Exhibit 10.59
GROUND LEASE
BETWEEN
NETWORK APPLIANCE, INC.
(“NAI”)
AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)
July 17, 2007

 

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TABLE OF CONTENTS

              Page  
RECITALS
    1  
GRANTING CLAUSES
    1  
GENERAL TERMS AND CONDITIONS
    3  
1 Additional Definitions
    3  
“Common Elements”
    3  
“Condominium Declaration”
    3  
“Condominium Instruments”
    3  
“Condominium Map”
    3  
“Contingent Purchase Option”
    3  
“Fair Rental Value”
    3  
“Ground Lease Default”
    4  
“Ground Lease Rent”
    4  
“Ground Lease Term”
    4  
“Leasehold Mortgage”
    4  
“Leasehold Mortgagee”
    4  
“Owner”
    4  
“Plat”
    4  
“Turnover Date”
    4  
“Unit 4”
    4  
2 Ground Lease Term and Early Termination
    4  
3 Ground Lease Rent
    5  
4 Receipt and Application of Insurance and Condemnation Proceeds
    5  
5 No Lease Termination
    5  
6 The Lease and Other Operative Documents
    6  
7 Use of Leased Property
    6  
8 Assignment and Subletting; Pass Through of BNPPLC’s Liability Insurance and
Indemnity Rights
    6  
9 Estoppel Certificate
    7  
10 Leasehold Mortgages
    8  
11 Other Representations, Warranties and Covenants of NAI
    10  
(A) Condition of the Property
    10  
(B) Environmental Representations
    10  
(C) Current Status of Title to the Land
    11  
(D) Title Insurance
    11  
(E) Title to Improvements
    11  
(F) Defense of Adverse Title Claims
    11  
(G) Prohibition Against Consensual Liens on the Leased Property
    13  
(H) Compliance With Permitted Encumbrances
    13  
(I) Compliance With Laws
    13  
(J) Modification of Permitted Encumbrances
    13  
(K) Performance and Preservation of the Permitted Encumbrances for the Benefit
of BNPPLC
    13  

 

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              Page  
(L) Cooperation by NAI and its Affiliates
    14  
(M) Condominium Instruments
    15  
(N) Omissions
    16  
(O) Insurance and Casualty
    17  
(P) Condemnation
    17  
(Q) Further Assurances
    17  
12 Ground Lease Defaults
    17  
(A) Definition of Ground Lease Default
    17  
(B) Remedy
    18  
13 Quiet Enjoyment
    18  
14 Option to Purchase
    19  
15 Miscellaneous
    19  
(A) No Merger
    19  
(B) Recording; Memorandum of Lease
    19  

Exhibits and Schedules

      Exhibit A   Legal Description       Exhibit B   Permitted Encumbrances
List       Exhibit C   Contingent Purchase Option       Exhibit D  
Determination of Fair Value

 

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GROUND LEASE
     This GROUND LEASE (this “Ground Lease”), dated as of July 17, 2007 (the
“Effective Date”), is made by and between BNP PARIBAS LEASING CORPORATION
(“BNPPLC”), a Delaware corporation, and NETWORK APPLIANCE, INC. (“NAI”), a
Delaware corporation.
RECITALS
     Contemporaneously with the execution of this Ground Lease, BNPPLC and NAI
are executing a Common Definitions and Provisions Agreement dated as of the
Effective Date (the “Common Definitions and Provisions Agreement”), which by
this reference is incorporated into and made a part of this Ground Lease for all
purposes. As used in this Ground Lease, capitalized terms defined in the Common
Definitions and Provisions Agreement and not otherwise defined in this Ground
Lease are intended to have the respective meanings assigned to them in the
Common Definitions and Provisions Agreement.
     At the request of NAI, and to facilitate the transactions contemplated in
the other Operative Documents, BNPPLC is executing this Ground Lease to acquire
from NAI a leasehold estate of 99 years in the Land described in Exhibit A
attached hereto (the “Land”) and any existing Improvements on the Land.
     Also contemporaneously with this Ground Lease, BNPPLC and NAI are executing
a Construction Agreement (the“Construction Agreement”) and a Lease Agreement
(the “Lease”). Pursuant to the Construction Agreement, BNPPLC is agreeing to
provide funding for the construction of new Improvements. When the term of the
Lease commences, the Lease will cover all Improvements on the Land.
     Pursuant to a Purchase Agreement dated as of the Effective Date (the
“Purchase Agreement”) between BNPPLC and NAI, NAI will have the right to
purchase, among other things, BNPPLC’s leasehold estate under this Ground Lease
on and subject to the terms and conditions set forth therein.
GRANTING CLAUSES
     In consideration of the rent to be paid and the covenants and agreements to
be performed by BNPPLC, as hereinafter set forth, NAI does hereby LEASE, DEMISE
and LET unto BNPPLC for the term hereinafter set forth the Land, together with:
     (A) all easements and rights-of-way now owned or hereafter acquired by NAI
for use in connection with the Land or any Improvements constructed thereon or
as a means of access thereto and any and all easements and rights appurtenant to
the Land; and

 

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     (B) all right, title and interest of NAI, 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 abutting land not
owned by NAI.
The Land and all of the property described in items (1) and (2) above 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 NAI as the owner
of any interest in the Real Property, NAI also hereby grants and assigns to
BNPPLC for the term of this Ground Lease the right to use and enjoy (and, in the
case of contract rights, to enforce) such rights or interests of NAI:
     (A) the Permitted Encumbrances; and
     (B) any general intangibles, permits, licenses, franchises, certificates,
and other rights and privileges related to the Real Property that BNPPLC (rather
than NAI) would have acquired if BNPPLC had itself acquired the fee estate in
the Real Property (excluding, however, the rights and privileges of NAI under
this Ground Lease, the Construction Agreement, the Lease, the Purchase Agreement
and any other Operative Documents).
Such rights and interests of NAI, 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 “Leased
Property.” The Leased Property and all Improvements on the Land now or in the
future (whether such Improvements are owned by BNPPLC or NAI) are hereinafter
sometimes called the “Improved Property”.
     However, the leasehold estate conveyed hereby and BNPPLC’s rights hereunder
are expressly made subject and subordinate to the Permitted Encumbrances listed
on Exhibit B.
     Further, so long as any of the other Operative Documents remain in force,
the rights and obligations of NAI and BNPPLC hereunder will be subject to any
contrary provisions therein, including provisions in the Construction Agreement
and the Lease that govern the collection and application of condemnation and
insurance proceeds in the event of any taking of or damage to the Improved
Property.

 

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GENERAL TERMS AND CONDITIONS
     The Leased Property is leased by NAI to BNPPLC and is accepted and is to be
used and possessed by BNPPLC upon and subject to the following terms,
provisions, covenants, agreements and conditions:
1 Additional Definitions. As used in this Ground Lease, capitalized terms
defined above have the respective meanings assigned to them above; as indicated
above, capitalized terms that are defined in the Common Definitions and
Provisions Agreement and that are used but not otherwise defined have the
respective meanings assigned to them in the Common Definitions and Provisions
Agreement; and, the following terms have the following respective meanings:
     “Common Elements” has the meaning assigned to it in the Condominium
Declaration.
     “Condominium Declaration” means the Declaration of Condominium for NetApp
RTP Phase I Condominium recorded in Book 012647, Page 01310, Wake County, North
Carolina Registry, as such Declaration may be extended, supplemented, amended,
restated or otherwise modified from time to time in accordance with its terms
and in accordance with the limitations and requirements of this Ground Lease.
     “Condominium Instruments” has the meaning assigned to it in the Condominium
Declaration.
     “Condominium Map” means the map showing the units and common elements
created by the Condominium Declaration attached to and made a part of Exhibit A.
(The Condominium Map has also been filed in the Book of Maps CM2007, Page 444A1,
Wake County, North Carolina Registry.)
     “Contingent Purchase Option” means the option granted BNPPLC by NAI as
provided in Exhibit C attached to this Ground Lease.
     “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 Exhibit D, 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 (including appurtenances) 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 this Ground Lease and

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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.
     “Ground Lease Default” has the meaning assigned to it in subparagraph 13(A)
below.
     “Ground Lease Rent” means the rent payable by BNPPLC pursuant to
Paragraph 3 below.
     “Ground Lease Term” has the meaning assigned to it in Paragraph 2 below.
     “Leasehold Mortgage” means any mortgage, deed of trust (with or without a
private power of sale), security agreement or assignment executed by BNPPLC to
secure an obligation to repay borrowed money or other voluntary obligations,
which covers BNPPLC’s leasehold estate hereunder or any part thereof or any
rents or other charges to be paid to BNPPLC pursuant to any sublease.
     “Leasehold Mortgagee” means any lender or other beneficiary of a Leasehold
Mortgage that has notified NAI of the existence such Leasehold Mortgage and of
its address to which notices should be delivered.
     “Owner” has the meaning assigned to it in the Condominium Declaration.
     “Plat” means the plat prepared by Barbara H. Mulkey Engineering, Inc.,
dated May 30, 2000, recorded in Book of Maps 2000, page
1300\, Wake County Registry.
     “Turnover Date” means the day which is thirty days after any Designated
Sale Date upon which, for any reason whatsoever, NAI does not purchase the
Improved Property from BNPPLC pursuant to the Purchase Agreement.
     “Unit 4” has the meaning assigned to it in the Condominium Declaration.
2 Ground Lease Term and Early Termination. The term of this Ground Lease (herein
called the “Ground Lease Term”) will commence on and include the Effective Date
and end on the last Business Day prior to the ninety-ninth (99th) anniversary of
the Effective Date. However, subject to the prior approval of any Leasehold
Mortgagee, BNPPLC will have the right to terminate this Ground Lease by giving a
notice to NAI stating that BNPPLC 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.

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3 Ground Lease Rent. The rent required by this Ground Lease (herein called
“Ground Lease Rent”) will equal the Fair Rental Value, determined as provided in
Exhibit D, and be paid as follows:
     Prior to the Completion Date, BNPPLC must pay Ground Lease Rent to NAI on
the first Business Day of every calendar month for the preceding month.
Consistent with the agreement of the parties in Exhibit D that the initial Fair
Rental Value is $81,000 per annum, each such monthly payment will be in the
amount of $6,750 prior to the Completion Date. (Notwithstanding the forgoing, if
agreed by the parties for administrative convenience, BNPPLC will prepay all or
a portion of the Ground Lease Rent expected to accrue prior to the Completion
Date, rather than pay it monthly on the first Business Day of each month.)
     After the Completion Date, Ground Lease Rent will be paid annually in
arrears on each anniversary of the Effective Date. So long as the Lease
continues, each such payment by BNPPLC may be offset against the reimbursement
for such payment required of NAI by the Lease. After the Lease expires or
terminates, however, BNPPLC’s obligation for the payment of Ground Lease will
continue so long as this Ground Lease continues, on and subject to the terms and
conditions set forth herein.
4 Receipt and Application of Insurance and Condemnation Proceeds. All insurance
and condemnation proceeds payable with respect to any damage to or taking of the
Leased Property will be payable to and become the property of BNPPLC; provided,
however, NAI will be entitled to receive condemnation proceeds awarded for the
value of NAI’s remainder interest in the Land exclusive of the Improvements.
BNPPLC is authorized to take all action necessary on behalf of both BNPPLC and
NAI (as lessor under this Ground Lease) to collect insurance and condemnation
proceeds.
5 No Lease Termination. Except as expressly provided herein, this Ground Lease
will not terminate, nor will NAI have any right to terminate this Ground Lease
nor will the obligations of NAI under this Ground Lease be excused, for any
reason whatsoever, including without limitation any of the following: (i) any
damage to or the destruction of all or any part of the Leased Property from
whatever cause, (ii) the taking of the Leased Property or any portion thereof by
eminent domain or otherwise for any reason, (iii) any default on the part of
BNPPLC under this Ground Lease or under any other agreement to which NAI and
BNPPLC are parties, or (iv) any other cause whether similar or dissimilar to the
foregoing, any existing or future law to the contrary notwithstanding.
Notwithstanding the foregoing, after any purchase by NAI of BNPPLC’s interest in
the Improved Property pursuant to the Purchase Agreement and payment to BNPPLC
of the purchase price required by the Purchase Agreement and all other sums dues
under any of the other Operative Documents, NAI (as the holder of both the
lessor’s and lessee’s interests hereunder) may elect to terminate this Ground
Lease; and after a purchase by BNPPLC

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of the Land because of BNPPLC exercise of the Contingent Purchase Option, BNPPLC
(as the holder of both the lessor’s and lessee’s interests hereunder) may elect
to terminate this Ground Lease. It is the intention of the parties hereto that
the obligations of NAI hereunder will be separate and independent of the
covenants and agreements of BNPPLC. However, nothing in this Paragraph will be
construed as a waiver by NAI of any right NAI may have at law or in equity to
recover monetary damages for any default under this Ground Lease by BNPPLC.
6 The Lease and Other Operative Documents. Nothing contained in this Ground
Lease will limit, modify or otherwise affect any of NAI’s or BNPPLC’s respective
rights and obligations under the other Operative Documents, which rights and
obligations are intended to be separate, independent and in addition to, and not
in lieu of, the obligations established by this Ground Lease. In the event of
any inconsistency between the terms and provisions of the other Operative
Documents and the terms and provisions of this Ground Lease, the terms and
provisions of the other Operative Documents will control.
7 Use of Leased Property. Subject to the Permitted Encumbrances and the terms
hereof, BNPPLC may use and occupy the Leased Property for any purpose permitted
by Applicable Laws and may construct, modify, renovate, replace and remove any
Improvements on the Land from time to time, subject only to the constraints that
Applicable Laws would impose upon the owner of the Land if the owner were
constructing, modifying, renovating, replacing or removing Improvements. To
provide NAI an opportunity to file any applicable statutory notice of
nonresponsibility, BNPPLC will, before commencing the construction any major
Improvements upon the Land after the Turnover Date, endeavor to notify NAI that
BNPPLC intends to commence such construction; provided, however, BNPPLC will
have no liability for its failure to provide such a notice.
8 Assignment and Subletting; Pass Through of BNPPLC’s Liability Insurance and
Indemnity Rights. BNPPLC may sublet or assign this Ground Lease without the
consent of NAI or any of its Affiliates, subject only to limitations set forth
in the Lease for the benefit of NAI so long as those limitations remain in
force.
To the extent that BNPPLC may from time to time after the Turnover Date require
any subtenant to agree to maintain liability insurance against claims of third
parties and agree to make BNPPLC an additional or named insured under such
insurance, BNPPLC will also require the subtenant to agree to make NAI an
additional or named insured. However, BNPPLC will have no liability to NAI for a
breach by the subtenant of any such agreements, and to the extent that BNPPLC’s
rights as an additional or named insured are subject to exceptions or
limitations concerning BNPPLC’s own acts or omissions or the acts or omissions
of anyone other than the subtenant, so too may NAI’s rights as an additional or
named insured be subject to exceptions or limitations concerning NAI’s own acts
or omissions or the acts or omissions of anyone other than the subtenant.

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     To the extent that BNPPLC may itself from time to time after the Turnover
Date 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
Leased Property, BNPPLC will cause NAI to be an additional or named insured
under such insurance, provided NAI pays or reimburses BNPPLC for any additional
insurance premium required to have NAI made an insured.
     To the extent that BNPPLC may from time to time after the Turnover Date
require any subtenant to agree to indemnify BNPPLC against Environmental Losses
or other Losses concerning the Leased Property, BNPPLC will also require the
subtenant to agree to indemnify NAI. However, BNPPLC will have no liability to
NAI for a breach by the subtenant of any such agreement, and to the extent that
BNPPLC’s rights as an indemnitee of the subtenant are subject to exceptions or
limitations concerning BNPPLC’s own acts or omissions or the acts or omissions
of anyone other than the subtenant, so too may NAI’s rights as an indemnitee be
subject to exceptions or limitations concerning NAI’s own acts or omissions or
the acts or omissions of anyone other than the subtenant.
9 Estoppel Certificate. NAI and BNPPLC will from time to time, within ten days
after receipt of request by the other party hereto, deliver a statement in
writing to such other party or other Person(s) designated by such party
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 the party providing such certificate, the
other party 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 the party so certifying 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 to the knowledge of the party providing such certificate, the
other party is not in default under any provision of this Ground Lease (or if in
default, the nature thereof in detail) and, in any certificate provided by NAI,
a statement as to any outstanding obligations on the part of NAI or BNPPLC; and
     (E) in any certificate provided by NAI, such other factual matters
concerning the Leased Property or BNPPLC’s rights and obligations under this
Ground Lease as are requested by BNPPLC.
NAI’s failure to deliver such statement within such time will constitute an
admission by NAI (i)

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that this Ground Lease is in full force and effect, without modification except
as may be represented by BNPPLC, and (ii) that there are no uncured defaults in
BNPPLC’s performance hereunder.
10 Leasehold Mortgages.
     (A) By Leasehold Mortgage BNPPLC may encumber BNPPLC’s leasehold estate in
the Leased Property created by this Ground Lease and BNPPLC’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
BNPPLC from the Leased Property. However, prior to the Turnover Date, a
Leasehold Mortgage will be permitted hereunder only if it constitutes a
Permitted Transfer and only if it is made expressly subject to the rights of NAI
under the other Operative Documents.
     (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 BNPPLC’s rights and interests in 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 NAI.
     (C) NAI must serve notice of any default by BNPPLC hereunder upon any
Leasehold Mortgagee for which NAI has received written notification from BNPPLC
of the Leasehold Mortgagee’s address for such notice. No notice of a default by
BNPPLC will be deemed effective until it is so served. Any Leasehold Mortgagee
will 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 BNPPLC under this Ground
Lease to correct or cure defaults, plus an additional period of thirty days
thereafter. NAI will accept performance by any Leasehold Mortgagee of any
covenant, condition or agreement on BNPPLC’s part to be performed hereunder with
the same force and effect as though performed by BNPPLC.
     (D) If this Ground Lease should terminate by reason of a disaffirmance or
rejection of this Ground Lease by BNPPLC or any receiver, liquidator or trustee
for the property of BNPPLC, or by any governmental authority which had taken
possession of the business or property of BNPPLC by reason of the insolvency or
alleged insolvency of BNPPLC, then:
     (1) NAI must give notice thereof to each Leasehold Mortgagee for which NAI
has received written notification from BNPPLC of the Leasehold Mortgagee’s
address for

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such notice; and upon request of any Leasehold Mortgagee made within sixty days
after NAI has given such notice, NAI must enter into a new ground lease of the
Leased 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
(including subparagraph 11(E)) as are contained in this Ground Lease (a “New
Ground Lease”).
     (2) The estate of the Leasehold Mortgagee, as lessee under the New Ground
Lease, will have priority equal to the estate of BNPPLC hereunder. That is,
there will be no charge, lien or burden upon the Leased Property prior to or
superior to the estate granted by such New Ground Lease which was not prior to
or superior to the estate of BNPPLC under this Ground Lease as of the date
immediately preceding the termination of this Ground Lease. To the extent,
however, that the other Operative Documents are in effect at the time of
execution of such New Ground Lease, the New Ground Lease will be made expressly
subject to the other Operative Documents.
     (3) Notwithstanding the foregoing, if NAI receives requests to enter into a
New Ground Lease from more than one Leasehold Mortgagee because of the
expiration or termination of this Ground Lease, NAI will be required to enter
into only one New Ground Lease, and the New Ground Lease will be to the
requesting Leasehold Mortgagee who holds the highest priority lien or interest
in BNPPLC’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 will name all such Leasehold Mortgagees as co-tenants thereunder.
     (E) If BNPPLC 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 BNPPLC, and if NAI has been notified in writing of such
agreement, such consent will be required for such Leasehold Mortgagee to be
bound by any such modification or early termination of this Ground Lease.
     (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 Leased Property, unless and
until the Leasehold Mortgagee acquires BNPPLC’s leasehold estate in the Leased
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, NAI agrees to include, in addition
to the items specified in Paragraph 9, confirmation of the foregoing with
respect to any Leasehold Mortgagee or prospective Leasehold Mortgagee in any
statement delivered to such Leasehold Mortgagee which is provided to a pursuant
to Paragraph 9.

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11 Other Representations, Warranties and Covenants of NAI. NAI represents,
warrants and covenants as follows:
     (A) Condition of the Property. The Land described in Exhibit A is the same
as the land described in the Title Policy and is shown on both the Plat and the
Condominium Map, copies of which were delivered to BNPPLC at the request of NAI.
Unit 4 is located as shown on the Condominium Map, and all material improvements
on the Land as of the Effective Date are as shown on the Plat or the Condominium
Map. There are no easements or encroachments (including Permitted Encumbrances)
which extend over or within the boundaries of Unit 4. No part of Unit 4 is
within a flood plain as designated by any governmental authority. Existing
Improvements, if any, are free from latent or patent defects or deficiencies
that, either individually or in the aggregate, could materially and adversely
affect the use or occupancy of the Improved Property as permitted by the Lease
or could reasonably be anticipated to cause injury or death to any person. When
the construction contemplated by the Construction Agreement is complete in
accordance with plans approved as described therein, the Improved Property and
use thereof permitted by the Lease will comply in all material respects with all
Applicable Laws, including laws regarding access and use by disabled persons and
local zoning ordinances. Adequate provision has been made (or can be made at a
cost that is reasonable in connection with future development of the Land) for
the Land to be served by electric, gas, storm and sanitary sewers, sanitary
water supply, telephone and other utilities required for the use thereof. All
streets, alleys and easements necessary to serve the Improved Property for the
construction contemplated by the Construction Agreement or uses permitted by the
Lease have been completed and are serviceable or will be completed and made
serviceable as part of the construction contemplated by the Construction
Agreement. No extraordinary circumstances (including any use of the Land as a
habitat for endangered species) exist that would materially and adversely affect
such construction or uses of the Improved Property. The Improvements, when
constructed as contemplated in the Construction Agreement, will be useable for
their intended purpose without the need to obtain any additional easements,
rights-of-way or concessions from any third party or parties.
     (B) Environmental Representations. Except as otherwise disclosed in the
Environmental Report, to the knowledge of NAI: (i) no Hazardous Substances
Activity has occurred prior to the Effective Date; (ii) no owner or operator of
the Improved Property has reported or been required to report any release of any
Hazardous Substances on or from the Leased Property pursuant to any
Environmental Law; and (iii) no owner or operator of the Leased Property has
received from any federal, state or local governmental authority any warning,
citation, notice of violation or other communication regarding a suspected or
known release or discharge of Hazardous Substances on or from the Leased
Property or regarding a suspected or known violation of Environmental Laws
concerning the Leased Property. Further, NAI represents, to its knowledge, that
the Environmental Report taken as a whole is not misleading or inaccurate in any
material respect.

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     (C) Current Status of Title to the Land. NAI holds good and indefeasible
title to the Land, free and clear of all liens and encumbrances, other than the
Permitted Encumbrances and any Liens Removable by BNPPLC.
     (D) Title Insurance. Without limiting NAI’s obligations under the preceding
subparagraph, contemporaneously with the execution of this Ground Lease NAI must
provide to BNPPLC a title insurance policy or binder committing the applicable
title insurer to issue a title insurance policy, without the payment of further
premiums (as the case may be, the “Title Policy”) in the amount of no less than
$61,000,000, in form and substance satisfactory to BNPPLC (including
comprehensive, survey, variable rate, access, and such other endorsements as may
be requested by BNPPLC), written by one or more title insurance companies
satisfactory to BNPPLC and insuring BNPPLC’s leasehold estate under the Ground
Lease and its fee estate in the Improvements.
     (E) Title to Improvements. The leasehold estate created in favor of BNPPLC
by this Ground Lease will extend to and include the rights to use and enjoy any
and all Improvements of whatever nature at any time and from time to time
located on the Land. Thus, throughout the term of this Ground Lease, BNPPLC and
its sublessees, assignees, licensees and concessionaires will be entitled to use
and enjoy such Improvements — to the exclusion of NAI as the lessor hereunder,
but subject to NAI’s rights under the Operative Documents (including the Lease)
so long as they remain in effect — as if the lessee hereunder was the owner of
the Improvements. Further, although any Improvements which remain on the Land
when this Ground Lease expires or is terminated will revert to NAI, it is also
understood and agreed that the lessee hereunder may at any time and from time to
time — after NAI ceases to have possession of the Leased Property pursuant to
the Construction Agreement or 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 NAI and without any obligation to NAI or
its Affiliates to provide compensation or to construct other Improvements on or
about the Land. Any Improvements removed as provided in the preceding sentence
will be considered severed from the Land and thereupon become personal property
of the lessee hereunder.
     (F) Defense of Adverse Title Claims. If any encumbrance or title defect
whatsoever affecting the Improved Property, other than Permitted Encumbrances or
Liens Removable by BNPPLC, is claimed or discovered (including Liens against any
part of or interest in the Improved Property which are not Fully Subordinated or
Removable) or if any legal proceedings are instituted with respect to any such
claimed or discovered encumbrance or title defect, NAI must give prompt notice
thereof to BNPPLC and at NAI’s own cost and expense will promptly remove any
such encumbrance and cure any such defect and will take all necessary and proper
steps for the defense of any such legal proceedings, including the employment of
counsel, the

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prosecution or defense of litigation and the release or discharge of all adverse
claims. If NAI fails to promptly remove any encumbrance or cure any title defect
as required by the preceding sentence, BNPPLC (whether or not named as a party
to legal proceedings with respect thereto) may take such additional steps as in
its judgment may be necessary or proper to remove such encumbrance or cure such
defect or for the defense of any such attack or legal proceedings or the
protection of BNPPLC’s leasehold or other interest in the Improved Property,
including the employment of counsel, the prosecution or defense of litigation,
the compromise or discharge of any adverse claims made with respect to the
Improved Property, the removal of prior liens or security interests, and all
expenses (including Attorneys’ Fees) so incurred of every kind and character
will be a demand obligation owing by NAI.
     For purposes of this subparagraph 11(B), NAI will be deemed to be acting
promptly to remove any encumbrance or to cure any title defect, other than a
Lien which NAI or any of its Affiliates has granted or authorized, so long as
NAI is in good faith by appropriate proceedings contesting the validity and
applicability of the encumbrance or defect, and pending such contest NAI will
not be deemed in default under this subparagraph because of the encumbrance or
defect, provided that NAI must satisfy the following conditions and
requirements:
     (1) NAI must diligently prosecute the contest to completion in a manner
reasonably satisfactory to BNPPLC.
     (2) NAI must immediately remove the encumbrance or cure the defect upon a
final determination by a court of competent jurisdiction that it is valid and
applicable to the Improved Property.
     (3) NAI must in any event conclude the contest and remove the encumbrance
or cure the defect and pay any claims asserted against BNPPLC or the Improved
Property because of such encumbrance or defect, all prior to (i) the date any
criminal charges may be brought against BNPPLC or any of its directors, officers
or employees because of such encumbrance or defect or (ii) the date any action
is taken or threatened against BNPPLC or any property owned by BNPPLC (including
BNPPLC’s leasehold estate under this Ground Lease) by any governmental authority
or any other Person who has or claims rights superior to BNPPLC because of the
encumbrance or defect. Also, with respect to a contest of any encumbrance or
defect discovered or claimed before the Designated Sale Date, NAI must conclude
the contest and remove the encumbrance or cure the defect and pay any claims
asserted against BNPPLC or the Improved Property because of such encumbrance or
defect, all prior to the Designated Sale Date, unless on the Designated Sale
Date NAI or an Affiliate of NAI or any Applicable Purchaser purchases the
Improved Property pursuant to the Purchase Agreement for a net price to BNPPLC
(when taken together with any additional payments made by NAI pursuant to
Paragraph 1(a)(ii) of the Purchase Agreement, in the case of a purchase by an
Applicable Purchaser) equal to the Lease Balance.

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     (G) Prohibition Against Consensual Liens on the Leased Property. NAI will
not, without the prior consent of BNPPLC, 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 Land or Improvements or any part thereof (other than Permitted
Encumbrances and Liens Removable by BNPPLC). It is understood and agreed,
however, that any Liens which are Fully Subordinated or Removable will
constitute Permitted Encumbrances and thus will not be prohibited by this
provision.
     (H) Compliance With Permitted Encumbrances. NAI must comply with and cause
to be performed all of the covenants, agreements and obligations imposed upon
NAI or the owner of the Leased Property by the Permitted Encumbrances.
     (I) Compliance With Laws. Without limiting the foregoing, the use of the
Improved Property permitted by the Lease complies, or will comply after readily
available permits are obtained, in all material respects with all Applicable
Laws.
     (J) Modification of Permitted Encumbrances. NAI will not enter create any
new Permitted Encumbrance or enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance that would create or expand or purport
to create or expand obligations or restrictions which would encumber the Leased
Property or any Improvements constructed thereon without the prior consent of
BNPPLC; provided, this provision will not limit any right of the NAI Parties to
modify any Lien that is Fully Subordinated or Removable and will remain Fully
Subordinated or Removable after the modification. Whether BNPPLC must give any
such consent requested by NAI prior to the Designated Sale Date will be governed
by subparagraph 4(C) of the Closing Certificate.
     (K) Performance and Preservation of the Permitted Encumbrances for the
Benefit of BNPPLC. Not only prior to the expiration or termination of other
Operative Documents, but thereafter throughout the term of this Ground Lease,
NAI must comply with and perform the obligations imposed by the Permitted
Encumbrances upon NAI or upon any owner of the Land and do whatever is required
to preserve the rights and benefits conferred or intended to be conferred by the
Permitted Encumbrances, as necessary to prevent any claim against or forfeiture
of any of the Improved Property and to facilitate the construction and use of
any Improvements on the Land after the Turnover Date by BNPPLC and its
successors, assigns and subtenants under this Ground Lease. Further, NAI hereby
agrees for itself and its Affiliates, as the owner of the Land and any other
land now owned or hereafter acquired by NAI or its Affiliates, which is
encumbered or benefitted by the Permitted Encumbrances, to assume liability for
and to indemnify BNPPLC and other Interested Parties and to defend and hold them
harmless from and against all Losses (including Losses caused by any decline in
the value of the Leased Property or

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of the Improvements) that they would not have incurred or suffered but for:
     (1) any breach by NAI of its obligations under the preceding sentence,
     (2) any termination of any benefit to the owner, users or occupants of the
Land or Improvements conferred by the Permitted Encumbrances if NAI agreed to
the termination or the termination resulted from a breach of any Permitted
Encumbrance by NAI or its Affiliates, or
     (3) any restrictions imposed by or asserted under any Permitted Encumbrance
upon any transfer after (but only after) the Turnover Date by BNPPLC of any
interests it may then have in the Leased Property or in any Improvements.
NAI’s obligations under this subparagraph 11(K) will be binding upon any
successor or assign of NAI or its Affiliates with respect to the Land and other
properties encumbered or benefitted by the Permitted Encumbrances, and such
obligations will survive any sale of NAI’s interest in the Leased Property to
BNPPLC because of BNPPLC’s exercise of the Contingent Purchase Option.
     (L) Cooperation by NAI and its Affiliates.
     (1) After the Turnover Date, if neither NAI nor an Applicable Purchaser has
purchased BNPPLC’s interest in the Improved Property pursuant to the Purchase
Agreement, and if a use of the Improved Property by BNPPLC or any new
Improvements or any removal or modification of Improvements proposed by BNPPLC
would violate any Permitted Encumbrance or Applicable Law unless NAI or any of
its Affiliates, as an owner of adjacent land or otherwise, gave its consent or
approval thereto or agreed to join in a modification of a Permitted Encumbrance,
then NAI must give and cause its Affiliates to give such consent or approval or
join in such modification.
     (2) After the Turnover Date, if neither NAI nor an Applicable Purchaser has
purchased BNPPLC’s interest in the Improved Property pursuant to the Purchase
Agreement, and if any Permitted Encumbrance or Applicable Law requires the
consent or approval of NAI or any of its Affiliates or of the city or county in
which the Improved Property is located or of any other Person to an assignment
of any interest in the Improved Property by BNPPLC or by any of its successors
or assigns, NAI will without charge give and cause its Affiliates to give such
consent or approval and will cooperate in any way reasonably requested by BNPPLC
to assist BNPPLC to obtain such consent or approval from the city, county or
other Person.
     (3) NAI’s obligations under this subparagraph 11(L) will be binding upon
any successor or assign of NAI or its Affiliates with respect to the Land and
other properties

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encumbered or benefitted by the Permitted Encumbrances, and such obligations
will survive (a) any sale of the Improved Property by BNPPLC, other than to NAI
or an Applicable Purchaser under the Purchase Agreement, for the benefit of
BNPPLC’s assignees, and (b) any sale of NAI’s interest in the Leased Property to
BNPPLC because of BNPPLC’s exercise of the Contingent Purchase Option.
     (M) Condominium Instruments. Without limiting the provisions the preceding
subparagraphs 11(K) and 11(L), Ground Lessor agrees as follows with regard to
the Condominium Declaration and other Condominium Instruments:
     (1) This Ground Lease will be superior to any and all liens granted in the
Condominium Declaration, or arising to secure any obligations created by the
Condominium Declaration (including judgment liens which may secure damages
because of any failure of the Owner of Unit 4 to satisfy its obligations under
the Condominium Instruments).
     (2) As the Owner of Unit 4, NAI will on a timely basis pay any assessments
or other amounts required of the Owner of Unit 4 by the Condominium Instruments
and take any other action required of the Owner of Unit 4 by the Condominium
Instruments, including the filing of any new maps required by the Condominium
Declaration after the completion of construction of Improvements over the land
designated as Unit 4. In no even will BNPPLC be required to make any such
payment or take any such action, nor will BNPPLC suffer any loss of rights or
interests under this Ground Lease because of any failure of NAI to do so.
     (3) Before this Ground Lease expires or is terminated, without the prior
written consent of BNPPLC in each case: (A) no rules or regulations will be
imposed pursuant to the Condominium Declaration that would limit or restrict the
rights which BNPPLC would enjoy under this Ground Lease or the other Operative
Documents if the Condominium Declaration did not exist; (B) no amendment to any
of the Condominium Instruments will be made which would terminate or limit the
rights or easements appurtenant to Unit 4 thereunder or expand the obligations
of any owner or occupant of the Land thereunder; (C) no liens will be granted or
permitted against the Common Elements unless they are expressly subject and
subordinate to (i) the rights and easements appurtenant to Unit 4 under the
Condominium Declaration, and (ii) the rights and interests of BNPPLC under this
Ground Lease and the other Operative Documents; (D) the rights of the Declarant
under the Condominium Declaration will not be transferred to anyone other than
the Owner of Unit 4; and (D) no conveyance of the fee estate in Unit 4 will be
made without a transfer of all rights of the Declarant to the same transferee
(i.e., the new Owner of Unit 4). Further, until this Ground Lease expires or is
terminated, this Ground Lease and the other Operative Documents will control in
the event of any

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conflict between the Condominium Declaration and the terms and conditions of
this Ground Lease or the other Operative Documents.
     (4) After the Turnover Date: (a) BNPPLC will be entitled to attend and
receive notice of any meeting the Owners required or permitted by the
Condominium Instruments, and BNPPLC will be entitled to cast a vote in any vote
of the Owners required or permitted by the Condominium Instruments, as if BNPPLC
were the Owner of Unit 4. (b) Further, if the Owner of Unit 4 breaches any
obligations imposed upon it by the Condominium Instruments, BNPPLC will have the
right to receive notice of such breach and the right, but not the obligation, to
cure such breach, as if BNPPLC itself were the Owner of Unit 4. (c) Also, the
rights of BNPPLC and its invitees to use parking and driveways within the
Additional Leased Premises (as defined in Exhibit A) will be superior to the
rights granted to others by the Condominium Declaration; and BNPPLC may, as it
from time to time deems necessary, identify any or all parking areas within the
Additional Leased Premises as “reserved” or take other reasonable steps to
assure preferred access to such parking by occupants of the Improvements which
comprise Unit 4.
     (5) BNPPLC will not be restricted or limited by anything in the Condominium
Instruments in the demolition, construction, alteration repair, replacement, use
or operation of Improvements. Further, BNPPLC will not be required by reason of
the Condominium Instruments to obtain any consent or approval for any such
demolition, construction, alteration, use or operation or for any related
submissions (including site plans) to Wake County or other governmental
authorities.
     (6) The rights of BNPPLC under this Ground Lease or any other Operative
Documents to control and to receive and retain or apply insurance or
condemnation proceeds with respect to the Property will control over any
conflicting provisions of the Condominium Instruments.
     (7) BNPPLC will not be bound by or required to participate in any
arbitration by reason of any arbitration provisions or other provisions in the
Condominium Instruments.
The agreements of NAI in this subparagraph 11(M) are made by NAI, not only as
the current owner of the Ground Leased Premises (as defined in Exhibit A), but
also as the current Owner of all Units created by the Condominium Declaration,
and with the understanding that all of such agreements will be binding upon all
future Owners so long as this Ground Lease remains in force.
     (N) Omissions. None of NAI’s representations or warranties contained in
this Ground

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Lease or in any other document, certificate or written statement furnished to
BNPPLC by or on behalf of NAI contains any untrue statement of a material fact
or omits a material fact necessary in order to make the statements contained
herein or therein (when taken in their entireties) not misleading.
     (O) Insurance and Casualty. In the event any of the Leased Property is
destroyed or damaged by fire, explosion, windstorm, hail or by any other
casualty against which insurance is maintained or required hereunder, (i) BNPPLC
may make proof of loss, (ii) each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to BNPPLC for
application as required by Paragraph 4, and (iii) BNPPLC’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.
     (P) Condemnation. All proceeds of condemnation awards or proceeds of sale
in lieu of condemnation with respect to the Leased Property and all judgments,
decrees and awards for injury or damage to the Leased Property will be paid to
BNPPLC and applied as provided in Paragraph 4 above. BNPPLC is hereby
authorized, in the name of NAI, to execute and deliver valid acquittances for,
and to appeal from, any such judgment, decree or award concerning condemnation
of any of the Leased Property. BNPPLC will 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.
     (Q) Further Assurances. NAI must, on request of BNPPLC, (i) promptly
correct any defect, error or omission which may be discovered in the contents of
this Ground Lease or in any other instrument executed in connection herewith or
in the execution or acknowledgment thereof; (ii) execute, acknowledge, deliver
and record or file such further instruments and do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Ground Lease and to subject to this Ground Lease any property intended by
the terms hereof to be covered hereby including specifically, but without
limitation, any renewals, additions, substitutions, replacements or
appurtenances to the Leased Property; (iii) execute, acknowledge, deliver,
procure and record or file any document or instrument deemed advisable by BNPPLC
to protect BNPPLC’s rights in and to the Leased Property against the rights or
interests of third persons; and (iv) provide such certificates, documents,
reports, information, affidavits and other instruments and do such further acts
as may be necessary, desirable or proper in the reasonable determination of
BNPPLC to enable BNPPLC or any Leasehold Mortgagee to comply with the
requirements or requests of any agency or authority having jurisdiction over
them.
12 Ground Lease Defaults.
     (A) Definition of Ground Lease Default. Each of the following events will
be deemed

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to be a “Ground Lease Default” by BNPPLC under this Ground Lease:
     (1) A failure by BNPPLC to pay when due any installment of Ground Lease
Rent due hereunder if such failure continues for sixty days after BNPPLC
receives notice thereof.
     (2) A failure by BNPPLC to comply with any term, provision or covenant of
this Ground Lease (other than as described in the other clauses of this
subparagraph 13(A)) if such failure is not cured prior to the earlier of
(A) ninety days after notice thereof is sent to BNPPLC, or (B) the date any writ
or order is issued for the levy or sale of any property owned by NAI or its
Affiliates (including the leasehold created by this Ground Lease) because of
such failure or any criminal action is instituted against BNPPLC or any of its
directors, officers or employees because of such failure; provided, however,
that so long as no such writ or order is issued and no such criminal actions is
instituted, if such failure is susceptible of cure but cannot with reasonable
diligence be cured within such ninety day period, and if BNPPLC has promptly
commenced to cure the same and thereafter prosecutes the curing thereof with
reasonable diligence, the period within which such failure may be cured will be
extended for such further period as is necessary to complete the cure.
     (B) Remedy. Upon the occurrence of a Ground Lease Default which is not
cured within any applicable period expressly permitted by subparagraph 13(A),
NAI’s sole and exclusive remedies will be to sue BNPPLC for the collection of
any amount due under this Ground Lease, to sue for the specific enforcement of
BNPPLC’s obligations hereunder, or to enjoin the continuation of the Ground
Lease Default, provided, however, no limitation of NAI’s remedies contained
herein will prevent NAI from exercising rights expressly provided in other
Operative Documents or from recovering any reasonable costs NAI may incur to
mitigate its damages by curing a Ground Lease Default that BNPPLC has failed to
cure itself (so long as the cure by NAI is pursued in a lawful manner and the
costs NAI seeks to recover do not exceed the actual damages to be mitigated).
NAI may not terminate this Ground Lease or BNPPLC’s right to possession under
this Ground Lease, except as expressly provided in the Operative Documents. Any
judgment which NAI may obtain against BNPPLC for amounts due under this Ground
Lease may be collected only through resort of a judgement lien against BNPPLC’s
interest in the Leased Property and any Improvements. BNPPLC will have no
personal liability for the payment amounts due under this or for the performance
of any obligations of BNPPLC under this Ground Lease.
13 Quiet Enjoyment. NAI warrants that neither it nor any third party lawfully
claiming any right or interest in the Leased Property will, during the Ground
Lease Term, disturb BNPPLC’s peaceable and quiet enjoyment of the Leased
Property; however, such enjoyment will be subject to the terms, provisions,
covenants, agreements and conditions of this Ground Lease and those Permitted
Encumbrances which are listed on Exhibit B.

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14 Option to Purchase. Subject to the terms and conditions set forth in
Exhibit C, BNPPLC (and any assignee of BNPPLC’s entire interest in the Leased
Property, but not any subtenant or assignee of a lesser interest) will have the
option, and NAI hereby grants to BNPPLC such option, to purchase NAI’s interest
in the Leased Property.
15 Miscellaneous.
     (A) No Merger. There will be no merger of this Ground Lease or of the
leasehold estate hereby created with the fee or any other estate in the Leased
Property or any part thereof by reason of the fact that the same person may
acquire or hold, directly or indirectly, this Ground Lease or the leasehold
estate hereby created or any interest in this Ground Lease or in such leasehold
estate as well as the fee or any other estate in the Leased Property or any
interest in such fee or other estate, unless all parties with an interest in the
Leased Property that would be adversely affected by any such merger specifically
agree in writing that such a merger has occurred.
     (B) Recording; Memorandum of Lease. Either party may record this Ground
Lease in the real property records of Wake County, North Carolina. If NAI and
BNPPLC decide not to record this Ground Lease, they will execute a memorandum of
this Ground Lease in recordable form which will be filed in the real property
records of Wake County, North Carolina.
16 Certain Remedies Cumulative. No right or remedy herein conferred upon or
reserved to BNPPLC is intended to be exclusive of any other right or remedy
BNPPLC has with respect to the Improved Property, and each and every right and
remedy of BNPPLC will be cumulative and in addition to any other right or remedy
given to it under this Ground Lease or now or hereafter existing in its favor at
law or in equity. In addition to other remedies available under this Ground
Lease, either party will be entitled, to the extent permitted by applicable law,
to a decree compelling performance of any of the other party’s agreements
hereunder.
17 Attorneys’ Fees and Legal Expenses. If BNPPLC commences any legal action or
other proceeding because of any breach of this Ground Lease by NAI, BNPPLC may
recover all Attorneys’ Fees incurred by it in connection therewith from NAI,
whether or not such controversy, claim or dispute is prosecuted to a final
judgment. Any Attorneys’ Fees incurred by BNPPLC in enforcing a judgment in its
favor under this Ground Lease will be recoverable separately from such judgment,
and the obligation for such Attorneys’ Fees is intended to be severable from
other provisions of this Ground Lease and not to be merged into any such
judgment.

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18 Successors and Assigns. The terms, provisions, covenants and conditions of
this Ground Lease will be binding upon NAI and BNPPLC and their respective
permitted successors and assigns and will inure to the benefit of NAI and BNPPLC
and all permitted transferees, mortgagees, successors and assignees of NAI and
BNPPLC with respect to the Leased Property; except that (A) BNPPLC will not
assign this Ground Lease or any rights hereunder except pursuant to a Permitted
Transfer, and (C) NAI will not assign this Ground Lease or any rights hereunder
prior to the Turnover Date without the prior written consent of BNPPLC.
[The signature pages follow.]

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     IN WITNESS WHEREOF, this Ground Lease is executed to be effective as of
July 17, 2007.

            BNP PARIBAS LEASING CORPORATION,
a Delaware corporation
      By:           Lloyd G. Cox, Managing Director             

                 
STATE OF TEXAS
    )          
 
    )     SS    
COUNTY OF DALLAS
    )          

I,                                                             , certify that
Lloyd G. Cox personally came before me this day and acknowledged that he is
Managing Director of BNP Paribas Leasing Corporation, a Delaware corporation,
and that he, as a Managing Director being duly authorized to do so, executed the
foregoing on behalf of the corporation.
Witness my hand and official seal this the                      day of July,
2007.
                                                                                
Notary Public, State of Texas
My Commission Expires:
                                                                                
(Notary Seal)
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[Continuation of signature pages for Ground Lease dated as of July 17, 2007.]

            NETWORK APPLIANCE, INC., a Delaware corporation
      By:           Ingemar Lanevi, Vice President and Corporate       
Treasurer     

                 
STATE OF NORTH CAROLINA
    )          
 
    )     SS    
COUNTY OF WAKE
    )          

I,                                                             , certify that
Ingemar Lanevi personally came before me this day and acknowledged that he is
Vice President and Corporate Treasurer of Network Appliance, Inc., a Delaware
corporation, and that he, as a Vice President and Corporate Treasurer being duly
authorized to do so, executed the foregoing on behalf of the corporation.
Witness my hand and official seal this the                      day of July,
2007.
                                                                                
Notary Public, State of North Carolina
My Commission Expires:
                                                                                
(Notary Seal)
Ground Lease - Signature Page

 

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[Continuation of signature pages for Ground Lease dated as of July 17, 2007.]
Consent and Agreement of the Condominium Association
     At the request and direction of NAI, as the current Owner of all Units
created by the Condominium Declaration, the undersigned, being the Association
under and as defined in the Condominium Declaration, joins in the execution of
this Ground Lease for the following limited purposes:
     1. The Association consents to the execution of this Ground Lease and the
other Operative Documents by NAI and BNPPLC.
     2. The Association agrees that the Association’s Relevant Property Rights
(as defined below) are and will be subject and subordinate to this Ground Lease
(and all its terms and conditions), to the leasehold estate created by this
Ground Lease and to each and all of the other Operative Documents (and all of
their terms and conditions). As used herein, the “Association’s Relevant
Property Rights” means any and all rights, titles and interests the Association
may have, now or in the future, to the land described in Exhibit A as the Ground
Lease Premises, or any part thereof, or to any land burdened by easements
appurtenant to the Ground Lease Premises as described in Exhibit A. The
Association’s Relevant Property Rights will include its rights, titles and
interests in and to Common Elements.
     3. In consideration of the rents to be paid to NAI under this Ground Lease,
and to assure BNPPLC that the Association’s Relevant Property Rights will be
subject to the leasehold estate contemplated by this Ground Lease, the
Association does hereby LEASE, DEMISE AND LET unto BNPPLC the Association’s
Relevant Property Rights. However, this lease by the Association to BNPPLC will
be limited to the land described in Exhibit A as the Ground Lease Premises and
the easements appurtenant to the Ground Lease Premises as described in
Exhibit A. Accordingly, any rights of possession or use created in favor of
BNPPLC by the lease from the Association will be limited to possession of the
Ground Lease Premises and to the nonexclusive use of adjacent land pursuant to
such appurtenant easements.

            NETAPP RTP PHASE I CONDOMINIUM OWNERS
ASSOCIATION, INC., a North Carolina nonprofit corporation
      By:           Name:           Title:        

Ground Lease - Signature Page

 

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STATE OF NORTH CAROLINA
    )          
 
    )     SS    
COUNTY OF WAKE
    )          

I,                                                             , certify that
                                                             personally came
before me this day and acknowledged that he is
                                                             of NetApp RTP Phase
I Condominium Owners Association, Inc., a North Carolina nonprofit corporation,
and that he, as a                                                             
being duly authorized to do so, executed the foregoing on behalf of the
corporation.
Witness my hand and official seal this the                      day of July,
2007.
                                                                                
Notary Public, State of North Carolina
My Commission Expires:
                                                                                
(Notary Seal)
Ground Lease - Signature Page

 

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Exhibit A
Legal Description
     BEING a portion of Site 12 as shown on the map entitled “Exempt Subdivision
Map of Site 12”, prepared by Barbara H. Mulkey Engineering, Inc., on May 30,
2000 as recorded in the Book of Maps 2000, Page 1300, Wake County, North
Carolina Registry, such portion being described as follows:
Unit 4 and the Additional Leased Premises, both as defined below (collectively,
the “Ground Lease Premises”).
As used in this Exhibit:
     (1) “Additional Leased Premises” means the land surrounding and adjacent to
Unit 4, depicted on the site plan attached to and made a part of this Exhibit as
the area shaded in gray, which includes parking lots, driveways and other areas
within the larger area designated as Common Elements in the Condominium
Declaration. The outer boundaries of the Additional Leased Premises are
described by metes and bounds on the last page attached to and made a part of
this Exhibit. All land within those outer boundaries, other than Unit 4, is
included in the Additional Leased Premises.
     (2) “Condominium Declaration” means the Declaration of Condominium for
NetApp RTP Phase I Condominium recorded in Book 012647, Page 01310, Wake County,
North Carolina Registry.
     (3) “Condominium Map” means the plat provided to BNP Paribas Leasing
Corporation (“BNPPLC”) by Network Appliance, Inc. (“NAI”) attached to and made a
part of this Exhibit. (The Condominium Map has also been filed in the Book of
Maps CM2007, Page 444A1, Wake County, North Carolina Registry.)
     (4) “Unit 4” means the land designated and described in the Condominium
Declaration as Unit 4 and is shown on the Condominium Map and site plan attached
to and made a part of this Exhibit.
TOGETHER WITH, easements appurtenant to the Ground Lease Premises (the
“Appurtenant Easements”) under, over and across adjacent parcels (“Adjacent
Parcels”) which are owned by NAI or the Association (as defined in the
Condominium Declaration) for the purposes described below and on and subject to
the express terms and conditions set forth below;
SUBJECT, HOWEVER, to an easement appurtenant to the Adjacent Parcels (the
“Reserved Easement”) over the Additional Leased Premises (but not any part of
Unit 4) in favor of the

 

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Association for the purposes described below and on and subject to the express
terms and conditions set forth below.
The Appurtenant Easements will be for the following purposes:
     1. The construction (including expansion or replacement), use, maintenance
and repair of utility lines under, over and across the Adjacent Parcels and
related equipment (including lines or equipment for water, sanitary sewer,
electricity, phone and gas) (collectively, the “Utility Lines”) to serve
improvements constructed from time to time on the Ground Lease Premises.
     2. Access and parking over and in paved driveways and parking lots or
garages now or hereafter located on the Adjacent Parcels (“Driveways and Parking
Areas”).
     3. The encroachment, support, maintenance, repair and replacement of any
buildings constructed on Unit 4 as shown on the Condominium Map during the
period that BNPPLC owns or leases Unit 4.
The Appurtenant Easements will be subject to the following terms and conditions:
     A. The Appurtenant Easements for Utility Lines will be limited to:
     (1) those Utility Lines, if any, existing on the first date upon which any
instrument is recorded which gives notice of the Appurtenant Easements;
     (2) those Utility Lines, if any, constructed by or at the request of NAI
itself;
     (3) any other Utility Lines reasonably necessary for the use of
improvements constructed or expected to be constructed as provided in the
Construction Agreement dated as of the date of this Ground Lease between NAI and
BNPPLC (whether constructed for BNPPLC or otherwise) (and in the case of Utility
Lines permitted only because of this clause (3), such Utility Lines must be
installed in a location that does not run through or under any then existing
building or structured garage on the Adjacent Parcels); and
     (4) replacements (including replacements that may increase utility
capacity) for any Utility Lines permitted under the preceding clauses
(1) through (3).
B. Any Utility Line on any Adjacent Parcel may be relocated to another

Exhibit A to Ground Lease - Page 2

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location on the same Adjacent Parcel by the owner of such parcel and at its sole
cost and expense, so long as the relocation is done in a good and workmanlike
manner that does not and will not impose any significant or unexpected
interruption of utility services or additional costs upon the owner or occupants
of the Ground Lease Premises.
     C. The use of Driveways and Parking Areas by the owner of the Ground Lease
Premises and its tenants and other invitees will not exceed that reasonably
required to provide buildings constructed on the Ground Lease Premises with
parking that both (i) meets local zoning and other legal requirements, and
(ii) when taken together with any permanent, concrete parking spaces from time
to time constructed on the Ground Lease Premises, causes the Parking Ratio (as
defined below) for building(s) constructed upon Unit 4 to equal the average
Parking Ratio for all buildings constructed upon all Units created by the
Condominium Declaration (collectively, the “Parking Requirements”). As used in
the preceding sentence, “Parking Ratio” means, for any building, the percentage
computed by dividing of the number of parking spaces on the Additional Leased
Premises or on the Adjacent Tracts which are available to the occupants of such
building, divided by the useable square footage of such building.
     D. NAI and its successors and assigns as the owners of Adjacent Parcels
will always maintain a number of parking spaces on the Adjacent Parcels which is
no less than the sum of (1) the spaces required to meet Parking Requirements for
buildings on the Ground Lease Premises, and (2) the spaces required to satisfy
zoning or other parking requirements for other buildings on or served by parking
on the Adjacent Parcels.
The Reserved Easement will be for the following purposes:
     1. The construction (including expansion and replacement), use, maintenance
and repair of any structured parking garage on any portion of the Additional
Leased Premises (but not any part of Unit 4) and related equipment (including
lines or equipment for electricity) (collectively, a “Structured Garage”) as
deemed necessary or helpful by the Association to serve improvements constructed
from time to time on both Unit 4 and any one or more other Units (as defined in
the Condominium Declaration) designated by the Association prior to the
construction of the Structured Garage (whether one or more, the “Other Units”);
and
     2. Access across paved driveways now or hereafter located on the Additional
Leased Premises, including access to loading docks which serve and are part of
the building designated as “Building 3” on the Condominium Map.
The Reserved Easement will be subject to the following terms and conditions:
     A. The construction (including expansion or replacement) of any Structured

Exhibit A to Ground Lease - Page 3

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Garage will be not exceed the size or scope required, as proposed in good faith
by the Association and approved by Ground Lessee (which approval will not be
unreasonably withheld), to provide Unit 4 and Other Units with parking that both
(i) meets local zoning and other legal requirements, and (ii) when taken
together with any permanent, concrete parking spaces from time to time
constructed and available for use on the Adjacent Tracts, is sufficient to meet
the reasonable projected parking needs of the owners and occupants of Unit 4 and
the Other Units (collectively, the “Association’s Proposed Parking
Requirements”). If, however, the Association does propose, and the tenant under
this Ground Lease does approve, the construction of a Structured Garage to meet
the Association’s Proposed Parking Requirements, then the Association may
undertake such construction pursuant to the Reserved Easement; and in the case
of any such construction commenced after the Turnover Date, the Ground Lessee
must join with the owners of Other Units to reimburse to the Association all
actual, out-of-pocket costs of design and construction in accordance with a
schedule of reimbursements imposed by the Association to facilitate the
construction.
     B. Before the Turnover Date, Ground Lessee will have no obligation for any
such reimbursements to the Association. After the Turnover Date, such
reimbursements will be allocated among the Ground Lessee and each owner of Other
Units in proportion to the square footage of their respective buildings to be
served by the Structured Garage; subject, however, to any reasonable
determination of the Association that (1) some other allocation of the cost
would be more equitable, (2) is made before construction commences and
contemporaneously with the Association’s determination that construction of a
Structured Garage is required to meet the Association’s Proposed Parking
Requirements, and (3) is made at a time when none of the parties affected by
such determination has voting control of the Association.
     B. Prior to the Turnover Date, Ground Lessee will have no obligation to pay
or reimburse the costs of operating or maintaining any Structured Garage.
However, after the Turnover Date and construction of any Structured Garage by
the Association, the cost of operating and maintaining it (including property
taxes) will be allocated among the Ground Lessee and the owners of Other Units
in the same proportion as the original costs of construction pursuant to the
preceding paragraph.
     C. The Reserved Easement will not preclude any construction by the Ground
Lessee, at its own expense, of any Structured Garage on the Additional Leased
Premises if ever the Ground Lessee itself should determine that a Structured
Garage is needed to meet the parking needs of the occupants of Unit 4.

Exhibit A to Ground Lease - Page 4

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(GROUND MAP) [f32867f3286701.gif]

Exhibit A to Ground Lease - Page 5

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(GROUND MAP) [f32867f3286702.gif]

Exhibit A to Ground Lease - Page 6

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Attachment to Exhibit A — Metes and Bounds
Description of “Additional Leased Premises”
     The following is a metes and bounds description of the outer boundaries of
the Additional Leased Premise:
BEGINNING at NCGS Monument “Hopson”, said monument having NC Grid Coordinates of
N=773,721.48 and E=2,034,907.39 (NAD 83), traveling thence South 11° 44' 59"
West 6154.66 feet to a right-of-way monument on the southern margin of Louis
Stephens Drive (a 100 foot public right-of-way), thence North 72° 48' 35" East
164.29 feet to a right-of-way monument on the southern margin of Kit Creek Road
(a 150 foot public right-of-way); thence with the southern margin of said Kit
Creek Road the following two (2) courses and distances:
     (1) South 68° 6' 54 East 412.64 feet to a right-of-way monument; and

     (2) with a curve to the right having a radius of 924.83 feet, an arc length
of 475.96, and a chord bearing
     and distance of South 54° 02' 59" East 470.72 feet to a computed point;
said computed being the POINT AND PLACE OF BEGINNING; thence from said point of
beginning and continuing with the southern margin of Kit Creek Road South 39°
18' 29" East 571.64 feet to a computed point, thence cornering and leaving said
right-of-way and with the common line of property now or formerly owned by
Research Triangle Foundation of NC (DB 1670 PG 239) the following two
(2) courses and distances:
     (1) South 50° 41' 31" West 100.00 feet to an iron pipe found; and

     (2) South 83° 31' 01" West 483.47 feet to an iron pipe found;
thence cornering and along three (3) new lines within the bounds of property
owned by Network Appliance, Inc. (DB 10941 Pg 2054) as follows:
     (1) North 12°44' 00" West 279.97 feet;

     (2) North 48° 55' 31" West 50.30 feet; and
     (3) North 32° 57' 24" East 401.61 feet to a point along the southern margin
of said Kit Creek Road; thence with the southern margin of Kit Creek Road along
a curve to the right having a radius of 925.04 feet, an arc length of 113.05
feet and a chord bearing and distance of South 42° 48' 33" East 112.98 feet to
the POINT AND PLACE OF BEGINNING. containing 5.36 acres (233.621 square feet),
more or less, said area shown on the rendering attached hereto.

Exhibit A to Ground Lease - Page 7

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Exhibit B
Permitted Encumbrances
     The leasehold and other interests in the Land hereby conveyed by NAI are
conveyed subject to the following matters to the extent the same are still valid
and in force:

1.   Taxes for the year 2007 and subsequent years, not yet due and payable.   2.
  Amended Declaration of Covenants recorded in Book 1663, page 559, Wake County
Registry and Amended Conditions, Covenants, Restrictions and Reservations
recorded in Book 3679, page 53, Wake County Registry as further amended and
modified by instrument recorded in Book 3679, page 41, Wake County Registry;
instrument recorded in Book 3679, page 48, Wake County Registry; and instrument
recorded in Book 3679, page 53, Wake County Registry. The aforesaid covenants
were extended by Extension Agreement recorded in Book 6098, page 683, Wake
County Registry.   3.   Easement(s) to Duke Power Company recorded in Book 1306,
page 330; Book 1262, page 51; Book 1262, page 186; Book 1306, page 334; Book
1389, page 570; and Book 1389, page 568, Wake County Registry.   4.   Sanitary
Sewer Easement recorded in Book 4783, page 360, Wake County Registry; and shown
in Map Book 1990, pages 973-976, Wake County Registry.   5.   Easement to Duke
Power Company as shown in Plat Book 1985, page 1208 and Plat Book 1985, 1347,
Wake County Registry.   6.   The following maters as shown on plat prepared by
Barbara H. Mulkey Engineering, Inc., dated May 30, 2000 entitled “Exempt
Subdivision Map of Site 12”, recorded in Book of Maps 2000, page 1300, Wake
County Registry:

  (a)   New permanent drainage easement along the eastern right of way
identified on such plat as “Future Roadway for Louis Stephens Drive”;     (b)  
Surface Cover Maintenance easement along the western boundary of Site 12 as
shown on such plat;     (c)   One hundred (100) year flood zone along the
southern boundary of Site 12 as shown on such plat;     (d)   Temporary drainage
easement along norther boundary of Site 12 as shown on such plat;     (e)  
Existing sixty (60) foot right of way of Kit Creek Road, which right of way is
to

 

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      be abandoned (if it has not already been abandoned) as located in the
northeastern portion of Site 12 as shown on such plat;     (f)   Overhead
electric lines located on the northeastern portion of Site 12 as shown on such
plat;     (g)   Flood plain area, wetlands and creek located within the Natural
Area Preserve as shown on such plat; and     (h)   Thirty (30) foot Wake County
sanitary sewer easement within the Natural Areas Preserve as shown on such plat.

7.   Except to the extent inconsistent with or in conflict with the
requirements, limitations and qualifications of subparagraphs 11(K), 11(L) and
11(M) of this Ground Lease, the terms and conditions of the Condominium
Declaration.

Exhibit B to Ground Lease - Page 2

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Exhibit C
CONTINGENT PURCHASE OPTION
     Subject to the terms of this Exhibit, BNPPLC shall have an option (the
“Option”) to buy NAI’ fee interest in the Leased Property at any time during the
term of this Ground Lease after (but only after) any breach by NAI under the
Purchase Agreement, provided NAI does not cure the breach within any time
permitted for cure by the express provisions of the Purchase Agreement, for a
purchase price (the “Option Price”) to NAI equal to fair market value.
     For the purposes of this Exhibit, “fair market value” 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 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 of BNPPLC’s exercise of the Option 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 the exercise of the Option.
     If BNPPLC exercises the Option, which BNPPLC may do by notifying NAI that
BNPPLC has elected to buy NAI’ interest in the Leased Property as provided
herein, then:
     (1) To the extent, if any, required as a condition imposed by law to the
conveyance of the fee interest in the Leased Property to BNPPLC, NAI shall
promptly at its expense do whatever is necessary and possible (including,
without limitation, cooperating with BNPPLC in seeking any zoning variances
requested by BNPPLC) to obtain approvals of a new recorded plat or lot line
adjustments. Should it be determined that it is not possible to satisfy any such
condition imposed by law, neither NAI nor BNPPLC shall be required to consummate
any purchase pursuant to this Exhibit, and this Ground Lease will continue as if
BNPPLC had not exercised the Option.
     (2) Upon BNPPLC’s tender of the Option Price to NAI, NAI will convey good
and indefeasible title to the fee estate in the Land and its interest in all
other Leased Property to BNPPLC by general warranty deed and assignment subject
only to the Permitted Encumbrances, to any claims of BNPPLC or Liens Removable
by BNPPLC, and (to the extent still in force) to the Lease and the Purchase
Agreement.
     (3) BNPPLC’s obligation to close the purchase shall be subject to the
following terms and conditions, all of which are for the benefit of BNPPLC:
(a) BNPPLC shall have been furnished with evidence satisfactory to BNPPLC that
NAI can convey title as required by the preceding subparagraph; (b) nothing
shall have occurred or been discovered after BNPPLC exercised the Option that
could significantly and adversely affect title to the Leased Property or
BNPPLC’s use thereof, (c) all of the

 

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representations of NAI 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 NAI or any of NAI’
representatives, would continue to be true on the date of the closing if all
relevant facts and circumstances were known to NAI and such representatives, and
(d) BNPPLC shall have been tendered the deed and other documents which are
described in this Exhibit as documents to be delivered to BNPPLC at the closing
of BNPPLC’s purchase.
     (4) 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 Exhibit and after any approvals described in
subparagraph (1) above are obtained, and prior to closing BNPPLC’s occupancy of
the Leased Property shall continue to be subject to the terms and conditions of
this Ground Lease, including the terms setting forth BNPPLC’s obligation to pay
rent. Closing shall take place at the offices of any title insurance company
reasonably selected by BNPPLC to insure title under the title insurance policy
described below.
     (5) Any transfer taxes or notices or registrations required by law in
connection with the sale contemplated by this Exhibit will be the responsibility
of NAI.
     (6) NAI will deliver a certificate of nonforeign status to BNPPLC at
closing as needed to comply with the provisions of the U.S. Foreign Investors
Real Property Tax Act (FIRPTA) or any comparable federal, state or local law in
effect at the time.
     (7) NAI will also pay for and deliver to BNPPLC 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 BNPPLC (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 BNPPLC and to Permitted Encumbrances.
     (8) NAI shall also deliver at the closing all other documents or things
reasonably required to be delivered to BNPPLC or by the title insurance company
to evidence NAI’ ability to transfer the Leased Property to BNPPLC.
     If NAI and BNPPLC do not otherwise agree upon the amount of the Option
Price within twenty days after BNPPLC exercises the Option, the Option Price
shall be determined in accordance with the following procedure:
     (a) NAI and BNPPLC 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

Exhibit C to Ground Lease - Page 2

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days after receipt of notice from the other party that the appraisal process
described in this Exhibit has been invoked. The agreement of the two appraisers
as to the Option Price will be binding upon NAI and BNPPLC. 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 monthly fair market value
will be binding upon NAI and BNPPLC. Notification in writing of the Option Price
shall be made to NAI and BNPPLC within fifteen days following the selection of
the third appraiser.
     (b) If appraisers must be selected under the procedure set out above and
either BNPPLC or NAI 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 Exhibit 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 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 NAI and BNPPLC may require the first two appraisers to immediately submit
its top choice for the third appraiser to the then highest ranking officer of
the Dallas, Texas Bar Association who will agree to help and who has no
attorney/client or other significant relationship to either NAI or BNPPLC. Such
officer will have complete discretion to select the most objective and competent
third appraiser from between the choice of each of the first two appraisers, and
will do so within ten days after such choices are submitted to him.
     (d) Either NAI or BNPPLC 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

Exhibit C to Ground Lease - Page 3

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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 NAI and BNPPLC.
     (e) NAI and BNPPLC shall each bear the expense of the appraiser appointed
by it, and the expense of the third appraiser and of any officer of the Dallas,
Texas Bar Association who participates in the appraisal process described above
will be shared equally by NAI and BNPPLC.

Exhibit C to Ground Lease - Page 4

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Exhibit D
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 Exhibit, “Rental Determination Date” means the
(1) the Effective Date, (2) the earliest anniversary of the Effective Date to
follow the Turnover Date by more than thirty days, and (3) after the second
Rental Determination Date described in clause (2), each fifth anniversary of the
preceding Rental Determination Date.
     As of the Effective Date (i.e., the first Rental Determination Date), the
parties have agreed that Fair Rental Value is the dollar amount set forth in
Paragraph 3 of this Ground Lease.
     If NAI and BNPPLC have not agreed upon Fair Rental Value as of any
subsequent Rental Determination Date within one hundred eighty days after the
such date, then Fair Rental Value will be determined as follows:
     (a) NAI and BNPPLC 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 Exhibit has been invoked. The agreement of
the two appraisers as to Fair Rental Value will be binding upon NAI and BNPPLC.
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 NAI and BNPPLC. Notification in
writing of this estimate shall be made to NAI and BNPPLC within fifteen days
following the selection of the third appraiser.
     (b) If appraisers must be selected under the procedure set out above and
either BNPPLC or NAI 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 Exhibit 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

 

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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 NAI and BNPPLC may require the first two appraisers to immediately
submit its top choice for the third appraiser to the then highest ranking
officer of the Dallas, Texas Bar Association who will agree to help and who has
no attorney/client or other significant relationship to either NAI or BNPPLC.
Such officer will have complete discretion to select the most objective and
competent third appraiser from between the choice of each of the first two
appraisers, and will do so within twenty days after such choices are submitted
to him.
     (d) Either NAI or BNPPLC 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 NAI and BNPPLC.
     (e) NAI and BNPPLC shall each bear the expense of the appraiser appointed
by it, and the expense of the third appraiser and of any officer of the Dallas,
Texas Bar Association who participates in the appraisal process described above
will be shared equally by NAI and BNPPLC.
Exhibit D to Ground Lease - Page 4