable;

(ii)    as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of NAI,
the consolidated balance sheet of NAI and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and
the consolidated statement of cash flows of NAI and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable 

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detail and all prepared in accordance with GAAP and certified by the
chief financial officer or controller of NAI (subject to year-end
adjustments);

(iii)   together with the financial statements furnished in accordance
with subparagraph 13.(a)(i) and 13.(a)(ii), a certificate of the chief
financial officer or controller of NAI: (i) certifying that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a brief statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, (ii)
certifying that the representations of NAI set forth in the Operative
Documents are true and correct in all material respects as of the date
thereof as though made on and as of the date thereof or, if not then
true and correct, a brief statement as to why such representations are
no longer true and correct, and (iii) with computations demonstrating
compliance with the financial covenants contained in Schedule 1;

(iv)    within five days after the end of each calendar month, a
certificate of the chief financial officer or controller of NAI
certifying that at the end of the preceding calendar month, NAI had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;

(v)     promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which NAI sends to
NAI's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which NAI files
with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange;

(vi)    upon request by BNPLC, 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 the dates to
which the Base Rent has been paid and either stating that to the
knowledge of NAI no Default or Event of Default under this Land Lease
has occurred and is continuing or, if a Default or Event of Default
under this Land Lease has occurred and is continuing, a brief statement
as to the nature thereof; it being intended that any such statement by
NAI may be relied upon by any prospective purchaser or mortgagee of the
Property and by the Participants

(vii)   as soon as possible after, and in any event within ten days
after NAI becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to NAI relating
thereto is $500,000 or more, a notice signed by a senior financial
officer of NAI setting forth details of the following and the response,
if any, which NAI or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by NAI or an ERISA Affiliate with respect to any of the
following or the events or conditions leading up to the following): (A)
the assertion, to secure any Unfunded Benefit Liabilities, of any Lien
against the assets of NAI, against the assets of any Plan or
Multiemployer Plan or against any interest of BNPLC or NAI in the
Property, or (B) the taking of any action by the PBGC or any other
governmental authority against NAI to terminate any Plan of NAI or any
ERISA Affiliate of NAI or to cause the appointment of a trustee or
receiver to administer any such Plan ; and

(viii)  such other information respecting the condition or operations,
financial or otherwise, of NAI, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC may from time to time
reasonably request.

BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.

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14.     ASSIGNMENT AND SUBLETTING BY NAI.

(a)     BNPLC's Consent Required . Without the prior consent of BNPLC, NAI shall
not assign, transfer, mortgage, pledge or hypothecate this Land Lease or any
interest of NAI hereunder and shall not sublet all or any part of the Property,
by operation of law or otherwise; provided, that this provision will not be
construed to prohibit any sublease of space within Improvements expressly
permitted by the Other Lease Agreement.

(b)     Standard for BNPLC's Consent to Assignments and Certain Other Matters .
Consents and approvals of BNPLC which are required by this Paragraph 14 will not
be unreasonably withheld or delayed, but NAI acknowledges that BNPLC's
withholding of such consent or approval shall be reasonable if BNPLC determines
in good faith that (1) giving the approval may materially increase BNPLC's risk
of liability for any existing or future environmental problem, or (2) giving the
approval is likely to increase BNPLC's administrative burden of complying with
or monitoring NAI's compliance with the requirements of this Land Lease.

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

15.     ASSIGNMENT BY BNPLC.

(a)     Restrictions on Transfers . Except by a Permitted Transfer, BNPLC shall
not assign, transfer, mortgage, pledge, encumber or hypothecate this Land Lease
or the other Operative Documents or any interest of BNPLC in and to the Property
during the Term without the prior consent of NAI, which consent NAI may withhold
in its sole discretion. Further, notwithstanding anything to the contrary herein
contained, if withholding taxes are imposed on the rents and other amounts
payable to BNPLC hereunder because of BNPLC's assignment of this Land Lease to
any citizen of, or any corporation or other entity formed under the laws of, a
country other than the United States, NAI shall not be required to compensate
BNPLC or any such assignee for the withholding tax. If, in breach of this
subparagraph, BNPLC transfer the Property or any part thereof by a conveyance or
that does not constitute a Permitted Transfer, with the result that additional
transfer taxes or other Impositions are assessed against the Property or the
owner thereof, BNPLC shall be required to pay such additional transfer taxes or
other Impositions.

(b)     Effect of Permitted Transfer or other Assignment by BNPLC . If, without
breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the Property
and assigns all of its rights under this Land Lease and the other Operative
Documents, then BNPLC shall thereby be released from any obligations arising
after such assumption under this Land Lease or the other Operative Documents,
and NAI shall look solely to each successor in interest of BNPLC for performance
of such obligations.

16.     BNPLC'S RIGHT OF ACCESS.

(a)     During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraph 16.(c)) enter the Property at any reasonable time after five
Business Days advance written notice to NAI for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether NAI has complied with the
requirements of this Land Lease or the other Operative Documents.

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(b)     If NAI fails to perform any act or to take any action required of it by
this Land Lease or the Closing Certificate, or to pay any money which NAI is
required by this Land Lease or the Closing Certificate to pay, and if such
failure or action constitutes an Event of Default or renders BNPLC or any
director, officer, employee or Affiliate of BNPLC at risk of criminal
prosecution or renders BNPLC's interest in the Property or any part thereof at
risk of forfeiture by forced sale or otherwise, then in addition to any other
remedies specified herein or otherwise available, BNPLC may, perform or cause to
be performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by NAI to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Land Lease NAI may be
required to perform, and the performance thereof by BNPLC shall not constitute a
waiver of NAI's default. BNPLC may during the progress of any such work
permitted by BNPLC hereunder on or in the Property keep and store upon the
Property all necessary materials, tools, and equipment. BNPLC shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of business, or
other damage to NAI or the subtenants or invitees of NAI by reason of making
such repairs or the performance of any such work on or in the Property, or on
account of bringing materials, supplies and equipment into or through the
Property during the course of such work (except for any liability in excess of
the liability insurance limits established in Exhibit resulting from death or
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of NAI under this Land Lease shall not thereby
be excused in any manner.

(c)     NAI shall have no obligation to provide proprietary information (as
defined in the next sentence) to BNPLC, except and to the extent that (1) BNPLC
reasonably determines that BNPLC cannot accomplish the purposes of BNPLC's
inspection of the Property or exercise of other rights granted pursuant to the
various express provisions of this Land Lease and the other Operative Documents
without evaluating such information. For purposes of this Land Lease
"PROPRIETARY INFORMATION" includes NAI's intellectual property, trade secrets
and other confidential information of value to NAI about, among other things,
NAI's manufacturing processes, products, marketing and corporate strategies, but
in no event will "proprietary information" include any disclosure of substances
and materials (and their chemical composition) which are or previously have been
present in, on or under the Property at the time of any inspections by BNPLC,
nor will "proprietary information" include any additional disclosures reasonably
required to permit BNPLC to determine whether the presence of such substances
and materials has constituted a violation of Environmental Laws. In addition,
under no circumstances shall NAI have any obligation to disclose to BNPLC or any
other party any proprietary information of NAI (including, without limitation,
any pending applications for patents or trademarks, any research and design and
any trade secrets) except if and to the limited extent reasonably necessary to
comply with the express provisions of this Land Lease or the other Operative
Documents.

17.     EVENTS OF DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" by NAI under this Land Lease:

(a)     NAI shall fail to pay when due any installment of Rent due hereunder and
such failure shall continue for three (3) Business Days after NAI is notified in
writing thereof.

(b)     NAI shall fail to cause any representation or warranty of NAI contained
herein or in the Closing Certificate that was false or misleading in any
material respect when made to be made true and not misleading (other than as
described in the other clauses of this Paragraph 17), or NAI shall fail to
comply with any term, provision or covenant of this Land Lease or the Closing
Certificate (other than as described in the other clauses of this Paragraph 17),
and in either case shall not cure such failure prior to the earlier of (A)
thirty days after written notice thereof is sent to NAI or (B) the date any writ
or order is issued for the levy or sale of any property owned by BNPLC
(including the Property) or any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such failure; provided, however, that so long as no such writ or order is
issued and no such criminal prosecution is instituted or overtly threatened, the
period within which such failure may be cured by NAI shall be extended for a
further period (not to exceed an additional sixty days) as shall 

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be necessary for the curing thereof with diligence, if (but only if) (x) such
failure is susceptible of cure but cannot with reasonable diligence be cured
within such thirty day period, (y) NAI shall promptly have commenced to cure
such failure and shall thereafter continuously prosecute the curing thereof with
reasonable diligence and (z) the extension of the period for cure will not, in
any event, cause the period for cure to extend beyond five days prior to the
expiration of this Land Lease.

(c)     NAI shall abandon the Property.

(d)     NAI or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of NAI described in the next sentence
when due (taking into consideration the time NAI may have to cure such failure,
if any, under the documents governing such Debt). As used in this clause
14(a)(v), "DEBT" shall include only Debt (as defined in the Common Definitions
and Provisions Agreement (Phase II - Land)) of NAI or any of its Subsidiaries
now existing or arising in the future (a) payable to BNPLC or any Affiliate of
BNPLC, or (B) payable to any other Person and with respect to which $3,000,000
or more is actually due and payable because of acceleration or otherwise.

(e)     NAI: (a) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have had any such petition or application
filed against it; or (e) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty days or more.

(f)     One or more final judgments, decrees or orders for the payment of money
in excess of $3,000,000 in the aggregate shall be rendered against NAI and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of thirty consecutive days without NAI's having obtained an agreement (or
after the expiration or termination of an agreement) of the Persons entitled to
enforce such judgment, decrees or orders not to enforce the same pending
negotiations with NAI concerning the satisfaction or other discharge of the
same.

(g)     NAI shall breach the requirements of Paragraph 12, which by reference to
Schedule 1 establishes certain financial covenants and other requirements.

(h)     as of the effective date of this Land Lease, any of the representations
or warranties of NAI contained in subparagraphs 2(A) - (J) of the Closing
Certificate shall be false or misleading in any material respect.

(i)     NAI shall fail to pay the full amount of any Supplemental Payment
required by the Purchase Agreement on the Designated Sale Date or shall fail to
provide Collateral as and when due pursuant to the Pledge Agreement Documents.

(j)     NAI shall fail to comply with any term, provision or condition of the
Pledge Agreements after the expiration of any applicable notice and cure period
set forth in the Pledge Agreement.

18.     REMEDIES.

(a)     Basic Remedies . At any time after an Event of Default and after BNPLC
has given any notice required by subparagraph 18.(b), BNPLC shall be entitled at
BNPLC's option (and without limiting BNPLC in the exercise of any other right or
remedy BNPLC may have, and without any further demand or notice except as
expressly described in this subparagraph 18.(a)), to exercise any one or more of
the following remedies:

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(i)     By notice to NAI, BNPLC may terminate NAI's right to possession
of the Property. A notice given in connection with unlawful detainer
proceedings specifying a time within which to cure a default shall
terminate NAI's right to possession if NAI fails to cure the default
within the time specified in the notice.

(ii)    Upon termination of NAI's right to possession and without
further demand or notice, BNPLC may re-enter the Property in any manner
not prohibited by Applicable Law and take possession of all
improvements, additions, alterations, equipment and fixtures thereon and
remove any persons in possession thereof. Any property on the Land may
be removed and stored in a warehouse or elsewhere at the expense and
risk of and for the account of NAI.

(iii)   Upon termination of NAI's right to possession, this Land Lease
shall terminate and BNPLC may recover from NAI:

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

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

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

d)      Any other amount necessary to compensate BNPLC for all
the detriment proximately caused by NAI's failure to perform
NAI's obligations under this Land Lease or which in the ordinary
course of things would be likely to result therefrom, including
the costs and expenses (including Attorneys' Fees, advertising
costs and brokers' commissions) of recovering possession of the
Property, removing persons or property therefrom, placing the
Property in good order, condition, and repair, preparing and
altering the Property for reletting, all other costs and
expenses of reletting, and any loss incurred by BNPLC as a
result of NAI's failure to perform NAI's obligations under the
other Operative Documents.

The "WORTH AT THE TIME OF AWARD" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall
be computed by allowing interest at the Default Rate. The "WORTH
AT THE TIME OF AWARD" of the amount referred to in subparagraph
18.(a)(iii)c) shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%).

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

(iv)    BNPLC shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in force even after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has
right to sublet or assign, subject only to reasonable limitations).
Accordingly, even if NAI has breached this Land Lease and abandoned the
Property, this Land Lease shall continue in effect for so long as BNPLC
does not terminate NAI's right to possession, and BNPLC may enforce all
of BNPLC's rights and remedies under this Land Lease, including the
right to recover the Rent as it becomes due under this Land Lease. NAI's
right to possession shall not be deemed to have been terminated by BNPLC
except pursuant to subparagraph 18.(a)(i) hereof. The following shall
not constitute a termination of NAI's right to possession:

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

b)      The appointment of a receiver upon the initiative of
BNPLC to protect BNPLC's interest under this Land Lease; or

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

(b)     Notice Required So Long As the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Continue Under the Purchase Agreement . So
long as NAI remains in possession of the Property and there has been no
termination of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations as provided Paragraph 4 of the Purchase Agreement, BNPLC's right to
exercise remedies provided in subparagraph 18.(a) will be subject to the
condition precedent that BNPLC shall have notified NAI, at a time when an Event
of Default shall have occurred and be continuing, of BNPLC's intent to exercise
remedies provided in subparagraph 18.(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing Rights
and Obligations before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPLC may proceed immediately to exercise remedies provided in subparagraph
18.(a) at any time after the earlier of (i) sixty days after BNPLC has given
such a notice to NAI, (ii) any date upon which NAI relinquishes possession of
the Property, or (iii) any termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.

(c)     Enforceability . This Paragraph shall be enforceable to the maximum
extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.

(d)     Remedies Cumulative . No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy shall be cumulative and in addition to any
other right or remedy given to BNPLC hereunder or now or hereafter existing in
favor of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Land Lease, BNPLC shall be entitled, to the extent permitted by
Applicable Law or in equity, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Land Lease, or to a decree compelling
performance of any of the other covenants, agreements, conditions or provisions
of this Land Lease to be performed by NAI, or to any other remedy allowed to
BNPLC at law or in equity. Nothing contained in this Land Lease shall limit or
prejudice the right of BNPLC to prove for and obtain in proceedings for
bankruptcy or insolvency of NAI by reason of the termination of this Land Lease,
an amount equal to the maximum allowed by any statute or rule of law in effect
at the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above. Without limiting the generality of the
foregoing, nothing contained herein shall modify, limit or impair any of the
rights and remedies of BNPLC under the Purchase Documents, and BNPLC shall not
be required to give the sixty day notice described in subparagraph 18.(b) as a
condition precedent to any acceleration of the Designated Sale Date or to taking
any action to enforce the Purchase Documents.

19.     DEFAULT BY BNPLC. If BNPLC should default in the performance of any of
its obligations under this Land Lease, BNPLC shall have the time reasonably
required, but in no event less than thirty days, to cure such default after
receipt of notice from NAI specifying such default and specifying what action
NAI believes is necessary to cure the default. If NAI prevails in any litigation
brought against BNPLC because of BNPLC's failure to cure a default within the
time required by the preceding sentence, then NAI shall be entitled to an award
against BNPLC for the monetary damages proximately caused to NAI by such
default.

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Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.

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

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

22.     HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right, title and
interest in the Property as provided in the Purchase Agreement, but nonetheless
continue to hold the Property after the termination of this Land Lease without
BNPLC's consent, whether such termination occurs by lapse of time or otherwise,
such holding over shall constitute and be construed as a tenancy from day to day
only, at a daily Base Rent equal to: (i) Stipulated Loss Value on the day in
question, times (ii) the Default Rate for such day; divided by (iii) three
hundred and sixty; subject, however, to all of the terms, provisions, covenants
and agreements on the part of NAI hereunder. No payments of money by NAI to
BNPLC after the termination of this Land Lease shall reinstate, continue or
extend the Term of this Land Lease and no extension of this Land Lease after the
termination thereof shall be valid unless and until the same shall be reduced to
writing and signed by both BNPLC and NAI.

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS. NAI
acknowledges and agrees that nothing contained in this Land Lease shall limit,
modify or otherwise affect any of NAI's obligations under the other Operative
Documents, which obligations are intended to be separate, independent and in
addition to, and not in lieu of, the obligations set forth herein. In the event
of any inconsistency between the express terms and provisions of the Purchase
Documents and the express terms and provisions of this Land Lease, the express
terms and provisions of the Purchase Documents shall control. In the event of
any inconsistency between the express terms and provisions of the Closing
Certificate and the express terms and provisions of this Land Lease, the express
terms and provisions of this Land Lease shall control; provided, nothing herein
will limit or impair NAI's obligations under the Closing Certificate following
any expiration of termination of this Land Lease.

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[The signature pages follow.]

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Land Lease Agreement
to be executed as of [EFFECTIVE DATE].

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:_________________________________
Title:________________________________

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[Continuation of signature pages to Lease Agreement dated to be effective
[EFFECTIVE DATE]]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Henry Setina, Vice President

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Exhibit A

LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14(degrees) 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38(degrees)
52' 02" East 134.85 feet; thence North 51(degrees) 07' 58" West 49.68; thence
North 38(degrees) 52' 02" East 87.23 feet to the Northerly line of last said
Parcel A; thence along said Northerly line North 75(degrees) 07' 58" West 44.97
feet to the point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14E 51' 33" West 186.10 feet to a point on the Northeasterly line of that parcel
of land described in the deed to Santa Clara Valley Transit District, recorded
October 24, 1997 as Instrument No. 13912192, Official Records in said Office of
the Recorder of the County of Santa Clara, said point being on a non-tangent
curve concave Southwesterly and having a radius of 1002.05 feet, a radial line
through said point bears North 45(degrees) 01' 56" East; thence Northwesterly
along said Northeasterly line and along said curve through a central angle of
04(degrees) 20' 28" an arc length of 75.92 feet; thence leaving said
Northeasterly line non-tangent from last said curve North 38(degrees) 52' 02"
East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.

PARCEL TWO:

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Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45E
01' 56" East, through a central angle of 4E 20' 28" for an arc length of 75.92
feet to the true point of beginning; thence North 38E 52' 02" East 82.92 feet;
thence Southeasterly along a non-tangent curve to the left with a radius of
78.00 feet, from which a radial line bears South 38E 52' 02" West, through a
central angle of 28E 09' 05" for an arc length of 38.32 feet; thence North 38E
52' 02" East 177.73 feet; thence Northwesterly along a curve to the left with a
radius of 17.00 feet through a central angle of 90E 00' 00" for an arc length of
26.70 feet; thence North 51E 07' 58" West 19.80 feet; thence the following three
courses: North 38E 52' 02" East 12.69 feet North 51E 07' 58" West 49.68 feet;
North 38E 52' 02" East 87.23 feet to the Northeasterly line of said Parcel A, as
shown upon that certain Parcel Map filed for record in Book 216 at Page 2;
thence South 75E 07' 58" East 13.45 feet along said Northeasterly line; thence
South 38E 52' 02" West 74.94 feet; thence Southerly along a non-tangent curve to
the left with a radius of 14.00 feet, from which a radial line bears North 88E
46' 22" West, through a central angle of 52E 21' 36" for an arc length of 12.79
feet; thence South 51E 07' 58" East 85.87 feet; thence South 38E 52' 02" West
252.96 feet; North 51E 07' 58" West 41.72 feet; thence Southwesterly along a
non-tangent curve to the left with a radius of 20.00 feet, from which a radial
line bears North 10E 35' 40" West, through a central angle of 40E 32' 18" for an
arc length of 14.15 feet; thence South 38E 52' 02" West 29.48 feet; thence
Southerly along a tangent curve to the left with a radius of 20.00 feet, through
a central angle of 60E 45' 15" for an arc length 21.21 feet to a point on 

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said Northeasterly line of said parcel of land described in the deed to Santa
Clara Valley Transit District; thence Northwesterly along said Northeasterly
line along a non-tangent curve to the left with a radius of 1002.05 feet, from
which a radial line bears North 42E 01' 23" East, through a central angle of 1E
19' 55" for an arc length of 23.29 feet to the True Point of Beginning.

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Exhibit B

INSURANCE REQUIREMENTS

I.      LIABILITY INSURANCE:

A.      NAI must maintain commercial general liability ("CGL") insurance
on an occurrence basis, affording immediate protection to the limit of not less
than $20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Land Lease (though such coverage or the
amount thereof shall in no way limit such indemnifications).

B.      Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when NAI shall continue to have
the right to exercise any Issue 97-10 Election under (and as defined in) the
Other Lease Agreement, or shall have previously exercised an Issue 97-10
Election. After the expiration of NAI's right to exercise any Issue 97-10
Election, and provided no Issue 97-10 Election has been exercised by NAI, NAI
may increase any deductible or self-insured retention applicable to such
insurance, but not to an amount in excess of $500,000.

C.      The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Land Lease, and the insurance company
or companies providing the CGL insurance, must be acceptable to BNPLC. BNPLC
shall have the right from time to time and at any time to review and approve
such policy forms (including endorsements) and the insurance company or
companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until NAI is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:

(1)     Forms: CGL Insurance must be provided on Insurance
Services Office ("ISO") forms CG 0001 1093 or CG 0001 0196 or
equivalent substitute forms providing the same or greater
coverage.

(2)     Rating Requirements: Insurance must be provided through
insurance or reinsurance companies rated by the A.M. Best
Company of Oldwick, New Jersey as having a policyholder's rating
of A or better and a reported financial information rating of X
or better.

(3)     Required Endorsements: CGL Insurance must be endorsed to
provide or include:

(a)     in any policy containing a general aggregate
limit, ISO form amendment "Aggregate Limits of Insurance Per
Location" CG 2504 1185 or equivalent substitute form;

(b)     a waiver of subrogation, using ISO form CG 2404
1093 or equivalent substitute form (and under the commercial
umbrella, if any), in favor of "BNP Leasing Corporation and
other Interested Parties (as defined in the Common Definitions
and Provisions Agreement (Phase II - Land) between Network
Appliance, Inc. and BNP Leasing Corporation dated [EFFECTIVE
DATE])";

(c)     ISO additional insured form CG 2026 1185 or
equivalent substitute form, without modification (and under the
commercial umbrella, if any), designating as additional insureds
"BNPLC and other Interested Parties, as defined in the Common
Definitions and Provisions Agreement (Phase II - Land) between
Network Appliance, Inc. and BNP Leasing Corporation dated
[EFFECTIVE DATE])"; and

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37
(d)     provisions entitling BNPLC to 30 days' notice
from the insurer prior to any cancellation, nonrenewal or
material modification to the CGL coverage.

(4)     Other Insurance: Each policy to contain standard CGL
"other insurance" wording, unmodified in any way that would make
it excess over or contributory with the additional insured's own
commercial general liability coverage.

II.     INTENTIONALLY DELETED.

III.    OTHER INSURANCE RELATED REQUIREMENTS:

A.      BNPLC must be notified in writing immediately by NAI of claims against
NAI that might cause a reduction below seventy-five percent (75%) of any
aggregate limit of any policy.

B.      Intentionally Deleted.

C.      NAI's CGL insurance must be evidenced by ACORD form 25
"Certificate of Insurance" completed and interlineated in a manner satisfactory
to BNPLC to show compliance with the requirements of this Exhibit. Copies of
endorsements to the CGL insurance must be attached to such form.

D.      Such evidence of required insurance must be delivered upon
execution of this Land Lease and new certificate or evidence of insurance must
be delivered no later than 10 days prior to expiration of existing policy.

E.      NAI shall not cancel, fail to renew, or make or permit any
material reduction in any of the policies or certificates described in this
Exhibit without the prior written consent of BNPLC. The certificates (ACORD
forms 25) described in this Exhibit must contain the following express
provision:

"This is to certify that the policies of insurance described herein have
been issued to the insured Network Appliance, Inc. for whom this certificate is
executed and are in force at this time. In the event of cancellation,
non-renewal, or material reduction in coverage affecting the certificate holder,
at least sixty days prior notice shall be given to the certificate holder."

F.      The limits of liability under the liability insurance required
by this Land Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.

G.      NAI shall provide copies, certified as complete and correct by
an authorized agent of the applicable insurer, of all insurance policies
required by this Exhibit within ten days after receipt of a request for such
copies from BNPLC.

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38
Exhibit C

NOTICE OF LIBOR PERIOD ELECTION

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Lease Agreement (Phase III - Improvements) and Lease Agreement
(Phase III Land), both dated as of [EFFECTIVE DATE], and both between Network
Appliance, Inc., as tenant, and BNP Leasing Corporation, as landlord

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the two Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under both of the Lease
Agreements shall be:

________________ month(s),

beginning with the first Base Rent Period that commences on or after:

______________, ____.

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

Executed this _____ day of ______________, 19___.

Network Appliance, Inc.

Name:____________________________________
Title:___________________________________

[cc all Participants]

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Schedule 1

FINANCIAL COVENANTS

This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase III - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of [EFFECTIVE DATE] (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase III - 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 III - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and Banque
Nationale de Paris, as a Participant and as agent for any financial institutions
that become Participants thereunder from time to time, and (d) the Pledge
Agreement (Phase III - Land) (collectively with the Pledge Agreement
(Improvements), the "PLEDGE AGREEMENTS") dated to be effective as of the
Effective Date, among BNPLC, NAI, and Banque Nationale de Paris, 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.

"COLLATERAL TEST DATES" mean the Base Rent Commencement Date and the earlier of
the following dates after each fiscal quarter of NAI that ends after the Base
Rent Commencement Date: (1) the seventh Business Day after the release by NAI of
its financial statements for the fiscal quarter; or (2) the first Business Day
of the third calendar month following the end of the fiscal quarter.

"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 credits 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
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 

1

40
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).

"MANDATORY COLLATERAL PERIOD" means any period during which, notwithstanding any
contrary designation of a Collateral Percentage by NAI under the Pledge
Agreements, the Collateral Percentage for purposes of the Pledge Agreements
shall be one hundred percent (100%), determined as set forth in Part III of this
Schedule 1.

"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 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.

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41
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.

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42
PART III - TESTS FOR MANDATORY COLLATERAL PERIODS

If, as of the end of the latest fiscal quarter of NAI ending before any
Collateral Test Date, NAI shall have both:

(A) failed to maintain a ratio of (1) the sum (without duplication of
any item) of Collateral delivered and pledged under the Pledge Agreements in
accordance with the requirements thereof (if any), unencumbered 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 (2) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis), of at least 1.5 to 1.00; and

(B) failed to maintain a ratio of (i) all Debt of NAI and its
Subsidiaries (determined on a consolidated basis) to (ii) Consolidated Tangible
Net Worth of NAI, of no more than 0.45 to 1.00;

such Collateral Test Date shall constitute a "FAILED COLLATERAL TEST DATE" for
purposes of the determination of Mandatory Collateral Periods. A Mandatory
Collateral Period shall commence on each Failed Collateral Test, and such
Mandatory Collateral Period shall continue until the second of any two
subsequent CONSECUTIVE Collateral Test Dates, neither of which constitutes a
Failed Collateral Test Date.

For purposes of illustration only, assume that the following dates are
consecutive Collateral Test Dates, some of which are Failed Collateral Test
Dates and some of which are not, as indicated opposite each date:

Date                         Failed Collateral Test Date?
----                         ----------------------------

February 15, 2001                       Yes
May 12, 2001                            No
August 16, 2001                         Yes
November 11, 2001                       No
February 18, 2002                       No
May 14, 2002                            Yes
August 18, 2002                         Yes
November 18, 2002                       No
February 15, 2003                       No

Under these assumptions, the entire period from February 15, 2001 to February
18, 2002 falls within one or more Mandatory Collateral Periods. Also, the entire
period commencing May 14, 2002 and ending February 15, 2003 falls within one or
more Mandatory Collateral Periods. The period from February 18, 2002 to May 14,
2002 does not constitute Mandatory Collateral Period.

PART IV - 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:

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43
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.

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.

5

44
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 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.

6

45
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE III - LAND)

BETWEEN

BNP LEASING CORPORATION

AND

NETWORK APPLIANCE, INC.

DATED AS OF [EFFECTIVE DATE]

46
TABLE OF CONTENTS

Page
----

ARTICLE I - LIST OF DEFINED TERMS:

ACTIVE NEGLIGENCE ........................................................................... 1
ADDITIONAL RENT ............................................................................. 1
ADJUSTED EBIT ............................................................................... 1
ADVANCE DATE ................................................................................ 2
AFFILIATE ................................................................................... 2
APPLICABLE LAWS ............................................................................. 2
APPLICABLE PURCHASER ........................................................................ 2
ATTORNEYS' FEES ............................................................................. 2
BANKING RULES CHANGE ........................................................................ 2
BASE RATE ................................................................................... 2
BASE RENT ................................................................................... 2
BASE RENT COMMENCEMENT DATE.................................................................. 2
BASE RENT DATE .............................................................................. 3
BASE RENT PERIOD ............................................................................ 3
BNPLC ....................................................................................... 4
BNPLC'S PARENT .............................................................................. 4
BREAKAGE COSTS .............................................................................. 4
BREAK EVEN PRICE ............................................................................ 4
BUSINESS DAY ................................................................................ 4
CAPITAL ADEQUACY CHARGES..................................................................... 4
CAPITAL LEASE ............................................................................... 5
CLOSING CERTIFICATE ......................................................................... 5
CODE ........................................................................................ 5
COLLATERAL .................................................................................. 5
COLLATERAL PERCENTAGE........................................................................ 5
COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND)................................ 5
CONSTRUCTION MANAGEMENT AGREEMENT............................................................ 5
CONSTRUCTION PROJECT ........................................................................ 5
CURRENT AS IS MARKET VALUE................................................................... 5
DEBT ........................................................................................ 6
DEFAULT ..................................................................................... 7
DEFAULT RATE ................................................................................ 7
DEFAULTING PARTICIPANT....................................................................... 7
DEPOSIT TAKER ............................................................................... 7
DEPOSIT TAKER LOSSES ........................................................................ 7
DESIGNATED SALE DATE ........................................................................ 7
DEVELOPMENT DOCUMENTS........................................................................ 7
DIRECT PAYMENTS TO PARTICIPANTS.............................................................. 8
EFFECTIVE DATE .............................................................................. 8
EFFECTIVE RATE .............................................................................. 8
ENVIRONMENTAL LAWS .......................................................................... 8

47

Page
----

ENVIRONMENTAL CUTOFF DATE.................................................................... 8
ENVIRONMENTAL LOSSES ........................................................................ 8
ENVIRONMENTAL REPORTS........................................................................ 9
ERISA ....................................................................................... 9
ERISA AFFILIATE ............................................................................. 9
ESCROWED PROCEEDS ........................................................................... 9
ESTABLISHED MISCONDUCT...................................................................... 10
EUROCURRENCY LIABILITIES.................................................................... 10
EURODOLLAR RATE RESERVE PERCENTAGE.......................................................... 10
EVENT OF DEFAULT ........................................................................... 10
EXCLUDED TAXES ............................................................................. 10
EXISTING CONTRACTS ......................................................................... 11
FAILED COLLATERAL TEST DATE................................................................. 11
FED FUNDS RATE ............................................................................. 11
GAAP ....................................................................................... 11
HAZARDOUS SUBSTANCE ........................................................................ 11
HAZARDOUS SUBSTANCE ACTIVITY................................................................ 11
IMPOSITIONS ................................................................................ 12
IMPROVEMENTS ............................................................................... 12
INITIAL FUNDING ADVANCE..................................................................... 12
INTERESTED PARTY ........................................................................... 12
ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT.............................. 12
LAND ....................................................................................... 13
LAND LEASE ................................................................................. 13
LIBOR ...................................................................................... 13
LIBOR PERIOD ELECTION....................................................................... 13
LIEN ....................................................................................... 14
LIENS REMOVABLE BY BNPLC.................................................................... 14
LOSSES ..................................................................................... 14
MANDATORY COLLATERAL PERIOD................................................................. 15
MATERIAL ENVIRONMENTAL COMMUNICATION........................................................ 15
MAXIMUM REMARKETING OBLIGATION.............................................................. 15
MINIMUM EXTENDED REMARKETING PRICE.......................................................... 15
MULTIEMPLOYER PLAN ......................................................................... 15
NAI. ....................................................................................... 15
NAI'S EXTENDED REMARKETING PERIOD........................................................... 15
NAI'S EXTENDED REMARKETING RIGHT............................................................ 15
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS............................................ 15
OPERATIVE DOCUMENTS ........................................................................ 15
OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT........................................... 15
OTHER LEASE AGREEMENT....................................................................... 15
OTHER PURCHASE AGREEMENT.................................................................... 16
PARTICIPANT ................................................................................ 16
PARTICIPATION AGREEMENT..................................................................... 16
PBGC ....................................................................................... 16
PERMITTED ENCUMBRANCES...................................................................... 16
PERMITTED HAZARDOUS SUBSTANCE USE........................................................... 16

48

Page
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PERMITTED HAZARDOUS SUBSTANCES.............................................................. 17
PERMITTED TRANSFER ......................................................................... 17
PERSON ..................................................................................... 17
PERSONAL PROPERTY .......................................................................... 17
PLAN ....................................................................................... 17
PLEDGE AGREEMENT ........................................................................... 18
PRIME RATE ................................................................................. 18
PROPERTY ................................................................................... 18
PURCHASE AGREEMENT ......................................................................... 18
PURCHASE DOCUMENTS ......................................................................... 18
PURCHASE OPTION ............................................................................ 18
QUALIFIED AFFILIATE ........................................................................ 18
QUALIFIED PREPAYMENTS....................................................................... 18
REAL PROPERTY .............................................................................. 19
REMEDIAL WORK .............................................................................. 19
RENT ....................................................................................... 19
RESIDUAL RISK PERCENTAGE.................................................................... 19
RESPONSIBLE FINANCIAL OFFICER............................................................... 19
SALE CLOSING DOCUMENTS...................................................................... 19
SECURED SPREAD ............................................................................. 19
SELLER ..................................................................................... 19
STIPULATED LOSS VALUE....................................................................... 19
SUBSIDIARY ................................................................................. 19
SUPPLEMENTAL PAYMENT ....................................................................... 20
TERM ....................................................................................... 20
THIRD PARTY PRICE .......................................................................... 20
THIRD PARTY SALE NOTICE..................................................................... 20
THIRD PARTY SALE PROPOSAL................................................................... 20
THIRD PARTY TARGET PRICE.................................................................... 20
TRANSACTION EXPENSES ....................................................................... 20
UNFUNDED BENEFIT LIABILITIES................................................................ 20
UNSECURED SPREAD ........................................................................... 20
VOLUNTARY RETENTION OF THE PROPERTY......................................................... 21

ARTICLE II - PROVISIONS USED IN COMMON:

1   NOTICES ................................................................................ 21
2   SEVERABILITY ........................................................................... 23
3   NO MERGER .............................................................................. 23
4   NO IMPLIED WAIVER ...................................................................... 24
5   ENTIRE AND ONLY AGREEMENTS.............................................................. 24
6   BINDING EFFECT                                                                           24
7   TIME IS OF THE ESSENCE.................................................................. 24
8   GOVERNING LAW                                                                            24
9   PARAGRAPH HEADINGS...................................................................... 24
10  NEGOTIATED DOCUMENTS.................................................................... 25
11  TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT.................................... 25
12  OTHER TERMS AND REFERENCES...............................................................25
13  EXECUTION IN COUNTERPARTS................................................................25
14  NOT A PARTNERSHIP, ETC...................................................................25

49
COMMON DEFINITIONS AND PROVISIONS AGREEMENT
(PHASE III - LAND)

This Common Definitions and Provisions Agreement (Phase III - Land), by
and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is dated as of
[EFFECTIVE DATE], the Effective Date.

RECITALS

Contemporaneously with the execution of this Common Definitions and
Provisions Agreement (Phase II - Improvements), NAI is executing the Closing
Certificate (as defined below) in favor of BNPLC, and BNPLC and NAI are
executing the Land Lease (as defined below) and the Purchase Agreement (as
defined below), both of which concern the Property (as defined below). Each of
the Closing Certificate, the Land Lease and the Purchase Agreement (together
with this Common Definitions and Provisions Agreement (Phase II - Land) and the
Pledge Agreement [as defined below], the "OPERATIVE DOCUMENTS") are intended to
create separate and independent obligations upon the parties thereto. However,
NAI and BNPLC intend that all of the Operative Documents share certain
consistent definitions and other miscellaneous provisions. To that end, the
parties are executing this Common Definitions and Provisions Agreement (Phase II
- Land) and incorporating it by reference into each of the other Operative
Documents.

AGREEMENTS

LIST OF DEFINED TERMS

UNLESS A CLEAR CONTRARY INTENTION APPEARS, THE FOLLOWING TERMS SHALL
HAVE THE RESPECTIVE INDICATED MEANINGS AS USED HEREIN AND IN THE OTHER OPERATIVE
DOCUMENTS:

"ACTIVE NEGLIGENCE " of any Person (including BNPLC) means, and is
limited to, the negligent conduct on the Property (and not mere omissions) by
such Person or by others acting and authorized to act on such Person's behalf in
a manner that proximately causes actual bodily injury or property damage for
which NAI does not carry (and is not obligated by the Land Lease to carry)
insurance. "ACTIVE NEGLIGENCE" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for BNPLC's
status as owner of the Land, the Improvements or any interest in any other
Property or as a party to the transactions described in the Land Lease or the
other Operative Documents or in the Other Lease Agreement or the Other Purchase
Agreement, (2) any negligent failure of any other Interested Party to act when
the duty to act would not have been imposed but for such party's contractual or
other relationship to BNPLC or participation or facilitation in any manner,
directly or indirectly, of the transactions described in the Land Lease or other
Operative Documents or in the Other Lease Agreement or Other Purchase Agreement,
or (3) the exercise in a lawful manner by BNPLC (or any party lawfully claiming
through or under BNPLC) of any right or remedy provided in or under the Land
Lease or the other Operative Documents or in the Other Lease Agreement or Other
Purchase Agreement.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 1

50
"ADDITIONAL RENT " shall have the meaning assigned to it in subparagraph
of the Land Lease.

"ADJUSTED EBIT " shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Land Lease and to the Pledge Agreement.

"ADVANCE DATE " means the first Business Day of every calendar month,
beginning with the first Business Day in May, 1999 and continuing regularly
thereafter to and including the Base Rent Commencement Date.

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

"APPLICABLE LAWS " means any or all of the following, to the extent
applicable to NAI or the Property or the Land Lease or the other Operative
Documents: restrictive covenants; zoning ordinances and building codes; flood
disaster laws; health, safety and environmental laws and regulations; the
Americans with Disabilities Act and other laws pertaining to disabled persons;
and other laws, statutes, ordinances, rules, permits, regulations, orders,
determinations and court decisions.

"APPLICABLE PURCHASER " means any third party designated by NAI to
purchase BNPLC's interest in the Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.

"ATTORNEYS' FEES " means the expenses and reasonable fees of counsel to
the parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. Such terms shall also include all such fees and expenses incurred
with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any manner of proceeding is brought with respect to the matter for which
such fees and expenses were incurred.

"BANKING RULES CHANGE " means either: (1) the introduction of or any
change in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).

"BASE RATE " for any Base Rent Period means a rate equal to the higher
of (1) the Prime Rate in effect on the first day of such period, or (2) the rate
which is fifty basis points (50/100 of 1%) above the Fed Funds Rate for that
period.

"BASE RENT " means the rent payable by NAI pursuant to subparagraph of
the Land Lease.

"BASE RENT COMMENCEMENT DATE " shall mean the earlier of (1) the first
Business Day of October, 2000, or (2) the "Base Rent Commencement Date" under
and as defined in the Other Common Definitions and Provisions Agreement.

"BASE RENT DATE " means a date upon which Base Rent must be paid under
the Land Lease, all of which dates shall be the first Business Day of a calendar
month. The first Base Rent Date shall be determined as follows:

Common Definitions and Provisions Agreement (Phase II - Land) - Page 2

51
a)      If a LIBOR Period Election of one month is in effect on
the Base Rent Commencement Date, then the first Business Day of the
first calendar month following the Base Rent Commencement Date shall be
the first Base Rent Date.

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

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

(1)     If a LIBOR Period Election of one month is in effect on
a Base Rent Date, then the first Business Day of the first calendar
month following such Base Rent Date shall be the next following Base
Rent Date.

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

Thus, for example, if the Base Rent Commencement Date falls on the first
Business Day of September, 1999 and a LIBOR Period Election of two months
commences on the Base Rent Commencement Date, then the first Base Rent Date
shall be the first Business Day of November, 1999.

"BASE RENT PERIOD " means a period for which Base Rent must be paid
under the Land Lease, each of which periods shall correspond to the LIBOR Period
Election for such period. The first Base Rent Period shall begin on and include
the Base Rent Commencement Date, and each successive Base Rent Period shall
begin on and include the Base Rent Date upon which the preceding Base Rent
Period ends. Each Base Rent Period, including the first Base Rent Period, shall
end on but not include the first or second Base Rent Date after the Base Rent
Date upon which such period began, determined as follows:

(1)     If the LIBOR Period Election for a Base Rent Period is
one month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
began.

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

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

1)      If NAI makes a LIBOR Period Election of three months for
a hypothetical Base Rent Period beginning on the first Business Day in
January, 2001, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent Period
will end on the first Business Day in April, 2001, the third calendar
month after January, 2001.

2)      If, however, NAI makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2001, then such Base Rent Period will end on
but not include the second Base Rent Date after it begins; that is, the
first Business Day in July, 2001.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 3

52
"BNPLC " means BNP Leasing Corporation, a Delaware corporation.

"BNPLC'S PARENT " means BNPLC's Affiliate, Banque Nationale de Paris, a
bank organized and existing under the laws of France and any successors of such
bank.

"BREAKAGE COSTS " means any and all costs, losses or expenses incurred
or sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:

(1)     used to make or maintain the Initial Funding Advance
upon application of a Qualified Prepayment or upon any sale of the
Property pursuant to the Purchase Agreement, if such application or sale
occurs on any day other than an Advance Date or the last day of a Base
Rent Period; or

(2)     used to make or maintain the Initial Funding Advance
upon the acceleration of the end of any Base Rent Period pursuant
subparagraph 3.(c)(ii) of the Land Lease.

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

"BREAK EVEN PRICE " shall have the meaning assigned to it in
subparagraph 1(B)(1) of the Purchase Agreement.

"BUSINESS DAY " means any day that is (1) not a Saturday, Sunday or day
on which commercial banks are generally closed or required to be closed in New
York City, New York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London interbank market;
provided that if such dealings are suspended indefinitely for any reason,
"Business Day" shall mean any day described in clause (1).

"CAPITAL ADEQUACY CHARGES " means any additional amounts BNPLC's Parent
or any other Participant requests BNPLC to pay as compensation for an increase
in required capital as provided in subparagraph 5.(b)(ii) of the Land Lease.

"CAPITAL LEASE " means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP or for federal income tax
purposes.

"CLOSING CERTIFICATE " means the Amended and Restated Closing
Certificate and Agreement dated as of [EFFECTIVE DATE] executed by NAI in favor
of BNPLC, as such Closing Certificate may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms.

"CODE " means the Internal Revenue Code of 1986, as amended.

"COLLATERAL " shall have the meaning assigned to it in the Pledge
Agreement.

"COLLATERAL PERCENTAGE " for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) the Pledge
Agreement; provided, however, for purposes of the Land Lease, the Collateral

Common Definitions and Provisions Agreement (Phase II - Land) - Page 4

53
Percentage for any Base Rent Period shall not exceed a fraction; the numerator
of which fraction shall equal the value (determined as provided in the Pledge
Agreement) of all Collateral (a) that is, on the first day of such period, held
by the Deposit Takers under (and as defined in) the Pledge Agreement subject to
a Qualifying Security Interest (as defined below), (b) that is free from claims
or security interests held or asserted by any third party, and (c) that is not
in excess of Stipulated Loss Value; and the denominator of which fraction shall
equal the Stipulated Loss Value on the first day of such period. "QUALIFYING
SECURITY INTEREST" means a first priority perfected security interest under the
Pledge Agreement.

"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE II - LAND) " means
this Agreement, which is incorporated by reference into each of the other
Operative Documents.

"CONSTRUCTION MANAGEMENT AGREEMENT " means the Construction Management
Agreement dated as of June 16, 1999 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"CONSTRUCTION PROJECT " means the new buildings or other substantial
Improvements to be constructed, or the alteration of existing Improvements, as
described generally in Exhibit B attached to the Construction Management
Agreement.

"CURRENT AS IS MARKET VALUE " means an amount equal to the fair market
value of BNPLC's interest in the Property (or any applicable portion thereof),
AS IS, WHERE IS AND WITH ALL FAULTS on the date in question. Whenever a
determination of Current AS IS Market Value is required by the express terms of
any Operative Document, it will be determined accordance with the following
procedure unless BNPLC and NAI have otherwise agreed in writing upon a Current
AS IS Market Value at that time:

(A)     BNPLC and NAI shall each, within ten days after written notice
from either to the other, select an appraiser. If either BNPLC
or NAI fails to select an appraiser within the required period,
then the appraiser who has been timely selected shall
conclusively determine the fair market value of the Property (or
applicable portion thereof) in accordance with this definition
within forty-five days after his or her selection.

(B)     Upon the selection of the two appraisers as provided above, such
appraisers shall proceed to determine the fair market value of
BNPLC's interest in the Property (or applicable portion thereof)
in accordance with this clause (v). Such appraisals shall be
submitted in writing no later than forty-five days after
selection of the second appraiser. If the fair market value as
determined by such appraisers is identical, such sum shall be
Current AS IS Market Value. If the fair market value indicated
by the lower appraisal differs from the fair market value
indicated by the higher appraisal by less than five percent (5%)
of the fair market value indicated by the higher appraisal, then
Current AS IS Market Value shall be the sum of the two appraisal
figures divided by two (2). If either appraiser fails to timely
submit his or her appraisal, the timely submitted appraisal
shall be determinative of Current AS IS Market Value.

(C)     If the fair market value indicated by the lower appraisal
differs from the fair market value indicated by the higher
appraisal by more than five percent (5%) of the fair market
value indicated by the higher appraisal, then the two appraisers
previously selected shall select a third appraiser. The name of
such appraiser shall be submitted at the same time the written
appraisals are due. Such third appraiser shall then review the
previously submitted appraisals and select the one that, in his
professional opinion, more closely reflects the fair market
value of BNPLC's interest in the Property (or applicable portion
thereof), such selection to be submitted in writing no later

Common Definitions and Provisions Agreement (Phase II - Land) - Page 5

54
than ten days after selection of the third appraiser. Such
selection shall be determinative of Current AS IS Market Value.

(D)     In making any such determination of fair market value, the
appraisers shall assume that any improvements then located on
the Property (or applicable portion thereof) or under
construction thereon constitute the highest and best use, and
that neither the Land Lease nor the Purchase Agreement add any
value to the Property. Each appraiser selected hereunder shall
be an independent MAI-designated appraiser with not less than
ten years' experience in commercial real estate appraisal in
Sunnyvale, California and surrounding areas.

"DEBT " of any Person means (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
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.

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

"DEFAULT RATE " means, for any period prior to the Designated Sale Date,
a floating per annum rate equal to two percent (2%) above the Prime Rate, and
for any period commencing on or after the Designated Sale Date, Default Rate
shall mean a floating per annum rate equal to five percent (5%) above the Prime
Rate. However, in no event will the "Default Rate" at any time exceed the
maximum interest rate permitted by law.

"DEFAULTING PARTICIPANT " shall have the meaning assigned to it in
Section 1 of the Participation Agreement.

"DEPOSIT TAKER " shall have the meaning assigned to it in the Pledge
Agreement.

"DEPOSIT TAKER LOSSES " shall have the meaning assigned to it in the
Pledge Agreement.

"DESIGNATED SALE DATE " means the earlier of:

(1)     the first Business Day of May, 2004; or

Common Definitions and Provisions Agreement (Phase II - Land) - Page 6

55
(2)     any Business Day designated as such in an irrevocable,
unconditional notice given by NAI to BNPLC; provided, that to be
effective for purposes of this definition, any such notice from NAI to
BNPLC must designate a Business Day that is more than thirty days after
the date of such notice; and provided, further, to be effective for
purposes of this definition, the notice must include an express,
unconditional, unequivocal and irrevocable acknowledgment by NAI that
because of NAI's election to accelerate the Designated Sale Date, the
Maximum Remarketing Obligation will equal the Break Even Price under the
Purchase Agreement; or

(3)     any Business Day designated as such in a notice given by
BNPLC to NAI after the effective date of any termination of the
Construction Management Agreement as provided in subparagraphs 5(D) or
5(E) thereof; provided, that to be effective for purposes of this
definition, any such notice from BNPLC to NAI must designate a Business
Day that is more than thirty days after the date of such notice; or

(4)     [Intentionally Deleted]; or

(5)     any Business Day designated as such in a notice given by
BNPLC to NAI when any Event of Default has occurred and is continuing;
provided, that to be effective for purposes of this definition, any such
notice from BNPLC to NAI must designate a Business Day that is more than
thirty days after the date of such notice.

"DEVELOPMENT DOCUMENTS " means the contracts, ordinances and other
documents described in Exhibit C attached to the Closing Certificate, as the
same may be modified from time to time in accordance with the Land Lease and the
Closing Certificate, and any applications, permits or certificates concerning or
affecting the use or development of the Property that may be submitted, issued
or executed from time to time as contemplated in such contracts, ordinances and
other documents or that BNPLC may hereafter execute, approve or consent to at
the request of NAI.

"DIRECT PAYMENTS TO PARTICIPANTS " means the amounts paid or required to
be paid directly to Participants on the Designated Sale Date as provided in
Section 6.2 of the Pledge Agreement at the direction of and for NAI by the
collateral agent appointed pursuant to the Pledge Agreement from all or any part
of the Collateral described therein.

"EFFECTIVE DATE " means [EFFECTIVE DATE].

"EFFECTIVE RATE " means for each Base Rent Period, the per annum rate
determined by dividing (A) LIBOR for such Base Rent Period, as the case may be,
by (B) one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
for such Base Rent Period. If LIBOR or the Eurodollar Rate Reserve Percentage
changes from Base Rent Period to Base Rent Period, then the Effective Rate shall
be automatically increased or decreased as of the date of such change, as the
case may be, without prior notice to NAI. If for any reason BNPLC determines
that it is impossible or unreasonably difficult to determine the Effective Rate
with respect to a given Base Rent Period in accordance with the foregoing, then
the "EFFECTIVE RATE" for that Base Rent Period shall equal any published index
or per annum interest rate determined in good faith by BNPLC's Parent to be
comparable to LIBOR at the beginning of the first day of that period. A
comparable interest rate might be, for example, the then existing yield on short
term United States Treasury obligations (as compiled by and published in the
then most recently published United States Federal Reserve Statistical Release
H.15(519) or its successor publication), plus or minus a fixed adjustment based
on BNPLC's Parent's comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by BNPLC of the Effective Rate
under this definition shall, in the absence of clear and demonstrable error, be
conclusive and binding upon NAI.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 7

56
"ENVIRONMENTAL LAWS " means any and all existing and future Applicable
Laws pertaining to safety, health or the environment, or to Hazardous Substances
or Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "CERCLA"), and the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, "RCRA").

"ENVIRONMENTAL CUTOFF DATE " means the later of the dates upon which (i)
the Land Lease terminates, or (ii) NAI surrenders possession and control of the
Property and ceases to have interest in the Land or Improvements or rights with
respect thereto under any of the Operative Documents.

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

"ENVIRONMENTAL REPORTS " means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I dated March 1997 by Hygeienetics Environmental Services,
Inc.; Phase I dated June 1998 by Dames & Moore; and, an Asbestos Containing
Material Survey conducted in 1989 by Vesar, Inc.

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

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

"ESCROWED PROCEEDS " means, subject to the exclusions specified in the
next sentence, any money that is received by BNPLC from time to time during the
Term (and any interest earned thereon) from any party (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction imposed by any governmental authority upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Escrowed Proceeds" there shall be deducted all expenses and costs of every
type, kind and nature (including Attorneys' Fees) incurred by BNPLC to collect
such proceeds. Notwithstanding the foregoing, 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 8

57
"Escrowed Proceeds" will not include (A) any payment to BNPLC by a Participant
or an Affiliate of BNPLC that is made to compensate BNPLC for the Participant's
or Affiliate's share of any Losses BNPLC may incur as a result of any of the
events described in the preceding clauses (1) through (4), (B) any money or
proceeds that have been applied as a Qualified Prepayment or to pay any Breakage
Costs or other costs incurred in connection with a Qualified Prepayment, (C) any
money or proceeds that, after no less than ten days notice to NAI, BNPLC returns
or pays to a third party because of BNPLC's good faith belief that such return
or payment is required by law, (D) any money or proceeds paid by BNPLC to NAI or
offset against any amount owed by NAI, or (E) any money or proceeds used by
BNPLC in accordance with the Land Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Escrowed Proceeds are paid to NAI pursuant to Paragraph of the Land Lease,
transferred to a purchaser under the Purchase Agreement as therein provided or
applied as a Qualified Prepayment or as otherwise described in the preceding
sentence, BNPLC shall keep the same deposited in one or more interest bearing
accounts, and all interest earned on such account shall be added to and made a
part of Escrowed Proceeds.

"ESTABLISHED MISCONDUCT " of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition, "conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent environmental
consultant engaged by that Person), but only to the extent that the agent is, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, (x) acting
within the scope of the authority granted to him by such Person, (y) not acting
with the consent or approval of or under the direction of NAI or NAI's
Affiliates, employees or agents, and (z) not acting in good faith to mitigate
Losses that such Person may suffer because of a breach or repudiation by NAI of
the Land Lease or the Purchase Documents.

"EUROCURRENCY LIABILITIES " shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

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

"EVENT OF DEFAULT " shall have the meaning assigned to it in
subparagraph of the Land Lease.

"EXCLUDED TAXES " means (1) all federal, state and local income taxes
upon Base Rent, any interest paid to BNPLC or any Participant pursuant to
subparagraph of the Land Lease, and any additional compensation claimed by BNPLC
pursuant to subparagraph of the Land Lease; (2) any transfer or change of
ownership taxes assessed because of BNPLC's 

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58
transfer or conveyance to any third party of any rights or interest in the Land
Lease, the Purchase Agreement or the Property (other than any such taxes
assessed because of any Permitted Transfer under clauses (1), (3), (4), (5), (6)
or (7) of the definition of Permitted Transfer in this Agreement), (3) all
federal, state and local income taxes upon any amounts paid as reimbursement for
or to satisfy Losses incurred by BNPLC or any Participant to the extent such
taxes are offset by a corresponding reduction of BNPLC's or the applicable
Participant's income taxes because of BNPLC's or such Participant's deduction of
the reimbursed Losses from its taxable income or because of any tax credits
attributable thereto. If, however, a change in Applicable Laws after the
Effective Date results in an increase in such taxes for any reason other than an
increase in the applicable tax rates (e.g., a disallowance of deductions that
would otherwise be available against payments described in clause (A) of this
definition), then for purposes of the Operative Documents, the term "Excluded
Taxes" will not include the increase in such taxes attributable to the change.

"EXISTING CONTRACTS " means the Option Agreement and Ground Lease
covering the Land between NAI and Seller, both dated June 11, 1998.

"FAILED COLLATERAL TEST DATE " shall have the meaning indicated in Part
III of Schedule 1 attached to the Improvements Lease.

"FED FUNDS RATE " means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon NAI.

"GAAP " means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
subparagraph of the Land Lease (except for changes with which NAI's independent
public accountants concur).

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

"HAZARDOUS SUBSTANCE ACTIVITY " means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, 

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59
generation, processing, construction, treatment, abatement, removal, disposal,
disposition, handling or transportation of any Hazardous Substance from, under,
in, into or on the Property, including the movement or migration of any
Hazardous Substance from surrounding property, surface water, groundwater or any
body of water under, in, into or onto the Property and any resulting residual
Hazardous Substance contamination in, on or under the Property. "HAZARDOUS
SUBSTANCE ACTIVITY" also means any existence of Hazardous Substances on the
Property that would cause the Property or the owner or operator thereof to be in
violation of, or that would subject the Property to any remedial obligations
under, any Environmental Laws, including CERCLA and RCRA, assuming disclosure to
the applicable governmental authorities of all relevant facts, conditions and
circumstances pertaining to the Property.

"IMPOSITIONS " means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Land Lease or which are imposed upon BNPLC or the Property
because of the ownership, leasing, occupancy, sale or operation of the Property,
or any part thereof or interest therein, or relating to or required to be paid
by any of the Permitted Encumbrances or the Development Documents, excluding
only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes imposed
because of a change of use or ownership of the Property on or prior to the date
of any sale by BNPLC pursuant to the Purchase Agreement.

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

"INITIAL FUNDING ADVANCE " means the advance made by BNPLC's Parent
(directly or through one or more of its Affiliates) to or on behalf of BNPLC on
or prior to the Effective Date to cover the cost of BNPLC's acquisition of the
Property and certain Transaction Expenses and other amounts described in this
definition. The amount of the Initial Funding Advance may be confirmed by a
separate closing certificate executed by NAI as of the Effective Date. To the
extent that BNPLC does not itself use the entire Initial Funding Advance to pay
Transaction Expenses incurred by BNPLC, the remainder thereof will be advanced
to NAI, with the understanding that NAI shall use any such amount advanced for
one or more of the following purposes: (1) the payment or reimbursement of
Transaction Expenses incurred by NAI; (2) the maintenance of the Property; or
(3) the payment of Rents next due.

"INTERESTED PARTY " means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.

"ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT " means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph of the Land Lease,
the occurrence of which event cannot be objectively determined. For example, an
Event of 

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60
Default under subparagraph 17.(e) of the Land Lease resulting solely from a
failure of NAI to "generally" pay its debts as such debts become due (in
contrast to a failure of NAI to pay Rent to BNPLC as it becomes due under the
Land Lease) would constitute an Issue 97-1 Non-performance-related Subjective
Event of Default. In no event, however, will the term "Issue 97-1
Non-performance-related Subjective Event of Default" include an Event of Default
resulting from (1) a failure of NAI to make any payment required to BNPLC under
the Operative Documents, (2) a breach by NAI of the provisions set forth in
Schedule 1 attached to the Land Lease (which set forth financial covenants), (3)
any failure of NAI to use, maintain and insure the Property in accordance with
the requirements of the Land Lease, or (4) any failure of NAI to pay the full
amount of any Supplemental Payment on the Designated Sale Date as required by
the Purchase Agreement. Except as provided in subparagraph 1(A)(2)(c)(i) of the
Purchase Agreement, the characterization of any Event of Default as an Issue
97-1 Non-performance-related Subjective Event of Default will not affect the
rights or remedies available to BNPLC because of the Event of Default.

"LAND " means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Land Lease and the Purchase Agreement.

"LAND LEASE " means the Lease Agreement (Phase III - Land") dated as of
[EFFECTIVE DATE] between BNPLC, as landlord, and NAI, as tenant, pursuant to
which NAI has agreed to lease BNPLC's interest in the Property, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"LIBOR " means, for purposes of determining the Effective Rate for each
Base Rent Period, the rate determined by BNPLC's Parent to be the average rate
of interest per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of
the rates at which deposits of dollars are offered or available to BNPLC's
Parent in the London interbank market at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such period. BNPLC shall
instruct BNPLC's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered: (i) for
delivery on the first day of such Base Rent Period, as the case may be, (ii) in
an amount equal or comparable to the total (projected on the applicable date of
determination by BNPLC's Parent) Stipulated Loss Value on the first day of such
period, and (iii) for a time equal or comparable to the length of such period.
If BNPLC's Parent so chooses, it may determine LIBOR for any period by reference
to the rate reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason BNPLC's
Parent determines that it is impossible or unreasonably difficult to determine
LIBOR with respect to a given Base Rent Period in accordance with the foregoing,
or if BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain the Initial Funding Advance
during any Base Rent Period for which Base Rent is computed by reference to
LIBOR, then "LIBOR" for that period shall equal the Base Rate for that period.
All determinations of LIBOR by BNPLC's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon NAI.

"LIBOR PERIOD ELECTION " for any Base Rent Period means a period of one
month, three months or six months as designated by NAI at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit attached to the Land Lease. (For purposes of the
Land Lease a LIBOR Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on the Base Rent Commencement
Date or Base Rent Date upon which such Base Rent Period begins.) Any LIBOR
Period Election so designated by NAI shall remain in effect for the entire Base
Rent Period specified in NAI's notice to BNPLC (provided such Base Rent Period
commences at least ten Business Days after BNPLC's receipt of the notice) and
for all subsequent Base Rent Periods until a new designation becomes effective
in accordance with the provisions set forth in this definition. Notwithstanding
the foregoing, however: (1) 

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61
NAI shall not be entitled to designate a LIBOR Period Election that would cause
a Base Rent Period to extend beyond the end of the scheduled Term; (2) changes
in the LIBOR Period Election shall become effective only upon the commencement
of a new Base Rent Period; (3) for each Base Rent Period that occurs within any
Mandatory Collateral Period, the LIBOR Period Election shall be one month; (4)
no LIBOR Period Election designated by NAI hereunder shall be different than the
LIBOR Period Election specified under (and as defined in) the Other Common
Definitions and Provisions Agreement; and (5) if NAI fails to make a LIBOR
Period Election consistent with the foregoing requirements for any Base Rent
Period, or if an Event of Default shall have occurred and be continuing on the
third Business Day preceding the commencement of any Base Rent Period, the LIBOR
Period Election for such Base Rent Period shall be deemed to be one month.

"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part IV of
Schedule 1 attached to the Land Lease, "Lien" includes any Liens under ERISA
relating to Unfunded Benefit Liabilities of which NAI is required to notify
BNPLC under subparagraph 13.(a)(vii) of the Land Lease (irrespective of whether
NAI actually notifies BNPLC as required thereunder).

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

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

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62
"MANDATORY COLLATERAL PERIOD " shall have the meaning assigned to it in
Part I of Schedule 1 attached to the Land Lease and to the Pledge Agreement.

"MATERIAL ENVIRONMENTAL COMMUNICATION " means a communication between
NAI or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.

"MAXIMUM REMARKETING OBLIGATION " shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"MINIMUM EXTENDED REMARKETING PRICE " shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.

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

"NAI " means Network Appliance, Inc., a California corporation.

"NAI'S EXTENDED REMARKETING PERIOD " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S EXTENDED REMARKETING RIGHT " shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

"NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS " shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.

"OPERATIVE DOCUMENTS " means the Closing Certificate, the Land Lease,
the Purchase Agreement, the Pledge Agreement and this Common Definitions and
Provisions Agreement (Phase II - Land).

"OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT " means the Common
Definitions and Provisions Agreement (Phase III - Improvements), dated as of the
June 16, 1999, between BNPLC and NAI, as such Common Definitions and Provisions
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"OTHER LEASE AGREEMENT " means the Lease Agreement (Phase III -
Improvements), dated as of June 16, 1999, between BNPLC and NAI, as such Lease
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"OTHER PURCHASE AGREEMENT " means the Purchase Agreement (Phase III -
Improvements), dated as of June 16, 1999, between BNPLC and NAI, as such
Purchase Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.

"PARTICIPANT " means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to

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63
participate in all or some of the risks and rewards to BNPLC of the Land Lease
and the Purchase Documents. As of the Effective Date, the only Participant is
BNPLC's Parent, but BNPLC may agree after the Effective Date to share in risks
and rewards of the Land Lease and the Purchase Documents with other
Participants. However, no Person other than BNPLC's Parent and its Affiliates
shall qualify as a Participant for purposes of the Operative Documents or other
agreements concerning the Property to which NAI is a party unless such Person,
during the continuance of an Event of Default or otherwise with NAI's prior
written approval (which approval will not be unreasonably withheld), became a
party to the Pledge Agreement and to the Participation Agreement by executing
supplements to those agreements as contemplated therein.

"PARTICIPATION AGREEMENT " means the Participation Agreement between
BNPLC and BNPLC's Parent dated as of the June 16, 1999, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Land Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

"PBGC " means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

"PERMITTED ENCUMBRANCES " means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) any
ground lease executed pursuant to the Other Purchase Agreement, (iv) any Liens
securing the payment of Impositions which are not delinquent or claimed to be
delinquent or which are being contested in accordance with subparagraph 5.(a) of
the Land Lease, and (iv) mechanics' and materialmen's liens for amounts not past
due or claimed to be past due or which are being contested in accordance with
subparagraph 11.(c) of the Land Lease.

"PERMITTED HAZARDOUS SUBSTANCE USE " means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:

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

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

Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.

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64
"PERMITTED HAZARDOUS SUBSTANCES " means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by NAI and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2.(a) of the Land Lease, in either
case in strict compliance with all Environmental Laws and with due care given
the nature of the Hazardous Substances involved. Without limiting the generality
of the foregoing, Permitted Hazardous Substances shall include usual and
customary office, laboratory and janitorial products.

"PERMITTED TRANSFER " means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as BNPLC's Parent, or any other
Qualified Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to Banque Nationale de Paris or another Qualified Affiliate of (A)
any interest in the Property or any portion thereof by an assignment or other
document which will be recorded in the real property records of San Mateo
County, California or (B) BNPLC's entire interest in the Land and the Property;
(3) any assignment or conveyance by BNPLC or its permitted successors or assigns
to any present or future Participant of any lien or security interest against
the Property (in contrast to a conveyance of BNPLC's fee estate in the Land and
Improvements) or of any interest in Rent, payments required by or under the
Purchase Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of NAI under the Operative Documents; (4) any agreement to exercise or
refrain from exercising rights or remedies under the Operative Documents made by
BNPLC with any present or future Participant; (5) any assignment or conveyance
by BNPLC requested by NAI or required by any Permitted Encumbrance, by the
Purchase Agreement, by the Existing Contracts, by any other Development Contract
or by Applicable Laws; or (6) any assignment or conveyance after a Designated
Sale Date on which NAI shall not have purchased or caused an Applicable
Purchaser to purchase BNPLC's interest in the Property and, if applicable, after
the expiration of the thirty day cure period specified in Paragraph 4(D) of the
Purchase Agreement.

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

"PERSONAL PROPERTY " shall have the meaning assigned to it on page 2 of
the Land Lease.

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

"PLEDGE AGREEMENT " means the Pledge Agreement (Phase III - Land) dated
as of the date hereof between BNPLC and NAI, pursuant to which NAI may pledge
certificates of deposit as security for NAI's obligations under the Purchase
Agreement (and for the corresponding obligations of BNPLC to the Participants
under the Participation Agreement), as such Pledge Agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.

"PRIME RATE " means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPLC shall be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from 

Common Definitions and Provisions Agreement (Phase II - Land) - Page 16

65
time to time after the Effective Date without notice to NAI as of the effective
time of each change in rates described in this definition.

"PROPERTY " means the Personal Property and the Real Property,
collectively. Any rights, titles and interests acquired by BNPLC under the
Existing Contracts, to the extent not covered by the Land Lease and thus not
encompassed within this definition of Property, are intended to be covered by
the Other Lease Agreement and encompassed within the term "Property" as defined
in the Other Common Definitions and Provisions Agreement.

"PURCHASE AGREEMENT " means the Purchase Agreement (Phase III - Land)
dated as of [EFFECTIVE DATE] between BNPLC and NAI, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

"PURCHASE DOCUMENTS " means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.

"PURCHASE OPTION " shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.

"QUALIFIED AFFILIATE " means any Person that is one hundred percent
(100%) owned, directly or indirectly, by Banque Nationale de Paris or any
successor of such bank; provided, that such Person can make (and has in writing
made) the same representations to NAI that BNPLC has made in Paragraphs 3(D) and
3(E) of the Closing Certificate; and, provided, further, that such Person is not
insolvent.

"QUALIFIED PREPAYMENTS " means any payments received by BNPLC from time
to time during the Term (1) under any property insurance policy as a result of
damage to the Property, (2) as compensation for any restriction placed upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof, (3) because of any judgment, decree or award for injury or
damage to the Property or (4) under any title insurance policy or otherwise as a
result of any title defect or claimed title defect with respect to the Property;
provided, however, that (x) in determining the amount of "Qualified
Prepayments", there shall be deducted all expenses and costs of every kind, type
and nature (including taxes, Breakage Costs and Attorneys' Fees) incurred by
BNPLC with respect to the collection or application of such payments, (y)
"Qualified Prepayments" shall not include any payment to BNPLC by a Participant
or an Affiliate of BNPLC that is made to compensate BNPLC for the Participant's
or Affiliate's share of any Losses BNPLC may incur as a result of any of the
events described in the preceding clauses (1) through (4) and (z) "Qualified
Prepayments" shall not include any payments received by BNPLC that BNPLC has
paid or is obligated to pay to NAI for the restoration or repair of the Property
or that BNPLC is holding as Escrowed Proceeds pursuant to Paragraph of the Land
Lease or any other provision of the Land Lease. For purposes of computing the
total Qualified Prepayments (and other amounts dependent upon Qualified
Prepayments, such as Stipulated Loss Value) paid to or received by BNPLC as of
any date, payments described in the preceding clauses (1) through (4) will be
considered as Escrowed Proceeds, not Qualified Prepayments, until they are
actually applied as Qualified Prepayments by BNPLC as provided in the Paragraph
10 of the Land Lease.

"REAL PROPERTY " shall have the meaning assigned to it on page 1 of the
Land Lease.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 17

66
"REMEDIAL WORK " means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.

"RENT " means the Base Rent and all Additional Rent.

"RESIDUAL RISK PERCENTAGE " means fifteen percent (15%).

"RESPONSIBLE FINANCIAL OFFICER " means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.

"SALE CLOSING DOCUMENTS " shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.

"SECURED SPREAD " means thirty basis points (30/100 of 1%); provided,
however, that for purposes of calculating the Base Rent for any period
commencing on a Failed Collateral Test Date and continuing through the next
Collateral Test Date (under and as defined in Schedule 1 attached to the Lease)
that does not constitute a Failed Collateral Test Date, the Secured Spread shall
equal one-half of the Unsecured Spread.

"SELLER " means 475 Java Drive Associates, L.P., a California limited
partnership.

"STIPULATED LOSS VALUE " as of any date means the amount equal to the
sum of the Initial Funding Advance, minus all funds actually received by BNPLC
and applied as Qualified Prepayments on or prior to such date. Under no
circumstances will any payment of Base Rent reduce Stipulated Loss Value.

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

"SUPPLEMENTAL PAYMENT " shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

"TERM " shall have the meaning assigned to it in subparagraph 1.(a) of
the Land Lease.

"THIRD PARTY PRICE " shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.

"THIRD PARTY SALE NOTICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"THIRD PARTY SALE PROPOSAL " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 18

67
"THIRD PARTY TARGET PRICE " shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

"TRANSACTION EXPENSES " means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.

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

"UNSECURED SPREAD " means, for each period beginning on and including
the Base Rent Commencement Date or a Base Rent Date and ending on but not
including the next Base Rent Date, the amount established as described below in
this definition on the date (in this definition, the "SPREAD TEST DATE") that is
two Business Days prior to such period by reference to the ratio calculated by
dividing (1) Adjusted EBIT for the then latest Rolling Four Quarters Period that
ended prior to (and for which NAI has reported earnings as necessary to compute
Adjusted EBIT) into (2) the total Debt of NAI and its Subsidiaries (determined
on a consolidated basis) as of the end of such Rolling Four Quarters Period. The
Unsecured Spread shall be established at the Level in the pricing grid below
which corresponds to such ratio; provided, that:

(a)     for any period commencing on or prior to the first
Business Day of January, 2000, the Unsecured Spread will be the amount
indicated for Level III in the pricing grid below;

(b)     promptly after earnings are reported by NAI for the
latest quarter in any Rolling Four Quarters Period, NAI must notify
BNPLC of any resulting change in the Unsecured Spread under this
definition, and no reduction in the Unsecured Spread from one period to
the next will be effective for purposes of the Operative Documents
unless, prior to the Spread Test Date for the next period, NAI shall
have provided BNPLC with a written notice setting forth and certifying
the calculation under this definition that justifies the reduction; and

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

============================================================================
LEVELS     RATIO OF TOTAL DEBT TO ADJUSTED EBIT     UNSECURED SPREAD
----------------------------------------------------------------------------
Level I                less than 0.5                125.0 basis points
----------------------------------------------------------------------------
Level II     greater than or equal to 0.5, but      137.5 basis points
less than 1.0
----------------------------------------------------------------------------
Level III    greater than or equal to 1.0, but      150.0 basis points
less than 1.5
----------------------------------------------------------------------------
Level IV     greater than or equal to 1.5, but      175.0 basis points
less than 2.0
----------------------------------------------------------------------------
Level V         greater than or equal to 2.0        200.0 basis points
============================================================================

Common Definitions and Provisions Agreement (Phase II - Land) - Page 19

68
All determinations of the Unsecured Spread by BNPLC shall, in the absence of
clear and demonstrable error, be binding and conclusive for purposes of the Land
Lease. Further BNPLC may, but shall not be required, to rely on the
determination of the Unsecured Spread set forth in any notice delivered by NAI
as described above in clause (b) of this definition.

"VOLUNTARY RETENTION OF THE PROPERTY " means an affirmative election
made by BNPLC to keep the Property pursuant to, and under the circumstances
described in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase
Agreement.

ARTICLE II - RULES OF INTERPRETATION

THE FOLLOWING PROVISIONS WILL APPLY TO AND GOVERN THE INTERPRETATION OF
EACH OF THE OPERATIVE DOCUMENTS:

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

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

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Sunnyvale Synthetic Land Lease

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

(ii)    All Collateral required to be paid by NAI to the Agent shall be
paid in immediately available funds by wire transfer to:

Federal Reserve Bank of New York
ABA  026007689 Banque Nationale de Paris
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ NAI Collateral Payment

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

Common Definitions and Provisions Agreement (Phase II - Land) - Page 20

69
(iii)   All notices, demands, approvals, consents and other
communications to be made under any Operative Document to or by the
parties thereto must, to be effective for purpose of such Operative
Document, be in writing. Notices, demands and other communications
required or permitted under any Operative Document are to be sent to the
addresses set forth below (or in the case of communications to
Participants, at the addresses set forth in Schedule 1 to the
Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex,
telegram or telecopying (if confirmed in writing sent by United States
first class mail, return receipt requested); or (C) registered or
certified first class mail, return receipt requested. Such addresses may
be changed by notice to the other parties given in the same manner as
provided above. Any notice or other communication sent pursuant to
clause (A) or (B) hereof shall be deemed received upon such personal
service or upon dispatch by electronic means, and, if sent pursuant to
clause (C) shall be deemed received five days following deposit in the
mail.

Address of BNPLC:

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox
Telecopy: (972) 788-9191

With a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Gavin Holles
Telecopy: (415) 296-8954

And for draw requests and funding notices, with a copy to:

Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: George Fung
Telecopy: (415) 296-8954

Address of NAI:

Network Appliance, Inc.
Attn: Leslie Paulides
2770 San Thomas Expressway
Santa Clara, CA 95051
Telecopy: (408) 367-3452

Common Definitions and Provisions Agreement (Phase II - Land) - Page 21

70
2       SEVERABILITY . If any term or provision of any Operative Document or the
application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of such document, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.

3       NO MERGER . There shall be no merger of the Land Lease or of the
leasehold estate created by the Land Lease with any other interest in the
Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Land Lease or the leasehold estate created hereby
and any other interest in the Property, unless all Persons with an interest in
the Property that would be adversely affected by any such merger specifically
agree in writing that such a merger shall occur. There shall be no merger of the
Purchase Agreement or of the purchase options or obligations created by the
Purchase Agreement with any other interest in the Property by reason of the fact
that the same person may acquire or hold, directly or indirectly, the Land Lease
or the leasehold estate created hereby and any other interest in the Property,
unless all Persons with an interest in the Property that would be adversely
affected by any such merger specifically agree in writing that such a merger
shall occur.

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

5       ENTIRE AND ONLY AGREEMENTS . The Operative Documents supersede any prior
negotiations and agreements between BNPLC, Agent and NAI concerning the Property
or the Collateral, and no amendment or modification of any Operative Document
shall be binding or valid unless expressed in a writing executed by all parties
to such Operative Document.

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

7       TIME IS OF THE ESSENCE . Time is of the essence as to all obligations of
NAI and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 22

71
8      GOVERNING LAW . Each Operative Document shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the "UCC," as defined in the Pledge
Agreement).

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

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

11    TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT . As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase II - Land), but is defined in
another Operative Document, shall have the meaning ascribed to it in the other
Operative Document.

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

13    EXECUTION IN COUNTERPARTS . To facilitate execution, each Operative
Document may be executed in as many identical counterparts as may be required.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart. All counterparts, taken together, shall collectively constitute a
single instrument. It shall not be necessary in making proof of any Operative
Document to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages.

Common Definitions and Provisions Agreement (Phase II - Land) - Page 23

72
14      NOT A PARTNERSHIP, ETC . NOTHING IN ANY OPERATIVE DOCUMENT IS INTENDED
TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE BETWEEN
BNPLC AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE
ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY
OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE
DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
NAI. 

[The signature pages follows.]

Common Definitions and Provisions Agreement (Phase II - Land) - Page 24

73
IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase II - Land) to be executed as of [EFFECTIVE
DATE].

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:_________________________________
Title:________________________________

Common Definitions and Provisions Agreement (Phase II - Land) - Page 25

74
[Continuation of signature pages to Common Definitions and Provisions Agreement
(Phase II - Land) dated to be effective [EFFECTIVE DATE]]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Henry Setina, Vice President

Common Definitions and Provisions Agreement (Phase II - Land) - Page 26

1
Exhibit 10.37

================================================================================

PLEDGE AGREEMENT
(PHASE III - LAND)

AMONG

BNP LEASING CORPORATION

("BNPLC")

BANQUE NATIONALE DE PARIS, AS AGENT

("AGENT")

NETWORK APPLIANCE, INC.

("NAI")

AND

PARTICIPANTS AS DESCRIBED HEREIN

JUNE 16, 1999

================================================================================

2
TABLE OF CONTENTS

Page
----

ARTICLE I   DEFINITIONS AND INTERPRETATION                                                                -1-
Section 1.1 Capitalized Terms Used But Not Defined in This Agreement                              -1-
Section 1.2  Definitions                                                                          -1-
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                                                                      -2-
DEFAULT                                                                                    -3-
DEPOSIT TAKER                                                                              -3-
DEPOSIT TAKER LOSSES                                                                       -3-
DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT                                               -3-
DISQUALIFIED DEPOSIT TAKER                                                                 -3-
EVENT OF DEFAULT                                                                           -3-
FAILED COLLATERAL TEST DATE                                                                -4-
INITIALLY QUALIFIED DEPOSIT TAKER                                                          -4-
LIEN                                                                                       -4-
MATERIAL LEASE DEFAULT                                                                     -5-
MANDATORY COLLATERAL PERIOD                                                                -5-
MINIMUM COLLATERAL VALUE                                                                   -5-
NAI                                                                                        -5-
NAI'S PURCHASE AGREEMENT OBLIGATIONS                                                       -5-
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-
VALUE                                                                                      -6-
Section 1.3  Attachments                                                                          -7-
Section 1.4  Amendment of Defined Instruments

-7-
Section 1.5  References and Titles                                                                -7-

ARTICLE II   SECURITY INTEREST                                                                            -7-

i

3

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                                                  -8- 
Section 3.1  Determination of Minimum Collateral Percentage Generally                             -8- 
Section 3.2  Limitations on NAI's Right to Lower the Collateral Percentage                        -8-
Section 3.3  Mandatory Collateral Periods                                                         -8-

ARTICLE IV   PROVISIONS CONCERNING DEPOSIT TAKERS                                                         -9-
Section 4.1  Qualification of Deposit Takers Generally                                            -9-
Section 4.2  Existing Deposit Takers                                                              -9-
Section 4.3  Replacement of Participants Proposed by NAI                                          -9-
Section 4.4  Mandatory Substitution for 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                            -10-
Section 4.7  Constructive Possession of Collateral                                               -10-
Section 4.8  Attempted Setoff by Deposit Takers                                                  -11-
Section 4.9  Deposit Taker Losses                                                                -11-
Section 4.10  Losses Resulting from Failure of Deposit Taker to Comply with this 
Agreement                                                                          -11-

ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL                                                    -11- 
Section 5.1  Delivery of Funds by NAI                                                            -11- 
Section 5.2  Transition Account                                                                  -12- 
Section 5.3  Allocation of Cash Collateral Among Deposit Takers                                  -12- 
Section 5.4  Issuance and Redemption of Certificates of Deposit                                  -12-
Section 5.5  Status of the Accounts Under the Reserve Requirement Regulations                    -13- 
Section 5.6  Acknowledgment by NAI that Requirements of this Agreement are 
Commercially Reasonable                                                             -13-

ARTICLE VI   WITHDRAWAL OF CASH COLLATERAL                                                               -13-
Section 6.1  Withdrawal of Collateral Prior to the Designated Sale Date                          -13-
Section 6.2  Withdrawal and Application of Cash Collateral to Reduce or Satisfy the 
Secured Obligations to the Participants                                             -14-
Section 6.3  Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC                                            -14-
Section 6.4  Withdrawal of Cash Collateral From Accounts Maintained by Disqualified 
Deposit Takers                                                                      -14-

ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI                                                         -15- 
Section 7.1  Representations of NAI                                                              -15- 
Section 7.2  Covenants of NAI                                                                    -15-

ARTICLE VIII    AUTHORIZED ACTION BY AGENT                                                               -17-
Section 8.1  Power of Attorney                                                                   -17-

ARTICLE IX    DEFAULT AND REMEDIES                                                                       -17-
Section 9.1  Remedies                                                                            -17-

ii

4

ARTICLE X    OTHER RECOURSE                                                                              -18-
Section 10.1  Recovery Not Limited                                                               -18-

ARTICLE XI PROVISIONS CONCERNING AGENT                                                                   -18- 
Section 11.1  Appointment and Authority                                                          -18- 
Section 11.2  Exculpation, Agent's Reliance, Etc                                                 -19-
Section 11.3  Participant's Credit Decisions                                                     -19- 
Section 11.4  Indemnity                                                                          -19-
Section 11.5  Agent's Rights as Participant and Deposit Taker                                    -20-
Section 11.6  Investments                                                                        -20-
Section 11.7  Benefit of Article XI                                                              -20-
Section 11.8  Resignation                                                                        -20-

ARTICLE XII   MISCELLANEOUS                                                                              -21-
Section 12.1 Provisions Incorporated From Other Operative Documents                              -21-
Section 12.2  Cumulative Rights, etc                                                             -21-
Section 12.3  Survival of Agreements                                                             -21-
Section 12.4  Other Liable Party                                                                 -21-
Section 12.5  Termination                                                                        -21-

Attachment 1   Form of Certificate of Deposit

Attachment 2   Supplement to Pledge Agreement (Phase III - Land)

Attachment 3   Notice of NAI's Election to Change the Collateral Percentage

Attachment 4   Notice of Security Interest

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 Participants

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

iii

5
PLEDGE AGREEMENT
(PHASE III - LAND)

This PLEDGE AGREEMENT (PHASE III - LAND) (this "AGREEMENT") is made as
of [EFFECTIVE DATE] (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and
BANQUE NATIONALE DE PARIS, 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 III - Land) dated as of the Effective Date (the
"COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE III - LAND)"); and (ii) a
Purchase Agreement (Phase III - Land) dated as of the Effective Date (the
"PURCHASE AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL
PAYMENT" (as defined in the Common Definitions and Provisions Agreement (Phase
III - Land)), in consideration of the rights granted to NAI by the Purchase
Agreement.

B.      Pursuant to a Participation Agreement dated as of June 16, 1999
(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 III - Land)), 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.

C.      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:

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 III - Land) and not
otherwise defined herein shall have the same meanings herein as set forth in the
Common Definitions and Provisions Agreement (Phase III - Land). 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.

1

6
"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 (i) 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 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 the percentage designated by
NAI or required during a Mandatory Collateral Period pursuant to Article
III.

"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 4.4 and 4.5
below.

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"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 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 Land Lease an amount
equal to interest at the Default Rate (as defined in the Land
Lease) 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 to BNPLC any additional Base Rent that has accrued under the
Land 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 Land 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

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(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
(c) 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.

"FAILED COLLATERAL TEST DATE " means any date upon which
commences a Mandatory Collateral Period as described in Part III of
Schedule 1.

"INITIALLY QUALIFIED DEPOSIT TAKER " means (1) Banque Nationale
de Paris, acting through any branch, office or agency that can lawfully
maintain an Account as a Deposit Taker hereunder, and (2) any of the
fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, with debt
ratings of at least (i) 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 Moody's
Investor Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by Moody's
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 Moody 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)     any "Event of Default" under and as defined in
the Land Lease, including any such Event of Default consisting
of a failure of NAI to comply with the requirements of Exhibit I
attached to the Land Lease; and

9
(2)(a)  any failure of NAI to make any payment required
by and when first due under the Land Lease, regardless of
whether any period provided in the Land 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 Land 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.)

"MANDATORY COLLATERAL PERIOD" shall mean any period, as
determined in accordance with Part III of Schedule 1, during which NAI
is required to maintain a Collateral Percentage of one hundred percent
(100%) pursuant to Section 3.2.

"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 Land Lease; and (2) as of any date after the
Designated Sale 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 (i) NAI's obligation
to pay any Supplemental Payment as required under subparagraph 1(A) of
the Purchase Agreement, and (ii) 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 (i) 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.

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"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 Land 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 perfection or
non-perfection of the pledge of and security interests in the Collateral
created by this Agreement.

"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 Land 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 lien
in and against all right, title and 

11
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

Section 3.1  Determination of Minimum Collateral Percentage Generally.
Effective as of the date of this Agreement, and until a new Collateral
Percentage becomes effective, the Collateral Percentage is zero percent (0%).
Subject to the provisions of this Article III, NAI may from time to time
designate a new Collateral Percentage between 0% and 100% by written notice
delivered to Agent, BNPLC and the Participants in the form of ATTACHMENT 3. Any
new Collateral Percentage so designated shall not become effective, however,
until the commencement of the later of (A) the first Base Rent Period to
commence on or after the first Business Day of January, 2001, or (B) the next
following Base Rent Period which is at least ten Business Days after the receipt
of such notice by Agent, BNPLC and the Participants. Further, after the first
change in the Collateral Percentage resulting from a designation by NAI of a
Collateral Percentage greater than zero percent (0%), any subsequent change
resulting from NAI's designation of a new Collateral Percentage shall not become
effective before the first Business Day of the first Base Rent Period that
commences at least ninety days after the effective date of the last preceding
change in the Collateral Period. In any event, if NAI provides more than one
notice of a change in the Collateral Percentage to be effective on a particular
Base Rent Date, then the latest such notice from NAI which satisfies the
requirements of this Section (and of Sections and ) will control. After any
Collateral Percentage becomes effective as provided in this Article, it shall
remain in effect until a different Collateral Percentage becomes effective as
provided in this Article.

Section 3.2  Limitations on NAI's Right to Lower the Collateral
Percentage. Notwithstanding the foregoing, no designation by NAI of a new
Collateral Percentage will be effective to reduce the Collateral Percentage if
the designation is given, or the reduction would otherwise become effective, on
or after the Designated Sale Date or when any of the following shall have
occurred and be continuing:

3.2.1   any Material Lease Default;

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3.2.2   any Event of Default under and as defined in this Agreement;

3.2.3   any Default under and as defined in this Agreement - excluding,
however, any such Default limited to a failure of NAI described in
clause (c) or clause (e) of the definition of Event of Default above,
with respect to which the time for cure specified in clause (c) or
clause (e), as applicable, has not expired.

Section 3.3  Mandatory Collateral Periods. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.

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:

4.1.1   Such Person must have received from Agent and NAI a completed,
executed Notice of Security Interest in the form of ATTACHMENT 4 (a
"NOTICE OF SECURITY INTEREST") 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 concerning the issuance and redemption of Certificates of
Deposit.

Section 4.2  Existing Deposit Takers. BNPLC's Parent (as Deposit Taker
for itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subSections and .

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 

13
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 required to
pay the termination fee by Section 6.4 of the 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 Substitution for Disqualified Deposit Takers. If
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. Pending the designation of the substitute and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral held by the
Disqualified Deposit Taker and deposit such Collateral with other Deposit
Takers, subject to Section 5.3 below.

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 further, unless the designation of a new Deposit Taker is required
by Section 4.4 to replace a Disqualified Deposit Taker, 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.

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, 

14
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 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. However, Deposit Taker Losses with respect to a
Deposit Taker for a particular Participant 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 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. 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 be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.

ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL

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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 the Land Lease 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 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:

6.4     

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 a Certificate of Deposit evidencing the Account into which such
deposit is made and deliver such Certificate of Deposit to 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 ATTACHMENT 1 to this Agreement. Upon depositing any
Cash Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has issued a 

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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 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 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 the
Certificate, upon the written request of Agent, shall issue 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 
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:

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.

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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 2.2 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 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:

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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 III - Land) 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 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.

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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.

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 Land 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

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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 Land Lease,
the Purchase Agreement, the Participation Agreement, the UCC and other
Applicable Laws, Agent may, upon the occurrence and 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

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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:

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 

22
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 (6)
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.

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, Banque Nationale de Paris 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, Banque Nationale de Paris
shall have the same rights and obligations as any Deposit Taker and may exercise
such rights as though it were not Agent. Banque Nationale de Paris 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 Banque Nationale de Paris 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 

23
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.

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 Article 10.1 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 III
- Land), 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 III - Land) 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

24
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.

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.

[The signature pages follow.]

25
IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of
[EFFECTIVE DATE].

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________

26
[Continuation of signature pages to Pledge Agreement (Phase III - Land) dated to
be effective [EFFECTIVE DATE]]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Henry Setina, Vice President

27
[Continuation of signature pages to Pledge Agreement (Phase III - Land) dated to
be effective [EFFECTIVE DATE]]

"AGENT"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

"PARTICIPANT"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

28
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:  BANQUE NATIONALE DE PARIS, as Agent under the Pledge Agreement
(Phase III - Land) dated [EFFECTIVE DATE], among Network
Appliance, Inc., BNP Leasing Corporation, Banque Nationale de
Paris and any other financial institutions which are from time to
time Participants under such Pledge Agreement (Phase III - Land)
and Banque Nationale de Paris, 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

1

29
ATTACHMENT 2
TO PLEDGE AGREEMENT

SUPPLEMENT TO PLEDGE AGREEMENT

[_________, ____]

Banque Nationale de Paris

-------------------------
-------------------------
-------------------------

Network Appliance, Inc.

-------------------------
-------------------------
-------------------------

1.      Reference is made to the Pledge Agreement (Phase III - Land) (the
"PLEDGE AGREEMENT") dated [EFFECTIVE DATE] among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, 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 of the
Pledge Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Supplement as of the day
and year indicated above.

[       ]

By:______________________________________
Name:_________________________________
Title:________________________________

1

30
ATTACHMENT 3
TO PLEDGE AGREEMENT

NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE

[________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Land) (the "PLEDGE AGREEMENT") dated
[EFFECTIVE DATE] among Network Appliance, Inc., BNP Leasing Corporation,
Banque Nationale de Paris and any other financial institutions which are
from time to time Participants under such Pledge Agreement and Banque
Nationale de Paris, 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 referenced above. This letter constitutes notice
to you, as Agent under the Pledge Agreement, that pursuant to Section 3.1 of the
Pledge Agreement, NAI elects to change the Collateral Percentage to:

__________ percent (___%),

on the following Base Rent Date:

_________, ____

NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:

____________________________ Dollars ($__________),

will result in an expected new Minimum Collateral Value of:

____________________________ Dollars ($__________).

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:

Because of the increase in the Collateral Percentage which will result from this
notice and the corresponding increase in the Minimum Collateral Value, NAI will
deliver additional Cash Collateral to you as required by Section of the Pledge
Agreement no later than 12:00 noon (San Francisco time) on the Base Rent Date
specified above, in the amount of:

1

31
____________________________ Dollars ($__________).]

To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:

1.      NAI is giving this notice to you, BNPLC and the
Participants at least ten Business Days prior to the Base Rent Date
specified above, and such Base Rent Date is the commencement of a Base
Rent Period.

2.      No Event of Default or other event or circumstance that
would, pursuant to Section of the Pledge Agreement, preclude NAI from
designating the new Collateral Percentage above has occurred and is
continuing, and NAI does not anticipate that on the Base Rent Date
specified above there will have occurred and be continuing any such
Event of Default or other event or circumstance.

3.      No Mandatory Collateral Period shall be in effect as of
the effective date specified above.

NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
ABOVE ARE NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY
IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

[cc BNPLC and all Participants]

2

32
ATTACHMENT 4
TO PLEDGE AGREEMENT

NOTICE OF SECURITY INTEREST

[_________, _____]

[Name of Deposit Taker]
[Address of Deposit Taker]

1.      Reference is made to the Pledge Agreement (Phase III - Land) (the
"PLEDGE AGREEMENT") dated [EFFECTIVE DATE] among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, 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 (the "DEPOSIT TAKER") the following non-interest bearing Account(s)
to be maintained at the following Account Office(s):

Account            Account             Account
Type             Office               Number
-------            -------             -------

Time Deposit          _______             _______
Time Deposit          _______             _______
Time Deposit          _______             _______

NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the 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(s) 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(s); 

3

33
(b)     make a notation in its books and records of the interest
of Agent in the Collateral and that the Account(s) 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 the
Account(s), as directed by Agent pursuant to the Pledge Agreement;

(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 the Deposit Taker may require
compliance by Agent with the provisions in Section 5.4 of the Pledge
Agreement for redemption of any outstanding Certificates of Deposit
which evidence the Account(s).

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 hereunder 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 the 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"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

2

34
"NAI"

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

3

35
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 Offices 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(s)
is accurate. Such Account(s) is (are) currently open and Deposit Taker
has no prior notice of any other pledge, security interest, Lien,
adverse claim or interest in such Account(s).

(e)     Deposit Taker shall promptly notify NAI and Agent if the
representations made by Deposit Taker above cease to be true and
correct.

(f)     Deposit Taker shall not (i) allow the withdrawal of
funds from any 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 Secured Obligations owed to Deposit
Taker against any Collateral held from time to time by Deposit Taker, or
(iii) WITHOUT IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN
AUTHORIZATION OF BOTH NAI AND AGENT, setoff or attempt to setoff any
obligations owed to Deposit Taker other than Secured Obligations,
against any Collateral held from time to time by Deposit Taker.

[      ]

By:______________________________________
Name:_________________________________
Title:________________________________

[Date]

4

36
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. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.

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, Funding Advances (including those to
cover Carrying Costs under the Land 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 was
$7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
Loss Value).

4.      On the Base Rent Commencement Date, NAI had delivered to Agent Cash
Collateral of $7,200,000, 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 $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:

A.      BNPLC's Deposit Taker (5% of Minimum Collateral Value)                   $  360,000

B.      Participant A's Deposit Taker (50% of Minimum Collateral Value)           3,600,000

C.      Participant B's Deposit Taker (45% of Minimum Collateral Value)           3,240,000
----------

TOTAL                                                                    $7,200,000

1

37
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, NAI increased its Collateral
Percentage from 60% to 80%, raising the Minimum Collateral Value to
$9,600,000. Because of such increase, NAI also delivered an additional
$2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
bringing the total of all Cash Collateral delivered by NAI to $9,600,000
as required by Section 5.1 of this Agreement.

2.      Also 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)              $  480,000

B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)      3,840,000

C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)      3,360,000

D.      Participant C's  Deposit Taker (20% of Minimum Collateral Value)     1,920,000
----------

TOTAL                                                               $9,600,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($480,000 less $360,000 already on deposit)                $  120,000

B.      Participant A's Deposit Taker ($3,840,000 less $3,600,000 already on deposit)       240,000

C.      Participant B's Deposit Taker ($3,360,000 less $3,240,000 already on deposit)       120,000

D.      Participant C's  Deposit Taker ($1,920,000 less $0 already on deposit)            1,920,000
----------

TOTAL                                                                            $2,400,000

EXAMPLE NO. 3

Assumptions:  Assume the same facts as in Example No. 2, except that:

1.      Instead of increasing its Collateral Percentage from 60% to 80%, NAI
increased its Collateral Percentage to 70% on the first Base Rent Date,
raising the Minimum Collateral Value to $8,400,000. Because of such
increase, NAI delivered an additional $1,200,000 as additional Cash
Collateral to Agent on the first Base Rent Date, bringing the total of
all Cash Collateral delivered by NAI to $8,400,000 as required by
Section 5.1 of this Agreement.

2

38
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)             $  420,000

B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)     3,360,000

C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)     2,940,000

D.      Participant C's  Deposit Taker (20% of Minimum Collateral Value)    1,680,000
----------

TOTAL                                                              $8,400,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($420,000 less $360,000 already on deposit)               $   60,000

B.      Participant A's Deposit Taker ($3,360,000 less $3,600,000 already on deposit)     (240,000)

C.      Participant B's Deposit Taker ($2,940,000 less $3,240,000 already on deposit)     (300,000)

D.      Participant C's  Deposit Taker ($1,680,000 less $0 already on deposit)           1,680,000
---------

TOTAL                                                                           $1,200,000

NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.

3

39
ATTACHMENT 6
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL

[________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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 ($__________),

40
and the Minimum Collateral Value on the date specified above will equal:

____________________________ Dollars ($__________).

Such Minimum Collateral Value equals the Collateral Percentage of:

__________ 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.

41
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]

42
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH EXCESS COLLATERAL

[________, _____]

Deposit Takers on the
Attached Distribution List

Re:     Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) referenced above
(the "PLEDGE AGREEMENT"). This letter constitutes notice from the undersigned,
as Agent under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires Agent 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:       $_______________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

43

ATTACHMENT 7
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENTS TO PARTICIPANTS

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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 the 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 ($__________).

1

44
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 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]

45
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 III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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:       $_______________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

46
ATTACHMENT 8
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENT TO BNPLC

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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 for
BNPLC 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 the
Deposit Taker for BNPLC 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 the 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 amount NAI believes you must withdraw to comply with Section
6.3 of the Pledge Agreement.

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

[cc BNPLC]

1

47
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 III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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 Account maintained by you, as
Deposit Taker for BNPLC, the sum of:

____________________________ Dollars ($__________)

and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:

__________, ____

Accordingly, on such date, the undersigned intends to withdraw such
amount 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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

2

48
ATTACHMENT 9
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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, 

1

49
ALL IN SUFFICIENT DETAIL TO 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

50
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 III - Land) dated [EFFECTIVE DATE] among
Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Land) and Banque Nationale de Paris, 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 III - Land) 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 has advised Agent that you are a Disqualified Deposit Taker, and
NAI requires Agent to withdraw from the Account maintained by you, as a Deposit
Taker under the Pledge Agreement, the sum of:

____________________________ Dollars ($__________)

no later than the following date:

__________, ____

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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

3

1
Exhibit 10.38

================================================================================

PLEDGE AGREEMENT
(PHASE III - IMPROVEMENTS)

AMONG

BNP LEASING CORPORATION

("BNPLC")

BANQUE NATIONALE DE PARIS, AS AGENT

("AGENT")

NETWORK APPLIANCE, INC.

("NAI")

AND

PARTICIPANTS AS DESCRIBED HEREIN

JUNE 16, 1999

================================================================================

2

TABLE OF CONTENTS

Page
----
ARTICLE I   DEFINITIONS AND INTERPRETATION                                 -1-
Section 1.1  Capitalized Terms Used But Not Defined in This Agreement    -1-
Section 1.2  Definitions                                                 -1-
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                                                  -2-
DEFAULT                                                                -3-
DEPOSIT TAKER                                                          -3-
DEPOSIT TAKER LOSSES                                                   -3-
DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT                           -3-
DISQUALIFIED DEPOSIT TAKER                                             -3-
EVENT OF DEFAULT                                                       -3-
FAILED COLLATERAL TEST DATE                                            -4-
INITIALLY QUALIFIED DEPOSIT TAKER                                      -4-
LIEN                                                                   -4-
MATERIAL LEASE DEFAULT                                                 -5-
MANDATORY COLLATERAL PERIOD                                            -5-
MINIMUM COLLATERAL VALUE                                               -5-
NAI                                                                    -5-
NAI'S PURCHASE AGREEMENT OBLIGATIONS                                   -5-
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-
VALUE                                                                  -6-
Section 1.3  Attachments                                                 -7-
Section 1.4  Amendment of Defined Instruments                            -7-
Section 1.5  References and Titles                                       -7-

ARTICLE II   SECURITY INTEREST                                             -7-

3
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                   -8-
Section 3.1  Determination of Minimum Collateral Percentage
Generally                                                     -8-
Section 3.2  Limitations on NAI's Right to Lower the Collateral
Percentage                                                    -8-
Section 3.3  Mandatory Collateral Periods                                  -9-

ARTICLE IV   PROVISIONS CONCERNING DEPOSIT TAKERS                            -9-
Section 4.1  Qualification of Deposit Takers Generally                     -9-
Section 4.2  Existing Deposit Takers                                       -9-
Section 4.3  Replacement of Participants Proposed by NAI                   -9-
Section 4.4  Mandatory Substitution for 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     -10-
Section 4.7  Constructive Possession of Collateral                        -10-
Section 4.8  Attempted Setoff by Deposit Takers                           -11-
Section 4.9  Deposit Taker Losses                                         -11-
Section 4.10  Losses Resulting from Failure of Deposit Taker to Comply    
with this Agreement                                         -11-

ARV   DELIVERY AND MAINTENANCE OF CASH COLLATERAL                           -11-
Section 5.1  Delivery of Funds by NAI                                     -11-
Section 5.2  Transition Account                                           -12-
Section 5.3  Allocation of Cash Collateral Among Deposit Takers           -12-
Section 5.4  Issuance and Redemption of Certificates of Deposit           -12-
Section 5.5  Status of the Accounts Under the Reserve Requirement
Regulations                                                  -13-
Section 5.6  Acknowledgment by NAI that Requirements of this
Agreement are Commercially Reasonable                        -13-

ARVI   WITHDRAWAL OF CASH COLLATERAL                                        -13-
Section 6.1  Withdrawal of Collateral Prior to the
Designated Sale Date                                         -13-
Section 6.2  Withdrawal and Application of Cash Collateral to 
Reduce or Satisfy the Secured Obligations to 
the Participants                                             -14-
Section 6.3  Withdrawal and Application of Cash Collateral to 
Reduce or Satisfy the Secured Obligations to BNPLC           -14-
Section 6.4  Withdrawal of Cash Collateral From Accounts 
Maintained by Disqualified Deposit Takers                    -15-

ARTICLE VII   REPRESENTATIONS AND COVENANTS OF NAI                          -15-
Section 7.1  Representations of NAI                                       -15-
Section 7.2  Covenants of NAI                                             -16-

ARTICLE VIII    AUTHORIZED ACTION BY AGENT                                  -17-
Section 8.1  Power of Attorney                                            -17-

ARTICLE IX    DEFAULT AND REMEDIES                                          -18-
Section 9.1  Remedies                                                     -18-

ii

4
ARTICLE X    OTHER RECOURSE                                                -18-
Section 10.1  Recovery Not Limited                                 -18-

ARTICLE XI   PROVISIONS CONCERNING AGENT                                   -19-
Section 11.1  Appointment and Authority                            -19-
Section 11.2  Exculpation, Agent's Reliance, Etc                   -19-
Section 11.3  Participant's Credit Decisions                       -19-
Section 11.4  Indemnity                                            -20-
Section 11.5  Agent's Rights as Participant and Deposit Taker      -20-
Section 11.6  Investments                                          -20-
Section 11.7  Benefit of Article XI                                -20-
Section 11.8  Resignation                                          -21-

ARTICLE XII   MISCELLANEOUS                                                -21-
Section 12.1  Provisions Incorporated From Other Operative
Documents                                            -21-
Section 12.2  Cumulative Rights, etc                               -21-
Section 12.3  Survival of Agreements                               -21-
Section 12.4  Other Liable Party                                   -21-
Section 12.5  Termination                                          -22-

Attachment 1   Form of Certificate of Deposit

Attachment 2   Supplement to Pledge Agreement (Phase III - Improvements)

Attachment 3   Notice of NAI's Election to Change the Collateral Percentage

Attachment 4   Notice of Security Interest

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 Participants

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

iii

5
PLEDGE AGREEMENT
(PHASE III - IMPROVEMENTS)

This PLEDGE AGREEMENT (PHASE III - IMPROVEMENTS) (this "AGREEMENT") is
made as of June 16, 1999 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and
BANQUE NATIONALE DE PARIS, 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 III - Improvements) dated as of the Effective Date
(the "COMMON DEFINITIONS AND PROVISIONS AGREEMENT (PHASE III - IMPROVEMENTS)");
and (ii) a Purchase Agreement (Phase III - 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 III - Improvements)), in
consideration of the rights granted to NAI by the Purchase Agreement.

B.      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
III - 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.

C.      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:

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 III - Improvements) and
not otherwise defined herein shall have the same meanings herein as set forth in
the Common Definitions and Provisions Agreement (Phase III - 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.

1

6

"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 (i) 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 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 the percentage designated by
NAI or required during a Mandatory Collateral Period pursuant to Article
III.

"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 4.4 and 4.5 and
below.

7
"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 (as
defined in the Improvements Lease) 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 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

8
(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
(c) 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.

"FAILED COLLATERAL TEST DATE " means any date upon which
commences a Mandatory Collateral Period as described in Part III of
Schedule 1.

"INITIALLY QUALIFIED DEPOSIT TAKER " means (1) Banque Nationale
de Paris, acting through any branch, office or agency that can lawfully
maintain an Account as a Deposit Taker hereunder, and (2) any of the
fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, with debt
ratings of at least (i) 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 Moody's
Investor Service, Inc. The parties believe it improbable that the
ratings systems used by Standard and Poor's Corporation and by Moody's
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 Moody 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)     any "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

9
(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.)

"MANDATORY COLLATERAL PERIOD " shall mean any period, as
determined in accordance with Part III of Schedule 1, during which NAI
is required to maintain a Collateral Percentage of one hundred percent
(100%) pursuant to Section 3.2.

"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 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 (i) 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 (i) 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.

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"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 perfection or
non-perfection of the pledge of and security interests in the Collateral
created by this Agreement.

"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. 

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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 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

Section 3.1 Determination of Minimum Collateral Percentage Generally .
Effective as of the date of this Agreement, and until a new Collateral
Percentage becomes effective, the Collateral Percentage is zero percent (0%).
Subject to the provisions of this Article III, NAI may from time to time
designate a new Collateral Percentage between 0% and 100% by written notice
delivered to Agent, BNPLC and the Participants in the form of ATTACHMENT 3. Any
new Collateral Percentage so designated shall not become effective, however,
until the commencement of the later of (A) the first Base Rent Period to
commence on or after the first Business Day of January, 2001, or (B) the next
following Base Rent Period which is at least ten Business Days after the receipt
of such notice by Agent, BNPLC and the Participants. Further, after the first
change in the Collateral Percentage resulting from a designation by NAI of a
Collateral Percentage greater than zero percent (0%), any subsequent change
resulting from NAI's designation of a new Collateral Percentage shall not become
effective before the first Business Day of the first Base Rent Period that
commences at least ninety days after the effective date of the last preceding
change in the Collateral Period. In any event, if NAI provides more than one
notice of a change in the Collateral Percentage to be effective on a particular
Base Rent Date, then the latest such notice from NAI which satisfies the
requirements of this Section (and of Sections 3.2 and 3.3) will control. After
any Collateral Percentage becomes effective as provided in this Article, it
shall remain in effect until a different Collateral Percentage becomes effective
as provided in this Article.

Section 3.2 Limitations on NAI's Right to Lower the Collateral
Percentage. Notwithstanding the foregoing, no designation by NAI of a new
Collateral Percentage will be effective to reduce the Collateral Percentage if
the

12
designation is given, or the reduction would otherwise become effective, on or
after the Designated Sale Date or when any of the following shall have occurred
and be continuing:

3.2.1   any Material Lease Default;

3.2.2   any Event of Default under and as defined in this Agreement;

3.2.3   any Default under and as defined in this Agreement - excluding,
however, any such Default limited to a failure of NAI described in
clause (c) or clause (e) of the definition of Event of Default above,
with respect to which the time for cure specified in clause (c) or
clause (e), as applicable, has not expired.

Section 3.3  Mandatory Collateral Periods. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.

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:

4.1.1   Such Person must have received from Agent and NAI a completed,
executed Notice of Security Interest in the form of ATTACHMENT 4 (a
"NOTICE OF SECURITY INTEREST") 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  Existing Deposit Takers. BNPLC's Parent (as Deposit Taker
for itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subSections 4.1.1 and 4.1.2.

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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 required to pay the termination fee
by Section 6.4 of the 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 Substitution for Disqualified Deposit Takers. If
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. Pending the designation of the substitute and the satisfaction by it of the
requirements set forth in Section 4.1, Agent may withdraw Collateral held by the
Disqualified Deposit Taker and deposit such Collateral with other Deposit
Takers, subject to Section 5.3 below.

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 further, unless the designation of a new Deposit Taker is required
by Section 4.4 to replace a Disqualified Deposit Taker, 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.

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 

14
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 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. However, Deposit Taker Losses with respect to a Deposit
Taker for a particular Participant 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 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. 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 be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.

15

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 the Improvements Lease 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 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 a Certificate of Deposit evidencing the Account into which such deposit is
made and deliver such Certificate of Deposit to 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 ATTACHMENT 1 to this Agreement. Upon depositing any Cash
Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has issued a 

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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 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 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 the
Certificate, upon the written request of Agent, shall issue 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:

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.

17
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 2.2 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 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:

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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 III - 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 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.

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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.

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.

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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.

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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 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.

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ARTICLE XI PROVISIONS CONCERNING AGENT

In the event of any conflict between the following and other provisions
in this Agreement, the following will control:

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 (6) 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.

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 

23
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, Banque Nationale de Paris 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, Banque Nationale de Paris shall
have the same rights and obligations as any Deposit Taker and may exercise such
rights as though it were not Agent. Banque Nationale de Paris 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 Banque Nationale de Paris 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.

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 Article 10.1
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.

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ARTICLE XII MISCELLANEOUS

Section 12.1 Provisions Incorporated From Other Operative Documents . Reference
is made to the Common Definitions and Provisions Agreement (Phase III -
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 III - 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.

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.

[The signature pages follow.]

25
IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of June 16,
1999.

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________

26
[Continuation of signature pages to Pledge Agreement (Phase III - Improvements)
dated to be effective June 16, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Henry Setina, Vice President

27
[Continuation of signature pages to Pledge Agreement (Phase III - Improvements)
dated to be effective June 16, 1999]

"AGENT"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

"PARTICIPANT"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

28
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:   BANQUE NATIONALE DE PARIS, as Agent under the Pledge Agreement
(Phase III - Improvements) dated June 16, 1999, among Network
Appliance, Inc., BNP Leasing Corporation, Banque Nationale de
Paris and any other financial institutions which are from time
to time Participants under such Pledge Agreement (Phase III -
Improvements) and Banque Nationale de Paris, 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

29
ATTACHMENT 2
TO PLEDGE AGREEMENT

SUPPLEMENT TO PLEDGE AGREEMENT

[_________, ____]

Banque Nationale de Paris
_________________________
_________________________
_________________________

Network Appliance, Inc.
_________________________
_________________________
_________________________

1.      Reference is made to the Pledge Agreement (Phase III - Improvements)
(the "PLEDGE AGREEMENT") dated June 16, 1999 among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, 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:________________________________

30
ATTACHMENT 3
TO PLEDGE AGREEMENT

NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE

[________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Improvements) (the "PLEDGE AGREEMENT")
dated June 16, 1999 among Network Appliance, Inc., BNP Leasing
Corporation, Banque Nationale de Paris and any other financial
institutions which are from time to time Participants under such Pledge
Agreement and Banque Nationale de Paris, 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 referenced above. This letter constitutes notice
to you, as Agent under the Pledge Agreement, that pursuant to Section 3.1 of the
Pledge Agreement, NAI elects to change the Collateral Percentage to:

__________ percent (___%),

on the following Base Rent Date:

__________, ____

NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:

____________________________ Dollars ($__________),

will result in an expected new Minimum Collateral Value of:

____________________________ Dollars ($__________).

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:

Because of the increase in the Collateral Percentage which will result from this
notice and the corresponding increase in the Minimum Collateral Value, NAI will
deliver additional Cash Collateral to you as required by Section 5.1 of the
Pledge Agreement no later than 12:00 noon (San Francisco time) on the Base Rent
Date specified above, in the amount of:

1

31
____________________________ Dollars ($__________).]

To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:

1.      NAI is giving this notice to you, BNPLC and the
Participants at least ten Business Days prior to the Base Rent Date
specified above, and such Base Rent Date is the commencement of a Base
Rent Period.

2.      No Event of Default or other event or circumstance that
would, pursuant to Section 3.2 of the Pledge Agreement, preclude NAI
from designating the new Collateral Percentage above has occurred and is
continuing, and NAI does not anticipate that on the Base Rent Date
specified above there will have occurred and be continuing any such
Event of Default or other event or circumstance.

3.      No Mandatory Collateral Period shall be in effect as of
the effective date specified above.

NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
ABOVE ARE NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY
IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

[cc BNPLC and all Participants]

2

32
ATTACHMENT 4
TO PLEDGE AGREEMENT

NOTICE OF SECURITY INTEREST

[_________, _____]

[Name of Deposit Taker]
[Address of Deposit Taker]

1.      Reference is made to the Pledge Agreement (Phase III - Improvements)
(the "PLEDGE AGREEMENT") dated June 16, 1999 among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, 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 (the "DEPOSIT TAKER") the following non-interest bearing Account(s)
to be maintained at the following Account Office(s):

Account           Account       Account
Type             Office        Number
-------           -------       -------
Time Deposit         -------       -------        
Time Deposit         -------       -------        
Time Deposit         -------       -------        

NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the 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(s) 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(s); 

3

33
(b)     make a notation in its books and records of the interest
of Agent in the Collateral and that the Account(s) 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 the
Account(s), as directed by Agent pursuant to the Pledge Agreement;

(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 the Deposit Taker may require
compliance by Agent with the provisions in Section 5.4 of the Pledge
Agreement for redemption of any outstanding Certificates of Deposit
which evidence the Account(s).

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 hereunder 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 the 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"

BANQUE NATIONALE DE PARIS

By:______________________________________
Name:_________________________________
Title:________________________________

By:______________________________________
Name:_________________________________
Title:________________________________

2

34
"NAI"

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

3

35
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 Offices 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(s)
is accurate. Such Account(s) is (are) currently open and Deposit Taker
has no prior notice of any other pledge, security interest, Lien,
adverse claim or interest in such Account(s).

(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 (i) allow the withdrawal of
funds from any 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 Secured Obligations owed to Deposit
Taker against any Collateral held from time to time by Deposit Taker, or
(iii) WITHOUT IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN
AUTHORIZATION OF BOTH NAI AND AGENT, setoff or attempt to setoff any
obligations owed to Deposit Taker other than Secured Obligations,
against any Collateral held from time to time by Deposit Taker.

[______]

By:______________________________________
Name:_________________________________
Title:________________________________

[Date]

4

36
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. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.

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, 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 was
$7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
Loss Value).

4.      On the Base Rent Commencement Date, NAI had delivered to Agent Cash
Collateral of $7,200,000, 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 $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:

A.      BNPLC's Deposit Taker (5% of Minimum Collateral Value)           $  360,000

B.      Participant A's Deposit Taker (50% of Minimum Collateral Value)   3,600,000

C.      Participant B's  Deposit Taker (45% of Minimum Collateral Value)  3,240,000
----------
TOTAL                                                            $7,200,000

1

37
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, NAI increased its Collateral
Percentage from 60% to 80%, raising the Minimum Collateral Value to
$9,600,000. Because of such increase, NAI also delivered an additional
$2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
bringing the total of all Cash Collateral delivered by NAI to $9,600,000
as required by Section 5.1 of this Agreement.

2.      Also 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)           $  480,000

B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)   3,840,000

C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)   3,360,000

D.      Participant C's  Deposit Taker (20% of Minimum Collateral Value)  1,920,000
----------
TOTAL                                                             $9,600,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($480,000 less $360,000 already on deposit)               $  120,000

B.      Participant A's Deposit Taker ($3,840,000 less $3,600,000 already on deposit)      240,000

C.      Participant B's Deposit Taker ($3,360,000 less $3,240,000 already on deposit)      120,000

D.      Participant C's  Deposit Taker ($1,920,000 less $0 already on deposit)           1,920,000
---------
TOTAL                                                                           $2,400,000

EXAMPLE NO. 3

Assumptions:  Assume the same facts as in Example No. 2, except that:

1.      Instead of increasing its Collateral Percentage from 60% to 80%, NAI
increased its Collateral Percentage to 70% on the first Base Rent Date,
raising the Minimum Collateral Value to $8,400,000. Because of such
increase, NAI delivered an additional $1,200,000 as additional Cash
Collateral to Agent on the first Base Rent Date, bringing the total of
all Cash Collateral delivered by NAI to $8,400,000 as required by
Section 5.1 of this Agreement.

2

38
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)             $  420,000

B.      Participant A's Deposit Taker (40% of Minimum Collateral Value)     3,360,000

C.      Participant B's Deposit Taker (35% of Minimum Collateral Value)     2,940,000

D.      Participant C's  Deposit Taker (20% of Minimum Collateral Value)    1,680,000
----------
TOTAL                                                              $8,400,000

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

A.      BNPLC's Deposit Taker ($420,000 less $360,000 already on deposit)              $   60,000

B.      Participant A's Deposit Taker ($3,360,000 less $3,600,000 already on deposit)    (240,000)

C.      Participant B's Deposit Taker ($2,940,000 less $3,240,000 already on deposit)    (300,000)

D.      Participant C's  Deposit Taker ($1,680,000 less $0 already on deposit)          1,680,000
---------
TOTAL                                                                          $1,200,000

NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.

3

39
ATTACHMENT 6
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Improvements) dated June __, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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 ($__________),

1

40
and the Minimum Collateral Value on the date specified above will equal:

____________________________ Dollars ($__________).

Such Minimum Collateral Value equals the Collateral Percentage of:

__________ 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.

41
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]

42
Annex 1
TO NAI'S NOTICE OF REQUIREMENT TO
WITHDRAW CASH EXCESS COLLATERAL

[_________, _____]

Deposit Takers on the
Attached Distribution List

Re:     Pledge Agreement (Phase III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.1
of the Pledge Agreement, NAI requires Agent 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:       $_______________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

43
ATTACHMENT 7
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENTS TO PARTICIPANTS

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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
the 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 ($__________).

1

44
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 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]

45
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 III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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:       $_______________

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

46
ATTACHMENT 8
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF
DIRECT PAYMENT TO BNPLC

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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 for BNPLC 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 the
Deposit Taker for BNPLC 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 the 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 amount NAI believes you must withdraw to comply with Section
6.3 of the Pledge Agreement.

Network Appliance, Inc.

By:______________________________________
Name:_________________________________
Title:________________________________

[cc BNPLC]

1

47
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 III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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 Account
maintained by you, as Deposit Taker for BNPLC, the sum of:

____________________________ Dollars ($__________)

and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:

__________, ____

Accordingly, on such date, the undersigned intends to withdraw such
amount 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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

2

48
ATTACHMENT 9
TO PLEDGE AGREEMENT

NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
OF CASH COLLATERAL FROM
A DISQUALIFIED DEPOSIT TAKER

[_________, _____]

Banque Nationale de Paris
[address of BNP]

Re:     Pledge Agreement (Phase III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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, 

1

49
ALL IN SUFFICIENT DETAIL TO 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

50
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 III - Improvements) dated June 16, 1999
among Network Appliance, Inc., BNP Leasing Corporation, Banque
Nationale de Paris and any other financial institutions which
are from time to time Participants under such Pledge Agreement
(Phase III - Improvements) and Banque Nationale de Paris, 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 III - 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 has advised Agent that you are a Disqualified
Deposit Taker, and NAI requires Agent to withdraw from the Account maintained by
you, as a Deposit Taker under the Pledge Agreement, the sum of:

____________________________ Dollars ($__________)

no later than the following date:

__________, ____

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.

BANQUE NATIONALE DE PARIS, AS AGENT

Name:____________________________________
Title:___________________________________

[cc BNPLC and NAI]

3

1
Exhibit 10.39

================================================================================

PURCHASE AGREEMENT
(PHASE III - LAND)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

JUNE 16, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2
TABLE OF CONTENTS

Page
----

1       NAI's OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE                                        1
(A)    Right to Purchase; Right and Obligation to Remarket                                       1
(B)    Determinations Concerning Price                                                           3
(C)    Designation of the Purchaser                                                              4
(D)    Effect of the Purchase Option and NAI's Initial Remarketing Rights and 
Obligations on Subsequent Title Encumbrances                                              4
(E)    Security for the Purchase Option and NAI's Initial Remarketing Rights and 
Obligations                                                                               4
(F)    Delivery of Books and Records If BNPLC Retains the Property                               5

2       NAI's RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE                                          5
(A)    NAI's Extended Right to Remarket                                                          5
(B)    Definition of Minimum Extended Remarketing Price                                          5
(C)    BNPLC's Right to Sell                                                                     6
(D)    NAI's Right to Excess Sales Proceeds                                                      7
(E)    Permitted Transfers During NAI's Extended Remarketing Period                              7

3       TERMS OF CONVEYANCE UPON PURCHASE                                                                7

4       SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC                          7
(A)    Status of this Agreement Generally                                                        7
(B)    Intentionally Deleted.                                                                    8
(C)    Intentionally Deleted                                                                     8
(D)    Automatic Termination of NAI's Rights                                                     8
(E)    Termination of NAI's Extended

Remarketing Rights to Permit a Sale by BNPLC                8
(F)    Payment Only to BNPLC                                                                     9
(G)    Remedies Under the Other Operative Documents                                              9
(H)    Occupancy by NAI Prior to Closing of a Sale                                               9

5       SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS                                                  9

6       CERTAIN REMEDIES CUMULATIVE                                                                     10

7       ATTORNEYS' FEES AND LEGAL EXPENSES                                                              10

8       ESTOPPEL CERTIFICATE                                                                            10

9       SUCCESSORS AND ASSIGNS                                                                          10

8       GROUND LEASE TERM AND EARLY TERMINATION BY BNPLC                                                 2

3

9       NO OTHER GROUND LEASE TERMINATION                                                                2

10      GROUND LEASE RENT                                                                                3

11      USE OF GL PROPERTY                                                                               3
(A)    Permitted Uses and Construction of Improvements                                           3
(B)    Cooperation by Lessor and its Affiliates                                                  3
(C)    Title to Improvements                                                                     3

12      ASSIGNMENT AND SUBLETTING; PASS THROUGH OF BNPLC's LIABILITY INSURANCE AND INDEMNITY
RIGHTS                                                                                           4

13      REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR                                              4
(A)    Title to the Property                                                                     4
(B)    Modification of Permitted Encumbrances and Development Documents                          5
(C)    Performance and Preservation of the Development Documents and Permitted 
Encumbrances for the Benefit of BNPLC                                                     5

14      INSURANCE AND CONDEMNATION                                                                       5
(A)    Entitlement to Insurance and Condemnation Proceeds                                        5
(B)    Collection of Insurance Proceeds                                                          5
(C)    Collection of Condemnation Proceeds                                                       6

15      LEASEHOLD MORTGAGES                                                                              6

16      EVENTS OF DEFAULT                                                                                7
(A)    Definition of Ground Lease Default                                                        7
(B)    Remedy                                                                                    7

17      QUIET ENJOYMENT                                                                                  8

18      ESTOPPEL CERTIFICATE                                                                             8

19      OPTION TO REPURCHASE                                                                             8

Exhibits and Schedules

2

4
Exhibit A            Legal Description

Exhibit B            Requirements Re: Form of Grant Deed and Ground Lease

Exhibit C            Bill of Sale and Assignment

Exhibit D            Acknowledgment and Disclaimer

Exhibit E            Secretary's Certificate

Exhibit F            Certificate Concerning Tax Withholding

3

5
PURCHASE AGREEMENT
(PHASE III - LAND)

This PURCHASE AGREEMENT (PHASE III - LAND) (this "AGREEMENT"), by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and NETWORK
APPLIANCE, INC., a California corporation ("NAI"), is made and dated as of
[EFFECTIVE DATE], the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Agreement are intended to have the
meanings assigned to them in the Common Definitions and Provisions Agreement
(Phase I - Land) executed by BNPLC and NAI contemporaneously with this
Agreement. By this reference, the Common Definitions and Provisions Agreement
(Phase III - Land) is incorporated into and made a part of this Agreement for
all purposes.)

RECITALS

Pursuant to the Existing Contracts, which cover the Land described in
Exhibit A, BNPLC is acquiring the Land and any appurtenances thereto from Seller
contemporaneously with the execution of this Agreement. Pursuant to the Lease
Agreement (Phase III - Land) executed by BNPLC and NAI contemporaneously with
this Agreement (the "LAND LEASE"), BNPLC is leasing the Land to NAI. (All of
BNPLC's interests, including those created by the documents delivered at the
closing under the Existing Contracts, in the Land and in all other real and
personal property from time to time covered by the Land Lease and included
within the "Property" as defined therein are hereinafter collectively referred
to as the "PROPERTY". The Property does not include the Improvements, it being
understood that the Other Purchase Agreement constitutes a separate agreement
providing for the possible sale of the Improvements and the appurtenances
thereto, and only the Improvements and the appurtenances thereto, from BNPLC to
NAI or a third party designated by NAI.)

NAI and BNPLC have reached agreement upon the terms and conditions upon
which NAI will purchase or arrange for the purchase of the Property, and by this
Agreement they desire to evidence such agreement.

AGREEMENTS

1       NAI's OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE.

(A)     Right to Purchase; Right and Obligation to Remarket . Whether or not an
Event of Default shall have occurred and be continuing or the Land Lease shall
have been terminated, but subject to Paragraph below: 

(1)     NAI shall have the right (the "PURCHASE OPTION") to purchase or
cause an Affiliate of NAI to purchase the Property and BNPLC's interest
in Escrowed Proceeds, if any, on the Designated Sale Date for a cash
price equal to the Break Even Price (as defined below).

(2)     If neither NAI nor an Affiliate of NAI purchases the Property
and BNPLC's interest in any Escrowed Proceeds on the Designated Sale
Date as provided in the preceding subparagraph 1(A)(1), then NAI shall
have the following rights and obligations (collectively, "NAI'S INITIAL
REMARKETING RIGHTS AND OBLIGATIONS"):

(a)     First, NAI shall have the right (but not the obligation)
to cause an Applicable Purchaser who is not an Affiliate of NAI
to purchase the Property and BNPLC's interest in any Escrowed
Proceeds on the Designated 

4

6
Sale Date for a cash purchase price (the "THIRD PARTY PRICE")
determined as provided below. If, however, the Break Even Price
exceeds the sum of any Third Party Price tendered or to be
tendered to BNPLC by an Applicable Purchaser and any
Supplemental Payment paid by NAI as described below, then BNPLC
may affirmatively elect to decline such tender from the
Applicable Purchaser and to keep the Property and any Escrowed
Proceeds rather than sell to the Applicable Purchaser pursuant
to this subparagraph (a "VOLUNTARY RETENTION OF THE PROPERTY").

(b)     Second, if the Third Party Price actually paid by an
Applicable Purchaser to BNPLC on the Designated Sale Date
exceeds the Break Even Price, NAI shall be entitled to such
excess, subject, however, to BNPLC's right to offset against
such excess any and all sums that are then due from NAI to BNPLC
under the other Operative Documents.

(c)     Third, if for any reason whatsoever (including a
Voluntary Retention of the Property or a decision by NAI not to
exercise its right to purchase or cause an Applicable Purchaser
to purchase from BNPLC as described above) neither NAI nor an
Applicable Purchaser pays a net cash price to BNPLC on the
Designated Sale Date equal to or in excess of the Break Even
Price in connection with a sale of the Property and BNPLC's
interest in any Escrowed Proceeds pursuant to this Agreement,
then NAI shall have the obligation to pay to BNPLC on the
Designated Sale Date a supplemental payment (the "SUPPLEMENTAL
PAYMENT") equal to the lesser of (1) the amount by which the
Break Even Price exceeds such net cash price (if any) actually
received by BNPLC on the Designated Sale Date (such excess being
hereinafter called a "DEFICIENCY") or (2) the Maximum
Remarketing Obligation. As used herein, the "MAXIMUM REMARKETING
OBLIGATION" means a dollar amount determined in accordance with
the following provisions:

1)      The "MAXIMUM REMARKETING OBLIGATION" will equal
the product of (i) Stipulated Loss Value on the
Designated Sale Date, times (ii) 100% minus the Residual
Risk Percentage, provided that both of the following
conditions are satisfied:

(x)     NAI shall not have elected to accelerate
the Designated Sale Date as provided in clause (2) of
the definition of Designated Sale Date in the Common
Definitions and Provisions Agreement (Phase III - Land).

(y)     No Event of Default, other than an Issue
97-1 Non-performance-related Subjective Event of
Default, shall occur on or be continuing on the
Designated Sale Date.

2)      If either of the conditions listed in
subparagraph 1) preceding are not satisfied, the
"MAXIMUM REMARKETING OBLIGATION" will equal the Break
Even Price.

If any Supplemental Payment or other amount payable to BNPLC pursuant to this
subparagraph 1(A) is not actually paid to BNPLC on the Designated Sale Date, NAI
shall pay interest on the past due amount computed at the Default Rate from the
Designated Sale Date.

(B)     Determinations Concerning Price .

(1)     Determination of the Break Even Price. As used herein, "BREAK
EVEN PRICE" means an amount equal, on the Designated Sale Date, to
Stipulated Loss Value, plus all out-of-pocket costs and expenses
(including appraisal costs, withholding taxes (if any) not constituting
Excluded Taxes, and Attorneys' Fees) incurred by BNPLC in connection
with any sale of BNPLC's interests in the Property under this Agreement
or in connection with collecting payments due hereunder, but less the
aggregate amounts (if any) of Direct Payments to Participants and
Deposit Taker Losses.

2

7
(2)     Determination of Third Party Price. The Third Party Price
required of any Applicable Purchaser purchasing from BNPLC under
subparagraph 1(A)2(a) will be determined as follows:

(a)     NAI may give a notice (a "REMARKETING NOTICE") to BNPLC
and to each of the Participants no earlier than one hundred
twenty days before the Designated Sale Date and no later than
ninety days before the Designated Sale Date, specifying an
amount as the Third Party Price that NAI believes in good faith
to constitute reasonably equivalent value for the Property and
any Escrowed Proceeds. Once given, a Remarketing Notice shall
not be rescinded or modified without BNPLC's written consent.

(b)     If BNPLC believes in good faith that the Third Party
Price specified by NAI in a Remarketing Notice does not
constitute reasonably equivalent value for the Property and any
Escrowed Proceeds, BNPLC may at any time before sixty days prior
to the Designated Sale Date respond to the Remarketing Notice
with a notice back to NAI, objecting to the Third Party Price so
specified by NAI. If BNPLC receives a Remarketing Notice, yet
does not respond with an objection as provided in the preceding
sentence, the Third Party Price suggested by NAI in the
Remarketing Notice will be the Third Party Price for purposes of
this Agreement. If, however, BNPLC does respond with an
objection as provided in this subparagraph, and if NAI and BNPLC
do not otherwise agree in writing upon a Third Party Price, then
the Third Party Price will be the lesser of (I) fair market
value of the Property, plus the amount of any Escrowed Proceeds,
as determined by a professional independent appraiser
satisfactory to BNPLC, or (II) the Break Even Price.

(c)     If for any reason, including an acceleration of the
Designated Sale Date as provided in the definition thereof in
the Common Definitions and Provisions Agreement (Phase III -
Land), NAI does not deliver a Remarketing Notice to BNPLC within
the time period specified above, then the Third Party Price will
be an amount determined in good faith by BNPLC as constituting
reasonably equivalent value for the Property and any Escrowed
Proceeds, but in no event more than the Break Even Price.

If any payment to BNPLC by an Applicable Purchaser hereunder is held to
constitute a preference or a voidable transfer under Applicable Law, or
must for any other reason be refunded by BNPLC to the Applicable
Purchaser or to another Person, and if such payment to BNPLC reduced or
had the effect of reducing a Supplemental Payment or increased or had
the effect of increasing any excess sale proceeds paid to NAI pursuant
to subparagraph 1(A)(2)(b) or pursuant to subparagraph 2(D), then NAI
shall pay to BNPLC upon demand an amount equal to the reduction of the
Supplemental Payment or to the increase of the excess sale proceeds paid
to NAI, as applicable, and this Agreement shall continue to be effective
or shall be reinstated as necessary to permit BNPLC to enforce its right
to collect such amount from NAI.

(C)     Designation of the Purchaser . To give BNPLC the opportunity before the
Designated Sale Date to prepare the deed and other documents that BNPLC must
tender pursuant to Paragraph 3 (collectively, the "SALE CLOSING DOCUMENTS"), NAI
must, by a notice to BNPLC given at least seven days prior to the Designated
Sale Date, specify irrevocably, unequivocally and with particularity the party
who will purchase the Property in order to satisfy the obligations of NAI set
forth in subparagraph 1(A). If for any reason NAI fails to so specify a party
who will in accordance with the terms and conditions set forth herein purchase
the Property (be it NAI itself, an Affiliate of NAI or another Applicable
Purchaser), BNPLC shall be entitled to postpone the tender of the Sale Closing
Documents until a date after the Designated Sale Date and not more than twenty
days after NAI finally does so specify a party, but such postponement will not
relieve or postpone the obligation of NAI to make a Supplemental Payment on the
Designated Sale Date as provided in Paragraph 1(A)(2)(c).

(D)     Effect of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations on Subsequent Title Encumbrances . Any conveyance of the Property to
NAI or any Applicable Purchaser pursuant to this Paragraph 1(A) shall cut off
and terminate any interest in the Land or other Property claimed by, through or
under BNPLC, including any interest claimed by the Participants and including
any Liens Removable by BNPLC (such as, but not limited to, any judgment liens
established against the Property because of a judgment rendered against BNPLC
and any leasehold or other interests conveyed by 

3

8
BNPLC in the ordinary course of BNPLC's business), but not including personal
obligations of NAI to BNPLC under the Land Lease or other Operative Documents
(including obligations arising under the indemnities therein). Anyone accepting
or taking any interest in the Property by or through BNPLC after the date of
this Agreement shall acquire such interest subject to the Purchase Option and
NAI's Initial Remarketing Rights and Obligations. Further, NAI and any
Applicable Purchaser shall be entitled to pay any payment required by this
Agreement for the purchase of the Property directly to BNPLC notwithstanding any
prior conveyance or assignment by BNPLC, voluntary or otherwise, of any right or
interest in this Agreement or the Property, and neither NAI nor any Applicable
Purchaser shall be responsible for the proper distribution or application of any
such payments by BNPLC; and any such payment to BNPLC shall discharge the
obligation of NAI to cause such payment to all Persons claiming an interest in
such payment. Contemporaneously with the execution of this Agreement, the
parties shall record a memorandum of this Agreement for purposes of effecting
constructive notice to all Persons of NAI's rights under this Agreement,
including its rights under this subparagraph.

(E)     Security for the Purchase Option and NAI's Initial Remarketing Rights
and Obligations . To secure BNPLC's obligation to sell the Property pursuant to
this Paragraph and to pay any damages to NAI caused by a breach of such
obligations, including any such breach caused by a rejection or termination of
this Agreement in any bankruptcy or insolvency proceeding instituted by or
against BNPLC, as debtor, BNPLC does hereby grant to NAI a lien and security
interest against all rights, title and interests of BNPLC from time to time in
and to the Land and other Property. NAI may enforce such lien and security
interest judicially after any such breach by BNPLC, but not otherwise.
Contemporaneously with the execution of this Agreement, NAI and BNPLC will
execute a memorandum of this Agreement which is in recordable form and which
specifically references the lien granted in this subparagraph, and NAI shall be
entitled to record such memorandum at any time prior to the Designated Sale
Date.

(F)     Delivery of Books and Records If BNPLC Retains the Property . Unless NAI
or its Affiliate or another Applicable Purchaser purchases the Property pursuant
to Paragraph 1(A), promptly after the Designated Sale Date NAI shall deliver to
BNPLC copies of books and records of NAI which will be necessary or useful to
any future owner's or occupant's use of the Property.

2       NAI's RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE.

(A)     NAI's Extended Right to Remarket . During the two years following the
Designated Sale Date ("NAI's EXTENDED REMARKETING PERIOD"), NAI shall have the
right ("NAI'S EXTENDED REMARKETING RIGHT") to cause an Applicable Purchaser who
is not an Affiliate of NAI to purchase the Property for a cash purchase price
not below the lesser of (I) the Minimum Extended Remarketing Price (as defined
below), or (II) if applicable, the Third Party Target Price (as defined below)
specified in any Third Party Sale Notice (as defined below) given by BNPLC
pursuant to subparagraph 2(C)(2)within the ninety days prior to the date (the
"FINAL SALE DATE") upon which BNPLC receives such purchase price from the
Applicable Purchaser. NAI's Extended Remarketing Right shall, however, be
subject to all of the following conditions:

(1)     The Property and BNPLC's interest in Escrowed Proceeds, if any,
shall not have been sold on the Designated Sale Date as provided in
Paragraph 1.

(2)     No Voluntary Retention of the Property shall have occurred as
described in subparagraph 1(A)(2)(a).

(3)     NAI's Extended Remarketing Right shall not have been terminated
pursuant to subparagraph 4(D) below because of NAI's failure to make any
Supplemental Payment required on the Designated Sale Date.

(4)     NAI's Extended Remarketing Right shall not have been terminated
by BNPLC pursuant to subparagraph 4(E) below to facilitate BNPLC's sale
of the Property to a third party in accordance with subparagraph 2(C).

4

9
(5)     At least thirty days prior to the Final Sale Date, NAI shall
have notified BNPLC of (x) the date proposed by NAI as the Final Sale
Date (which must be a Business Day), (y) the full legal name of the
Applicable Purchaser and such other information as will be required to
prepare the Sale Closing Documents, and (z) the amount of the purchase
price that the Applicable Purchaser will pay (consistent with the
minimum required pursuant to the other provisions of this subparagraph
2(A)) for the Property.

(B)     Definition of Minimum Extended Remarketing Price . As used herein,
"MINIMUM EXTENDED REMARKETING PRICE" means an amount equal to the sum of the
following:

(1)     the amount by which the Break Even Price computed on the
Designated Sale Date exceeds any Supplemental Payment actually paid to
BNPLC on the Designated Sale Date, together with interest on such excess
computed at the Default Rate from the period commencing on the
Designated Sale Date and ending on the Final Sale Date, plus

(2)     all out-of-pocket costs and expenses (including withholding
taxes [if any], other than Excluded Taxes, and Attorneys' Fees) incurred
by BNPLC in connection with the sale to the Applicable Purchaser, to the
extent not already included in the computation of Break Even Price, and
plus

(3)     the sum of all Impositions, insurance premiums and other Losses
of every kind suffered or incurred by BNPLC or any other Interested
Party with respect to the ownership, operation or maintenance of the
Property on or after the Designated Sale Date (except to the extent
already reimbursed by any lessee of the Property after the Designated
Sale Date), together with interest on such Impositions, insurance
premiums and other Losses computed at the Default Rate from the date
paid or incurred to the Final Sale Date.

If, however, Losses described in the preceding clause (3) consist of claims
against BNPLC or another Interested Party that have not been liquidated prior to
the Final Sale Date (and, thus, such Losses have yet to be fixed in amount as of
the Final Sale Date), then NAI may elect to exclude any such Losses from the
computation of the Minimum Extended Remarketing Price by providing to BNPLC, for
the benefit of BNPLC and other Interested Parties, a written agreement to
indemnify and defend BNPLC and other Interested Parties against such Losses. To
be effective hereunder for purposes of reducing the Minimum Extended Remarketing
Price (and, thus, the Break Even Price), any such written indemnity must be
fully executed and delivered by NAI on or prior to the Final Sale Date, must
include provisions comparable to subparagraphs 5(c)(ii), (iii), (iv) and (v) of
the Land Lease and otherwise must be in form and substance satisfactory to
BNPLC.

(C)     BNPLC's Right to Sell . After the Designated Sale Date, if the Property
has not already been sold by BNPLC pursuant to Paragraph or this Paragraph ,
BNPLC shall have the right to sell the Property or offer the Property for sale
to any third party on any terms believed to be appropriate by BNPLC in its sole
good faith business judgment; provided, however, that so long as the conditions
to NAI's Extended Remarketing Rights specified in subparagraph continue to be
satisfied:

(1)     BNPLC shall not sell the Property to an Affiliate of BNPLC on
terms less favorable than those which BNPLC would require from a
prospective purchaser not an Affiliate of BNPLC;

(2)     If BNPLC receives or desires to make a written proposal (whether
in the form of a "letter of intent" or other nonbinding expression of
interest or in the form of a more definitive purchase and sale
agreement) for a sale of the Property to a prospective purchaser (a
"THIRD PARTY SALE PROPOSAL"), and if on the basis of such Third Party
Sale Proposal BNPLC expects to enter into or to pursue negotiations for
a definitive purchase and sale agreement with the prospective purchaser,
then prior to executing any such definitive agreement, BNPLC shall
submit the Third Party Sale Proposal to NAI with a notice (the "THIRD
PARTY SALE NOTICE") explaining that (A) BNPLC is then prepared to accept
a price not below an amount specified in such Third Party Sale Notice
(the "THIRD PARTY TARGET PRICE") if BNPLC and the prospective purchaser
reach agreement on other terms and conditions to be incorporated into a
definitive purchase and

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sale agreement, and (B) NAI's Extended Remarketing Right may be
terminated pursuant to subparagraph 4(E) of this Agreement unless NAI
causes an Applicable Purchaser to consummate a purchase of the Property
pursuant to this Paragraph within ninety days after the date of such
Third Party Sale Notice.

(D)     NAI's Right to Excess Sales Proceeds . If the cash price actually paid
by any third party purchasing the Property from BNPLC during NAI's Extended
Remarketing Period, including any price paid by an Applicable Purchaser
purchasing from BNPLC pursuant to this Paragraph 2, exceeds the Minimum Extended
Remarketing Price, then NAI shall be entitled to the excess; provided, that
BNPLC may offset and retain from the excess any and all sums that are then due
and unpaid from NAI to BNPLC under any of the Operative Documents.

(E)     Permitted Transfers During NAI's Extended Remarketing Period . Any
"Permitted Transfer" described in clause (6) of the definition thereof in the
Common Definitions and Provisions Agreement (Phase III - Land) to an Affiliate
of BNPLC or that covers BNPLC's entire interest in the Land will be subject to
NAI's Extended Remarketing Right if, at the time of the Permitted Transfer,
NAI's Extended Remarketing Right has not expired or been terminated as provided
herein. Any other Permitted Transfer described in clause (6) of the definition
thereof, however, will not be subject to NAI's Extended Remarketing Right. Thus,
for example, BNPLC's conveyance of a utility easement or space lease more than
thirty days after the Designated Sale Date to a Person not an Affiliate of BNPLC
shall not be subject to NAI's Extended Remarketing Right, though following the
conveyance of the lesser estate, NAI's Extended Remarketing Right may continue
to apply to BNPLC's remaining interest in the Land and any Personal Property.

3       TERMS OF CONVEYANCE UPON PURCHASE. As necessary to consummate any sale
of the Property to NAI or an Applicable Purchaser pursuant to this Agreement,
BNPLC must, subject to any postponement permitted by subparagraph , promptly
after the tender of the purchase price and any other payments to BNPLC required
pursuant to Paragraph or Paragraph , as applicable, convey all of BNPLC's right,
title and interest in the Land and other Property to NAI or the Applicable
Purchaser, as the case may be, by BNPLC's execution, acknowledgment (where
appropriate) and delivery of the Sale Closing Documents. Such conveyance by
BNPLC will be subject only to the Permitted Encumbrances and any other
encumbrances that do not constitute Liens Removable by BNPLC. However, such
conveyance shall not include the rights of BNPLC or other Interested Parties
under the indemnities provided in the Operative Documents, including rights to
any payments then due from NAI under the indemnities or that may become due
thereafter because of any expense or liability incurred by BNPLC or another
Interested Party resulting in whole or in part from events or circumstances
occurring or alleged to have occurred before such conveyance. All costs, both
foreseen and unforeseen, of any purchase by NAI or an Applicable Purchaser
hereunder shall be the responsibility of the purchaser. The Sale Closing
Documents used to accomplish such conveyance shall consist of the following: (1)
a Corporation Grant Deed in the form attached as Exhibit B-1 or Exhibit B-2 or
Exhibit B-4, as required by Exhibit B, (2) if required by Exhibit B, a Ground
Lease in the form attached as Exhibit B-3, which NAI or the Applicable Purchase
must execute and return to BNPLC, (3) a Bill of Sale and Assignment in the form
attached as Exhibit C, (4) an Acknowledgment of Disclaimer of Representations
and Warranties, in the form attached as Exhibit D, which NAI or the Applicable
Purchaser must execute and return to BNPLC, (5) a Secretary's Certificate in the
form attached as Exhibit E, and (6) a certificate concerning tax withholding in
the form attached as Exhibit F. If for any reason BNPLC fails to tender the Sale
Closing Documents as required by this Paragraph 3, BNPLC may cure such refusal
at any time before thirty days after receipt of a demand for such cure from NAI.

4       SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC.

(A)     Status of this Agreement Generally . Except as expressly provided
herein, this Agreement shall not terminate; nor shall NAI have any right to
terminate this Agreement; nor shall NAI be entitled to any reduction of the
Break Even Price, any Deficiency, the Maximum Remarketing Obligation, any
Supplemental Payment or the Minimum Extended Remarketing Price hereunder; nor
shall the obligations of NAI to BNPLC under Paragraph be affected, by reason of
(i) any damage to or the destruction of all or any part of the Property from
whatever cause (though it is understood that NAI will receive any remaining
Escrowed Proceeds yet to be applied as provided in the Land Lease that may
result from such damage 

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if NAI purchases the Property and the Escrowed Proceeds as herein provided),
(ii) the taking of or damage to the Property or any portion thereof by eminent
domain or otherwise for any reason (though it is understood that NAI will
receive any remaining Escrowed Proceeds yet to be applied as provided in the
Land Lease that may result from such taking or damage if NAI purchases the
Property and the Escrowed Proceeds as herein provided), (iii) the prohibition,
limitation or restriction of NAI's use of all or any portion of the Property or
any interference with such use by governmental action or otherwise, (iv) any
eviction of NAI or any party claiming under NAI by paramount title or otherwise,
(v) NAI's prior acquisition or ownership of any interest in the Property, (vi)
any default on the part of BNPLC under this Agreement, the Land Lease or any
other agreement to which BNPLC is a party, or (vii) any other cause, whether
similar or dissimilar to the foregoing, any existing or future law to the
contrary notwithstanding. It is the intention of the parties hereto that the
obligations of NAI to make payment to BNPLC hereunder shall be separate and
independent covenants and agreements from BNPLC's obligations under this
Agreement or any other agreement between BNPLC and NAI; provided, however, that
nothing in this subparagraph shall excuse BNPLC from its obligation to tender
the Sale Closing Documents in substantially the form attached hereto as exhibits
when required by Paragraph 3. Further, nothing in this subparagraph shall be
construed as a waiver by NAI of any right NAI may have at law or in equity to
the following remedies, whether because of BNPLC's failure to remove a Lien
Removable by BNPLC or because of any other default by BNPLC under this
Agreement: (i) the recovery of monetary damages, (ii) injunctive relief in case
of the violation, or attempted or threatened violation, by BNPLC of any of the
express covenants, agreements, conditions or provisions of this Agreement which
are binding upon BNPLC, or (iii) a decree compelling performance by BNPLC of any
of the express covenants, agreements, conditions or provisions of this Agreement
which are binding upon BNPLC.

(B)     Intentionally Deleted.

(C)     Intentionally Deleted .

(D)     Automatic Termination of NAI's Rights . Without limiting BNPLC's right
to enforce NAI's obligation to pay any Supplemental Payment or other amounts
required by this Agreement, the rights of NAI (to be distinguished from the
obligations of NAI) included in NAI's Initial Remarketing Rights and
Obligations, the Purchase Option and NAI's Extended Remarketing Rights shall all
terminate automatically if NAI shall fail to pay the full amount of any
Supplemental Payment required by subparagraph 1(A)(2)(c) on the Designated Sale
Date or if BNPLC shall elect a Voluntary Retention of the Property as provided
in subparagraph 1(A)(2)(a). However, notwithstanding anything in this
subparagraph to the contrary, even after a failure to pay any required
Supplemental Payment on the Designated Sale Date, NAI may nonetheless tender to
BNPLC the full Break Even Price and all amounts then due under the Operative
Documents, together with interest on the total Break Even Price computed at the
Default Rate from the Designated Sale Date to the date of tender, on any
Business Day within thirty days after the Designated Sale Date, and if presented
with such a tender within thirty days after the Designated Sale Date, BNPLC must
accept it and promptly thereafter deliver any Escrowed Proceeds and the Sale
Closing Documents listed in Paragraph 3 to NAI.

(E)     Termination of NAI's Extended Remarketing Rights to Permit a Sale by
BNPLC . At any time more than ninety days after BNPLC has delivered a Third
Party Sale Notice to NAI as described in subparagraph 2(C)(2), BNPLC may
terminate NAI's Extended Remarketing Rights contemporaneously with the
consummation of a sale of the Property by BNPLC to any third party (be it the
prospective purchaser named in the Third Party Sale Notice or another third
party) at a price equal to or in excess of the Third Party Target Price
specified in the Third Party Sale Notice, so as to permit the sale of the
Property unencumbered by NAI's Extended Remarketing Rights.

(F)     Payment Only to BNPLC . All amounts payable under this Agreement by NAI
and, if applicable, by an Applicable Purchaser must be paid directly to BNPLC,
and no payment to any other party shall be effective for the purposes of this
Agreement. In addition to the payments required under subparagraph 1A, on the
Designated Sale Date NAI must pay all amounts then due to BNPLC under the Land
Lease or other Operative Documents.

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(G)     Remedies Under the Other Operative Documents . No repossession of or
re-entering upon the Property or exercise of any other remedies available to
BNPLC under the Land Lease or other Operative Documents shall terminate NAI's
rights or obligations hereunder, all of which shall survive BNPLC's exercise of
remedies under the other Operative Documents. NAI acknowledges that the
consideration for this Agreement is separate and independent of the
consideration for the Land Lease and the Closing Certificate, and NAI's
obligations hereunder shall not be affected or impaired by any event or
circumstance that would excuse NAI from performance of its obligations under
such other Operative Documents.

(H)     Occupancy by NAI Prior to Closing of a Sale . Prior to the closing of
any sale of the Property to NAI or an Applicable Purchaser hereunder, NAI's
occupancy of the Land and its use of the Property shall continue to be subject
to the terms and conditions of the Land Lease, including the terms setting forth
NAI's obligation to pay rent, prior to any termination or expiration of the Land
Lease pursuant to its express terms and conditions.

5       SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS. NAI's obligations under
this Agreement are secured by the Pledge Agreement, reference to which is hereby
made for a description of the Collateral covered thereby and the rights and
remedies provided to BNPLC thereby. Although the collateral agent appointed for
BNPLC as provided in the Pledge Agreement shall be entitled to hold all
Collateral as security for the full and faithful performance by NAI of NAI's
covenants and obligations under this Agreement, the Collateral shall not be
considered an advance payment of the Break Even Price or any Supplemental
Payment or a measure of BNPLC's damages should NAI breach this Agreement. If NAI
does breach this Agreement and fails to cure the same within any time specified
herein for the cure, BNPLC may, from time to time, without prejudice to any
other remedy and without notice to NAI, require the collateral agent to
immediately apply the proceeds of any disposition of the Collateral (and any
cash included in the Collateral) to amounts then due hereunder from NAI. If by a
Permitted Transfer BNPLC conveys its interest in the Property before the
Designated Sale Date, BNPLC may also assign BNPLC's interest in the Collateral
to the transferee. BNPLC shall be entitled to return any Collateral not sold or
used to satisfy the obligations secured by the Pledge Agreement directly to NAI
notwithstanding any prior actual or attempted conveyance or assignment by NAI,
voluntary or otherwise, of any right to receive the same; neither BNPLC nor the
collateral agent named in the Pledge Agreement shall be responsible for the
proper distribution or application by NAI of any such Collateral returned to
NAI; and any such return of Collateral to NAI shall discharge any obligation of
BNPLC to deliver such Collateral to all Persons claiming an interest in the
Collateral. Further, BNPLC shall be entitled to deliver any Escrowed Proceeds it
holds on the Designated Sale Date directly to NAI or to any Applicable Purchaser
purchasing BNPLC's interest in the Property and the Escrowed Proceeds pursuant
to this Agreement notwithstanding any prior actual or attempted conveyance or
assignment by NAI, voluntary or otherwise, of any right to receive the same;
BNPLC shall not be responsible for the proper distribution or application by NAI
or any Applicable Purchaser of any such Escrowed Proceeds paid over to NAI or
the Applicable Purchaser; and any such payment of Escrowed Proceeds to NAI or an
Applicable Purchaser shall discharge any obligation of BNPLC to deliver the same
to all Persons claiming an interest therein.

6       CERTAIN REMEDIES CUMULATIVE. No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy BNPLC
has with respect to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute. In addition to other
remedies available under this Agreement, either party shall be entitled, to the
extent permitted by applicable law, to a decree compelling performance of any of
the other party's agreements hereunder.

7       ATTORNEYS' FEES AND LEGAL EXPENSES. If either party to this Agreement
commences any legal action or other proceeding to enforce any of the terms of
this Agreement, or because of any breach by the other party or dispute
hereunder, the party prevailing in such action or proceeding shall be entitled
to recover from the other party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is prosecuted to a
final judgment. Any such Attorneys' Fees incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
such judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment.

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8       ESTOPPEL CERTIFICATE. Upon request by BNPLC, NAI shall execute,
acknowledge and deliver a written statement certifying that this Agreement is
unmodified and in full effect (or, if there have been modifications, that this
Agreement is in full effect as modified, and setting forth such modification)
and either stating that no default exists hereunder or specifying each such
default of which NAI has knowledge. Any such statement may be relied upon by any
Participant or prospective purchaser or assignee of BNPLC with respect to the
Property.

9       SUCCESSORS AND ASSIGNS. The terms, provisions, covenants and conditions
hereof shall be binding upon NAI and BNPLC and their respective permitted
successors and assigns and shall inure to the benefit of NAI and BNPLC and all
permitted transferees, mortgagees, successors and assignees of NAI and BNPLC
with respect to the Property; provided, that (A) the rights of BNPLC hereunder
shall not pass to NAI or any Applicable Purchaser or any subsequent owner
claiming through NAI or an Applicable Purchaser, (B) BNPLC shall not assign this
Agreement or any rights hereunder except pursuant to a Permitted Transfer, and
(C) NAI shall not assign this Agreement or any rights hereunder without the
prior written consent of BNPLC. 

[Signature pages follow.]

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IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be
executed as of [EFFECTIVE DATE].

"NAI"

NETWORK APPLIANCE, INC.

By:______________________________________
Name:_________________________________
Title:________________________________

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[Continuation of signature pages to Purchase Agreement (Phase III - Land) dated
to be effective [EFFECTIVE DATE]]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Henry Setina, Vice President

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EXHIBIT A

LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38 degrees 52'
02" East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.

PARCEL TWO:

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Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" West, through a central angle of 52 degrees
21' 36" for an arc length of 12.79 feet; thence South 51 degrees 07' 58" East
85.87 feet; thence South 38 degrees 52' 02" West 252.96 feet; North 51 degrees
07' 58" West 41.72 feet; thence Southwesterly along a non-tangent curve to the
left with a radius of 20.00 feet, from which a radial line bears North 10
degrees 35' 40" West, through a central angle of 40 degrees 32' 18" for an arc
length of 14.15 feet; thence South 38 degrees 52' 02" West 29.48 feet; thence
Southerly along a tangent curve to the left with a 

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radius of 20.00 feet, through a central angle of 60 degrees 45' 15" for an arc
length 21.21 feet to a point on said Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District; thence
Northwesterly along said Northeasterly line along a non-tangent curve to the
left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

APN: 110-32-010
ARB: 110-03-x066

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EXHIBIT B

REQUIREMENTS RE: FORM OF GRANT DEED AND GROUND LEASE

The form of deed to be used to convey BNPLC's interest in the Land to NAI or an
Applicable Purchaser will depend upon whether BNPLC's interest in the
Improvements has been or is being conveyed at the same time to the same party.

If BNPLC's interests in BOTH the Land and the Improvements are to be conveyed to
NAI or an Applicable Purchaser at the same time, because a sale under this
Purchase Agreement and a sale under the Other Purchase Agreement (covering the
Improvements) are being consummated at the same time and to the same party, then
the one deed in form attached as Exhibit B-1 will be used to convey both.

If, however, a sale of BNPLC's interest in the Improvements pursuant to the
Other Purchase Agreement has not been consummated before, and is not being
consummated contemporaneously with the sale of BNPLC's interest in the Land
under this Agreement, then BNPLC's interest in the Land will be conveyed by a
deed in the from attached as Exhibit B-2, and BNPLC and the grantee under such
deed shall, as a condition to BNPLC's obligation to deliver the deed, execute
and deliver a Ground Lease covering the Land in the form attached hereto as
Exhibit B-3.

Finally, BNPLC's interest in the Land will be conveyed by a deed in the from
attached as Exhibit B-4 if BNPLC's interest in the Improvements has been sold
pursuant to the Other Purchase Agreement before a sale of BNPLC's interest in
the Land under this Agreement, or if BNPLC's interest in the Improvements is
being sold contemporaneously with a sale of BNPLC's interest in the Land, but
the purchaser of the Improvements is not the same as the purchaser of the Land.

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EXHIBIT B-1

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Land and Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof and all improvements on such land, together with the
any other right, title and interest of Grantor in and to any easements,
rights-of-way, privileges and other rights appurtenant to such land or the
improvements thereon; provided, however, that this grant is subject to the
encumbrances described on Annex B (the "Permitted Encumbrances"). Grantee hereby
assumes the obligations (including any personal obligations) of Grantor, if any,
created by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the land
or improvements conveyed by this deed.

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BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, ___________________, personally 
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, ___________________, personally 
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature_________________________

2

22
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28"

3

23
an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" 

4

24
West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

APN: 110-32-010
ARB: 110-03-x066

5

25
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Land) incorporated by reference into the Lease Agreement
(Phase III - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.  TAXES for the fiscal year 1999-2000, 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
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 430, Official
Records
Affects           : A strip of land 18 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

4.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Public utilities
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 450, Official
Records
Affects           : A strip of land 7 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

5.  AGREEMENT on the terms and conditions contained therein,
For               : Construction of additional storm drainage system
facilities
Between           : City of Sunnyvale
And               : Moffett Park Associates, a joint venture partnership
Recorded          : November 2, 1966 in Book 7552, page 688, Official 
Records.

AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

26
NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.  Covenants, Conditions and Restrictions in the Declaration of Protective
Covenants - Moffett 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 Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Streets and street improvements
Granted to        : City of Sunnyvale
Recorded          : November 16, 1976 in Book C414, page 95, Official
Records
Affects           : The most Westerly corner of said Parcel `A', as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

8.      EASEMENT for the purposes stated herein and incidents thereto
Purpose           : for ingress and egress of motor vehicles
Granted to        : 495 Java Drive Associates, L.P., a California
Limited Partnership
Recorded          : September 16, 1998, under Series No. 14396001, 
Official Records
Affects:          as follows:

All that certain real property situate in the City of Sunnyvale, County of
Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara and a portion of Parcel A, as shown
upon that certain Parcel Map filed for record in Book 216 at Page 2, on
October 25, 1966, in the Office of the Recorder of the County of Santa
Clara, described as follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land described in
the deed to Santa Clara Valley Transit District, recorded October 24, 1997
as Instrument No. 13912192, Official Records in said Office of the Recorder
of the County of Santa Clara, said point lying on the

7

27
Easterly line of said Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet to a point hereafter referred to as Point A; thence North 51
degrees 07' 58" West 12.96 feet; thence South 38 degrees 52' 02" West 64.41
feet; thence Westerly along a tangent curve to the right with a radius of 20.00
feet, through a central angle of 64 degrees 20' 39" for an arc length of 22.46
feet to a point on said Northeasterly line of said parcel of land described in
the deed to Santa Clara Valley Transit District; thence Southeasterly along said
Northeasterly line along a non-tangent curve to the right with a radius of
1002.05 feet, from which a radial line bears North 39 degrees 18' 05" East,
through a central angle of 1 degree 23' 23" for an arc length of 24.30 feet to
the true point of beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65 feet to
the true point of beginning; thence North 51 degrees 07' 58" West 49.68 feet;
thence North 38 degrees 52' 02" Est 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence North 75 degrees 07' 58" West 13.91 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 94.26 feet; thence South 51 degrees
07' 58" East 62.39 feet; thence North 38 degrees 52' 02" East 12.70 feet to the
true point of beginning.

9.  ANY RIGHTS, interests, or claims adverse to those of the vestee herein which
may exist or arise by reason of the following facts shown on a survey plat
entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART
DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998, prepared by Kier
& Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

a.  Concrete walks and concrete berms or landscaping enclosures extend
across the Easterly and Northerly boundary lines of the subject real
property onto adjoining lands.

b.  A wood fence extends across the Easterly boundary line of the subject
real property, onto adjoining land.

c.  Underground gas and electric lines, and storm drains, extend across the
Easterly boundary line of the subject real property, onto or from
adjoining land.

d.  An electric box and an electric vault exist on the Northerly boundary
line of the subject real property.

e.  Construction of certain public improvements is in progress, in the
Southwesterly corner of the subject real property, alongside the
intersection of Java Drive and Geneva Drive.

10. Lease Agreement (Phase III - Land) dated [EFFECTIVE DATE], by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee,
and Lease Agreement (Phase III - Improvements) dated June 16, 1999, by and
between BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as
lessee.

8

28
EXHIBIT B-2

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Land but not the Improvements On the Land)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof (the "Land"), together with the any other right, title
and interest of Grantor in and to any easements, rights-of-way, privileges and
other rights appurtenant to the Land; provided, however, that this grant is
subject to the encumbrances described on Annex B (the "Permitted Encumbrances")
and any reservations or qualifications set forth below. Grantee hereby assumes
the obligations (including any personal obligations) of Grantor, if any, created
by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the Land.

Although this deed conveys Grantor's interest in the Land itself, this deed does
not convey any interest in any buildings or other improvements on the Land
(collectively, "Improvements") or any rights or easements appurtenant to
Improvements. Grantor retains and reserves all right, title and interest of
Grantor in and to Improvements and any rights and easements appurtenant to
Improvements, together with a leasehold estate in and to the Land and any rights
and easements appurtenant to the Land, which leasehold estate will permit the
construction, maintenance and use of Improvements by Grantor and Grantor's
successors and assigns on and subject to the terms and conditions set forth in
the Ground Lease dated of even date herewith, executed by Grantee, as lessor,
and Grantor, as lessee. Reference is made to such Ground Lease, all the terms
and conditions of which are incorporated into this deed as if set forth herein.

9

29
BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, ____________, personally appeared
____________ and ____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, ____________, personally appeared
____________ and ____________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature________________________

2

30
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28"

3

31
an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" 

4

32
West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

APN: 110-32-010
ARB: 110-03-x066

5

33
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Land) incorporated by reference into the Lease Agreement
(Phase III - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.  TAXES for the fiscal year 1999-2000, 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
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 430, Official
Records
Affects           : A strip of land 18 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

4.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Public utilities
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 450, Official
Records
Affects           : A strip of land 7 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

5.  AGREEMENT on the terms and conditions contained therein,
For               : Construction of additional storm drainage system
facilities
Between           : City of Sunnyvale
And               : Moffett Park Associates, a joint venture partnership
Recorded          : November 2, 1966 in Book 7552, page 688, Official
Records.

AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

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NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.  Covenants, Conditions and Restrictions in the Declaration of Protective
Covenants - Moffett 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 Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Streets and street improvements
Granted to        : City of Sunnyvale
Recorded          : November 16, 1976 in Book C414, page 95, Official
Records
Affects           : The most Westerly corner of said Parcel `A', as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

8.      EASEMENT for the purposes stated herein and incidents thereto
Purpose           : for ingress and egress of motor vehicles
Granted to        : 495 Java Drive Associates, L.P., a California
Limited Partnership
Recorded          : September 16, 1998, under Series No. 14396001,
Official Records 
Affects           : as follows:

All that certain real property situate in the City of Sunnyvale, County of
Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara and a portion of Parcel A, as shown
upon that certain Parcel Map filed for record in Book 216 at Page 2, on
October 25, 1966, in the Office of the Recorder of the County of Santa
Clara, described as follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land described in
the deed to Santa Clara Valley Transit District, recorded October 24, 1997
as Instrument No. 13912192, Official Records in said Office of the Recorder
of the County of Santa Clara, said point lying on the

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Easterly line of said Parcel A, as shown upon that certain Parcel Map filed
for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve
to the left with a radius of 1002.05 feet, from which a radial line bears
North 45 degrees 01' 56" East, through a central angle of 4 degrees 20' 28"
for an arc length of 75.92 feet to the true point of beginning; thence North
38 degrees 52' 02" East 82.92 feet to a point hereafter referred to as Point
A; thence North 51 degrees 07' 58" West 12.96 feet; thence South 38 degrees
52' 02" West 64.41 feet; thence Westerly along a tangent curve to the right
with a radius of 20.00 feet, through a central angle of 64 degrees 20' 39"
for an arc length of 22.46 feet to a point on said Northeasterly line of
said parcel of land described in the deed to Santa Clara Valley Transit
District; thence Southeasterly along said Northeasterly line along a
non-tangent curve to the right with a radius of 1002.05 feet, from which a
radial line bears North 39 degrees 18' 05" East, through a central angle of
1 degree 23' 23" for an arc length of 24.30 feet to the true point of
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65 feet
to the true point of beginning; thence North 51 degrees 07' 58" West 49.68
feet; thence North 38 degrees 52' 02" Est 87.23 feet to the Northeasterly
line of said Parcel A, as shown upon that certain Parcel Map filed for
record in Book 216 at Page 2; thence North 75 degrees 07' 58" West 13.91
feet along said Northeasterly line; thence South 38 degrees 52' 02" West
94.26 feet; thence South 51 degrees 07' 58" East 62.39 feet; thence North 38
degrees 52' 02" East 12.70 feet to the true point of beginning.

9.  ANY RIGHTS, interests, or claims adverse to those of the vestee herein which
may exist or arise by reason of the following facts shown on a survey plat
entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART
DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998, prepared by Kier
& Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

a.  Concrete walks and concrete berms or landscaping enclosures extend
across the Easterly and Northerly boundary lines of the subject real
property onto adjoining lands.

b.  A wood fence extends across the Easterly boundary line of the subject
real property, onto adjoining land.

c.  Underground gas and electric lines, and storm drains, extend across the
Easterly boundary line of the subject real property, onto or from
adjoining land.

d.  An electric box and an electric vault exist on the Northerly boundary
line of the subject real property.

e.  Construction of certain public improvements is in progress, in the
Southwesterly corner of the subject real property, alongside the
intersection of Java Drive and Geneva Drive.

10. Lease Agreement (Phase III - Land) dated [EFFECTIVE DATE], by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee,
and Lease Agreement (Phase III - Improvements) dated June 16, 1999, by and
between BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as
lessee.

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EXHIBIT B-3

GROUND LEASE

This GROUND LEASE (this "GROUND LEASE"), by and between BNP LEASING
CORPORATION, a Delaware corporation ("BNPLC"), whose address is 12201 Merit
Drive, Suite 860,Dallas, Texas 75251, and [NAI or the Applicable Purchaser], a
___________ ("LESSOR"), whose address is ____________________. as of
____________, ____ (the "GL EFFECTIVE DATE").

RECITALS

This Ground Lease is being executed pursuant to a Purchase Agreement
(Phase III - Land) dated as of [EFFECTIVE DATE] (the "PURCHASE AGREEMENT"),
between BNP Leasing Corporation and Network Appliance, Inc., covering the land
described in Annex 1 attached hereto (the "LAND"). Incorporated by reference
into the Purchase Agreement is a Common Definitions and Provisions Agreement
(Phase III - Land) dated as of the effective date of the Purchase Agreement (the
"CDPA"), between BNP Leasing Corporation and Network Appliance, Inc. The CDPA is
hereby incorporated into and made a part of this Ground Lease for all purposes.
Capitalized terms defined in the CDPA and used but not otherwise defined herein
are intended in this Ground Lease to have the respective meanings ascribed to
them in the CDPA. The provisions in Article II of the CDPA are intended to apply
to this Ground Lease as if set forth herein and as if this Ground Lease were one
of the "Operative Documents" as defined therein.

Lessor and BNPLC have reached agreement as to the terms and conditions
upon which Lessor is willing to lease the Land described in Annex 1 to BNPLC for
a term of approximately just less that 35 years, and by this Ground Lease Lessor
and BNPLC desire to evidence such agreement.

GRANTING CLAUSES

NOW, THEREFORE, in consideration of the rent to be paid and the
covenants and agreements to be performed by BNPLC, as hereinafter set forth,
Lessor does hereby LEASE, DEMISE and LET unto BNPLC for the term hereinafter set
forth the Land, together with:

1.      all easements and rights-of-way now owned or hereafter acquired
by Lessor for use in connection with the Land or as a means of
access thereto; and

2.      all right, title and interest of Lessor, now owned or hereafter
acquired, in and to (A) any land lying within the right-of-way
of any street, open or proposed, adjoining the Land, (B) any and
all sidewalks and alleys adjacent to the Land and (C) any strips
and gores between the Land and any abutting land not owned by
Lessor.

The Land and all of the property described in the preceding clauses (1) and (2)
are hereinafter referred to collectively as the "REAL PROPERTY".

To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been or will be acquired by Lessor
as the owner of any interest in the Real Property, Lessor also hereby grants and
assigns to BNPLC for 

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the term of this Ground Lease (and thereafter, if BNPLC purchases the Real
Property from Lessor pursuant to the Repurchase Option described in Paragraph
___) the right to use and enjoy (and, in the case of contract rights, to
enforce) such rights or interests of Lessor:

(a)     the Permitted Encumbrances; and

(b)     any general intangibles, permits, licenses, franchises,
certificates, and other rights and privileges related to the Real
Property that BNPLC (rather than Lessor) would have acquired if BNPLC
had itself acquired the fee estate in the Real Property (excluding,
however, any rights and privileges of Lessor under this Ground Lease,
any rights or privileges of Lessor under the Purchase Agreement or other
Operative Documents, and [without limiting Lessor's obligations under
subparagraphs ___, or ___] any rights and privileges of Lessor under the
Development Documents described in Annex 3).

Such rights and interests of Lessor, whether now existing or hereafter arising,
are hereinafter collectively called the "GL PERSONAL PROPERTY". The Real
Property and the GL Personal Property are hereinafter sometimes collectively
called the "GL PROPERTY."

Provided, however, the leasehold estate conveyed hereby and BNPLC's
rights hereunder are expressly made subject and subordinate to the Permitted
Encumbrances, including those listed on Annex 2. FURTHER, IF AND SO LONG AS THE
OTHER LEASE AGREEMENT AND THE OTHER PURCHASE AGREEMENT (BOTH AS DEFINED IN THE
CDPA) REMAIN IN FORCE, THE RIGHTS AND OBLIGATIONS OF LESSOR AND BNPLC HEREUNDER
SHALL BE SUBJECT TO ANY CONTRARY PROVISIONS THEREIN. ACCORDINGLY, BNPLC'S RIGHTS
UNDER PARAGRAPH BELOW SHALL BE SUBJECT TO THE PROVISIONS GOVERNING INSURANCE AND
CONDEMNATION IN THE OTHER LEASE AGREEMENT, IF AND SO LONG AS THE OTHER LEASE
AGREEMENT REMAINS IN FORCE.

GENERAL TERMS AND CONDITIONS

The GL Property is leased by Lessor to BNPLC and is accepted and is to
be used and possessed by BNPLC upon and subject to the following terms and
conditions:

1       GROUND LEASE TERM AND EARLY TERMINATION BY BNPLC. The term of this
Ground Lease (the "GROUND LEASE TERM") shall commence on and include the GL
Effective Date and end on last Business Day prior to the thirty-fifth
anniversary of the GL Effective Date. However, subject to the prior approval of
any Leasehold Mortgagee, BNPLC shall have the right to terminate this Ground
Lease by giving a notice to Lessor stating that BNPLC unequivocally elects to
terminate effective as of a date specified in such notice, which may be any date
more than thirty days after the notice and after the expiration or termination
of the Lease pursuant to its terms.

2       NO OTHER GROUND LEASE TERMINATION. Except as expressly provided herein,
this Ground Lease shall not terminate, nor shall Lessor have any right to
terminate this Ground Lease, nor shall the obligations of Lessor under this
Ground Lease be excused, for any reason whatsoever, including any of the
following: (i) any damage to or the destruction of all or any part of the GL
Property from whatever cause, (ii) the taking of the GL Property or any portion
thereof by eminent domain or otherwise for any reason, (iii) any default on the
part of BNPLC under this Ground Lease or under any other agreement to which
Lessor and BNPLC are parties, or (iv) any other cause whether similar or
dissimilar to the foregoing, any existing or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the obligations
of Lessor hereunder shall be separate and independent of the covenants and
agreements of BNPLC. However, nothing in this Paragraph shall be construed as a
waiver by Lessor of any right Lessor may have at law or in equity to recover
monetary damages for any default under this Ground Lease by BNPLC.

3       GROUND LEASE RENT. On each anniversary of the GL Effective Date, BNPLC
shall make a payment to Lessor of rent for the then preceding year ("GROUND
LEASE RENT"), in currency that at the time of payment is legal tender for public
and 

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private debts in the United States of America. Each such payment of Ground
Lease Rent shall equal the Fair Rental Value, determined as provided in Annex 4.

4       USE OF GL PROPERTY.

(A)     Permitted Uses and Construction of Improvements. Subject to the
Permitted Encumbrances and the terms hereof, BNPLC may use and occupy the GL
Property for any purpose permitted by Applicable Laws and may construct,
maintain and use any Improvements on the Land which are permitted by Applicable
Laws.

(B)     Cooperation by Lessor and its Affiliates.

(1)     After the expiration or any earlier termination of the Lease, if
a use of the GL Property by BNPLC or any new Improvements or any removal
or modification of Improvements proposed by BNPLC would violate any
Permitted Encumbrance, Development Document or Applicable Law unless
Lessor or any of its Affiliates, as an owner of adjacent property or
otherwise, gave its consent or approval thereto or agreed to join in a
modification of a Permitted Encumbrance or Development Document, then
Lessor shall give and cause its Affiliates to give such consent or
approval or join in such modification.

(2)     To the extent, if any, that any Permitted Encumbrance,
Development Document or Applicable Law requires the consent or approval
of Lessor or any of its Affiliates or of the City of South San Francisco
or any other Person to an assignment of this Ground Lease or a transfer
of any interest in the GL Property by BNPLC or its successors or
assigns, Lessor will without charge give and cause its Affiliates to
give such consent or approval and will cooperate in any way reasonably
requested by BNPLC to assist BNPLC to obtain such consent or approval
from the City or any other Person; provided, however, the assignment or
transfer is not then prohibited by the Lease.

(3)     Lessor's obligations under this subparagraph shall be binding
upon any successor or assign of Lessor with respect to the Land and
other properties encumbered by the Permitted Encumbrances or subject to
the Development Documents, and such obligations shall survive any sale
of Lessor's interest in the GL Property to BNPLC because of BNPLC's
exercise of the Repurchase Option (as defined in Paragraph ___).

(C)     Title to Improvements. Any and all Improvements of whatever nature at
any time constructed, placed or maintained upon any part of the Land shall be
and remain the property of BNPLC and BNPLC's sublessee's, assignees, licensees
and concessionaires, as their interests may appear; provided, any such
Improvements which remain on the Land when this Ground Lease expires or is
terminated shall become and thereupon be the property of Lessor, free and clear
of any Liens Removable by BNPLC. It is the intention of Lessor and BNPLC that
severance of fee title to the Land and the Improvements shall not change the
character of the Improvements as real property. BNPLC may at any time after
Lessor ceases to have possession of the GL Property as tenant under the Lease
and prior to the expiration or termination of this Ground Lease remove all or
any Improvements from the Land without the consent of Lessor and without any
obligation to Lessor or its Affiliates to provide compensation or to construct
other Improvements on or about the Land.

5       ASSIGNMENT AND SUBLETTING; PASS THROUGH OF BNPLC'S LIABILITY INSURANCE
AND INDEMNITY RIGHTS. BNPLC may sublet or assign this Ground Lease without the
consent of Lessor or any of its Affiliates, subject only to limitations set
forth in the Lease for the benefit of Lessor so long as those limitations remain
in force.

To the extent that BNPLC may from time to time after the expiration or
earlier termination of the Other Lease Agreement require any subtenant to agree
to maintain liability insurance against claims of third parties and agree to
make BNPLC an additional or named insured under such insurance, BNPLC shall also
require the subtenant to agree to make Lessor an additional or named insured.
However, BNPLC shall have no liability to Lessor for a breach by the subtenant
of any such agreements, and to the extent that BNPLC's rights as an additional
or named insured are subject to exceptions or limitations concerning BNPLC's own
acts or omissions or the acts or omissions of anyone other than the subtenant,
so too 

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may Lessor's rights as an additional or named insured be subject to exceptions
or limitations concerning Lessor's own acts or omissions or the acts or
omissions of anyone other than the subtenant.

To the extent that BNPLC may itself from time to time after the
expiration or earlier termination of the Other Lease Agreement maintain
liability insurance against claims of third parties which may arise because of
any occurrence on or alleged to have occurred on or about the GL Property, BNPLC
shall cause Lessor to be an additional or named insured under such insurance,
provided Lessor pays or reimburses BNPLC for any additional insurance premium
required to have Lessor made an insured.

To the extent that BNPLC may from time to time after the expiration or
earlier termination of the Other Lease Agreement require any subtenant to agree
to indemnify BNPLC against Environmental Losses or other Losses concerning the
GL Property, BNPLC shall also require the subtenant to agree to indemnify
Lessor. However, BNPLC shall have no liability to Lessor for a breach by the
subtenant of any such agreement, and to the extent that BNPLC's rights as an
indemnitee of the subtenant are subject to exceptions or limitations concerning
BNPLC's own acts or omissions or the acts or omissions of anyone other than the
subtenant, so too may Lessor's rights as an indemnitee be subject to exceptions
or limitations concerning Lessor's own acts or omissions or the acts or
omissions of anyone other than the subtenant.

6       REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR Concerning the
Property. Lessor represents, warrants and covenants as follows:

(A)     Title to the Property. This Ground Lease shall vest in BNPLC good and
marketable title to a leasehold estate in the Land, subject only to the terms
and conditions hereof, the Permitted Encumbrances, the Development Documents and
any Liens Removable by BNPLC. Lessor shall not, without the prior consent of
BNPLC, create, place or authorize, or through any act or failure to act,
acquiesce in the placing of, any deed of trust, mortgage or other Lien, whether
statutory, constitutional or contractual against or covering the GL Property or
any part thereof (other than Permitted Encumbrances and Liens Removable by
BNPLC), regardless of whether the same are expressly or otherwise subordinate to
the Operative Documents or BNPLC's interest in the Property.

(B)     Modification of Permitted Encumbrances and Development Documents.
Without the prior consent of BNPLC, Lessor shall not enter into, initiate,
approve or consent to any modification of any Permitted Encumbrance or
Development Document that would create or expand or purport to create or expand
obligations or restrictions which would encumber the GL Property or any
improvements constructed thereon.

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(C)     Performance and Preservation of the Development Documents and Permitted
Encumbrances for the Benefit of BNPLC. Not only during the term of the Other
Lease Agreement, but thereafter throughout the term of this Ground Lease, Lessor
shall comply with and perform the obligations imposed by the Permitted
Encumbrances and the Development Documents upon Lessor or upon any owner of the
Land, and shall do whatever is required to preserve the rights and benefits
conferred or intended to be conferred by the Permitted Encumbrances and the
Development Documents, as necessary to facilitate the construction of the
Construction Project on the Land as contemplated in the Other Lease Agreement
and the use of the Improvements included in the Construction Project by BNPLC
and its successors, assigns and subtenants under this Ground Lease after the
expiration or any earlier termination of the Other Lease Agreement. Further, if
Lessor or any Affiliate of Lessor now or hereafter owns, acquires or leases land
(other than the Land) that is the subject of a Permitted Encumbrance or
Development Document, then Lessor shall, and shall cause its Affiliate to,
assume liability for and indemnify BNPLC and other Interested Parties and defend
and hold them harmless from and against all Losses (including Losses caused by
any decline in the value of the Property or of the Improvements) that they would
not have incurred or suffered but for (i) a termination of such Permitted
Encumbrance or Development Document, to which Lessor or its Affiliate agreed, or
which resulted from a breach thereof by Lessor or its Affiliate, or (ii) a
refusal of Lessor or its Affiliate to agree to any waiver or modification
requested by BNPLC of restrictions upon the Property or the transfer thereof
imposed by such Permitted Encumbrance or Development Document, or (iii) anything
done, authorized or suffered by Lessor or its Affiliate in violation of such
Permitted Encumbrance or Development Document. Lessor's obligations under this
subparagraph 6(C) shall be binding upon any successor or assign of Lessor or its
Affiliates with respect to their interest in properties subject to the
Development Documents and Permitted Encumbrances.

7       INSURANCE AND CONDEMNATION.

(A)     Entitlement to Insurance and Condemnation Proceeds. All insurance and
condemnation proceeds payable with respect to any damage to or taking of the GL
Property shall be payable to and become the property of BNPLC; provided,
however, Lessor shall be entitled to receive condemnation proceeds awarded for
the value of Lessor's remainder interest in the Land exclusive of the
Improvements. BNPLC is authorized to take all action necessary on behalf of both
BNPLC and Lessor (as lessor under this Ground Lease) to collect insurance and
condemnation proceeds.

(B)     Collection of Insurance Proceeds. In the event any of the GL Property
is destroyed or damaged by fire, explosion, windstorm, hail or by any other
casualty against which insurance shall have been required hereunder, (i) BNPLC
may make proof of loss, (ii) each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to BNPLC for
application as required by subparagraph ___, and (iii) BNPLC's consent must be
obtained for any settlement, adjustment or compromise of any claims for loss,
damage or destruction under any policy or policies of insurance.

(C)     Collection of Condemnation Proceeds. All proceeds of condemnation awards
or proceeds of sale in lieu of condemnation with respect to the GL Property and
all judgments, decrees and awards for injury or damage to the GL Property shall
be paid to BNPLC and applied as provided in subparagraph 7(A) above. BNPLC is
hereby authorized, in the name of Lessor, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award
concerning condemnation of any of the GL Property. BNPLC shall not be, in any
event or circumstances, liable or responsible for failure to collect, or to
exercise diligence in the collection of, any such proceeds, judgments, decrees
or awards.

8       LEASEHOLD MORTGAGES.

(A)     By Leasehold Mortgage BNPLC may encumber BNPLC's leasehold estate in the
GL Property created by this Ground Lease, as well as BNPLC's rights and
interests in buildings, fixtures, equipment and Improvements situated on the
Land and rents, issues, profits, revenues and other income to be derived by
BNPLC therefrom.

(B)     Any Leasehold Mortgagee or other party, including any corporation formed
by a Leasehold Mortgagee, may become the legal owner of the leasehold estate
created by this Ground Lease, and of the Improvements, equipment, fixtures 

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and other property assigned as additional security pursuant to a Leasehold
Mortgage, by foreclosure of a Leasehold Mortgage or as a result of the
assignment or conveyance in lieu of foreclosure. Further, any such Leasehold
Mortgagee or other party may itself, after becoming the legal owner and holder
of the leasehold estate created by this Ground Lease, or of any Improvements,
equipment, fixtures and other property assigned as additional security pursuant
to a Leasehold Mortgage, convey or pledge the same without the consent of
Lessor.

(C)     Lessor shall serve notice of any default by BNPLC hereunder upon any
Leasehold Mortgagee. No notice of a default by BNPLC shall be deemed effective
until it is so served. Any Leasehold Mortgagee shall have the right to correct
or cure any such default within the same period of time after receipt of such
notice as is given to BNPLC under this Ground Lease to correct or cure defaults,
plus an additional period of thirty days thereafter. Lessor will accept
performance by any Leasehold Mortgagee of any covenant, condition or agreement
on BNPLC's part to be performed hereunder with the same force and effect as
though performed by BNPLC.

(D)     If this Ground Lease should terminate by reason of a disaffirmance or
rejection of this Ground Lease by BNPLC or any receiver, liquidator or trustee
for the property of BNPLC, or by any governmental authority which had taken
possession of the business or property of BNPLC by reason of the insolvency or
alleged insolvency of BNPLC, then:

(1)     Lessor shall give notice thereof to each Leasehold Mortgagee;
and upon request of any Leasehold Mortgagee made within sixty days after
Lessor has given such notice, Lessor shall enter into a new ground lease
of the GL Property with such Leasehold Mortgagee for the remainder of
the Ground Lease Term, at the same Ground Lease Rent and on the same
terms and conditions as contained in this Ground Lease.

(2)     The estate of the Leasehold Mortgagee, as lessee under the new
lease, shall have priority equal to the estate of BNPLC hereunder. That
is, there shall be no charge, lien or burden upon the GL Property prior
to or superior to the estate granted by such new lease which was not
prior to or superior to the estate of BNPLC under this Ground Lease as
of the date immediately preceding the termination of this Ground Lease.

(3)     Notwithstanding the foregoing, if Lessor shall receive requests
to enter into a new ground lease from more than one Leasehold Mortgagee,
Lessor shall be required to enter into only one new ground lease, and
the new ground lease shall be to the requesting Leasehold Mortgagee who
holds the highest priority lien or interest in BNPLC's leasehold estate
in the Land. If the liens or security interests of two or more such
requesting Leasehold Mortgagees which shared the highest priority just
prior to the termination of this Ground Lease, the new ground lease
shall name all such Leasehold Mortgagees as co-tenants thereunder.

(E)     If BNPLC has agreed with any Leasehold Mortgagee that such Leasehold
Mortgagee's consent will be required to any modification or early termination of
this Ground Lease by BNPLC, and if Lessor has been notified of such agreement,
such consent will be required.

(F)     No Leasehold Mortgagee will assume any liability under this Ground Lease
either by virtue of its Leasehold Mortgage or by any subsequent receipt or
collection of rents or profits generated from the GL Property, unless and until
the Leasehold Mortgagee acquires BNPLC's leasehold estate in the GL Property at
foreclosure or by deed in lieu of foreclosure.

(G)     Although the foregoing provisions concerning Leasehold Mortgages and
Leasehold Mortgagees will be self operative, Lessor agrees to include, in
addition to the items specified in Paragraph 11, confirmation of the foregoing
in any statement provided to a Leasehold Mortgagee or prospective Leasehold
Mortgagee pursuant to Paragraph 11.

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9       EVENTS OF DEFAULT.

(A)     Definition of Ground Lease Default. Each of the following events shall
be deemed to be a "GROUND LEASE DEFAULT" by BNPLC under this Ground Lease:

(1)     BNPLC shall fail to pay when due any installment of Ground Lease
Rent due hereunder and such failure shall continue for sixty days after
BNPLC receives notice thereof.

(2)     BNPLC shall fail to comply with any term, provision or covenant
of this Ground Lease (other than as described in the other clauses of
this subparagraph), and shall not cure such failure prior to the
earlier of (A) ninety days after notice thereof is sent to BNPLC, or (B)
the date any writ or order is issued for the levy or sale of any
property owned by Lessor or its Affiliates (including the GL Property)
because of such failure or any criminal action is instituted against
BNPLC or any of its directors, officers or employees because of such
failure; provided, however, that so long as no such writ or order is
issued and no such criminal actions is instituted, if such failure is
susceptible of cure but cannot with reasonable diligence be cured within
such ninety day period, and if BNPLC shall promptly have commenced to
cure the same and shall thereafter prosecute the curing thereof with
reasonable diligence, the period within which such failure may be cured
shall be extended for such further period as shall be necessary for the
curing thereof with reasonable diligence.

(B)     Remedy. Upon the occurrence of a Ground Lease Default which is not
cured within any applicable period expressly permitted by subparagraph 9(A),
Lessor's sole and exclusive remedies shall be to sue BNPLC for the collection of
any amount due under this Ground Lease, to sue for the specific enforcement of
BNPLC's obligations hereunder, or to enjoin the continuation of the Ground Lease
Default; provided, however, no limitation of Lessor's remedies contained herein
will prevent Lessor from recovering any reasonable costs Lessor may incur to
mitigate its damages by curing a Ground Lease Default that BNPLC has failed to
cure itself (so long as the cure by Lessor is pursued in a lawful manner and the
costs Lessor seeks to recover do not exceed the actual damages to be mitigated).
Lessor may not terminate this Ground Lease or BNPLC's right to possession under
this Ground Lease. Any judgment which Lessor may obtain against BNPLC for
amounts due under this Ground Lease may be collected only through resort of a
judgement lien against BNPLC's interest in the GL Property and any Improvements.
BNPLC shall have no personal liability for the payment amounts due under this or
for the performance of any obligations of BNPLC under this Ground Lease.

10      QUIET ENJOYMENT. Neither Lessor nor any third party lawfully claiming
any right or interest in the GL Property shall during the Ground Lease Term
disturb BNPLC's peaceable and quiet enjoyment of the GL Property; however, such
enjoyment shall be subject to the terms, provisions, covenants, agreements and
conditions of this Ground Lease and the Permitted Encumbrances, to which this
Ground Lease is subject and subordinate as herein above set forth.

11      ESTOPPEL CERTIFICATE. Lessor shall from time to time, within ten days
after receipt of request by BNPLC, deliver a statement in writing certifying:

(A)     that this Ground Lease is unmodified and in full force and effect (or if
modified that this Ground Lease as so modified is in full force and effect);

(B)     that to the knowledge of Lessor BNPLC has not previously assigned or
hypothecated its rights or interests under this Ground Lease, except as is
described in such statement with as much specificity as Lessor is able to
provide;

(C)     the term of this Ground Lease and the Ground Lease Rent then in effect
and any additional charges;

(D)     that BNPLC is not in default under any provision of this Ground Lease
(or if in default, the nature thereof in detail) and a statement as to any
outstanding obligations on the part of Lessor or BNPLC; and

7

43
(E)     such other matters as are reasonably requested by BNPLC.

Lessor's failure to deliver such statement within such time shall be conclusive
upon BNPLC (i) that this Ground Lease is in full force and effect, without
modification except as may be represented by BNPLC, (ii) that there are no
uncured defaults in BNPLC's performance hereunder.

12      OPTION TO REPURCHASE. Subject to the terms and conditions set forth in
Annex 5, BNPLC (and any assignee of BNPLC's entire interest in the GL Property,
but not any subtenant or assignee of a lesser interest) shall have the option
(the "REPURCHASE OPTION") to purchase Lessor's interest in the GL Property. To
secure BNPLC's right to recover any damages caused by a breach of the Repurchase
Option or other provisions of this Ground Lease by Lessor, including any such
breach caused by a rejection or termination of this Ground Lease in any
bankruptcy or insolvency proceeding instituted by or against Lessor, as debtor,
Lessor does hereby grant to BNPLC a lien and security interest against the Land
and against all rights, title and interests of Lessor from time to time in and
to the GL Property.

[The signature pages follow.]

8

44
IN WITNESS WHEREOF, this Ground Lease is hereby executed in multiple
originals as of the date first written above.

"Lessor"

[NAI or the Applicable Purchaser]

By:______________________________________
Name:_________________________________
Title:________________________________

9

45
[Continuation of signature pages to GROUND LEASE dated as of ___________, ____]

"BNPLC"

BNP LEASING CORPORATION

By:______________________________________
Name:_________________________________
Title:________________________________

10

46
STATE OF ___________         )
)
COUNTY OF _____________      )

On _____________, _____, before me, ________________________, personally
appeared ____________________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature________________________________

11

47
STATE OF ________            )
)
COUNTY OF __________         )

On ___________, _____, before me, ________________________, personally
appeared ____________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature________________________________

12

48
ANNEX 1

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

All that certain real property situate in the City of Sunnyvale, State of
California, described as follows:

PARCEL ONE:

Parcel `A', so designated and delineated on the Parcel Map recorded November 10,
1971 in Book 292 of Maps, page 41, Santa Clara County Records.

EXCEPTING THEREFROM that portion thereof described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997, Document No. 13912192,
Official Records.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel `A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records. Said easements are the same as are described in the deeds to Los Altos
Venture, a Joint Venture consisting of Mape Industries, Inc., a California
corporation, and REBMA California Six, Inc., a Missouri corporation, recorded
December 29, 1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page
380, Official Records; and to Paul Enterprises, a partnership, and Northwest
Poultry and Dairy Products Co., an Oregon corporation, recorded June 17, 1975 in
Book B467, page 167, Official Records.

APN: 110-32-001
ARB: 110-03-x066

13

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ANNEX 2

PERMITTED ENCUMBRANCES

The leasehold and other interests in the Land hereby conveyed by Lessor are
conveyed subject to the following matters to the extent the same are still valid
and in force:

[THE SAME LIST OF PERMITTED ENCUMBRANCES ATTACHED TO THE GRANT DEED FROM BNPLC
TO NAI OR THE APPLICABLE PURCHASER SHALL BE INSERTED HERE.]

14

50
ANNEX 3

LIST OF DEVELOPMENT DOCUMENTS

NONE

15

51
ANNEX 4

DETERMINATION OF FAIR RENTAL VALUE

Each annual payment of Ground Lease Rent will equal the Fair Rental
Value, computed as of the most recent Rental Determination Date when such
payment becomes due. As used in this Annex:

"FAIR RENTAL VALUE" means (and all appraisers and other persons involved
in the determination of the Fair Rental Value will be so advised) the annual
rent, as determined in accordance with this Annex, that would be agreed upon
between a willing tenant, under no compulsion to lease, and a willing
landlord, under no compulsion to lease, for unimproved land comparable in
size and location to the Land, exclusive of any Improvements but assuming
that there is no higher and better use for such land than as a site for
improvements of comparable size and utility to the Improvements, at the time
a determination is required under hereunder and taking into consideration
the condition of the Land, the encumbrances affecting the title to the Land
and all applicable zoning, land use approvals and other governmental permits
relating to the Land at the time of such determination; and

"RENTAL DETERMINATION DATE" means the GL Effective Date and each fifth
anniversary of the GL Effective Date.

If Lessor and BNPLC have not agreed upon Fair Rental Value as of any
Rental Determination Date within one hundred eighty days after the such date,
then Fair Rental Value will be determined as follows:

(a)     Lessor and BNPLC shall each appoint a real estate appraiser who
is familiar with rental values for properties in the vicinity of the
Land and who has not previously acted for either party. Each party will
make the appointment no later than ten days after receipt of notice from
the other party that the appraisal process described in this Annex has
been invoked. The agreement of the two appraisers as to Fair Rental
Value will be binding upon Lessor and BNPLC. If the two appraisers
cannot agree upon the Fair Rental Value within ten days following their
appointment, they shall within another ten days agree upon a third real
estate appraiser. Immediately thereafter, each of the first two
appraisers will submit his best estimate of the appropriate Fair Rental
Value (together with a written report supporting such estimate) to the
third appraiser and the third appraiser will choose between the two
estimates. The estimate of Fair Rental Value chosen by the third
appraiser as the closest to the prevailing annual fair rental value will
be binding upon Lessor and BNPLC. Notification in writing of this
estimate shall be made to Lessor and BNPLC within fifteen days following
the selection of the third appraiser.

(b)     If appraisers must be selected under the procedure set out above
and either BNPLC or Lessor fails to appoint an appraiser or fails to
notify the other party of such appointment within fifteen days after
receipt of notice that the prescribed time for appointing the appraisers
has passed, then the other party's appraiser will determine the Fair
Rental Value. All appraisers selected for the appraisal process set out
in this Annex will be disinterested, reputable, qualified real estate
appraisers with the designation of MAI or equivalent and with at least 5
years experience in appraising properties comparable to the Land.

(c)     If a third appraiser must be chosen under the procedure set out
above, he or she will be chosen on the basis of objectivity and
competence, not on the basis of his relationship with the other
appraisers or the parties to this Ground Lease, and the first two
appraisers will be so advised. Although the first two appraisers will be
instructed to attempt in good faith to agree upon the third appraiser,
if for any reason they cannot agree within the prescribed time, either
Lessor and BNPLC may require the first two appraisers to immediately
submit its top choice for the third appraiser to the then highest
ranking officer of the California Bar Association who will agree to help
and who has no attorney/client or other significant relationship to
either Lessor or BNPLC. Such officer will have complete discretion to
select the most objective and competent third appraiser from between the
choices of each of the first two appraisers, and will do so within
twenty days after such choices are submitted to him.

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52
(d)     Either Lessor or BNPLC may notify the appraiser selected by the
other party to demand the submission of an estimate of Fair Rental Value
or a choice of a third appraiser as required under the procedure
described above; and if the submission of such an estimate or choice is
required but the other party's appraiser fails to comply with the demand
within fifteen days after receipt of such notice, then the Fair Rental
Value or choice of the third appraiser, as the case may be, selected by
the other appraiser (i.e., the notifying party's appraiser) will be
binding upon Lessor and BNPLC.

(e)     Lessor and BNPLC shall each bear the expense of the appraiser
appointed by it, and the expense of the third appraiser and of any
officer of the California Bar Association who participates in the
appraisal process described above will be shared equally by Lessor and
BNPLC.

17

53
ANNEX 5

REPURCHASE OPTION

Subject to the terms of this Annex, BNPLC shall have an option (the
"OPTION") to buy Lessor's fee interest in the GL Property at any time during the
term of this Ground Lease for a purchase price (the "OPTION PRICE") to Lessor
equal to the fair market value of the GL Property, determined as described in
the next paragraph.

For the purposes of this Annex, "fair market value" of the GL Property
means (and all appraisers and other persons involved in the determination of the
Option Price will be so advised) the price that would be agreed upon between a
willing buyer, under no compulsion to buy, and a willing seller, under no
compulsion to sell, for the Land, exclusive of any Improvements as if the Land
were unimproved, but assuming that there is no higher and better use for the
Land than as a site for the construction of improvements of comparable size and
utility to the Improvements, at the time of BNPLC's exercise of the Option and
taking into consideration the encumbrances affecting the title to the Land and
all applicable zoning, land use approvals and other governmental permits
relating to the Land at the time of the exercise of the Option.

If BNPLC exercises the Option, which BNPLC may do by notifying Lessor
that BNPLC has elected to buy Lessor's interest in the GL Property as provided
herein, then:

(a)     To the extent, if any, required as a condition imposed by law to
the conveyance of the fee interest in the GL Property to BNPLC, Lessor
shall promptly at its expense do whatever is necessary to obtain
approvals of a new Parcel Map or lot line adjustments.

(b)     Upon BNPLC's tender of the Option Price to Lessor, Lessor will
convey to BNPLC by general warranty deed and assignment, subject only to
the Permitted Encumbrances, good and marketable title to the fee estate
in the Land , to Lessor's interest in all other GL Property and, to the
extent still in force, to Lessor's Extended Remarketing Rights under the
Purchase Agreement.

(c)     BNPLC's obligation to close the purchase shall be subject to the
following terms and conditions, all of which are for the benefit of
BNPLC: (1) BNPLC shall have been furnished with evidence satisfactory to
BNPLC that Lessor can convey title as required by the preceding
subparagraph; (2) nothing shall have occurred or been discovered after
BNPLC exercised the Option that could significantly and adversely affect
title to the GL Property or BNPLC's use thereof, (3) all of the
representations of Lessor in this Ground Lease shall continue to be true
as if made effective on the date of the closing and, with respect to any
such representations which may be limited to the knowledge of Lessor or
any of Lessor's representatives, would continue to be true on the date
of the closing if all relevant facts and circumstances were known to
Lessor and such representatives, (4) BNPLC shall find the Option Price
acceptable after it is determined as provided in this Annex, and (5)
BNPLC shall have been tendered the deed and other documents which are
described in this Annex as documents to be delivered to BNPLC at the
closing of BNPLC's purchase.

(d)     Closing of the purchase will be scheduled on the first Business
Day following thirty days after the Option Price is established in
accordance with the terms and conditions of this Annex and after any
approvals described in subparagraph (a) above are obtained, and prior to
closing BNPLC's occupancy of the GL Property shall continue to be
subject to the terms and conditions of this Ground Lease, including the
terms setting forth BNPLC's obligation to pay rent. Closing shall take
place at the offices of any title insurance company reasonably selected
by BNPLC to insure title under the title insurance policy described
below.

(e)     Any transfer taxes or notices or registrations required by law
in connection with the sale contemplated by this Annex will be the
responsibility of Lessor.

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54
(f)     Lessor will deliver a certificate of nonforeign status to BNPLC
at closing as needed to comply with the provisions of the Foreign
Investors Real Property Tax Act (FIRPTA) or any comparable federal,
state or local law in effect at the time.

(g)     Lessor will also pay for and deliver to BNPLC at the closing an
owner's title insurance policy in the full amount of the Option Price,
issued by a title insurance company designated by BNPLC (or written
confirmation from the title company that it is then prepared to issue
such a policy), and subject only to standard printed exceptions which
the title insurance company refuses to delete or modify in a manner
acceptable to BNPLC and to Permitted Encumbrances.

(h)     Lessor shall also deliver at the closing all other documents or
things reasonably required to be delivered to BNPLC or by the title
insurance company to evidence Lessor's ability to transfer the GL
Property to BNPLC.

If Lessor and BNPLC do not otherwise agree upon the amount of the Option
Price within twenty days after BNPLC exercises the Option, the Option Price
shall be determined in accordance with the following procedure:

(1)     Lessor and BNPLC shall each appoint a real estate
appraiser who is familiar with properties in the vicinity of the
Land and who has not previously acted for either party. Each
party will make the appointment no later than ten days after
receipt of notice from the other party that the appraisal
process described in this Annex has been invoked. The agreement
of the two appraisers as to the Option Price will be binding
upon Lessor and BNPLC. If the two appraisers cannot agree upon
the Option Price within ten days following their appointment,
they shall within another ten days agree upon a third real
estate appraiser. Immediately thereafter, each of the first two
appraisers will submit his best estimate of the appropriate
Option Price (together with a written report supporting such
estimate) to the third appraiser and the third appraiser will
choose between the two estimates. The estimate of Option Price
chosen by the third appraiser as the closest to the prevailing
fair market value will be binding upon Lessor and BNPLC.
Notification in writing of the Option Price shall be made to
Lessor and BNPLC within fifteen days following the selection of
the third appraiser.

(2)     If appraisers must be selected under the procedure set
out above and either BNPLC or Lessor fails to appoint an
appraiser or fails to notify the other party of such appointment
within fifteen days after receipt of notice that the prescribed
time for appointing the appraisers has passed, then the other
party's appraiser will determine the Option Price. All
appraisers selected for the appraisal process set out in this
Annex will be disinterested, reputable, qualified real estate
appraisers with the designation of MAI or equivalent and with at
least 5 years experience in appraising properties comparable to
the Land.

(3)     If a third appraiser must be chosen under the procedure
set out above, he will be chosen on the basis of objectivity and
competence, not on the basis of his relationship with the other
appraisers or the parties to this Ground Lease, and the first
two appraisers will be so advised. Although the first two
appraisers will be instructed to attempt in good faith to agree
upon the third appraiser, if for any reason they cannot agree
within the prescribed time, either Lessor and BNPLC may require
the first two appraisers to immediately submit its top choice
for the third appraiser to the then highest ranking officer of
the California Bar Association who will agree to help and who
has no attorney/client or other significant relationship to
either Lessor or BNPLC. Such officer will have complete
discretion to select the most objective and competent third
appraiser from between the choices of each of the first two
appraisers, and will do so within ten days after such choices
are submitted to him.

(4)     Either Lessor or BNPLC may notify the appraiser selected
by the other party to demand the submission of an estimate of
Option Price or a choice of a third appraiser as required under
the procedure described above; and if the submission of such an
estimate or choice is required but the other party's appraiser
fails to comply with the demand within fifteen days after
receipt of such notice, then the Option Price or choice of the
third appraiser, as the case may be, selected by the other
appraiser (i.e., the notifying party's appraiser) will be
binding upon Lessor and BNPLC.

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55
(5)     Lessor and BNPLC shall each bear the expense of the
appraiser appointed by it, and the expense of the third
appraiser and of any officer of the California Bar Association
who participates in the appraisal process described above will
be shared equally by Lessor and BNPLC.

20

56
EXHIBIT-4

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

MAIL TAX STATEMENTS TO:

NAME:   [NAI or the Applicable Purchaser]
ADDRESS:       ___________________
ATTN:          ___________________
CITY:          ___________________
STATE:         ___________________
Zip:           ___________________

CORPORATION GRANT DEED
(Covering Land but not the Improvements On the Land)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof (the "Land"), together with the any other right, title
and interest of Grantor in and to any easements, rights-of-way, privileges and
other rights appurtenant to the Land; provided, however, that this grant is
subject to the encumbrances described on Annex B (the "Permitted Encumbrances")
and any reservations or qualifications set forth below. Grantee hereby assumes
the obligations (including any personal obligations) of Grantor, if any, created
by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the Land.

Although this deed conveys Grantor's interest in the Land itself, this deed does
not convey any interest in any buildings or other improvements on the Land
(collectively, "Improvements") or any rights or easements appurtenant to
Improvements. Prior to or contemporaneously with the delivery of this deed,
Grantor has conveyed or is conveying the Improvements and appurtenant rights and
easements to another party.

21

57
BNP LEASING CORPORATION

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

[NAI or Applicable Purchaser]

Date: As of ____________               By:______________________________________
Its:__________________________________

Attest:__________________________________
Its:______________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

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58
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28"

3

59
an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel `A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" 

4

60
West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

APN: 110-32-010
ARB: 110-03-x066

5

61
ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Land) incorporated by reference into the Lease Agreement
(Phase III - Land) referenced in the last item of the list below), including the
following matters to the extent the same are still valid and in force:

1.  TAXES for the fiscal year 1999-2000, 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
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 430, Official
Records
Affects           : A strip of land 18 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

4.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Public utilities
In favor of       : City of Sunnyvale
Recorded          : October 9, 1964 in Book 6695, page 450, Official
Records
Affects           : A strip of land 7 feet in width, contiguous to and
Northerly of the Northerly line of Java Drive, as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job
No. 97208-2.

5.  AGREEMENT on the terms and conditions contained therein,
For               : Construction of additional storm drainage system
facilities
Between           : City of Sunnyvale
And               : Moffett Park Associates, a joint venture partnership
Recorded          : November 2, 1966 in Book 7552, page 688, Official
Records.

AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

62
NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.  Covenants, Conditions and Restrictions in the Declaration of Protective
Covenants - Moffett 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 Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.  EASEMENT for the purposes stated herein and incidents thereto
Purpose           : Streets and street improvements
Granted to        : City of Sunnyvale
Recorded          : November 16, 1976 in Book C414, page 95, Official
Records
Affects           : The most Westerly corner of said Parcel `A', as
shown on a survey plat entitled "TOPOGRAPHIC AND
ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART DEVELOPMENT
COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors,
Inc., Job No. 97208-2.

8.      EASEMENT for the purposes stated herein and incidents thereto
Purpose           : for ingress and egress of motor vehicles
Granted to        : 495 Java Drive Associates, L.P., a California
Limited Partnership
Recorded          : September 16, 1998, under Series No. 14396001,
Official Records 
Affects           : as follows:

All that certain real property situate in the City of Sunnyvale, County of
Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara and a portion of Parcel A, as shown
upon that certain Parcel Map filed for record in Book 216 at Page 2, on
October 25, 1966, in the Office of the Recorder of the County of Santa
Clara, described as follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land described in
the deed to Santa Clara Valley Transit District, recorded October 24, 1997
as Instrument No. 13912192, Official Records in said Office of the Recorder
of the County of Santa Clara, said point lying on the 

63
Easterly line of said Parcel A, as shown upon that certain Parcel Map filed
for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve
to the left with a radius of 1002.05 feet, from which a radial line bears
North 45 degrees 01' 56" East, through a central angle of 4 degrees 20' 28"
for an arc length of 75.92 feet to the true point of beginning; thence North
38 degrees 52' 02" East 82.92 feet to a point hereafter referred to as Point
A; thence North 51 degrees 07' 58" West 12.96 feet; thence South 38 degrees
52' 02" West 64.41 feet; thence Westerly along a tangent curve to the right
with a radius of 20.00 feet, through a central angle of 64 degrees 20' 39"
for an arc length of 22.46 feet to a point on said Northeasterly line of
said parcel of land described in the deed to Santa Clara Valley Transit
District; thence Southeasterly along said Northeasterly line along a
non-tangent curve to the right with a radius of 1002.05 feet, from which a
radial line bears North 39 degrees 18' 05" East, through a central angle of
1 degree 23' 23" for an arc length of 24.30 feet to the true point of
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65 feet
to the true point of beginning; thence North 51 degrees 07' 58" West 49.68
feet; thence North 38 degrees 52' 02" Est 87.23 feet to the Northeasterly
line of said Parcel A, as shown upon that certain Parcel Map filed for
record in Book 216 at Page 2; thence North 75 degrees 07' 58" West 13.91
feet along said Northeasterly line; thence South 38 degrees 52' 02" West
94.26 feet; thence South 51 degrees 07' 58" East 62.39 feet; thence North 38
degrees 52' 02" East 12.70 feet to the true point of beginning.

9.  ANY RIGHTS, interests, or claims adverse to those of the vestee herein which
may exist or arise by reason of the following facts shown on a survey plat
entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR THE MOZART
DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998, prepared by Kier
& Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

a.  Concrete walks and concrete berms or landscaping enclosures extend
across the Easterly and Northerly boundary lines of the subject real
property onto adjoining lands.

b.  A wood fence extends across the Easterly boundary line of the subject
real property, onto adjoining land.

c.  Underground gas and electric lines, and storm drains, extend across the
Easterly boundary line of the subject real property, onto or from
adjoining land.

d.  An electric box and an electric vault exist on the Northerly boundary
line of the subject real property.

e.  Construction of certain public improvements is in progress, in the
Southwesterly corner of the subject real property, alongside the
intersection of Java Drive and Geneva Drive.

10. Lease Agreement (Phase III - Land) dated [EFFECTIVE DATE], by and between
BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as lessee,
and Lease Agreement (Phase III - Improvements) dated June 16, 1999, by and
between BNP Leasing Corporation, as lessor, and Network Appliance, Inc., as
lessee.

8

64
EXHIBIT C

BILL OF SALE AND ASSIGNMENT

Reference is made to: (1) that certain Purchase Agreement (Phase III -
Land) between BNP Leasing Corporation ("ASSIGNOR") and Network Appliance, Inc.,
dated as of [EFFECTIVE DATE], (the "PURCHASE AGREEMENT") and (2) that certain
Lease Agreement (Phase III - Land) between Assignor, as landlord, and Network
Appliance, Inc., as tenant, dated as of [EFFECTIVE DATE] (the "LAND LEASE").
(Capitalized terms used and not otherwise defined in this document are intended
to have the meanings assigned to them in the Common Definitions and Provisions
Agreement (Phase III - Land) incorporated by reference into both the Purchase
Agreement and Land Lease.)

As contemplated by the Purchase Agreement, Assignor hereby sells,
transfers and assigns unto [NAI OR THE APPLICABLE PURCHASER, AS THE CASE MAY
BE], a _____________ ("ASSIGNEE"), all of Assignor's right, title and interest
in and to the following property, if any, to the extent such property is
assignable:

(a)     the Land Lease;

(b)     any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property; and

(c)     all other property included within the definition of "Property"
as set forth in the Purchase Agreement.

Provided, however, excluded from this conveyance and reserved to Assignor are
any rights or privileges of Assignor under the following ("EXCLUDED RIGHTS"):
(1) the indemnities set forth in the Land Lease, whether such rights are
presently known or unknown, including rights of the Assignor to be indemnified
against environmental claims of third parties as provided in the Land Lease
which may not presently be known, (2) provisions in the Land Lease that
establish the right of Assignor to recover any accrued unpaid rent under the
Land Lease which may be outstanding as of the date hereof, (3) agreements
between Assignor and "BNPLC's Parent" or any "Participant," both as defined in
the Land Lease, or any modification or extension thereof, or (4) any other
instrument being delivered to Assignor contemporaneously herewith pursuant to
the Purchase Agreement. To the extent that this conveyance does include any
rights to receive future payments under the Land Lease, such rights ("INCLUDED
RIGHTS") shall be subordinate to Assignor's Excluded Rights, and Assignee hereby
waives any rights to enforce Included Rights until such time as Assignor has
received all payments to which it remains entitled by reason of Excluded Rights.
If any amount shall be paid to Assignee on account of any Included Rights at any
time before Assignor has received all payments to which it is entitled because
of Excluded Rights, such amount shall be held in trust by Assignee for the
benefit of Assignor, shall be segregated from the other funds of Assignee and
shall forthwith be paid over to Assignor to be held by Assignor as collateral
for, or then or at any time thereafter applied in whole or in part by Assignor
against, the payments due to Assignor because of Excluded Rights, whether
matured or unmatured, in such order as Assignor shall elect.

Assignor does for itself and its successors covenant and agree to
warrant and defend the title to the property assigned herein against the just
and lawful claims and demands of any person claiming under or through a Lien
Removable by BNPLC, but not otherwise.

Assignee hereby assumes and agrees to keep, perform and fulfill
Assignor's obligations, if any, relating to any permits or contracts, under
which Assignor has rights being assigned herein.

1

65
IN WITNESS WHEREOF, the parties have executed this instrument as of
_______________, _____.

ASSIGNOR:

BNP LEASING CORPORATION a Delaware
corporation

By:______________________________________
Its:__________________________________

ASSIGNEE:

[NAI or the Applicable Purchaser], a

By:______________________________________
Its:__________________________________

2

66
STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

STATE OF ____________ )
)      SS
COUNTY OF ___________ )

On ___________________ before me, _______________, personally appeared
_______________ and _______________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the persons whose names are subscribed
to the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument the
person, or the entity upon behalf of which the persons acted, executed the
instrument.

WITNESS my hand and official seal.

Signature_________________________

3

67
ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DOCUMENT TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 

68
38 degrees 52' 02" East 164.71 feet to said Point of beginning. As created by
that certain Certificate of Compliance (Lot Line Adjustment) recorded September
16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" West, through a central angle of 52 degrees
21' 36" for an arc length of 12.79 feet; thence South 51 degrees 07' 58" 

5

69
East 85.87 feet; thence South 38 degrees 52' 02" West 252.96 feet; North 51
degrees 07' 58" West 41.72 feet; thence Southwesterly along a non-tangent curve
to the left with a radius of 20.00 feet, from which a radial line bears North 10
degrees 35' 40" West, through a central angle of 40 degrees 32' 18" for an arc
length of 14.15 feet; thence South 38 degrees 52' 02" West 29.48 feet; thence
Southerly along a tangent curve to the left with a radius of 20.00 feet, through
a central angle of 60 degrees 45' 15" for an arc length 21.21 feet to a point on
said Northeasterly line of said parcel of land described in the deed to Santa
Clara Valley Transit District; thence Northwesterly along said Northeasterly
line along a non-tangent curve to the left with a radius of 1002.05 feet, from
which a radial line bears North 42 degrees 01' 23" East, through a central angle
of 1 degree 19' 55" for an arc length of 23.29 feet to the True Point of
Beginning.

APN: 110-32-010
ARB: 110-03-x066

6

70
EXHIBIT D

ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "Certificate") is made as of ___________________, ____, by [NAI or the
Applicable Purchaser, as the case may be], a ___________________ ("GRANTEE").

Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNPLC"), is executing and delivering to
Grantee (1) a corporate grant deed and (2) a Bill of Sale and Assignment (the
foregoing documents and any other documents to be executed in connection
therewith are herein called the "CONVEYANCING DOCUMENTS" and any of the
properties, rights or other matters assigned, transferred or conveyed pursuant
thereto are herein collectively called the "SUBJECT PROPERTY").

NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS TO
THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNPLC MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees that
warranties of merchantability and fitness for a particular purpose are excluded
from the transaction contemplated by the Conveyancing Documents, as are any
warranties arising from a course of dealing or usage of trade. Grantee hereby
assumes all risk and liability (and agrees that BNPLC shall not be liable for
any special, direct, indirect, consequential, or other damages) resulting or
arising from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property, except for damages
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of BNPLC. As used in the
preceding sentence, "ESTABLISHED MISCONDUCT" is intended to have, and be limited
to, the meaning given to it in the Common Definitions and Provisions Agreement
(Phase III - Land) incorporated by reference into the Purchase Agreement between
BNPLC and Network Appliance, Inc. dated [EFFECTIVE DATE], pursuant to which
Purchase Agreement BNPLC is delivering the Conveyancing Documents.

The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNPLC is entitled to rely and is relying on this
Certificate.

EXECUTED as of ________________, ____.

[NAI or the Applicable Purchaser]

By:______________________________________
Name:_________________________________
Title:________________________________

1

71
EXHIBIT E

SECRETARY'S CERTIFICATE

The undersigned, [Secretary or Assistant Secretary] of BNP Leasing
Corporation, a Delaware corporation (the "Corporation"), hereby certifies as
follows:

1.      That he is the duly, elected, qualified and acting Secretary [or
Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.

2.      That the following named persons have been properly designated,
elected and assigned to the office in the Corporation as indicated below; that
such persons hold such office at this time and that the specimen signature
appearing beside the name of such officer is his or her true and correct
signature.

[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER SALE CLOSING DOCUMENTS ON BEHALF
OF THE CORPORATION.]

Name                    Title                    Signature
----                    -----                    ---------

------------------      ------------------       ------------------

------------------      ------------------       ------------------

------------------      ------------------       ------------------

3.      That the resolutions attached hereto and made a part hereof were
duly adopted by the Board of Directors of the Corporation in accordance with the
Corporation's Articles of Incorporation and Bylaws. Such resolutions have not
been amended, modified or rescinded and remain in full force and effect.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this ____, day of __________, ____.

_________________________________________
[signature and title]

1

72
CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION

WHEREAS, pursuant to that certain Purchase Agreement (Phase III - Land)
(herein called the "Purchase Agreement") dated as of [EFFECTIVE DATE], by and
between BNP Leasing Corporation (the "Corporation") and [NAI OR THE APPLICABLE
PURCHASER AS THE CASE MAY BE] ("Purchaser"), the Corporation agreed to sell and
Purchaser agreed to purchase or cause the Applicable Purchaser (as defined in
the Purchase Agreement) to purchase the Corporation's interest in the property
(the "Property") located in Sunnyvale, California more particularly described
therein.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of the
Corporation and its shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed in the name and on behalf of the
Corporation to cause the Corporation to fulfill its obligations under the
Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed to take or cause to be taken any and
all actions and to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.

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EXHIBIT F

FIRPTA STATEMENT

Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of a
California real property interest must withhold income tax if the transferor is
a nonresident seller.

To inform [NAI OR THE APPLICABLE PURCHASER] (the "Transferee") that
withholding of tax is not required upon the disposition of a California real
property interest by transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the Seller:

1.      The Seller is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

2.      The United States employer identification number for the Seller
is _____________________;

3. The   office address of the Seller is ______________
_________________________ _________________.

4.      The Seller is qualified to do business in California.

The Seller understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

The Seller understands that the Transferee is relying on this affidavit
in determining whether withholding is required upon said transfer.

Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of the Seller.

Dated: ___________, ____.

By:______________________________________
Name:_________________________________
Title:________________________________

1

1
Exhibit 10.40

================================================================================

PURCHASE AGREEMENT
(PHASE III - IMPROVEMENTS)

BETWEEN

BNP LEASING CORPORATION

("BNPLC")

AND

NETWORK APPLIANCE, INC.

("NAI")

JUNE 16, 1999

(SUNNYVALE, CALIFORNIA)

================================================================================

2

TABLE OF CONTENTS

Page
----

1    NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE                              1
(A)   Right to Purchase; Right and Obligation to Remarket                              1
(B)   Determinations Concerning Price                                                  3
(C)   Designation of the Purchaser                                                     4
(D)   Effect of the Purchase Option and NAI's Initial Remarketing Rights
and Obligations on Subsequent Title Encumbrances                                 4
(E)   Security for the Purchase Option and NAI's Initial Remarketing Rights
and Obligations                                                                  5
(F)   Delivery of Books and Records If BNPLC Retains the Property                      5

2    NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE                                5
(A)   NAI's Extended Right to Remarket                                                 5
(B)   Definition of Minimum Extended Remarketing Price                                 6
(C)   BNPLC's Right to Sell                                                            7
(D)   NAI's Right to Excess Sales Proceeds                                             7
(E)   Permitted Transfers During NAI's Extended Remarketing Period                     7

3    TERMS OF CONVEYANCE UPON PURCHASE                                                      8

4    SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC                8
(A)   Status of this Agreement Generally                                               8
(B)   Election by NAI to Terminate the Purchase Option and NAI's Initial 
Remarketing Rights and Obligations

Prior to the Base Rent Commencement
Date                                                                             9
(C)   Election by BNPLC to Terminate the Purchase Option and NAI's Initial 
Remarketing Rights and Obligations                                               9
(D)   Automatic Termination of NAI's Rights                                            9
(E)   Termination of NAI's Extended Remarketing Rights to Permit a Sale by BNPLC      10
(F)   Payment Only to BNPLC                                                           10
(G)   Remedies Under the Other Operative Documents                                    10
(H)   Occupancy by NAI Prior to Closing of a Sale                                     10

5    SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS                                       10

6    CERTAIN REMEDIES CUMULATIVE                                                           11

7    ATTORNEYS' FEES AND LEGAL EXPENSES                                                    11

8    ESTOPPEL CERTIFICATE                                                                  11

9    SUCCESSORS AND ASSIGNS                                                                12

3

Exhibits and Schedules

Exhibit A Legal Description

Exhibit B Grant Deed Form Requirements

Exhibit C Bill of Sale and Assignment

Exhibit D Acknowledgment and Disclaimer

Exhibit E Secretary's Certificate

Exhibit F Certificate Concerning Tax Withholding

Exhibit K Notice by NAI of Election to Terminate

2

4

PURCHASE AGREEMENT
(PHASE III - IMPROVEMENTS)

This PURCHASE AGREEMENT (PHASE III - IMPROVEMENTS) (this "AGREEMENT"),
by and between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and
NETWORK APPLIANCE, INC., a California corporation ("NAI"), is made and dated as
of June 16, 1999, the Effective Date. ("EFFECTIVE DATE" and other capitalized
terms used and not otherwise defined in this Agreement are intended to have the
meanings assigned to them in the Common Definitions and Provisions Agreement
(Phase III - Improvements) executed by BNPLC and NAI contemporaneously with this
Agreement. By this reference, the Common Definitions and Provisions Agreement
(Phase III - Improvements) is incorporated into and made a part of this
Agreement for all purposes.)

RECITALS

Pursuant to the Existing Contracts, which cover the Land described in
Exhibit  , NAI has leased the Land for a term of 25 years and may acquire or
cause BNPLC to acquire Seller's fee interest in the Land and any appurtenances
thereto.

Pursuant to the Construction Management Agreement (the "CONSTRUCTION
MANAGEMENT AGREEMENT") and the Lease Agreement (Phase III - Improvements) (the
"IMPROVEMENTS LEASE") executed by BNPLC and NAI contemporaneously with this
Agreement, BNPLC is agreeing to provide funding for the construction and
completion of Improvements on the Land, all of which will be owned by BNPLC, and
is leasing the Improvements to NAI. (All of BNPLC's interests, including those
created by the documents delivered at the closing under the Existing Contracts,
in the Improvements and in all other real and personal property from time to
time covered by the Improvements Lease and included within the "Property" as
defined therein are hereinafter collectively referred to as the "PROPERTY". The
Property does not include the fee estate in the Land itself, it being understood
that even after any conveyance of the fee estate in the Land to BNPLC under the
Existing Contracts or otherwise, the Other Purchase Agreement will constitute a
separate agreement providing for the possible sale of the Land and the
appurtenances thereto, and only the Land and the appurtenances thereto, from
BNPLC to NAI or a third party designated by NAI.)

NAI and BNPLC have reached agreement upon the terms and conditions upon
which NAI will purchase or arrange for the purchase of the Property, and by this
Agreement they desire to evidence such agreement.

AGREEMENTS

1 NAI'S OPTIONS AND OBLIGATIONS ON THE DESIGNATED SALE DATE.

(A) Right to Purchase; Right and Obligation to Remarket. Whether or not an Event
of Default shall have occurred and be continuing or the Improvements Lease shall
have been terminated, but subject to Paragraph below:

(1) NAI shall have the right (the "PURCHASE OPTION") to purchase or
cause an Affiliate of NAI to purchase the Property and BNPLC's interest
in Escrowed Proceeds, if any, on the Designated Sale Date for a cash
price equal to the Break Even Price (as defined below).

3

5

(2) If neither NAI nor an Affiliate of NAI purchases the Property and BNPLC's
interest in any Escrowed Proceeds on the Designated Sale Date as provided in the
preceding subparagraph 1(A)1, then NAI shall have the following rights and
obligations (collectively, "NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS"):

(a) First, NAI shall have the right (but not the obligation) to cause
an Applicable Purchaser who is not an Affiliate of NAI to purchase the
Property and BNPLC's interest in any Escrowed Proceeds on the
Designated Sale Date for a cash purchase price (the "THIRD PARTY
PRICE") determined as provided below. If, however, the Break Even Price
exceeds the sum of any Third Party Price tendered or to be tendered to
BNPLC by an Applicable Purchaser and any Supplemental Payment paid by
NAI as described below, then BNPLC may affirmatively elect to decline
such tender from the Applicable Purchaser and to keep the Property and
any Escrowed Proceeds rather than sell to the Applicable Purchaser
pursuant to this subparagraph (a "VOLUNTARY RETENTION OF THE
PROPERTY").

(b) Second, if the Third Party Price actually paid by an Applicable
Purchaser to BNPLC on the Designated Sale Date exceeds the Break Even
Price, NAI shall be entitled to such excess, subject, however, to
BNPLC's right to offset against such excess any and all sums that are
then due from NAI to BNPLC under the other Operative Documents.

(c) Third, if for any reason whatsoever (including a Voluntary
Retention of the Property or a decision by NAI not to exercise its
right to purchase or cause an Applicable Purchaser to purchase from
BNPLC as described above) neither NAI nor an Applicable Purchaser pays
a net cash price to BNPLC on the Designated Sale Date equal to or in
excess of the Break Even Price in connection with a sale of the
Property and BNPLC's interest in any Escrowed Proceeds pursuant to this
Agreement, then NAI shall have the obligation to pay to BNPLC on the
Designated Sale Date a supplemental payment (the "SUPPLEMENTAL
PAYMENT") equal to the lesser of (1) the amount by which the Break Even
Price exceeds such net cash price (if any) actually received by BNPLC
on the Designated Sale Date (such excess being hereinafter called a
"DEFICIENCY") or (2) the Maximum Remarketing Obligation. As used
herein, the "MAXIMUM REMARKETING OBLIGATION" means a dollar amount
determined in accordance with the following provisions:

1) The "MAXIMUM REMARKETING OBLIGATION" will equal the product
of (i) Stipulated Loss Value on the Designated Sale Date,
times (ii) 100% minus the Residual Risk Percentage, provided
that both of the following conditions are satisfied:

(x) NAI shall not have elected to accelerate the
Designated Sale Date as provided in clause (2) of the
definition of Designated Sale Date in the Common Definitions
and Provisions Agreement (Phase III - Improvements).

(y) No Event of Default, other than an Issue 97-1
Non-performance-related Subjective Event of Default, shall
occur on or be continuing on the Designated Sale Date.

2) If either of the conditions listed in subparagraph 1)
preceding are not satisfied, the "MAXIMUM REMARKETING
OBLIGATION" will equal the Break Even Price.

2

6

If any Supplemental Payment or other amount payable to BNPLC pursuant to this
subparagraph is not actually paid to BNPLC on the Designated Sale Date, NAI
shall pay interest on the past due amount computed at the Default Rate from the
Designated Sale Date.

(B) Determinations Concerning Price.

(1) Determination of the Break Even Price. As used herein, "BREAK EVEN
PRICE" means an amount equal, on the Designated Sale Date, to
Stipulated Loss Value, plus all out-of-pocket costs and expenses
(including appraisal costs, withholding taxes (if any) not constituting
Excluded Taxes, and Attorneys' Fees) incurred by BNPLC in connection
with any sale of BNPLC's interests in the Property under this Agreement
or in connection with collecting payments due hereunder, and plus an
amount equal to the Balance of Unpaid Construction-Period Indemnity
Payments, but less the aggregate amounts (if any) of Direct Payments to
Participants and Deposit Taker Losses. As used herein, the "BALANCE OF
UNPAID CONSTRUCTION-PERIOD INDEMNITY PAYMENTS" means an amount equal to
the sum of Construction-Period Indemnity Payments, if any, that NAI
declined to pay pursuant to subparagraph 5(d)(ii) of the Improvements
Lease, plus interest accruing at the Default Rate, compounded annually,
on each such payment from the date such payment would have become due
but for NAI's right to decline to pay it as described in subparagraph
5(d)(ii) of the Improvements Lease. If, however, Losses for which NAI
has so declined to pay any Construction-Period Indemnity Payment
consist of claims against BNPLC or another Interested Party that have
not been liquidated prior to the Designated Sale Date (and, thus, such
Losses have yet to be fixed in amount as of the Designated Sale Date),
then NAI may elect to exclude any Construction-Period Indemnity Payment
attributable to such Losses by providing to BNPLC, for the benefit of
BNPLC and other Interested Parties, a written agreement to indemnify
and defend BNPLC and other Interested Parties against such Losses. To
be effective hereunder for purposes of reducing the Balance of Unpaid
Construction-Period Indemnity Payments (and, thus, the Break Even
Price), any such written indemnity must be fully executed and delivered
by NAI on or prior to the Designated Sale Date, must include provisions
comparable to subparagraphs 5(c)(ii), (iii), (iv) and (v) of the
Improvements Lease and otherwise must be in form and substance
satisfactory to BNPLC.

(2) Determination of Third Party Price. The Third Party Price required
of any Applicable Purchaser purchasing from BNPLC under subparagraph
1(A)(2)(a) will be determined as follows:

(a) NAI may give a notice (a "REMARKETING NOTICE") to BNPLC
and to each of the Participants no earlier than one hundred
twenty days before the Designated Sale Date and no later than
ninety days before the Designated Sale Date, specifying an
amount as the Third Party Price that NAI believes in good
faith to constitute reasonably equivalent value for the
Property and any Escrowed Proceeds. Once given, a Remarketing
Notice shall not be rescinded or modified without BNPLC's
written consent.

(b) If BNPLC believes in good faith that the Third Party Price
specified by NAI in a Remarketing Notice does not constitute
reasonably equivalent value for the Property and any Escrowed
Proceeds, BNPLC may at any time before sixty days prior to the
Designated Sale Date respond to the Remarketing Notice with a
notice back to NAI, objecting to the Third Party Price so
specified by NAI. If BNPLC receives a Remarketing Notice, yet
does not respond with an objection as provided in the
preceding sentence, the Third Party Price suggested by NAI in
the Remarketing Notice will be the Third Party Price for
purposes of this Agreement. If, however, BNPLC does respond
with an objection as provided in this subparagraph, and if NAI
and BNPLC do not otherwise agree in writing upon a Third Party
Price, then the Third Party Price will be the lesser of (I)
fair market value of the Property, plus the amount of any
Escrowed Proceeds, as determined by a professional independent
appraiser satisfactory to BNPLC, or (II) the Break Even Price.

(c) If for any reason, including an acceleration of the
Designated Sale Date as provided in the definition thereof in
the Common Definitions and Provisions Agreement (Phase III -
Improvements), NAI does not deliver a Remarketing Notice to
BNPLC within the time period specified above, then the Third
Party Price will be an 

3

7

amount determined in good faith by BNPLC as constituting
reasonably equivalent value for the Property and any Escrowed
Proceeds, but in no event more than the Break Even Price.

If any payment to BNPLC by an Applicable Purchaser hereunder is held to
constitute a preference or a voidable transfer under Applicable Law, or
must for any other reason be refunded by BNPLC to the Applicable
Purchaser or to another Person, and if such payment to BNPLC reduced or
had the effect of reducing a Supplemental Payment or increased or had
the effect of increasing any excess sale proceeds paid to NAI pursuant
to subparagraph 1(A)(2)(b) or pursuant to subparagraph 2(D), then NAI
shall pay to BNPLC upon demand an amount equal to the reduction of the
Supplemental Payment or to the increase of the excess sale proceeds
paid to NAI, as applicable, and this Agreement shall continue to be
effective or shall be reinstated as necessary to permit BNPLC to
enforce its right to collect such amount from NAI.

(C) Designation of the Purchaser. To give BNPLC the opportunity before the
Designated Sale Date to prepare the deed and other documents that BNPLC must
tender pursuant to Paragraph (collectively, the "SALE CLOSING DOCUMENTS"), NAI
must, by a notice to BNPLC given at least seven days prior to the Designated
Sale Date, specify irrevocably, unequivocally and with particularity the party
who will purchase the Property in order to satisfy the obligations of NAI set
forth in subparagraph 1(A). If for any reason NAI fails to so specify a party
who will in accordance with the terms and conditions set forth herein purchase
the Property (be it NAI itself, an Affiliate of NAI or another Applicable
Purchaser), BNPLC shall be entitled to postpone the tender of the Sale Closing
Documents until a date after the Designated Sale Date and not more than twenty
days after NAI finally does so specify a party, but such postponement will not
relieve or postpone the obligation of NAI to make a Supplemental Payment on the
Designated Sale Date as provided in Paragraph 1(A)(2)(c). 

(D) Effect of the Purchase Option and NAI's Initial Remarketing Rights and
Obligations on Subsequent Title Encumbrances. Any conveyance of the Property to
NAI or any Applicable Purchaser pursuant to this Paragraph 1(A) shall cut off
and terminate any interest in the Improvements or other Property claimed by,
through or under BNPLC, including any interest claimed by the Participants and
including any Liens Removable by BNPLC (such as, but not limited to, any
judgment liens established against the Property because of a judgment rendered
against BNPLC and any leasehold or other interests conveyed by BNPLC in the
ordinary course of BNPLC's business), but not including personal obligations of
NAI to BNPLC under the Improvements Lease or other Operative Documents
(including obligations arising under the indemnities therein). Anyone accepting
or taking any interest in the Property by or through BNPLC after the date of
this Agreement shall acquire such interest subject to the Purchase Option and
NAI's Initial Remarketing Rights and Obligations. Further, NAI and any
Applicable Purchaser shall be entitled to pay any payment required by this
Agreement for the purchase of the Property directly to BNPLC notwithstanding any
prior conveyance or assignment by BNPLC, voluntary or otherwise, of any right or
interest in this Agreement or the Property, and neither NAI nor any Applicable
Purchaser shall be responsible for the proper distribution or application of any
such payments by BNPLC; and any such payment to BNPLC shall discharge the
obligation of NAI to cause such payment to all Persons claiming an interest in
such payment. Contemporaneously with the execution of this Agreement, the
parties shall record a memorandum of this Agreement for purposes of effecting
constructive notice to all Persons of NAI's rights under this Agreement,
including its rights under this subparagraph.

(E) Security for the Purchase Option and NAI's Initial Remarketing Rights and
Obligations. To secure BNPLC's obligation to sell the Property pursuant to this
Paragraph 1(A) and to pay any damages to NAI caused by a breach of such
obligations, including any such breach caused by a rejection or termination of
this Agreement in any bankruptcy or insolvency proceeding instituted by or
against BNPLC, as debtor, BNPLC does hereby grant to NAI a lien and security
interest against all rights, title and interests of BNPLC from time to time in
and to the Improvements and other Property. NAI may enforce such lien and
security interest judicially after any such breach by BNPLC, but not otherwise.
Contemporaneously with the execution of this Agreement, NAI and BNPLC will
execute a memorandum of this Agreement which is in recordable form and which
specifically references the lien granted in this subparagraph, and NAI shall be
entitled to record such memorandum at any time prior to the Designated Sale
Date.

4

8
(F) Delivery of Books and Records If BNPLC Retains the Property. Unless NAI or
its Affiliate or another Applicable Purchaser purchases the Property pursuant to
Paragraph 1(A), promptly after the Designated Sale Date NAI shall deliver to
BNPLC copies of all plans and specifications for the Property prepared in
connection with the construction contemplated by the Construction Management
Agreement and the Improvements Lease, together with all other books and records
of NAI which will be necessary or useful to any future owner's or occupant's use
of the Property in the manner permitted by the Improvements Lease.

2 NAI'S RIGHTS AND OPTIONS AFTER THE DESIGNATED SALE DATE. 

(A) NAI's Extended Right to Remarket. During the two years following the
Designated Sale Date ("NAI'S EXTENDED REMARKETING PERIOD"), NAI shall have the
right ("NAI'S EXTENDED REMARKETING RIGHT") to cause an Applicable Purchaser who
is not an Affiliate of NAI to purchase the Property for a cash purchase price
not below the lesser of (I) the Minimum Extended Remarketing Price (as defined
below), or (II) if applicable, the Third Party Target Price (as defined below)
specified in any Third Party Sale Notice (as defined below) given by BNPLC
pursuant to subparagraph 2(C)(2) within the ninety days prior to the date (the
"FINAL SALE DATE") upon which BNPLC receives such purchase price from the
Applicable Purchaser. NAI's Extended Remarketing Right shall, however, be
subject to all of the following conditions:

(1) The Property and BNPLC's interest in Escrowed Proceeds, if any,
shall not have been sold on the Designated Sale Date as provided in
Paragraph 1.

(2) No Voluntary Retention of the Property shall have occurred as
described in subparagraph 1(A)(2)(a).

(3) NAI's Extended Remarketing Right shall not have been terminated
pursuant to subparagraph 4(D) below because of NAI's failure to make
any Supplemental Payment required on the Designated Sale Date.

(4) NAI's Extended Remarketing Right shall not have been terminated by
BNPLC pursuant to subparagraph 4(E) below to facilitate BNPLC's sale of
the Property to a third party in accordance with subparagraph 2(C).

(5) At least thirty days prior to the Final Sale Date, NAI shall have
notified BNPLC of (x) the date proposed by NAI as the Final Sale Date
(which must be a Business Day), (y) the full legal name of the
Applicable Purchaser and such other information as will be required to
prepare the Sale Closing Documents, and (z) the amount of the purchase
price that the Applicable Purchaser will pay (consistent with the
minimum required pursuant to the other provisions of this subparagraph
2(A)) for the Property.

(B) Definition of Minimum Extended Remarketing Price. As used herein, "MINIMUM
EXTENDED REMARKETING PRICE" means an amount equal to the sum of the following:

(1) the amount by which the Break Even Price computed on the Designated
Sale Date exceeds any Supplemental Payment actually paid to BNPLC on
the Designated Sale Date, together with interest on such excess
computed at the Default Rate from the period commencing on the
Designated Sale Date and ending on the Final Sale Date, plus

(2) all out-of-pocket costs and expenses (including withholding taxes
[if any], other than Excluded Taxes, and Attorneys' Fees) incurred by
BNPLC in connection with the sale to the Applicable Purchaser, to the
extent not already included in the computation of Break Even Price, and
plus

(3) the sum of all Impositions, insurance premiums and other Losses of
every kind suffered or incurred by BNPLC or any other Interested Party
with respect to the ownership, operation or maintenance of the Property
on or after the Designated Sale Date (except to the extent already
reimbursed by any lessee of the Property after the Designated 

5

9

Sale Date), together with interest on such Impositions, insurance
premiums and other Losses computed at the Default Rate from the date
paid or incurred to the Final Sale Date.

If, however, Losses described in the preceding clause (3) consist of claims
against BNPLC or another Interested Party that have not been liquidated prior to
the Final Sale Date (and, thus, such Losses have yet to be fixed in amount as of
the Final Sale Date), then NAI may elect to exclude any such Losses from the
computation of the Minimum Extended Remarketing Price by providing to BNPLC, for
the benefit of BNPLC and other Interested Parties, a written agreement to
indemnify and defend BNPLC and other Interested Parties against such Losses. To
be effective hereunder for purposes of reducing the Minimum Extended Remarketing
Price (and, thus, the Break Even Price), any such written indemnity must be
fully executed and delivered by NAI on or prior to the Final Sale Date, must
include provisions comparable to subparagraphs 5(c)(ii), (iii), (iv) and (v) of
the Improvements Lease and otherwise must be in form and substance satisfactory
to BNPLC.

(C) BNPLC's Right to Sell. After the Designated Sale Date, if the Property has
not already been sold by BNPLC pursuant to Paragraph 1 or this Paragraph 2,
BNPLC shall have the right to sell the Property or offer the Property for sale
to any third party on any terms believed to be appropriate by BNPLC in its sole
good faith business judgment; provided, however, that so long as the conditions
to NAI's Extended Remarketing Rights specified in subparagraph 2(A) continue to
be satisfied: 

(1) BNPLC shall not sell the Property to an Affiliate of BNPLC on terms
less favorable than those which BNPLC would require from a prospective
purchaser not an Affiliate of BNPLC;

(2) If BNPLC receives or desires to make a written proposal (whether in
the form of a "letter of intent" or other nonbinding expression of
interest or in the form of a more definitive purchase and sale
agreement) for a sale of the Property to a prospective purchaser (a
"THIRD PARTY SALE PROPOSAL"), and if on the basis of such Third Party
Sale Proposal BNPLC expects to enter into or to pursue negotiations for
a definitive purchase and sale agreement with the prospective
purchaser, then prior to executing any such definitive agreement, BNPLC
shall submit the Third Party Sale Proposal to NAI with a notice (the
"THIRD PARTY SALE NOTICE") explaining that (A) BNPLC is then prepared
to accept a price not below an amount specified in such Third Party
Sale Notice (the "THIRD PARTY TARGET PRICE") if BNPLC and the
prospective purchaser reach agreement on other terms and conditions to
be incorporated into a definitive purchase and sale agreement, and (B)
NAI's Extended Remarketing Right may be terminated pursuant to
subparagraph 4(E) of this Agreement unless NAI causes an Applicable
Purchaser to consummate a purchase of the Property pursuant to this
Paragraph within ninety days after the date of such Third Party Sale
Notice.

(D) NAI's Right to Excess Sales Proceeds. If the cash price actually paid by any
third party purchasing the Property from BNPLC during NAI's Extended Remarketing
Period, including any price paid by an Applicable Purchaser purchasing from
BNPLC pursuant to this Paragraph 2, exceeds the Minimum Extended Remarketing
Price, then NAI shall be entitled to the excess; provided, that BNPLC may offset
and retain from the excess any and all sums that are then due and unpaid from
NAI to BNPLC under any of the Operative Documents. 

(E) Permitted Transfers During NAI's Extended Remarketing Period. Any "Permitted
Transfer" described in clause (6) of the definition thereof in the Common
Definitions and Provisions Agreement (Phase III - Improvements) to an Affiliate
of BNPLC or that covers BNPLC's entire interest in the Improvements will be
subject to NAI's Extended Remarketing Right if, at the time of the Permitted
Transfer, NAI's Extended Remarketing Right has not expired or been terminated as
provided herein. Any other Permitted Transfer described in clause (6) of the
definition thereof, however, will not be subject to NAI's Extended Remarketing
Right. Thus, for example, BNPLC's conveyance of a utility easement or space
lease more than thirty days after the Designated Sale Date to a Person not an
Affiliate of BNPLC shall not be subject to NAI's Extended Remarketing Right,
though following the conveyance of the lesser estate, NAI's Extended Remarketing
Right may continue to apply to BNPLC's remaining interest in the Improvements
and any Personal Property. 

6

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3 TERMS OF CONVEYANCE UPON PURCHASE. As necessary to consummate any sale of the
Property to NAI or an Applicable Purchaser pursuant to this Agreement, BNPLC
must, subject to any postponement permitted by subparagraph 1(C), promptly after
the tender of the purchase price and any other payments to BNPLC required
pursuant to Paragraph 1 or Paragraph 2, as applicable, convey all of BNPLC's
right, title and interest in the Improvements and other Property to NAI or the
Applicable Purchaser, as the case may be, by BNPLC's execution, acknowledgment
(where appropriate) and delivery of the Sale Closing Documents. Such conveyance
by BNPLC will be subject only to the Permitted Encumbrances and any other
encumbrances that do not constitute Liens Removable by BNPLC. However, such
conveyance shall not include the rights of BNPLC or other Interested Parties
under the indemnities provided in the Operative Documents, including rights to
any payments then due from NAI under the indemnities or that may become due
thereafter because of any expense or liability incurred by BNPLC or another
Interested Party resulting in whole or in part from events or circumstances
occurring or alleged to have occurred before such conveyance. All costs, both
foreseen and unforeseen, of any purchase by NAI or an Applicable Purchaser
hereunder shall be the responsibility of the purchaser. The Sale Closing
Documents used to accomplish such conveyance shall consist of the following: (1)
a Corporation Grant Deed in the form attached as Exhibit B-1 or Exhibit B-2 or
Exhibit B-3, as required by Exhibit B, (2) a Bill of Sale and Assignment in the
form attached as Exhibit C, (3) an Acknowledgment of Disclaimer of
Representations and Warranties, in the form attached as Exhibit D, which NAI or
the Applicable Purchaser must execute and return to BNPLC, (4) a Secretary's
Certificate in the form attached as Exhibit E, and (5) a certificate concerning
tax withholding in the form attached as Exhibit F. If for any reason BNPLC fails
to tender the Sale Closing Documents as required by this Paragraph, BNPLC may
cure such refusal at any time before thirty days after receipt of a demand for
such cure from NAI. 

4 SURVIVAL AND TERMINATION OF THE RIGHTS AND OBLIGATIONS OF NAI AND BNPLC.

(A) Status of this Agreement Generally. Except as expressly provided herein,
this Agreement shall not terminate; nor shall NAI have any right to terminate
this Agreement; nor shall NAI be entitled to any reduction of the Break Even
Price, any Deficiency, the Maximum Remarketing Obligation, any Supplemental
Payment or the Minimum Extended Remarketing Price hereunder; nor shall the
obligations of NAI to BNPLC under Paragraph 1 be affected, by reason of (i) any
damage to or the destruction of all or any part of the Property from whatever
cause (though it is understood that NAI will receive any remaining Escrowed
Proceeds yet to be applied as provided in the Improvements Lease that may result
from such damage if NAI purchases the Property and the Escrowed Proceeds as
herein provided), (ii) the taking of or damage to the Property or any portion
thereof by eminent domain or otherwise for any reason (though it is understood
that NAI will receive any remaining Escrowed Proceeds yet to be applied as
provided in the Improvements Lease that may result from such taking or damage if
NAI purchases the Property and the Escrowed Proceeds as herein provided), (iii)
the prohibition, limitation or restriction of NAI's use of all or any portion of
the Property or any interference with such use by governmental action or
otherwise, (iv) any eviction of NAI or any party claiming under NAI by paramount
title or otherwise, (v) NAI's prior acquisition or ownership of any interest in
the Property, (vi) any default on the part of BNPLC under this Agreement, the
Improvements Lease or any other agreement to which BNPLC is a party, or (vii)
any other cause, whether similar or dissimilar to the foregoing, any existing or
future law to the contrary notwithstanding. It is the intention of the parties
hereto that the obligations of NAI to make payment to BNPLC hereunder shall be
separate and independent covenants and agreements from BNPLC's obligations under
this Agreement or any other agreement between BNPLC and NAI; provided, however,
that nothing in this subparagraph shall excuse BNPLC from its obligation to
tender the Sale Closing Documents in substantially the form attached hereto as
exhibits when required by Paragraph 3. Further, nothing in this subparagraph
shall be construed as a waiver by NAI of any right NAI may have at law or in
equity to the following remedies, whether because of BNPLC's failure to remove a
Lien Removable by BNPLC or because of any other default by BNPLC under this
Agreement: (i) the recovery of monetary damages, (ii) injunctive relief in case
of the violation, or attempted or threatened violation, by BNPLC of any of the
express covenants, agreements, conditions or provisions of this Agreement which
are binding upon BNPLC, or (iii) a decree compelling performance by BNPLC of any
of the express covenants, agreements, conditions or provisions of this Agreement
which are binding upon BNPLC. 

7

11

(B) Election by NAI to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations Prior to the Base Rent Commencement Date. At
any time prior to the Base Rent Commencement Date, NAI may elect to terminate
both the Purchase Option and NAI's Initial Remarketing Rights and Obligations,
subject to the following conditions: 

(1) To be effective, any such election to terminate must be made prior
to the Base Rent Commencement Date and must be made after (x) NAI shall
have given Notice of NAI's Election to Terminate pursuant to Paragraph
5(D) of the Construction Management Agreement, (y) BNPLC shall have
given any FOCB Notice as provided in Paragraph 5(E) of the Construction
Management Agreement, or (z) BNPLC shall have given notice of its
election to accelerate the Designated Sale Date when an Event of
Default has occurred and is continuing as provided in clause (5) of the
definition Designated Sale Date in the Common Definitions and
Provisions Agreement (Phase III - Improvements).

(2) To be effective, any such election to terminate must be made by
giving BNPLC and the Participants a notice thereof in the form attached
as Exhibit F prior to the Base Rent Commencement Date.

(3) No termination pursuant to this subparagraph 4(B) shall be
effective, notwithstanding any notice NAI may have given as described
in the preceding clause (2), unless contemporaneously with the giving
of the notice (and in any event prior to the Base Rent Commencement
Date) NAI shall deliver to BNPLC an Issue 97-10 Prepayment.

(4) If for any reason whatsoever, including any bona fide dispute over
the amount of any required Issue 97-10 Prepayment, BNPLC does not
receive both the notice described in the preceding clause (2) and a
full Issue 97-10 Prepayment as described in the preceding clause (3)
prior to the Base Rent Commencement Date, then without any notice or
other action by the parties to this Agreement NAI shall cease to have
any option to terminate pursuant to this subparagraph 4(B).

(C) Election by BNPLC to Terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations. By notice to NAI BNPLC shall be entitled to
terminate both the Purchase Option and NAI's Initial Remarketing Rights and
Obligations, as BNPLC deems appropriate in its sole and absolute discretion, at
any time after receiving a notice given by NAI to make or attempt to make any
Issue 97-10 Election. Upon any such termination by BNPLC, NAI shall become
immediately obligated to pay BNPLC an Issue 97-10 Prepayment.

(D) Automatic Termination of NAI's Rights. Without limiting BNPLC's right to
enforce NAI's obligation to pay any Supplemental Payment or other amounts
required by this Agreement, the rights of NAI (to be distinguished from the
obligations of NAI) included in NAI's Initial Remarketing Rights and
Obligations, the Purchase Option and NAI's Extended Remarketing Rights shall all
terminate automatically if NAI shall fail to pay the full amount of any
Supplemental Payment required by subparagraph 1(A)(2)(c) on the Designated Sale
Date or if BNPLC shall elect a Voluntary Retention of the Property as provided
in subparagraph 1(A)(2)(a). If, however, NAI's Initial Remarketing Rights and
Obligations are effectively terminated pursuant to subparagraph 4(B) or 4(C)
prior to the Designated Sale Date, thereby excusing NAI from the obligation to
make any Supplemental Payment pursuant to subparagraph 1(A)(2)(c) and precluding
any Voluntary Retention of the Property pursuant to subparagraph 1(A)(2)(a),
then NAI's Extended Remarketing Rights will not automatically terminate pursuant
to this subparagraph. Further, notwithstanding anything in this subparagraph to
the contrary, even after a failure to pay any required Supplemental Payment on
the Designated Sale Date, NAI may nonetheless tender to BNPLC the full Break
Even Price and all amounts then due under the Operative Documents, together with
interest on the total Break Even Price computed at the Default Rate from the
Designated Sale Date to the date of tender, on any Business Day within thirty
days after the Designated Sale Date, and if presented with such a tender within
thirty days after the Designated Sale Date, BNPLC must accept it and promptly
thereafter deliver any Escrowed Proceeds and the Sale Closing Documents listed
in Paragraph 3 to NAI.

(E) Termination of NAI's Extended Remarketing Rights to Permit a Sale by BNPLC.
At any time more than ninety days after BNPLC has delivered a Third Party Sale
Notice to NAI as described in subparagraph 2(C)(a), BNPLC may terminate NAI's
Extended Remarketing Rights contemporaneously with the consummation of a sale of
the Property by BNPLC to any 

8

12

third party (be it the prospective purchaser named in the Third Party Sale
Notice or another third party) at a price equal to or in excess of the Third
Party Target Price specified in the Third Party Sale Notice, so as to permit the
sale of the Property unencumbered by NAI's Extended Remarketing Rights.

(F) Payment Only to BNPLC. All amounts payable under this Agreement by NAI and,
if applicable, by an Applicable Purchaser must be paid directly to BNPLC, and no
payment to any other party shall be effective for the purposes of this
Agreement. In addition to the payments required under subparagraph, on the
Designated Sale Date NAI must pay all amounts then due to BNPLC under the
Improvements Lease or other Operative Documents.

(G) Remedies Under the Other Operative Documents. No repossession of or 
re-entering upon the Property or exercise of any other remedies available to
BNPLC under the Improvements Lease or other Operative Documents shall terminate
NAI's rights or obligations hereunder, all of which shall survive BNPLC's
exercise of remedies under the other Operative Documents. NAI acknowledges that
the consideration for this Agreement is separate and independent of the
consideration for the Improvements Lease, the Construction Management Agreement
and the Closing Certificate, and NAI's obligations hereunder shall not be
affected or impaired by any event or circumstance that would excuse NAI from
performance of its obligations under such other Operative Documents.

(H) Occupancy by NAI Prior to Closing of a Sale. Prior to the closing of any
sale of the Property to NAI or an Applicable Purchaser hereunder, NAI's
occupancy of the Improvements and its use of the Property shall continue to be
subject to the terms and conditions of the Improvements Lease, including the
terms setting forth NAI's obligation to pay rent, prior to any termination or
expiration of the Improvements Lease pursuant to its express terms and
conditions. 

5 SECURITY FOR NAI'S OBLIGATIONS; RETURN OF FUNDS. NAI's obligations under this
Agreement are secured by the Pledge Agreement, reference to which is hereby made
for a description of the Collateral covered thereby and the rights and remedies
provided to BNPLC thereby. Although the collateral agent appointed for BNPLC as
provided in the Pledge Agreement shall be entitled to hold all Collateral as
security for the full and faithful performance by NAI of NAI's covenants and
obligations under this Agreement, the Collateral shall not be considered an
advance payment of the Break Even Price or any Supplemental Payment or a measure
of BNPLC's damages should NAI breach this Agreement. If NAI does breach this
Agreement and fails to cure the same within any time specified herein for the
cure, BNPLC may, from time to time, without prejudice to any other remedy and
without notice to NAI, require the collateral agent to immediately apply the
proceeds of any disposition of the Collateral (and any cash included in the
Collateral) to amounts then due hereunder from NAI. If by a Permitted Transfer
BNPLC conveys its interest in the Property before the Designated Sale Date,
BNPLC may also assign BNPLC's interest in the Collateral to the transferee.
BNPLC shall be entitled to return any Collateral not sold or used to satisfy the
obligations secured by the Pledge Agreement directly to NAI notwithstanding any
prior actual or attempted conveyance or assignment by NAI, voluntary or
otherwise, of any right to receive the same; neither BNPLC nor the collateral
agent named in the Pledge Agreement shall be responsible for the proper
distribution or application by NAI of any such Collateral returned to NAI; and
any such return of Collateral to NAI shall discharge any obligation of BNPLC to
deliver such Collateral to all Persons claiming an interest in the Collateral.
Further, BNPLC shall be entitled to deliver any Escrowed Proceeds it holds on
the Designated Sale Date directly to NAI or to any Applicable Purchaser
purchasing BNPLC's interest in the Property and the Escrowed Proceeds pursuant
to this Agreement notwithstanding any prior actual or attempted conveyance or
assignment by NAI, voluntary or otherwise, of any right to receive the same;
BNPLC shall not be responsible for the proper distribution or application by NAI
or any Applicable Purchaser of any such Escrowed Proceeds paid over to NAI or
the Applicable Purchaser; and any such payment of Escrowed Proceeds to NAI or an
Applicable Purchaser shall discharge any obligation of BNPLC to deliver the same
to all Persons claiming an interest therein.

9

13

6 CERTAIN REMEDIES CUMULATIVE. No right or remedy herein conferred upon or
reserved to BNPLC is intended to be exclusive of any other right or remedy BNPLC
has with respect to the Property, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute. In addition to other
remedies available under this Agreement, either party shall be entitled, to the
extent permitted by applicable law, to a decree compelling performance of any of
the other party's agreements hereunder.

7 ATTORNEYS' FEES AND LEGAL EXPENSES. If either party to this Agreement
commences any legal action or other proceeding to enforce any of the terms of
this Agreement, or because of any breach by the other party or dispute
hereunder, the party prevailing in such action or proceeding shall be entitled
to recover from the other party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is prosecuted to a
final judgment. Any such Attorneys' Fees incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
such judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment. 

8 ESTOPPEL CERTIFICATE. Upon request by BNPLC, NAI shall execute, acknowledge
and deliver a written statement certifying that this Agreement is unmodified and
in full effect (or, if there have been modifications, that this Agreement is in
full effect as modified, and setting forth such modification) and either stating
that no default exists hereunder or specifying each such default of which NAI
has knowledge. Any such statement may be relied upon by any Participant or
prospective purchaser or assignee of BNPLC with respect to the Property. 

9 SUCCESSORS AND ASSIGNS. The terms, provisions, covenants and conditions hereof
shall be binding upon NAI and BNPLC and their respective permitted successors
and assigns and shall inure to the benefit of NAI and BNPLC and all permitted
transferees, mortgagees, successors and assignees of NAI and BNPLC with respect
to the Property; provided, that (A) the rights of BNPLC hereunder shall not pass
to NAI or any Applicable Purchaser or any subsequent owner claiming through NAI
or an Applicable Purchaser, (B) BNPLC shall not assign this Agreement or any
rights hereunder except pursuant to a Permitted Transfer, and (C) NAI shall not
assign this Agreement or any rights hereunder without the prior written consent
of BNPLC. 

[Signature pages follow.]

10

14

IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be
executed as of June 16, 1999.

"NAI"

NETWORK APPLIANCE, INC.

By:            
--------------------------------------
Name:       
--------------------------------
Title:  
-------------------------------

11

15

[Continuation of signature pages to Purchase Agreement (Phase III - 
Improvements) dated to be effective June 16, 1999]

"BNPLC"

BNP LEASING CORPORATION

By:
--------------------------------
Henry Setina, Vice President

12

16

EXHIBIT A

LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38 degrees 52'
02" East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.

PARCEL TWO:

1

17

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45 
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc 
length of 75.92 feet to the true point of beginning; thence North 38 degrees 
52' 02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the 
left with a radius of 78.00 feet, from which a radial line bears South 
38 degrees 52' 02" West, through a central angle of 28 degrees 09' 05" for an 
arc length of 38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; 
thence Northwesterly along a curve to the left with a radius of 17.00 feet 
through a central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; 
thence North 51 degrees 07' 58" West 19.80 feet; thence the following three
courses: North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" 
West 49.68 feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly 
line of said Parcel A, as shown upon that certain Parcel Map filed for record in
Book 216 at Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said 
Northeasterly line; thence South 38 degrees 52' 02" West 74.94 feet; thence 
Southerly along a non-tangent curve to the left with a radius of 14.00 feet, 
from which a radial line bears North 88 degrees 46' 22" West, through a central 
angle of 52 degrees 21' 36" for an arc length of 12.79 feet; thence South 
51 degrees 07' 58" East 85.87 feet; thence South 38 degrees 52' 02" West 252.96
feet; North 51 degrees 07' 58" West 41.72 feet; thence Southwesterly along a
non-tangent curve to the left with a radius of 20.00 feet, from which a radial
line bears North 10 degrees 35' 40" West, through a central angle of 40 degrees
32' 18" for an arc length of 14.15 feet; thence South 38 degrees 52' 02" West 
29.48 feet; thence Southerly along a tangent curve to the left with a 

2

18

radius of 20.00 feet, through a central angle of 60 degrees 45' 15" for an arc 
length 21.21 feet to a point on said Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District; thence 
Northwesterly along said Northeasterly line along a non-tangent curve to the
left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc 
length of 23.29 feet to the True Point of Beginning.

3

19

EXHIBIT B

REQUIREMENTS RE: FORM OF GRANT DEED

The form of deed to be used to convey BNPLC's interest in the Improvements to
NAI or an Applicable Purchaser will depend upon whether Seller has conveyed the
fee interest in the Land to BNPLC as contemplated in the Agreement to Lease and,
if so, whether BNPLC's interest in the Land has been or is being conveyed at the
same time to the same party.

If BNPLC has received a conveyance of the fee interest in the Land from Seller
and BNPLC's interests in BOTH the Land and the Improvements are to be conveyed
to NAI or an Applicable Purchaser at the same time, because a sale under this
Purchase Agreement and a sale under the Other Purchase Agreement (covering the
Land) are being consummated at the same time and to the same party, then the one
deed in form attached as Exhibit B-1 will be used to convey both.

If, however, BNPLC has received a conveyance of the fee interest in the Land
from Seller, but a sale of BNPLC's interest in the Land pursuant to the Other
Purchase Agreement has not been consummated before, and is not being consummated
contemporaneously with, the sale of BNPLC's interest in the Improvements under
this Agreement, then BNPLC's interest in the Improvements will be conveyed by a
deed in the from attached as Exhibit B-2.

BNPLC's interest in the Improvements will be conveyed by a deed in the from
attached as Exhibit B-3 if (1) BNPLC has received a conveyance of the fee
interest in the Land from Seller, and (2) BNPLC's interest in the Land has been
sold pursuant to the Other Purchase Agreement before a sale of BNPLC's interest
in the Improvements under this Agreement, or BNPLC's interest in the
Improvements is being sold contemporaneously with a sale of BNPLC's interest in
the Land, but the purchaser of the Improvements is not the same as the purchaser
of the Land.

Finally, if BNPLC has not received a conveyance of the fee interest in the Land,
then BNPLC's interest in the Improvements will be conveyed by a deed in the from
attached as Exhibit B-4.

4

20

EXHIBIT B-1

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

CORPORATION GRANT DEED
(Covering Land and Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the land
situated in Sunnyvale, California, described on Annex A attached hereto and
hereby made a part hereof and all improvements on such land, together with the
any other right, title and interest of Grantor in and to any easements,
rights-of-way, privileges and other rights appurtenant to such land or the
improvements thereon; provided, however, that this grant is subject to the
encumbrances described on Annex B (the "Permitted Encumbrances"). Grantee hereby
assumes the obligations (including any personal obligations) of Grantor, if any,
created by or under, and agrees to be bound by the terms and conditions of, the
Permitted Encumbrances to the extent that the same concern or apply to the land
or improvements conveyed by this deed.

2

21

BNP LEASING CORPORATION

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

[NAI or Applicable Purchaser]

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, ___________________, personally 
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
-------------------------------------------

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, ___________________, personally 
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
-------------------------------------------

2

22

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter 
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 
52' 02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence 
North 38 degrees 52' 02" East 87.23 feet to the Northerly line of last said 
Parcel A; thence along said Northerly line North 75 degrees 07' 58" West 44.97 
feet to the point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14 degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District, 
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said 
Office of the Recorder of the County of Santa Clara, said point being on a 
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a 
radial line through said point bears North 45 degrees 01' 56" East; thence 
Northwesterly along said Northeasterly line and along said curve through a 
central angle of 04 degrees 20' 28"

3

23

an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45 
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc 
length of 75.92 feet to the true point of beginning; thence North 38 degrees 
52' 02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the 
left with a radius of 78.00 feet, from which a radial line bears South 
38 degrees 52' 02" West, through a central angle of 28 degrees 09' 05" for an 
arc length of 38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; 
thence Northwesterly along a curve to the left with a radius of 17.00 feet 
through a central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; 
thence North 51 degrees 07' 58" West 19.80 feet; thence the following three
courses: North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" 
West 49.68 feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly 
line of said Parcel A, as shown upon that certain Parcel Map filed for record 
in Book 216 at Page 2; thence South 75 degrees 07' 58" East 13.45 feet along 
said Northeasterly line; thence South 38 degrees 52' 02" West 74.94 feet; 
thence Southerly along a non-tangent curve to the left with a radius of 14.00 
feet, from which a radial line bears North 88 degrees 46' 22" 

4

24

West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degrees 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

5

25

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Improvements) incorporated by reference into the [Lease
Agreement (Phase III - Improvements) referenced in the last item of the list
below]), including the following matters to the extent the same are still valid
and in force:

1.   TAXES for the fiscal year 1999-2000, 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
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 430, Official Records
Affects      : A strip of land 18 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

4.   EASEMENT for the purposes stated herein and incidents thereto
Purpose      : Public utilities
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 450, Official Records
Affects      : A strip of land 7 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

5.   AGREEMENT on the terms and conditions contained therein,
For          : Construction of additional storm drainage system 
facilities
Between      : City of Sunnyvale
And          : Moffett Park Associates, a joint venture partnership
Recorded     : November 2, 1966 in Book 7552, page 688, Official 
Records.

AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

26

NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.   Covenants, Conditions and Restrictions in the Declaration of Protective 
Covenants - Moffett 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) relates to handicap but does not
discriminate against handicapped persons.

ASSIGNMENT AND ASSUMPTION of the rights, powers, duties, obligations, and
reservations of Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : Streets and street improvements
Granted to  : City of Sunnyvale
Recorded    : November 16, 1976 in Book C414, page 95, Official Records
Affects     : The most Westerly corner of said Parcel `A', as shown on 
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright 
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

8.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : for ingress and egress of motor vehicles
Granted to  : 495 Java Drive Associates, L.P., a California Limited 
Partnership
Recorded    : September 16, 1998, under Series No. 14396001, Official 
Records
Affects     : as follows:

All that certain real property situate in the City of Sunnyvale,
County of Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 292 at page 41, on November 10, 1971, in
the Office of the Recorder of the County of Santa Clara and a
portion of Parcel A, as shown upon that certain Parcel Map filed
for record in Book 216 at Page 2, on October 25, 1966, in the
Office of the Recorder of the County of Santa Clara, described as
follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land
described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official
Records in said Office of the Recorder of the County of Santa
Clara, said point lying

7

27

on the Easterly line of said Parcel A, as shown upon that certain
Parcel Map filed for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District along
a curve to the left with a radius of 1002.05 feet, from which a radial
line bears North 45 degrees 01' 56" East, through a central angle of 
4 degrees 20' 28" for an arc length of 75.92 feet to the true point of 
beginning; thence North 38 degrees 52' 02" East 82.92 feet to a point 
hereafter referred to as Point A; thence North 51 degrees 07' 58" West 
12.96 feet; thence South 38 degrees 52' 02" West 64.41 feet; thence 
Westerly along a tangent curve to the right with a radius of 20.00 
feet, through a central angle of 64 degrees 20' 39" for an arc length 
of 22.46 feet to a point on said Northeasterly line of said parcel of 
land described in the deed to Santa Clara Valley Transit District; 
thence Southeasterly along said Northeasterly line along a non-tangent
curve to the right with a radius of 1002.05 feet, from which a radial 
line bears North 39 degrees 18' 05" East, through a central angle of 
1 degree 23' 23" for an arc length of 24.30 feet to the true point of 
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65
feet to the true point of beginning; thence North 51 degrees 07' 58" 
West 49.68 feet; thence North 38 degrees 52' 02" East 87.23 feet to the
Northeasterly line of said Parcel A, as shown upon that certain Parcel
Map filed for record in Book 216 at Page 2; thence North 75 degrees 
07' 58" West 13.91 feet along said Northeasterly line; thence South 
38 degrees 52' 02" West 94.26 feet; thence South 51 degrees 07' 58" 
East 62.39 feet; thence North 38 degrees 52' 02" East 12.70 feet to the
true point of beginning.

9.       ANY RIGHTS, interests, or claims adverse to those of the vestee herein
which may exist or arise by reason of the following facts shown on a
survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR
THE MOZART DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

1.       Concrete walks and concrete berms or landscaping enclosures
extend across the Easterly and Northerly boundary lines of the
subject real property onto adjoining lands.

2.       A wood fence extends across the Easterly boundary line of the
subject real property, onto adjoining land.

3.       Underground gas and electric lines, and storm drains, extend
across the Easterly boundary line of the subject real
property, onto or from adjoining land.

4.       An electric box and an electric vault exist on the Northerly
boundary line of the subject real property.

5.       Construction of certain public improvements is in progress, in
the Southwesterly corner of the subject real property,
alongside the intersection of Java Drive and Geneva Drive.

8

28

10.      [Lease Agreement (Phase III - Land) dated _________, ____, by and
between BNP Leasing Corporation, as lessor, and Network Appliance,
Inc., as lessee, and] Lease Agreement (Phase III - Improvements) dated
June 16, 1999, by and between BNP Leasing Corporation, as lessor, and
Network Appliance, Inc., as lessee.

9

29
EXHIBIT B-2

CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

CORPORATION GRANT DEED
(Covering Improvements but not the Land under the Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the
buildings and other improvements (the "Improvements") on the land situated in
Sunnyvale, California, described on Annex A attached hereto and hereby made a
part hereof (the "Land"), together with the any other right, title and interest
of Grantor in and to any easements, rights-of-way, privileges and other rights
appurtenant to the Improvements; provided, however, that this grant is subject
to the encumbrances described on Annex B (the "Permitted Encumbrances") and any
reservations or qualifications set forth below. Grantee hereby assumes the
obligations (including any personal obligations) of Grantor, if any, created by
or under, and agrees to be bound by the terms and conditions of, the Permitted
Encumbrances to the extent that the same concern or apply to the Improvements.

Although this deed conveys Grantor's interest in the Improvements, this deed
does not convey any interest in the Land under the Improvements or any rights or
easements appurtenant to Land. Grantor retains and reserves all right, title and
interest of Grantor in and to the Land and any rights and easements appurtenant
to Land. Further, this deed does not convey any right of access over or right to
use the Land, it being understood that the right of Grantee or its successors
and assigns to maintain or use the improvements conveyed hereby shall be on and
subject to the terms and conditions of any separate ground lease or deed that
Grantee may from time to time obtain from the owner of the Land. If Grantee does
not obtain a separate deed or ground lease giving Grantee the authority to
maintain the Improvements on the Land, Grantee shall remove or abandon the
Improvements promptly upon request of the owner of the Land. Nothing herein or
in the agreements pursuant to which this deed is being delivered shall be
construed as an obligation on the part of Grantor to deliver or cooperate
reasonably in obtaining for Grantee any deed or ground lease covering the Land
described on Annex A.

10

30

BNP LEASING CORPORATION

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

[NAI or Applicable Purchaser]

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _____________________, personally 
appeared ____________________ and ____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _______________________, personally 
appeared ____________________ and _____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

2

31

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter 
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 
52' 02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence 
North 38 degrees 52' 02" East 87.23 feet to the Northerly line of last said 
Parcel A; thence along said Northerly line North 75 degrees 07' 58" West 44.97 
feet to the point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14 degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District, 
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said 
Office of the Recorder of the County of Santa Clara, said point being on a 
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a 
radial line through said point bears North 45 degrees 01' 56" East; thence 
Northwesterly along said Northeasterly line and along said curve through a 
central angle of 04 degrees 20' 28"

3

32

an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 
45 degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 
52' 02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the 
left with a radius of 78.00 feet, from which a radial line bears South 
38 degrees 52' 02" West, through a central angle of 28 degrees 09' 05" for an 
arc length of 38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; 
thence Northwesterly along a curve to the left with a radius of 17.00 feet 
through a central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; 
thence North 51 degrees 07' 58" West 19.80 feet; thence the following three
courses: North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" 
West 49.68 feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly 
line of said Parcel A, as shown upon that certain Parcel Map filed for record in
Book 216 at Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said 
Northeasterly line; thence South 38 degrees 52' 02" West 74.94 feet; thence 
Southerly along a non-tangent curve to the left with a radius of 14.00 feet, 
from which a radial line bears North 88 degrees 46' 22" 

4

33

West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

5

34

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Improvements) incorporated by reference into the [Lease
Agreement (Phase III - Improvements) referenced in the last item of the list
below]), including the following matters to the extent the same are still valid
and in force:

1.   TAXES for the fiscal year 1999-2000, 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
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 430, Official Records
Affects      : A strip of land 18 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

4.   EASEMENT for the purposes stated herein and incidents thereto
Purpose      : Public utilities
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 450, Official Records
Affects      : A strip of land 7 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

5.   AGREEMENT on the terms and conditions contained therein,
For          : Construction of additional storm drainage system 
facilities
Between      : City of Sunnyvale
And          : Moffett Park Associates, a joint venture partnership
Recorded     : November 2, 1966 in Book 7552, page 688, Official 
Records.

AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

35
NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.   Covenants, Conditions and Restrictions in the Declaration of Protective 
Covenants - Moffett 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) relates to handicap but 
does not discriminate against handicapped persons.

ASSIGNMENT AND ASSUMPTION of the rights, powers, duties, obligations, and
reservations of Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : Streets and street improvements
Granted to  : City of Sunnyvale
Recorded    : November 16, 1976 in Book C414, page 95, Official Records
Affects     : The most Westerly corner of said Parcel `A', as shown on 
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright 
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

8.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : for ingress and egress of motor vehicles
Granted to  : 495 Java Drive Associates, L.P., a California Limited 
Partnership
Recorded    : September 16, 1998, under Series No. 14396001, Official 
Records
Affects     : as follows:

All that certain real property situate in the City of Sunnyvale,
County of Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 292 at page 41, on November 10, 1971, in
the Office of the Recorder of the County of Santa Clara and a
portion of Parcel A, as shown upon that certain Parcel Map filed
for record in Book 216 at Page 2, on October 25, 1966, in the
Office of the Recorder of the County of Santa Clara, described as
follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land
described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official
Records in said Office of the Recorder of the County of Santa
Clara, said point lying 

7

36

on the Easterly line of said Parcel A, as shown upon that certain
Parcel Map filed for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District along
a curve to the left with a radius of 1002.05 feet, from which a radial
line bears North 45 degrees 01' 56" East, through a central angle of 4
degrees 20' 28" for an arc length of 75.92 feet to the true point of
beginning; thence North 38 degrees 52' 02" East 82.92 feet to a point
hereafter referred to as Point A; thence North 51 degrees 07' 58" West
12.96 feet; thence South 38 degrees 52' 02" West 64.41 feet; thence
Westerly along a tangent curve to the right with a radius of 20.00
feet, through a central angle of 64 degrees 20' 39" for an arc length
of 22.46 feet to a point on said Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District;
thence Southeasterly along said Northeasterly line along a non-tangent
curve to the right with a radius of 1002.05 feet, from which a radial
line bears North 39 degrees 18' 05" East, through a central angle of 1
degree 23' 23" for an arc length of 24.30 feet to the true point of
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65
feet to the true point of beginning; thence North 51 degrees 07' 58"
West 49.68 feet; thence North 38 degrees 52' 02" East 87.23 feet to the
Northeasterly line of said Parcel A, as shown upon that certain Parcel
Map filed for record in Book 216 at Page 2; thence North 75 degrees 07'
58" West 13.91 feet along said Northeasterly line; thence South 38
degrees 52' 02" West 94.26 feet; thence South 51 degrees 07' 58" East
62.39 feet; thence North 38 degrees 52' 02" East 12.70 feet to the true
point of beginning.

9.       ANY RIGHTS, interests, or claims adverse to those of the vestee herein
which may exist or arise by reason of the following facts shown on a
survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR
THE MOZART DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

1.       Concrete walks and concrete berms or landscaping enclosures
extend across the Easterly and Northerly boundary lines of the
subject real property onto adjoining lands.

2.       A wood fence extends across the Easterly boundary line of the
subject real property, onto adjoining land.

3.       Underground gas and electric lines, and storm drains, extend
across the Easterly boundary line of the subject real
property, onto or from adjoining land.

4.       An electric box and an electric vault exist on the Northerly
boundary line of the subject real property.

5.       Construction of certain public improvements is in progress, in
the Southwesterly corner of the subject real property,
alongside the intersection of Java Drive and Geneva Drive.

8

37

6.       [Lease Agreement (Phase III - Land) dated _________, ____, by
and between BNP Leasing Corporation, as lessor, and Network
Appliance, Inc., as lessee, and] Lease Agreement (Phase III -
Improvements) dated June 16, 1999, by and between BNP Leasing
Corporation, as lessor, and Network Appliance, Inc., as
lessee.

9

38
EXHIBIT B-3
CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

CORPORATION GRANT DEED
(Covering Improvements but not the Land under the Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the
buildings and other improvements (the "Improvements") on the land situated in
Sunnyvale, California, described on Annex A attached hereto and hereby made a
part hereof (the "Land"), together with the any other right, title and interest
of Grantor in and to any easements, rights-of-way, privileges and other rights
appurtenant to the Improvements; provided, however, that this grant is subject
to the encumbrances described on Annex B (the "Permitted Encumbrances") and any
reservations or qualifications set forth below. Grantee hereby assumes the
obligations (including any personal obligations) of Grantor, if any, created by
or under, and agrees to be bound by the terms and conditions of, the Permitted
Encumbrances to the extent that the same concern or apply to the Improvements.

Although this deed conveys Grantor's interest in the Improvements on the Land,
this deed does not convey any interest in the Land itself or any rights or
easements appurtenant to Land. Prior to or contemporaneously with the delivery
of this deed, Grantor has conveyed or is conveying the Land and appurtenant
rights and easements to another party, subject to the terms and conditions of a
Ground Lease dated ________, filed or to be filed for record in the Santa Clara
County records. Grantor is assigning it's rights as lessee under the Ground
Lease to Grantee by a separate instrument dated of even date herewith.

10

39

BNP LEASING CORPORATION

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

[NAI or Applicable Purchaser]

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _____________________, personally 
appeared ___________________ and ____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _______________________, personally 
appeared ___________________ and _____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

2

40

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" 

3

41

an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" 

4

42

West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

5

43

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Improvements) incorporated by reference into the [Lease
Agreement (Phase III - Improvements) referenced in the last item of the list
below]), including the following matters to the extent the same are still valid
and in force:

1.   TAXES for the fiscal year 1999-2000, 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
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 430, Official Records
Affects      : A strip of land 18 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

4.   EASEMENT for the purposes stated herein and incidents thereto
Purpose      : Public utilities
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 450, Official Records
Affects      : A strip of land 7 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

5.   AGREEMENT on the terms and conditions contained therein,
For          : Construction of additional storm drainage system 
facilities
Between      : City of Sunnyvale
And          : Moffett Park Associates, a joint venture partnership
Recorded     : November 2, 1966 in Book 7552, page 688, Official 
Records.
AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

44

NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.   Covenants, Conditions and Restrictions in the Declaration of Protective 
Covenants - Moffett 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) relates to handicap but does not
discriminate against handicapped persons.

ASSIGNMENT AND ASSUMPTION of the rights, powers, duties, obligations, and
reservations of Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : Streets and street improvements
Granted to  : City of Sunnyvale
Recorded    : November 16, 1976 in Book C414, page 95, Official Records
Affects     : The most Westerly corner of said Parcel `A', as shown on 
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright 
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

8.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : for ingress and egress of motor vehicles
Granted to  : 495 Java Drive Associates, L.P., a California Limited 
Partnership
Recorded    : September 16, 1998, under Series No. 14396001, Official 
Affects:    Records as follows:

All that certain real property situate in the City of Sunnyvale, County
of Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map filed
for record in Book 292 at page 41, on November 10, 1971, in the Office
of the Recorder of the County of Santa Clara and a portion of Parcel A,
as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2, on October 25, 1966, in the Office of the Recorder of the
County of Santa Clara, described as follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land described
in the deed to Santa Clara Valley Transit District, recorded October
24, 1997 as Instrument No. 13912192, Official Records in said Office of
the Recorder of the County of Santa Clara, said point lying on the

7

45

Easterly line of said Parcel A, as shown upon that certain Parcel Map
filed for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District along
a curve to the left with a radius of 1002.05 feet, from which a radial
line bears North 45 degrees 01' 56" East, through a central angle of 4
degrees 20' 28" for an arc length of 75.92 feet to the true point of
beginning; thence North 38 degrees 52' 02" East 82.92 feet to a point
hereafter referred to as Point A; thence North 51 degrees 07' 58" West
12.96 feet; thence South 38 degrees 52' 02" West 64.41 feet; thence
Westerly along a tangent curve to the right with a radius of 20.00
feet, through a central angle of 64 degrees 20' 39" for an arc length
of 22.46 feet to a point on said Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District;
thence Southeasterly along said Northeasterly line along a non-tangent
curve to the right with a radius of 1002.05 feet, from which a radial
line bears North 39 degrees 18' 05" East, through a central angle of 1
degree 23' 23" for an arc length of 24.30 feet to the true point of
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65
feet to the true point of beginning; thence North 51 degrees 07' 58"
West 49.68 feet; thence North 38 degrees 52' 02" East 87.23 feet to the
Northeasterly line of said Parcel A, as shown upon that certain Parcel
Map filed for record in Book 216 at Page 2; thence North 75 degrees 07'
58" West 13.91 feet along said Northeasterly line; thence South 38
degrees 52' 02" West 94.26 feet; thence South 51 degrees 07' 58" East
62.39 feet; thence North 38 degrees 52' 02" East 12.70 feet to the true
point of beginning.

9.       ANY RIGHTS, interests, or claims adverse to those of the vestee herein
which may exist or arise by reason of the following facts shown on a
survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR
THE MOZART DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

1.       Concrete walks and concrete berms or landscaping enclosures
extend across the Easterly and Northerly boundary lines of the
subject real property onto adjoining lands.

2.       A wood fence extends across the Easterly boundary line of the
subject real property, onto adjoining land.

3.       Underground gas and electric lines, and storm drains, extend
across the Easterly boundary line of the subject real
property, onto or from adjoining land.

4.       An electric box and an electric vault exist on the Northerly
boundary line of the subject real property.

5.       Construction of certain public improvements is in progress, in
the Southwesterly corner of the subject real property,
alongside the intersection of Java Drive and Geneva Drive.

8

46

6.       [Lease Agreement (Phase III - Land) dated _________, ____, by
and between BNP Leasing Corporation, as lessor, and Network
Appliance, Inc., as lessee, and] Lease Agreement (Phase III -
Improvements) dated June 16, 1999, by and between BNP Leasing
Corporation, as lessor, and Network Appliance, Inc., as
lessee.

9

47
EXHIBIT B-4
CORPORATION GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

MAIL TAX STATEMENTS TO:

NAME:    [NAI or the Applicable Purchaser]
ADDRESS: _________________________________
ATTN:    _________________________________
CITY:    _________________________________
STATE:   _________________________________
Zip:     _________________________________

CORPORATION GRANT DEED
(Covering Improvements But Only a Quitclaim of Any Interest in
the Land under the Improvements)

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, BNP
LEASING CORPORATION, a Delaware corporation ("Grantor"), hereby grants to [NAI
or the Applicable Purchaser] ("Grantee") all of Grantor's interest in the
buildings and other improvements (the "Improvements") on the land situated in
Sunnyvale, California, described on Annex A attached hereto and hereby made a
part hereof (the "Land"), together with the any other right, title and interest
of Grantor in and to any easements, rights-of-way, privileges and other rights
appurtenant to the Improvements; provided, however, that this grant is subject
to the encumbrances described on Annex B (the "Permitted Encumbrances") and any
reservations or qualifications set forth below. Grantee hereby assumes the
obligations (including any personal obligations) of Grantor, if any, created by
or under, and agrees to be bound by the terms and conditions of, the Permitted
Encumbrances to the extent that the same concern or apply to the Improvements.

Although this deed conveys Grantor's interest in the Improvements, this deed
does not convey any interest in the Land under the Improvements or any rights or
easements appurtenant to Land. Rather, Grantor merely quitclaims unto Grantee
all right, titles and interests (if any) of Grantor in and to the Land and any
rights and easements appurtenant to Land. Further, this deed does not purport to
convey any right of access over or right to use the Land, it being understood
that the right of Grantee or its successors and assigns to maintain or use the
improvements conveyed hereby shall be on and subject to the terms and conditions
of any separate ground lease or deed that Grantee may from time to time obtain
from the owner of the Land. If Grantee does not obtain a separate deed or ground
lease giving Grantee the authority to maintain the Improvements on the Land,
Grantee shall remove or abandon the Improvements promptly upon request of the
owner of the Land. Nothing herein or in the agreements pursuant to which this
deed is being delivered shall be construed as an obligation on the part of
Grantor to deliver or cooperate reasonably in obtaining for Grantee any deed or
ground lease covering the Land described on Annex A.

10

48

BNP LEASING CORPORATION

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

[NAI or Applicable Purchaser]

Date: As of                           By:               
-----------------             ---------------------
Its:

Attest:           
----------------------
Its:

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _____________________, personally
appeared ____________________ and ____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

STATE OF ____________   )
)       SS
COUNTY OF ___________   )

On ___________________ before me, _______________________, personally
appeared ____________________ and _____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                            
---------------------------------------

2

49

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE LAND LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DEED TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" 

3

50

an arc length of 75.92 feet; thence leaving said Northeasterly line non-tangent
from last said curve North 38 degrees 52' 02" East 164.71 feet to said Point of
beginning. As created by that certain Certificate of Compliance (Lot Line
Adjustment) recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 14.00 feet, from which a radial
line bears North 88 degrees 46' 22" 

4

51

West, through a central angle of 52 degrees 21' 36" for an arc length of 12.79
feet; thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees
52' 02" West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence
Southwesterly along a non-tangent curve to the left with a radius of 20.00 feet,
from which a radial line bears North 10 degrees 35' 40" West, through a central
angle of 40 degrees 32' 18" for an arc length of 14.15 feet; thence South 38
degrees 52' 02" West 29.48 feet; thence Southerly along a tangent curve to the
left with a radius of 20.00 feet, through a central angle of 60 degrees 45' 15"
for an arc length 21.21 feet to a point on said Northeasterly line of said
parcel of land described in the deed to Santa Clara Valley Transit District;
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

5

52

ANNEX B

PERMITTED ENCUMBRANCES

[DRAFTING NOTE: TO THE EXTENT THAT ENCUMBRANCES (OTHER THAN "LIENS REMOVABLE BY
BNPLC") ARE IDENTIFIED IN ADDITION TO THOSE DESCRIBED BELOW, SUCH ADDITIONAL
ENCUMBRANCES WILL BE ADDED TO THE LIST BELOW AND THIS "DRAFTING NOTE" WILL BE
DELETED BEFORE THIS DEED IS ACTUALLY EXECUTED AND DELIVERED BY BNPLC. SUCH
ADDITIONAL ENCUMBRANCES WOULD INCLUDE ANY NEW ENCUMBRANCES APPROVED BY BNPLC AS
"PERMITTED ENCUMBRANCES" UNDER THE LAND LEASE OR THE OTHER LEASE AGREEMENT FROM
TIME TO TIME OR BECAUSE OF NAI'S REQUEST FOR BNPLC'S CONSENT OR APPROVAL TO AN
ADJUSTMENT.]

This conveyance is subject to all encumbrances not constituting a "Lien
Removable by BNPLC" (as defined in the Common Definitions and Provisions
Agreement (Phase III - Land Use/Acquisition incorporated by reference into the
[Lease Agreement (Phase III - Land Use/Acquisition referenced in the last item
of the list below]), including the following matters to the extent the same are
still valid and in force:

1.   TAXES for the fiscal year 1999-2000, 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
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 430, Official Records
Affects      : A strip of land 18 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

4.   EASEMENT for the purposes stated herein and incidents thereto
Purpose      : Public utilities
In favor of  : City of Sunnyvale
Recorded     : October 9, 1964 in Book 6695, page 450, Official Records
Affects      : A strip of land 7 feet in width, contiguous to and 
Northerly of the Northerly line of Java Drive, as shown on
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

5.   AGREEMENT on the terms and conditions contained therein,
For          : Construction of additional storm drainage system 
facilities
Between      : City of Sunnyvale
And          : Moffett Park Associates, a joint venture partnership
Recorded     : November 2, 1966 in Book 7552, page 688, Official 
Records.
AMENDED AGREEMENT recorded April 21, 1967 in Book 7700, page 638, Official
Records.

6

53

NOTICE OF WAIVER OF CONSTRUCTION CREDITS regarding said Agreements, recorded
September 28, 1976 in Book C307, page 346, Official Records.

6.   Covenants, Conditions and Restrictions in the Declaration of Protective 
Covenants - Moffett 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) relates to handicap but does not
discriminate against handicapped persons.

ASSIGNMENT AND ASSUMPTION of the rights, powers, duties, obligations, and
reservations of Moffett Park Associates, in favor of The Prudential
Insurance Company of America, recorded February 8, 1977 in Book C583, page
685, Official Records.

7.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : Streets and street improvements
Granted to  : City of Sunnyvale
Recorded    : November 16, 1976 in Book C414, page 95, Official Records
Affects     : The most Westerly corner of said Parcel `A', as shown on 
a survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND 
TITLE SURVEY FOR THE MOZART DEVELOPMENT COMPANY 475 JAVA 
DRIVE", dated April 15, 1998, prepared by Kier & Wright 
Civil Engineers & Surveyors, Inc., Job No. 97208-2.

8.   EASEMENT for the purposes stated herein and incidents thereto
Purpose     : for ingress and egress of motor vehicles
Granted to  : 495 Java Drive Associates, L.P., a California Limited 
Partnership
Recorded    : September 16, 1998, under Series No. 14396001, Official 
Records
Affects     : as follows:

All that certain real property situate in the City of Sunnyvale, County
of Santa Clara, State of California, described as follows:

Being portions of Parcel A, as shown upon that certain Parcel Map filed
for record in Book 292 at page 41, on November 10, 1971, in the Office
of the Recorder of the County of Santa Clara and a portion of Parcel A,
as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2, on October 25, 1966, in the Office of the Recorder of the
County of Santa Clara, described as follows:

PARCEL ONE:

Commencing at the Northeasterly corner of that parcel of land described
in the deed to Santa Clara Valley Transit District, recorded October
24, 1997 as Instrument No. 13912192, Official Records in said Office of
the Recorder of the County of Santa Clara, said point lying on the

7

54

Easterly line of said Parcel A, as shown upon that certain Parcel Map
filed for record in Book 292 at page 41:

thence Northwesterly along the Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District along
a curve to the left with a radius of 1002.05 feet, from which a radial
line bears North 45 degrees 01' 56" East, through a central angle of 4
degrees 20' 28" for an arc length of 75.92 feet to the true point of
beginning; thence North 38 degrees 52' 02" East 82.92 feet to a point
hereafter referred to as Point A; thence North 51 degrees 07' 58" West
12.96 feet; thence South 38 degrees 52' 02" West 64.41 feet; thence
Westerly along a tangent curve to the right with a radius of 20.00
feet, through a central angle of 64 degrees 20' 39" for an arc length
of 22.46 feet to a point on said Northeasterly line of said parcel of
land described in the deed to Santa Clara Valley Transit District;
thence Southeasterly along said Northeasterly line along a non-tangent
curve to the right with a radius of 1002.05 feet, from which a radial
line bears North 39 degrees 18' 05" East, through a central angle of 1
degree 23' 23" for an arc length of 24.30 feet to the true point of
beginning.

PARCEL TWO:

Commencing at said Point A; thence North 38 degrees 52' 02" East 216.65
feet to the true point of beginning; thence North 51 degrees 07' 58"
West 49.68 feet; thence North 38 degrees 52' 02" Est 87.23 feet to the
Northeasterly line of said Parcel A, as shown upon that certain Parcel
Map filed for record in Book 216 at Page 2; thence North 75 degrees 07'
58" West 13.91 feet along said Northeasterly line; thence South 38
degrees 52' 02" West 94.26 feet; thence South 51 degrees 07' 58" East
62.39 feet; thence North 38 degrees 52' 02" East 12.70 feet to the true
point of beginning.

9.       ANY RIGHTS, interests, or claims adverse to those of the vestee herein
which may exist or arise by reason of the following facts shown on a
survey plat entitled "TOPOGRAPHIC AND ALTA/ACSM LAND TITLE SURVEY FOR
THE MOZART DEVELOPMENT COMPANY 475 JAVA DRIVE", dated April 15, 1998,
prepared by Kier & Wright Civil Engineers & Surveyors, Inc., Job No.
97208-2.

1.       Concrete walks and concrete berms or landscaping enclosures
extend across the Easterly and Northerly boundary lines of the
subject real property onto adjoining lands.

2.       A wood fence extends across the Easterly boundary line of the
subject real property, onto adjoining land.

3.       Underground gas and electric lines, and storm drains, extend
across the Easterly boundary line of the subject real
property, onto or from adjoining land.

4.       An electric box and an electric vault exist on the Northerly
boundary line of the subject real property.

5.       Construction of certain public improvements is in progress, in
the Southwesterly corner of the subject real property,
alongside the intersection of Java Drive and Geneva Drive.

8

55

6.       [Lease Agreement (Phase III - Land) dated _________, ____, by
and between BNP Leasing Corporation, as lessor, and Network
Appliance, Inc., as lessee, and] Lease Agreement (Phase III -
Improvements) dated June 16, 1999, by and between BNP Leasing
Corporation, as lessor, and Network Appliance, Inc., as
lessee.

9

56

EXHIBIT C

BILL OF SALE AND ASSIGNMENT

Reference is made to: (1) that certain Purchase Agreement (Phase III -
Improvements) between BNP Leasing Corporation ("ASSIGNOR") and Network
Appliance, Inc., dated as of June 16, 1999, (the "PURCHASE AGREEMENT") and (2)
that certain Lease Agreement (Phase III - Improvements) between Assignor, as
landlord, and Network Appliance, Inc., as tenant, dated as of June 16, 1999 (the
"IMPROVEMENTS LEASE"). (Capitalized terms used and not otherwise defined in this
document are intended to have the meanings assigned to them in the Common
Definitions and Provisions Agreement (Phase III - Improvements) incorporated by
reference into both the Purchase Agreement and Improvements Lease.)

As contemplated by the Purchase Agreement, Assignor hereby sells,
transfers and assigns unto [NAI OR THE APPLICABLE PURCHASER, AS THE CASE MAY
BE], a _____________ ("ASSIGNEE"), all of Assignor's right, title and interest
in and to the following property, if any, to the extent such property is
assignable:

(a) the Improvements Lease [DRAFTING NOTE: THE FOLLOWING WILL BE ADDED
ONLY IF APPLICABLE BECAUSE OF THE SIMULTANEOUS DELIVERY OF A GRANT DEED IN THE
FORM OF EXHIBIT B-3: and the Ground Lease dated _________, between _________, as
lessor, and Assignor, as lessee, filed for record on in ___________ of Santa
Clara County records (the "GROUND LEASE")];

(b) any pending or future award made because of any condemnation
affecting the Property or because of any conveyance to be made in lieu thereof,
and any unpaid award for damage to the Property and any unpaid proceeds of
insurance or claim or cause of action for damage, loss or injury to the
Property; and

(c) all other property included within the definition of "Property" as
set forth in the Purchase Agreement, including but not limited to any of the
following transferred to Assignor by the tenant pursuant to Paragraph 7 of the
Improvements Lease or otherwise acquired by Assignor, at the time of the
execution and delivery of the Improvements Lease and Purchase Agreement or
thereafter, by reason of Assignor's status as the owner of any interest in the
Property: (1) any goods, equipment, furnishings, furniture, chattels and
tangible personal property of whatever nature that are located on the Property
and all renewals or replacements of or substitutions for any of the foregoing;
(ii) the rights of Assignor, existing at the time of the execution of the
Improvements Lease and Purchase Agreement or thereafter arising, under Permitted
Encumbrances or Development Documents (both as defined in the Improvements
Lease); and (iii) any other permits, licenses, franchises, certificates, and
other rights and privileges related to the Property that Assignee would have
acquired if Assignee had itself acquired the Improvements covered by the
Improvements Lease and constructed the Improvements included in the Property.

Provided, however, excluded from this conveyance and reserved to Assignor are
any rights or privileges of Assignor under the following ("EXCLUDED RIGHTS"):
(1) the indemnities set forth in the Improvements Lease, whether such rights are
presently known or unknown, including rights of the Assignor to be indemnified
against environmental claims of third parties as provided in the Improvements
Lease which may not presently be known, (2) provisions in the Improvements Lease
that establish the right of Assignor to recover any accrued unpaid rent under
the Improvements Lease which may be outstanding as of the date hereof, (3)
agreements between Assignor and "BNPLC's Parent" or any "Participant," both as
defined in the Improvements Lease, or any modification or extension thereof, or
(4) any other instrument being delivered to Assignor contemporaneously herewith
pursuant to the Purchase Agreement. To the extent that this conveyance does
include any rights to receive future payments under the Improvements Lease, such
rights ("INCLUDED RIGHTS") shall be subordinate to Assignor's Excluded Rights,
and Assignee hereby waives any rights to enforce Included Rights until such time
as Assignor has received all payments to which it remains entitled by reason of
Excluded Rights. If 

1

57

any amount shall be paid to Assignee on account of any Included Rights at any
time before Assignor has received all payments to which it is entitled because
of Excluded Rights, such amount shall be held in trust by Assignee for the
benefit of Assignor, shall be segregated from the other funds of Assignee and
shall forthwith be paid over to Assignor to be held by Assignor as collateral
for, or then or at any time thereafter applied in whole or in part by Assignor
against, the payments due to Assignor because of Excluded Rights, whether
matured or unmatured, in such order as Assignor shall elect.

Assignor does for itself and its successors covenant and agree to
warrant and defend the title to the property assigned herein against the just
and lawful claims and demands of any person claiming under or through a Lien
Removable by BNPLC, but not otherwise.

Assignee hereby assumes and agrees to keep, perform and fulfill
Assignor's obligations, if any, relating to any permits or contracts, under
which Assignor has rights being assigned herein.

IN WITNESS WHEREOF, the parties have executed this instrument as of
_______________, _____.

ASSIGNOR:

BNP LEASING CORPORATION a Delaware corporation

By:     
---------------------------------------
Its:   
---------------------------------------

ASSIGNEE:

[NAI or the Applicable Purchaser], a __________

By:     
---------------------------------------
Its:   
---------------------------------------

2

58

STATE OF ____________ )
)        SS
COUNTY OF ___________ )

On ___________________ before me, ___________________ , personally
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                               
---------------------------------

STATE OF ____________ )
)        SS
COUNTY OF ___________ )

On ___________________ before me, ___________________, personally
appeared ___________________ and ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacities, and that by their signatures
on the instrument the person, or the entity upon behalf of which the persons
acted, executed the instrument.

WITNESS my hand and official seal.

Signature                               
---------------------------------

3

59

ANNEX A

LEGAL DESCRIPTION

[DRAFTING NOTE: TO THE EXTENT THAT THE "LAND" COVERED BY THE OTHER LEASE CHANGES
FROM TIME TO TIME BECAUSE OF ADJUSTMENTS FOR WHICH NAI REQUESTS BNPLC'S CONSENT
OR APPROVAL, SO TOO WILL THE DESCRIPTION OF THE LAND BELOW CHANGE. ANY SUCH
CHANGES WILL BE INCORPORATED INTO THE DESCRIPTION BELOW AND THIS "DRAFTING NOTE"
WILL BE DELETED BEFORE THE DOCUMENT TO WHICH THIS DESCRIPTION IS ATTACHED IS
ACTUALLY EXECUTED AND DELIVERED.]

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

PARCEL ONE:

All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Clara.

Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Clara, described as follows:

Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14 degrees 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38 degrees 52'
02" East 134.85 feet; thence North 51 degrees 07' 58" West 49.68; thence North
38 degrees 52' 02" East 87.23 feet to the Northerly line of last said Parcel A;
thence along said Northerly line North 75 degrees 07' 58" West 44.97 feet to the
point of beginning.

Excepting therefrom that parcel of land described in the deed to Santa Clara
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Clara,
described as follows:

Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Clara, described as
follows:

Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South 14
degrees 51' 33" West 186.10 feet to a point on the Northeasterly line of that
parcel of land described in the deed to Santa Clara Valley Transit District,
recorded October 24, 1997 as Instrument No. 13912192, Official Records in said
Office of the Recorder of the County of Santa Clara, said point being on a
non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45 degrees 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04 degrees 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38 degrees 52'
02" East 164.71 feet to said Point of beginning.

4

60

As created by that certain Certificate of Compliance (Lot Line Adjustment)
recorded September 16, 1998, under Series No. 14395996.

PARCEL TWO:

Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Clara County
Records.

Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Paul Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.

PARCEL THREE:

A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:

Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Clara, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Clara, described as
follows:

Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Clara Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Clara, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.

Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North 45
degrees 01' 56" East, through a central angle of 4 degrees 20' 28" for an arc
length of 75.92 feet to the true point of beginning; thence North 38 degrees 52'
02" East 82.92 feet; thence Southeasterly along a non-tangent curve to the left
with a radius of 78.00 feet, from which a radial line bears South 38 degrees 52'
02" West, through a central angle of 28 degrees 09' 05" for an arc length of
38.32 feet; thence North 38 degrees 52' 02" East 177.73 feet; thence
Northwesterly along a curve to the left with a radius of 17.00 feet through a
central angle of 90 degrees 00' 00" for an arc length of 26.70 feet; thence
North 51 degrees 07' 58" West 19.80 feet; thence the following three courses:
North 38 degrees 52' 02" East 12.69 feet North 51 degrees 07' 58" West 49.68
feet; North 38 degrees 52' 02" East 87.23 feet to the Northeasterly line of said
Parcel A, as shown upon that certain Parcel Map filed for record in Book 216 at
Page 2; thence South 75 degrees 07' 58" East 13.45 feet along said Northeasterly
line; thence South 38 degrees 52' 02" West 74.94 feet; thence Southerly along a
non-tangent curve to the left with a radius of 

5

61

14.00 feet, from which a radial line bears North 88 degrees 46' 22" West,
through a central angle of 52 degrees 21' 36" for an arc length of 12.79 feet;
thence South 51 degrees 07' 58" East 85.87 feet; thence South 38 degrees 52' 02"
West 252.96 feet; North 51 degrees 07' 58" West 41.72 feet; thence Southwesterly
along a non-tangent curve to the left with a radius of 20.00 feet, from which a
radial line bears North 10 degrees 35' 40" West, through a central angle of 40
degrees 32' 18" for an arc length of 14.15 feet; thence South 38 degrees 52' 02"
West 29.48 feet; thence Southerly along a tangent curve to the left with a
radius of 20.00 feet, through a central angle of 60 degrees 45' 15" for an arc
length 21.21 feet to a point on said Northeasterly line of said parcel of land
described in the deed to Santa Clara Valley Transit District; thence
Northwesterly along said Northeasterly line along a non-tangent curve to the
left with a radius of 1002.05 feet, from which a radial line bears North 42
degrees 01' 23" East, through a central angle of 1 degree 19' 55" for an arc
length of 23.29 feet to the True Point of Beginning.

6

62

EXHIBIT D

ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "CERTIFICATE") is made as of ___________________, ____, by [NAI or the
Applicable Purchaser, as the case may be], a ___________________ ("GRANTEE").

Contemporaneously with the execution of this Certificate, BNP Leasing
Corporation, a Delaware corporation ("BNPLC"), is executing and delivering to
Grantee (1) a corporate grant deed and (2) a Bill of Sale and Assignment (the
foregoing documents and any other documents to be executed in connection
therewith are herein called the "CONVEYANCING DOCUMENTS" and any of the
properties, rights or other matters assigned, transferred or conveyed pursuant
thereto are herein collectively called the "SUBJECT PROPERTY").

NOTWITHSTANDING ANY PROVISION CONTAINED IN THE CONVEYANCING DOCUMENTS
TO THE CONTRARY, GRANTEE ACKNOWLEDGES THAT BNPLC MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY NATURE OR KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, WITH
RESPECT TO ENVIRONMENTAL MATTERS OR THE PHYSICAL CONDITION OF THE SUBJECT
PROPERTY, AND GRANTEE, BY ACCEPTANCE OF THE CONVEYANCING DOCUMENTS, ACCEPTS THE
SUBJECT PROPERTY "AS IS," "WHERE IS," "WITH ALL FAULTS" AND WITHOUT ANY SUCH
REPRESENTATION OR WARRANTY BY GRANTOR AS TO ENVIRONMENTAL MATTERS, THE PHYSICAL
CONDITION OF THE SUBJECT PROPERTY, COMPLIANCE WITH SUBDIVISION OR PLATTING
REQUIREMENTS OR CONSTRUCTION OF ANY IMPROVEMENTS. Without limiting the
generality of the foregoing, Grantee hereby further acknowledges and agrees that
warranties of merchantability and fitness for a particular purpose are excluded
from the transaction contemplated by the Conveyancing Documents, as are any
warranties arising from a course of dealing or usage of trade. Grantee hereby
assumes all risk and liability (and agrees that BNPLC shall not be liable for
any special, direct, indirect, consequential, or other damages) resulting or
arising from or relating to the ownership, use, condition, location,
maintenance, repair, or operation of the Subject Property, except for damages
proximately caused by (and attributed by any applicable principles of
comparative fault to) the Established Misconduct of BNPLC. As used in the
preceding sentence, "ESTABLISHED MISCONDUCT" is intended to have, and be limited
to, the meaning given to it in the Common Definitions and Provisions Agreement
(Phase III - Improvements) incorporated by reference into the Purchase Agreement
between BNPLC and Network Appliance, Inc. dated June 16, 1999, pursuant to which
Purchase Agreement BNPLC is delivering the Conveyancing Documents.

The provisions of this Certificate shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that BNPLC is entitled to rely and is relying on this
Certificate.

EXECUTED as of ________________, ____.

[NAI or the Applicable Purchaser]
By:     
--------------------------------
Name:       
--------------------------
Title:      
--------------------------

1

63

EXHIBIT E

SECRETARY'S CERTIFICATE

The undersigned, [Secretary or Assistant Secretary] of BNP Leasing
Corporation, a Delaware corporation (the "Corporation"), hereby certifies as
follows:

1. That he is the duly, elected, qualified and acting Secretary [or
Assistant Secretary] of the Corporation and has custody of the corporate
records, minutes and corporate seal.

2. That the following named persons have been properly designated,
elected and assigned to the office in the Corporation as indicated below; that
such persons hold such office at this time and that the specimen signature
appearing beside the name of such officer is his or her true and correct
signature.

[THE FOLLOWING BLANKS MUST BE COMPLETED WITH THE NAMES AND SIGNATURES OF THE
OFFICERS WHO WILL BE SIGNING THE DEED AND OTHER SALE CLOSING DOCUMENTS ON BEHALF
OF THE CORPORATION.]

Name                            Title                           Signature

------------------------        ------------------------        ------------------------

------------------------        ------------------------        ------------------------

3. That the resolutions attached hereto and made a part hereof were
duly adopted by the Board of Directors of the Corporation in accordance with the
Corporation's Articles of Incorporation and Bylaws. Such resolutions have not
been amended, modified or rescinded and remain in full force and effect.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Corporation on this  ___, day of ___________________, ____.

------------------------------
[signature and title]

1

64

CORPORATE RESOLUTIONS OF
BNP LEASING CORPORATION

WHEREAS, pursuant to that certain Purchase Agreement (Phase III -
Improvements) (herein called the "Purchase Agreement") dated as of June 16,
1999, by and between BNP Leasing Corporation (the "Corporation") and [NAI OR THE
APPLICABLE PURCHASER AS THE CASE MAY BE] ("Purchaser"), the Corporation agreed
to sell and Purchaser agreed to purchase or cause the Applicable Purchaser (as
defined in the Purchase Agreement) to purchase the Corporation's interest in the
property (the "Property") located in Sunnyvale, California more particularly
described therein.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Corporation, in its best business judgment, deems it in the best interest of the
Corporation and its shareholders that the Corporation convey the Property to
Purchaser or the Applicable Purchaser pursuant to and in accordance with the
terms of the Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed in the name and on behalf of the
Corporation to cause the Corporation to fulfill its obligations under the
Purchase Agreement.

RESOLVED FURTHER, that the proper officers of the Corporation, and each
of them, are hereby authorized and directed to take or cause to be taken any and
all actions and to prepare or cause to be prepared and to execute and deliver
any and all deeds and other documents, instruments and agreements that shall be
necessary, advisable or appropriate, in such officer's sole and absolute
discretion, to carry out the intent and to accomplish the purposes of the
foregoing resolutions.

2

65

EXHIBIT F

FIRPTA STATEMENT

Section 1445 of the Internal Revenue Code of 1986, as amended, provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. Sections 18805, 18815 and 26131 of the
California Revenue and Taxation Code, as amended, provide that a transferee of a
California real property interest must withhold income tax if the transferor is
a nonresident seller.

To inform [NAI OR THE APPLICABLE PURCHASER] (the "Transferee") that
withholding of tax is not required upon the disposition of a California real
property interest by transferor, BNP Leasing Corporation (the "Seller"), the
undersigned hereby certifies the following on behalf of the Seller:

1. The Seller is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

2. The United States employer identification number for the Seller is 
_____________________;

3.The office address of the Seller is ______________
_________________________ _________________.

4. The Seller is qualified to do business in California.

The Seller understands that this certification may be disclosed to the
Internal Revenue Service and/or to the California Franchise Tax Board by the
Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

The Seller understands that the Transferee is relying on this affidavit
in determining whether withholding is required upon said transfer.

Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of the Seller.

Dated: ___________, ____.

By:                                  
--------------------------------
Name:                          
--------------------------------
Title:                           
--------------------------------

1

66

Exhibit K

NOTICE OF ELECTION TO TERMINATE THE PURCHASE OPTION AND
NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS

BNP Leasing Corporation
12201 Merit Drive
Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox

Re: Purchase Agreement (Phase III - Improvements) dated as of June 16,
1999 (the "PURCHASE AGREEMENT"), between Network Appliance, Inc. ("NAI") and BNP
Leasing Corporation ("BNPLC")

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Purchase Agreement referenced above. This letter shall
constitute a notice, given before the Base Rent Commencement Date pursuant to
subparagraph of the Purchase Agreement, of NAI's election to terminate the
Purchase Option and NAI's Initial Remarketing Rights and Obligations. NAI
irrevocably elects to terminate the Purchase Option and NAI's Initial
Remarketing Rights and Obligations effective immediately, subject only to the
conditions described below.

NAI ACKNOWLEDGES THAT THE ELECTION MADE BY NAI DESCRIBED ABOVE
CONSTITUTES AN ISSUE 97-10 ELECTION UNDER AND AS DEFINED IN THE OPERATIVE
DOCUMENTS.

NAI also acknowledges that its right to terminate the Purchase Option
and NAI's Initial Remarketing Rights and Obligations is subject to the condition
precedent that (x) NAI shall have given Notice of NAI's Election to Terminate
pursuant to Paragraph 5(D) of the Construction Management Agreement, or (y)
BNPLC shall have given any FOCB Notice as provided in Paragraph 5(E) of the
Construction Management Agreement, or (z) BNPLC shall have given notice of its
election to accelerate the Designated Sale Date when an Event of Default has
occurred and is continuing as provided in clause (5) of the definition
Designated Sale Date in the Common Definitions and Provisions Agreement (Phase
III - Improvements). Accordingly, if none of the notices described in the
preceding sentence have been given, the Purchase Option and NAI's Initial
Remarketing Rights and Obligations shall not terminate by reason of this notice.

NAI further acknowledges that no termination of the Purchase Option and
NAI's Initial Remarketing Rights and Obligations by NAI pursuant to this notice
shall be effective, unless contemporaneously with the giving of this notice NAI
shall deliver to BNPLC a full Issue 97-10 Prepayment. NAI hereby covenants to
pay, if NAI has not already done so, a full Issue 97-10 Prepayment to BNPLC.

Finally, NAI acknowledges that a termination of the Purchase Option and
NAI's Initial Remarketing Rights and Obligations pursuant to this notice shall
cause the Improvements Lease to terminate as of the Base Rent Commencement Date
pursuant to subparagraph 1(b) of the Improvements Lease.

2

67

Executed this _____ day of ______________, 19___.

NETWORK APPLIANCE, INC.

Name:                                       
--------------------------------- 
Title:                            
--------------------------------- 

[cc all Participants]

2

<ARTICLE> 5
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          APR-28-2000
<PERIOD-START>                             MAY-01-1999
<PERIOD-END>                               JUL-30-1999
<CASH>                                         230,025
<SECURITIES>                                    15,869
<RECEIVABLES>                                   68,910
<ALLOWANCES>                                     2,190
<INVENTORY>                                     15,019
<CURRENT-ASSETS>                               348,046
<PP                                          42,109
<DEPRECIATION>                                  17,093
<TOTAL-ASSETS>                                 382,334
<CURRENT-LIABILITIES>                           58,395
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       254,508
<OTHER-SE>                                      69,363
<TOTAL-LIABILITY-AND-EQUITY>                   382,334
<SALES>                                        103,279
<TOTAL-REVENUES>                               103,279
<CGS>                                           42,539
<TOTAL-COSTS>                                   42,539
<OTHER-EXPENSES>                                41,922
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                 20,881
<INCOME-TAX>                                     7,413
<INCOME-CONTINUING>                             13,468
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    13,468
<EPS-BASIC>                                       0.18
<EPS-DILUTED>                                     0.16