Document:

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                                                                   EXHIBIT 10.55

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                                PLEDGE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

                                      AMONG

                             BNP LEASING CORPORATION

                                    ("BNPLC")

                       BANQUE NATIONALE DE PARIS, AS AGENT

                                    ("AGENT")

                             NETWORK APPLIANCE, INC.

                                     ("NAI")

                                       AND

                        PARTICIPANTS AS DESCRIBED HEREIN

                               DECEMBER ___, 1999

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                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                Page
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<S>                                                                                             <C>
ARTICLE I   DEFINITIONS AND INTERPRETATION.....................................................   1
        Section 1.1 Capitalized Terms Used But Not Defined in This Agreement...................   1
        Section 1.2  Definitions...............................................................   1
               Account.........................................................................   1
               Account Office..................................................................   2
               Agent...........................................................................   2
               BNPLC...........................................................................   2
               BNPLC's Corresponding Obligations to Participants...............................   2
               Cash Collateral.................................................................   2
               Certificate of Deposit..........................................................   2
               Collateral......................................................................   2
               Collateral Imbalance............................................................   2
               Collateral Percentage...........................................................   2
               Default.........................................................................   2
               Deposit Taker...................................................................   3
               Deposit Taker Losses............................................................   3
               Deposit Taker's Acknowledgment and Agreement....................................   3
               Disqualified Deposit Taker......................................................   3
               Event of Default................................................................   3
               Failed Collateral Test Date.....................................................   4
               Initially Qualified Deposit Taker...............................................   4
               Lien............................................................................   4
               Material Lease Default..........................................................   5
               Mandatory Collateral Period.....................................................   5
               Minimum Collateral Value........................................................   5
               NAI.............................................................................   5
               NAI's Purchase Agreement Obligations............................................   5
               Notice of Security Interest.....................................................   5
               Other Liable Party..............................................................   5
               Participants....................................................................   5
               Participation Agreement.........................................................   5
               Percentage......................................................................   6
               Qualified Pledge................................................................   6
               Secured Obligations.............................................................   6
               Supplement......................................................................   6
               Transaction Documents...........................................................   6
               Value...........................................................................   6
        Section 1.3  Attachments...............................................................   6
        Section 1.4  Amendment of Defined Instruments..........................................   6
        Section 1.5  References and Titles.....................................................   6
ARTICLE II   SECURITY INTEREST.................................................................   7
        Section 2.1  Pledge and Grant of Security Interest.....................................   7
        Section 2.2  Return of Collateral After the Secured Obligations are Satisfied in Full..   7
ARTICLE III   DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE.....................................   7
        Section 3.1  Determination of Minimum Collateral Percentage Generally..................   7
</TABLE>

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<TABLE>
<S>                                                                                             <C>
        Section 3.2  Limitations on NAI's Right to Lower the Collateral Percentage.............   8
        Section 3.3  Mandatory Collateral Periods..............................................   8
ARTICLE IV   PROVISIONS CONCERNING DEPOSIT TAKERS..............................................   8
        Section 4.1  Qualification of Deposit Takers Generally.................................   8
        Section 4.2  Existing Deposit Takers...................................................   9
        Section 4.3  Replacement of Participants Proposed by NAI...............................   9
        Section 4.4  Mandatory Substitution for Disqualified Deposit Takers....................   9
        Section 4.5  Voluntary Substitution of Deposit Takers..................................  10
        Section 4.6  Delivery of Notice of Security Interest by NAI and Agent..................  10
        Section 4.7  Constructive Possession of Collateral.....................................  10
        Section 4.8  Attempted Setoff by Deposit Takers........................................  10
        Section 4.9  Deposit Taker Losses......................................................  10
        Section 4.10  Losses Resulting from Failure of Deposit Taker to Comply with this
                         Agreement.............................................................  11
ARTICLE V   DELIVERY AND MAINTENANCE OF CASH COLLATERAL........................................  11
        Section 5.1  Delivery of Funds by NAI..................................................  11
        Section 5.2  Transition Account........................................................  11
        Section 5.3  Allocation of Cash Collateral Among Deposit Takers........................  11
        Section 5.4  Issuance and Redemption of Certificates of Deposit........................  12
        Section 5.5  Status of the Accounts Under the Reserve Requirement Regulations..........  12
        Section 5.6  Acknowledgment by NAI that Requirements of this Agreement are
                         Commercially Reasonable...............................................  13
ARTICLE VI   WITHDRAWAL OF CASH COLLATERAL.....................................................  13
        Section 6.1  Withdrawal of Collateral Prior to the Designated Sale Date................  13
        Section 6.2  Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
                         Secured Obligations to the Participants...............................  13
        Section 6.3  Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
                         Secured Obligations to BNPLC..........................................  14
        Section 6.4  Withdrawal of Cash Collateral From Accounts Maintained by Disqualified
                         Deposit Takers........................................................  14
ARTICLE VII   REPRESENTATIONS AND COVENANTS OF NAI.............................................  14
        Section 7.1  Representations of NAI....................................................  14
        Section 7.2  Covenants of NAI..........................................................  15
ARTICLE VIII    AUTHORIZED ACTION BY AGENT.....................................................  17
        Section 8.1  Power of Attorney.........................................................  17
ARTICLE IX    DEFAULT AND REMEDIES.............................................................  17
        Section 9.1  Remedies..................................................................  17
ARTICLE X    OTHER RECOURSE....................................................................  18
        Section 10.1  Recovery Not Limited.....................................................  18
ARTICLE XI   PROVISIONS CONCERNING AGENT.......................................................  18
        Section 11.1  Appointment and Authority................................................  18
        Section 11.2  Exculpation, Agent's Reliance, Etc.......................................  19
        Section 11.3  Participant's Credit Decisions...........................................  19
        Section 11.4  Indemnity................................................................  20
        Section 11.5  Agent's Rights as Participant and Deposit Taker..........................  20
        Section 11.6  Investments..............................................................  20
        Section 11.7  Benefit of Article XI....................................................  20
        Section 11.8  Resignation..............................................................  20
ARTICLE XII   MISCELLANEOUS....................................................................  21
        Section 12.1 Provisions Incorporated From Other Operative Documents....................  21
        Section 12.2  Cumulative Rights, etc...................................................  21
</TABLE>

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<TABLE>
<S>                                                                                             <C>
        Section 12.3  Survival of Agreements...................................................  21
        Section 12.4  Other Liable Party.......................................................  21
        Section 12.5  Termination..............................................................  21
</TABLE>

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Attachment 1......................................Form of Certificate of Deposit

Attachment 2............Supplement to Pledge Agreement (Phase IV - Improvements)

Attachment 3........Notice of NAI's Election to Change the Collateral Percentage

Attachment 4.........................................Notice of Security Interest

Attachment 5............................................Examples of Calculations

Attachment 6......Notice of NAI's Requirement to Withdraw Excess Cash Collateral

Attachment 7......Notice of NAI's Requirement of Direct Payments to Participants

Attachment 8.............Notice of NAI's Requirement of Direct Payments to BNPLC

Attachment 9.........................Notice of NAI's Requirement of a Withdrawal
                            of Cash Collateral from a Disqualified Deposit Taker

Schedule 1............................Financial Covenants and Negative Covenants

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<PAGE>   6

                                PLEDGE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

        This PLEDGE AGREEMENT (PHASE IV - IMPROVEMENTS) (this "AGREEMENT") is
made as of December ___, 1999 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE,
INC., a California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"); BANQUE NATIONALE DE PARIS ("BNPLC'S PARENT"), as a
"PARTICIPANT"; and BANQUE NATIONALE DE PARIS, acting in its capacity as agent
for BNPLC and the Participants (in such capacity, "AGENT"), is made and dated as
of the Effective Date.

                                    RECITALS

        A. NAI and BNPLC are parties to: (i) a Common Definitions and Provisions
Agreement (Phase IV - Improvements) dated as of the Effective Date (the "COMMON
DEFINITIONS AND PROVISIONS AGREEMENT (PHASE IV - IMPROVEMENTS)"); and (ii) a
Purchase Agreement (Phase IV - Improvements) dated as of the Effective Date (the
"PURCHASE AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL
PAYMENT" (as defined in the Common Definitions and Provisions Agreement (Phase
IV - Improvements)), in consideration of the rights granted to NAI by the
Purchase Agreement.

        B. Pursuant to a Participation Agreement dated the date hereof (the
"PARTICIPATION AGREEMENT"), BNPLC's Parent has agreed with BNPLC to participate
in the risks and rewards to BNPLC of the Purchase Agreement and other Operative
Documents (as defined in the Common Definitions and Provisions Agreement (Phase
IV - Improvements)), and the parties to this Agreement anticipate that other
financial institutions may become parties to the Participation Agreement as
Participants, agreeing to participate in the risks and rewards to BNPLC of the
Purchase Agreement and other Operative Documents.

        C. NAI may from time to time deliver cash collateral for its obligations
to BNPLC under the Purchase Agreement and for BNPLC's corresponding obligations
to Participants under the Participation Agreement. This Agreement sets forth the
terms and conditions governing such cash collateral.

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                    ARTICLE I DEFINITIONS AND INTERPRETATION

        Section 1.1 Capitalized Terms Used But Not Defined in This Agreement.
All capitalized terms used in this Agreement which are defined in Article I of
the Common Definitions and Provisions Agreement (Phase IV - Improvements) and
not otherwise defined herein shall have the same meanings herein as set forth in
the Common Definitions and Provisions Agreement (Phase IV - Improvements). All
terms used in this Agreement which are defined in the UCC and not otherwise
defined herein shall have the same meanings herein as set forth therein, except
where the context otherwise requires.

        Section 1.2 Definitions. When used in this Agreement, the following
terms shall have the following respective meanings:

               "ACCOUNT" shall mean any deposit account maintained by a Deposit
        Taker into which Cash Collateral may be deposited at any time, excluding
        the Transition Account.

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               "ACCOUNT OFFICE" shall mean, with respect to any Account
        maintained by any Deposit Taker, the office of such Deposit Taker in
        California or New York at which such Account is maintained as specified
        in the applicable Deposit Taker's Acknowledgment and Agreement.

               "AGENT" shall have the meaning given to that term in the
        introductory paragraph hereof.

               "BNPLC" shall have the meaning given to that term in the
        introductory paragraph hereof.

               "BNPLC'S CORRESPONDING OBLIGATIONS TO PARTICIPANTS" shall mean
        BNPLC's obligations under the Participation Agreement to pay
        Participants their respective Percentages of (or amounts equal to their
        respective Percentages of) sums "actually received by BNPLC" (as defined
        in the Participation Agreement) in satisfaction of NAI's Purchase
        Agreement Obligations; provided, however, any modification of the
        Participation Agreement executed after the date hereof without NAI's
        written consent shall not be considered for purposes of determining
        BNPLC's Corresponding Obligations to Participants under this Agreement.

               "CASH COLLATERAL" shall mean (i) all money of NAI which NAI has
        delivered to Agent for deposit with a Deposit Taker pursuant to this
        Agreement, and (ii) any additional money delivered to Agent as
        Collateral pursuant to Section 4.9.

               "CERTIFICATE OF DEPOSIT" shall mean a certificate of deposit
        issued by a Deposit Taker as required by Section 5.4 below to evidence
        an Account into which Cash Collateral has been deposited pursuant to
        this Agreement. Each Certificate of Deposit shall be issued in an amount
        equal to the Value of the Account which it evidences and shall otherwise
        be in the form set forth as ATTACHMENT 1.

                "COLLATERAL" shall have the meaning given to that term in
        Section 2.1 hereof.

               "COLLATERAL IMBALANCE" shall mean on any date prior to the
        Designated Sale Date that the Value (without duplication) of Accounts
        maintained by and Certificates of Deposit issued by the Deposit Taker
        for any Participant (other than a Disqualified Deposit Taker) does not
        equal such Participant's Percentage, multiplied by the lesser of (1) the
        Minimum Collateral Value in effect on such date, or (2) the aggregate
        Value of all Collateral subject to this Agreement on such date. For
        purposes of determining whether a Collateral Imbalance exists, the Value
        of any Accounts maintained by a bank that is acting as Deposit Taker for
        two or more Participants will be deemed to be held for them in
        proportion to their respective Percentages, and the Value of any
        Accounts maintained by a bank as Deposit Taker for both a Participant
        and BNPLC (as in the case of BNPLC's Parent acting as Deposit Taker for
        itself, as a Participant, and for BNPLC) will be deemed to be held for
        the Participant only to the extent necessary to prevent or mitigate a
        Collateral Imbalance and otherwise for BNPLC.

               "COLLATERAL PERCENTAGE" shall mean the percentage designated by
        NAI or required during a Mandatory Collateral Period pursuant to Part
        III of Schedule 1.

               "DEFAULT" means any Event of Default and any default, event or
        condition which would, with the giving of any requisite notices and the
        passage of any requisite periods of time, constitute an Event of
        Default.

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               "DEPOSIT TAKER" for BNPLC shall mean BNPLC's Parent and for each
        Participant shall mean the Participant itself; provided, that each of
        BNPLC and the Participants, for itself only, may from time to time
        designate another Deposit Taker as provided in Sections 4.4 and 4.5
        below.

               "DEPOSIT TAKER LOSSES" shall mean the Value of any Cash
        Collateral delivered to a Deposit Taker, but that the Deposit Taker will
        not (because of the insolvency of the Deposit Taker, offsets by the
        Deposit Taker in violation of the Deposit Taker's Acknowledgment and
        Agreement, or otherwise) return to NAI or return to Agent for
        disposition or application as provided herein or as required by
        applicable law.

               "DEPOSIT TAKER'S ACKNOWLEDGMENT AND AGREEMENT" shall have the
        meaning given to that term in subsection 4.1.2 hereof.

               "DISQUALIFIED DEPOSIT TAKER" shall mean any Deposit Taker with
        whom Agent may decline to deposit Collateral pursuant to Section 4.1.

               "EVENT OF DEFAULT" shall mean the occurrence of any of the
        following:

                        (a) the failure by NAI to pay all or any part of NAI's
                Purchase Agreement Obligations when due, after giving effect to
                any applicable notice and grace periods expressly provided for
                in the Purchase Agreement;

                        (b) the failure by NAI to provide funds as and when
                required by Section 5.1 of this Agreement, if within seven
                Business Days after such failure commences NAI does not (1) cure
                such failure by delivering the funds required by Section 5.1,
                and (2) pay to BNPLC as additional Rent under the Improvements
                Lease an amount equal to interest at the Default Rate (as
                defined in the Improvements Lease) on such funds for the period
                from which they were first due to the date of receipt by Agent;

                        (c) the failure of the pledge or security interest
                contemplated herein in the Transition Account or any Account,
                Certificate of Deposit or Cash Collateral to be a Qualified
                Pledge (regardless of the characterization of the Transition
                Account or any Accounts, Certificates of Deposit or Cash
                Collateral as deposit accounts, instruments or general
                intangibles under the UCC), if within five Business Days after
                NAI becomes aware of such failure, NAI does not (1) notify
                Agent, BNPLC and the Participants of such failure, and (2) cure
                such failure, and (3) to the extent required by Section 7.2.9,
                pay to BNPLC any additional Base Rent that has accrued under the
                Improvements Lease because of (or that would have accrued if
                BNPLC had been aware of) such failure, together with interest at
                the Default Rate on any such additional Base Rent;

                        (d) the failure of any representation herein by NAI to
                be true (other than a failure described in another clause of
                this definition of Event of Default), if such failure is not
                cured within thirty days after NAI receives written notice
                thereof from Agent;

                        (e) the failure of any representation made by NAI in
                subsection 7.1.1 to be true, if within fifteen (15) days after
                NAI becomes aware of such failure, NAI does not (1) notify
                Agent, BNPLC and the Participants of such failure, and (2) cure
                such failure, and (3) pay to BNPLC any additional Base Rent that
                has accrued under the Improvements Lease because of (or that
                would have accrued if BNPLC had been aware of) such failure, and
                (4) pay to BNPLC interest at the Default Rate on any such
                additional Base Rent;

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<PAGE>   9

                        (f) the failure by NAI timely and properly to observe,
                keep or perform any covenant, agreement, warranty or condition
                herein required to be observed, kept or performed (other than a
                failure described in another clause of this definition of Event
                of Default), if such failure is not cured within thirty days
                after NAI receives written notice thereof from Agent; and

                        (g) the failure by BNPLC to pay when due on or after the
                Designated Sale Date any of BNPLC's Corresponding Obligations to
                Participants, after giving effect to any applicable notice and
                grace periods expressly provided for in the Participation
                Agreement.

        Notwithstanding the foregoing, if ever the aggregate Value of Cash
        Collateral held by Agent and the Deposit Takers EXCEEDS the Minimum
        Collateral Value then in effect, a failure of the pledge or security
        interest contemplated herein in SUCH EXCESS Cash Collateral to be a
        valid, perfected, first priority pledge or security interest shall not
        constitute an Event of Default under this Agreement. Accordingly, to
        provide a cure as required to avoid an Event of Default under clauses
        (c) or (e) of this definition, NAI could deliver additional Cash
        Collateral - the pledge of which or security interest in which created
        by this Agreement is a Qualified Pledge - sufficient in amount to cause
        the aggregate Value of the Cash Collateral then held by Agent and the
        Deposit Takers subject to a Qualified Pledge hereunder to equal or
        exceed the Minimum Collateral Value.

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

               "INITIALLY QUALIFIED DEPOSIT TAKER" means (1) Banque Nationale de
        Paris, acting through any branch, office or agency that can lawfully
        maintain an Account as a Deposit Taker hereunder, and (2) any of the
        fifty largest (measured by total assets) U.S. banks, or one of the one
        hundred largest (measured by total assets) banks in the world, with debt
        ratings of at least (i) A- (in the case of long term debt) and A-1 (in
        the case of short term debt) or the equivalent thereof by Standard and
        Poor's Corporation, and (ii) A3 (in the case of long term debt) and P-2
        (in the case of short term debt) or the equivalent thereof by Moody's
        Investor Service, Inc. The parties believe it improbable that the
        ratings systems used by Standard and Poor's Corporation and by Moody's
        Investor Service, Inc. will be discontinued or changed, but if such
        ratings systems are discontinued or changed, NAI shall be entitled to
        select and use a comparable ratings systems as a substitute for the S&P
        Rating or the Moody Rating, as the case may be, for purposes of
        determining the status of any bank as an Initially Qualified Deposit
        Taker.

                "LIEN" shall mean, with respect to any property or assets, any
        right or interest therein of a creditor to secure indebtedness of any
        kind which is owed to him or any other arrangement with such creditor
        which provides for the payment of such indebtedness out of such property
        or assets or which allows him to have such indebtedness satisfied out of
        such property or assets prior to the general creditors of any owner
        thereof, including any lien, mortgage, security interest, pledge,
        deposit, production payment, rights of a vendor under any title
        retention or conditional sale agreement or lease substantially
        equivalent thereto, tax lien, mechanic's or materialman's lien, or any
        other charge or encumbrance for security purposes, whether arising by
        law or agreement or otherwise, but excluding any right of setoff which
        arises without agreement in the ordinary course of business. "Lien" also
        means any filed financing statement, any registration with an issuer of
        uncertificated securities, or any other arrangement which would serve to
        perfect a Lien described in the preceding sentence, regardless of
        whether such financing statement is filed, such registration is made, or
        such arrangement is undertaken before or after such Lien exists.

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<PAGE>   10

               "MATERIAL LEASE DEFAULT" shall mean any of the following:

                      (1) any "Event of Default" under and as defined in the
               Improvements Lease, including any such Event of Default
               consisting of a failure of NAI to comply with the requirements of
               Exhibit I attached to the Improvements Lease; and

                      (2)(a) any failure of NAI to make any payment required by
               and when first due under the Improvements Lease, regardless of
               whether any period provided in the Improvements Lease for the
               cure of such failure by NAI shall have expired, and (b) any other
               default, event or condition which would, with the giving of any
               requisite notices and the passage of any requisite periods of
               time, constitute an "Event of Default" under and as defined in
               the Improvements Lease, if such other default, event or failure
               involves a material noncompliance with Applicable Law. (For
               purposes of this definition, "material" noncompliance with
               Applicable Law will include any noncompliance, the correction of
               which has been requested by a governmental authority, or because
               of which a threat of action against the Property or BNPLC has
               been asserted by a governmental authority.)

               "MANDATORY COLLATERAL PERIOD" shall mean any period, as
        determined in accordance with Part III of Schedule 1, during which NAI
        is required to maintain a Collateral Percentage of one hundred percent
        (100%) pursuant to Section 3.2.

               "MINIMUM COLLATERAL VALUE" shall mean (1) as of the Designated
        Sale Date or any prior date, an amount equal to the Collateral
        Percentage multiplied by the Stipulated Loss Value determined as of that
        date in accordance with the Improvements Lease; and (2) as of any date
        after the Designated Sale Date, an amount equal to the Break Even Price
        plus any unpaid interest accrued on past due amounts payable pursuant to
        Paragraph 1(a) of the Purchase Agreement.

               "NAI" shall have the meaning given to that term in the
        introductory paragraph hereof.

               "NAI'S PURCHASE AGREEMENT OBLIGATIONS" shall mean all of NAI's
        obligations under the Purchase Agreement, including (i) NAI's obligation
        to pay any Supplemental Payment as required under subparagraph 1(A) of
        the Purchase Agreement, and (ii) any damages incurred by BNPLC because
        of (A) NAI's breach of the Purchase Agreement or (B) the rejection by
        NAI of the Purchase Agreement in any bankruptcy or insolvency
        proceeding.

               "NOTICE OF SECURITY INTEREST" shall have the meaning given to
        that term in subsection 4.1.1 hereof.

               "OTHER LIABLE PARTY" shall mean any Person, other than NAI, who
        may now or may at any time hereafter be primarily or secondarily liable
        for any of the Secured Obligations or who may now or may at any time
        hereafter have granted to Agent a pledge of or security interest in any
        of the Collateral.

               "PARTICIPANTS" shall mean BNPLC's Parent and any other financial
        institutions which may hereafter become parties to (i) this Agreement by
        completing, executing and delivering to NAI and Agent a Supplement, and
        (ii) the Participation Agreement.

               "PARTICIPATION AGREEMENT" shall have the meaning given to such
        term in Recital B hereof.

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<PAGE>   11

               "PERCENTAGE" shall mean with respect to each Participant and the
        Deposit Taker for such Participant, such Participant's "Percentage"
        under and as defined in the Participation Agreement for purposes of
        computing such Participant's right thereunder to receive payments of (or
        amounts equal to a percentage of) any sales proceeds or Supplemental
        Payment received by BNPLC under the Purchase Agreement. Percentages may
        be adjusted from time to time as provided in the Participation Agreement
        or as provided in supplements thereto executed as provided in the
        Participation Agreement.

               "QUALIFIED PLEDGE" means a pledge or security interest that
        constitutes a valid, perfected, first priority pledge or security
        interest.

               "SECURED OBLIGATIONS" shall mean and include both NAI's Purchase
        Agreement Obligations and BNPLC's Corresponding Obligations to
        Participants.

               "SUPPLEMENT" shall mean a supplement to this Agreement in the
        form of ATTACHMENT 2.

               "TRANSACTION DOCUMENTS" shall mean, collectively, this Agreement,
        the Improvements Lease, the Purchase Agreement and the Participation
        Agreement.

               "TRANSITION ACCOUNT" shall have the meaning given it in Section
        5.2.

                "UCC" shall mean the Uniform Commercial Code as in effect in the
        State of California from time to time, and the Uniform Commercial Code
        as in effect in any other jurisdiction which governs the perfection or
        non-perfection of the pledge of and security interests in the Collateral
        created by this Agreement.

               "VALUE" shall mean with respect to any Account, Certificate of
        Deposit or Cash Collateral on any date, a dollar value determined as
        follows (without duplication):

                        (a) cash shall be valued at its face amount on such
                date;

                        (b) an Account shall be valued at the principal balance
                thereof on such date; and

                        (c) a Certificate of Deposit shall be valued at the face
                amount thereof.

        Section 1.3 Attachments. All attachments to this Agreement are a part
hereof for all purposes.

        Section 1.4 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including
references to the Improvements Lease, Purchase Agreement and Participation
Agreement) also refer to and include all valid renewals, extensions, amendments,
modifications, supplements or restatements of any such agreement, instrument or
document; provided that nothing contained in this Section shall be construed to
authorize any Person to execute or enter into any such renewal, extension,
amendment, modification, supplement or restatement.

        Section 1.5 References and Titles. All references in this Agreement to
Attachments, Articles, Sections, subsections, and other subdivisions refer to
the Attachments, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any subdivision are for convenience only and do not constitute any part of
any such

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<PAGE>   12

subdivision and shall be disregarded in construing the language contained in
this Agreement. The words "this Agreement", "herein", "hereof", "hereby",
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The phrases "this
Article," "this Section" and "this subsection" and similar phrases refer only to
the Articles, Sections or subsections hereof in which the phrase occurs. The
word "or" is not exclusive, and the word "including" (in all of its forms) means
"including without limitation". Pronouns in masculine, feminine and neuter
gender shall be construed to include any other gender, and words in the singular
form shall be construed to include the plural and vice versa unless the context
otherwise requires.

                          ARTICLE II SECURITY INTEREST

        Section 2.1 Pledge and Grant of Security Interest. As security for the
Secured Obligations, NAI hereby pledges and assigns to Agent (for the ratable
benefit of BNPLC and the Participants) and grants to Agent (for the ratable
benefit of BNPLC and the Participants) a continuing security interest and lien
in and against all right, title and interest of NAI in and to the following
property, whether now owned or hereafter acquired by NAI (collectively and
severally, the "COLLATERAL"):

                (a) All Cash Collateral, all Accounts, the Transition Account
        and all Certificates of Deposit issued from time to time and general
        intangibles arising therefrom or relating thereto (however, "general
        intangibles" as used in this clause shall not include any general
        intangibles not related to Cash Collateral, Accounts, the Transition
        Account or Certificates of Deposit issued from time to time, and thus
        will not include, without limitation, any intellectual property of NAI);
        and all documents, instruments and agreements evidencing the same; and
        all extensions, renewals, modifications and replacements of the
        foregoing; and any interest or other amounts payable in connection
        therewith; and

                (b) All proceeds of the foregoing (including whatever is
        receivable or received when Collateral or proceeds is invested, sold,
        collected, exchanged, returned, substituted or otherwise disposed of,
        whether such disposition is voluntary or involuntary, including rights
        to payment and return premiums and insurance proceeds under insurance
        with respect to any Collateral, and all rights to payment with respect
        to any cause of action affecting or relating to the Collateral).

The pledge, assignment and grant of a security interest made by NAI hereunder is
for security of the Secured Obligations only; the parties to this Agreement do
not intend that NAI's delivery of the Collateral to Agent as herein provided
will constitute an advance payment of any Secured Obligations or liquidated
damages, nor do the parties intend that the Collateral increase the dollar
amount of the Secured Obligations.

        Section 2.2 Return of Collateral After the Secured Obligations are
Satisfied in Full. If any proceeds of Collateral remain after all Secured
Obligations have been paid in full, Agent will deliver or direct the Deposit
Takers to deliver such proceeds to NAI or other Persons entitled thereto by law.

            ARTICLE III DESIGNATION OF MINIMUM COLLATERAL PERCENTAGE

        Section 3.1 Determination of Minimum Collateral Percentage Generally.
Effective as of the date of this Agreement, and until a new Collateral
Percentage becomes effective, the Collateral Percentage is zero percent (0%).
Subject to the provisions of this Article III, NAI may from time to time
designate a new Collateral Percentage between 0% and 100% by written notice
delivered to Agent, BNPLC and the Participants in the form of ATTACHMENT 3. Any
new Collateral Percentage so designated shall not become effective, however,
until the commencement of the later of (A) the first Base Rent Period to
commence on or after the first Business Day of January, 2002, or (B) the next
following Base Rent Period

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<PAGE>   13

which is at least ten Business Days after the receipt of such notice by Agent,
BNPLC and the Participants. Further, after the first change in the Collateral
Percentage resulting from a designation by NAI of a Collateral Percentage
greater than zero percent (0%), any subsequent change resulting from NAI's
designation of a new Collateral Percentage shall not become effective before the
first Business Day of the first Base Rent Period that commences at least ninety
days after the effective date of the last preceding change in the Collateral
Period. In any event, if NAI provides more than one notice of a change in the
Collateral Percentage to be effective on a particular Base Rent Date, then the
latest such notice from NAI which satisfies the requirements of this Section
(and of Sections 3.2 and 3.3) will control. After any Collateral Percentage
becomes effective as provided in this Article, it shall remain in effect until a
different Collateral Percentage becomes effective as provided in this Article.

        Section 3.2 Limitations on NAI's Right to Lower the Collateral
Percentage. Notwithstanding the foregoing, no designation by NAI of a new
Collateral Percentage will be effective to reduce the Collateral Percentage if
the designation is given, or the reduction would otherwise become effective, on
or after the Designated Sale Date or when any of the following shall have
occurred and be continuing:

                3.2.1 any Material Lease Default;

                3.2.2 any Event of Default under and as defined in this
        Agreement; or

                3.2.3 any Default under and as defined in this Agreement -
        excluding, however, any such Default limited to a failure of NAI
        described in clause (c) or clause (e) of the definition of Event of
        Default above, with respect to which the time for cure specified in
        clause (c) or clause (e), as applicable, has not expired.

        Section 3.3 Mandatory Collateral Periods. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN CONTAINED, THE COLLATERAL PERCENTAGE DURING ANY MANDATORY
COLLATERAL PERIOD SHALL BE ONE HUNDRED PERCENT (100%). No later than five
Business Days prior to any Failed Collateral Test Date, NAI shall notify Agent,
BNPLC and the Participants of the conditions set forth in Part III of Schedule 1
that NAI will be unable to satisfy on the Failed Collateral Test Date.

                 ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS

        Section 4.1 Qualification of Deposit Takers Generally. Agent may decline
to deposit or maintain Collateral hereunder with any Person designated as a
Deposit Taker, if such Person has failed to satisfy or no longer satisfies the
following requirements:

                4.1.1 Such Person must have received from Agent and NAI a
        completed, executed Notice of Security Interest in the form of
        ATTACHMENT 4 (a "NOTICE OF SECURITY INTEREST") which specifically
        identifies any and all Accounts in which such Person shall hold Cash
        Collateral delivered to it pursuant to this Agreement and which
        designates Account Offices with respect to all such Accounts in New York
        or California.

                4.1.2 Such Person must have executed the Acknowledgment and
        Agreement at the end of such Notice of Security Interest (the "DEPOSIT
        TAKER'S ACKNOWLEDGMENT AND AGREEMENT") and returned the same to Agent.
        Further, such Person must have complied with the Deposit Taker's
        Acknowledgment and Agreement, and the representations set forth therein
        with respect to such Person must continue to be true and correct.

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<PAGE>   14

                4.1.3 Such Person must be a commercial bank, organized under the
        laws of the United States of America or a state thereof or under the
        laws of another country which is doing business in the United States of
        America; must be authorized to maintain deposit accounts for others
        through Account Offices in New York or California (as specified in the
        Deposit Taker's Acknowledgment and Agreement); and must be an Affiliate
        of BNPLC or the Participant for whom such Person will act as Deposit
        Taker or must have a combined capital, surplus and undivided profits of
        at least $500,000,000.

                4.1.4 Such Person must have complied with the provisions in this
        Agreement applicable to Deposit Takers, including the provisions of
        Section 5.4 concerning the issuance and redemption of Certificates of
        Deposit.

        Section 4.2 Existing Deposit Takers. BNPLC's Parent (as Deposit Taker
for itself and for BNPLC) has received a Notice of Security Agreement dated the
Effective Date and has responded to such a notice with a Deposit Taker's
Acknowledgment and Agreement dated the Effective Date, as contemplated in
subsections 4.1.1 and 4.1.2.

        Section 4.3 Replacement of Participants Proposed by NAI. So long as no
Event of Default has occurred and is continuing, BNPLC shall not unreasonably
withhold its approval for a substitution under the Participation Agreement of a
new Participant proposed by NAI for any Participant, the Deposit Taker for whom
would no longer meet the requirements for an Initially Qualified Deposit Taker;
provided, however, that (A) the proposed substitution can be accomplished
without a release or breach by BNPLC of its rights and obligations under the
Participation Agreement; (B) the new Participant will agree (by executing a
Supplement and a supplement to the Participation Agreement as contemplated
therein and by other agreements as may be reasonably required by BNPLC and NAI)
to become a party to the Participation Agreement and to this Agreement, to
designate an Initially Qualified Deposit Taker as the Deposit Taker for it under
this Agreement and to accept a Percentage under the Participation Agreement
equal to the Percentage of the Participant to be replaced; (C) the new
Participant (or NAI) will provide the funds required to pay the termination fee
by Section 6.4 of the Participation Agreement to accomplish the substitution;
(D) NAI (or the new Participant) agrees in writing to indemnify and defend BNPLC
for any and all Losses incurred by BNPLC in connection with or because of the
substitution, including the cost of preparing supplements to the Participation
Agreement and this Agreement and including any cost of defending and paying any
claim asserted by the Participant to be replaced because of the substitution
(but not including any liability of BNPLC to such Participant for damages caused
by BNPLC's bad faith or gross negligence in the performance of BNPLC's
obligations under the Participation Agreement prior to the substitution); (E)
the new Participant shall be a reputable financial institution having a net
worth of no less than seven and one half percent (7.5%) of total assets and
total assets of no less than $10,000,000,000.00 (all according to then recent
audited financial statements); and (F) in no event will BNPLC be required to
approve a substitution pursuant to this Section 4.3 which will replace a
Participant that is an Affiliate of BNPLC. BNPLC shall attempt in good faith to
assist (and cause BNPLC's Parent to attempt in good faith to assist) NAI in
identifying a new Participant that NAI may propose to substitute for an existing
Participant pursuant to this Section, as NAI may reasonably request from time to
time. However, in no event shall BNPLC itself, or any of its Affiliates, be
required to take the Percentage of any Participant to be replaced.

        Section 4.4 Mandatory Substitution for Disqualified Deposit Takers. If
any Deposit Taker shall cease to satisfy the requirements set forth in Section
4.1, the party for whom such Disqualified Deposit Taker has been designated as
Deposit Taker (i.e., BNPLC or the applicable Participant) shall promptly (1)
provide notice thereof to Agent and NAI, and (2) designate a substitute Deposit
Taker and cause the substitute to satisfy the requirements set forth in Section
4.1. Pending the designation of the substitute and

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<PAGE>   15

the satisfaction by it of the requirements set forth in Section 4.1, Agent may
withdraw Collateral held by the Disqualified Deposit Taker and deposit such
Collateral with other Deposit Takers, subject to Section 5.3 below.

        Section 4.5 Voluntary Substitution of Deposit Takers. With the written
approval of Agent, which approval will not be unreasonably withheld, BNPLC or
any Participant may at any time designate for itself a new Deposit Taker (in
replacement of any prior Deposit Taker acting for it hereunder); provided, the
Person so designated has satisfied the requirements set forth in Section 4.1;
and, provided further, unless the designation of a new Deposit Taker is required
by Section 4.4 to replace a Disqualified Deposit Taker, at the time of the
replacement such Person must be an Initially Qualified Deposit Taker.

        Section 4.6 Delivery of Notice of Security Interest by NAI and Agent. To
the extent required for the designation of a new Deposit Taker by BNPLC or any
Participant pursuant to Section 4.5, or to permit the substitution or
replacement of a Deposit Taker for BNPLC or any Participant as provided in
Sections 4.4 and 4.5, NAI and Agent shall promptly execute and deliver any
properly completed Notice of Security Interest requested by BNPLC or the
applicable Participant.

        Section 4.7 Constructive Possession of Collateral. The possession by a
Deposit Taker of any deposit accounts, money, instruments, chattel paper or
other property constituting Collateral or evidencing Collateral shall be deemed
to be possession by Agent or a person designated by Agent, for purposes of
perfecting the security interest granted to Agent hereunder pursuant to the UCC
or other Applicable Law; and notifications to a Deposit Taker by other Persons
holding any such property, and Acknowledgments, receipts or confirmations from
any such Persons delivered to a Deposit Taker, shall be deemed notifications to,
or Acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of such Deposit Taker for the benefit of Agent
for the purposes of perfecting such security interests under Applicable Law.

        Section 4.8 Attempted Setoff by Deposit Takers. By delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, WITHOUT IN EACH CASE FIRST OBTAINING
THE PRIOR WRITTEN AUTHORIZATION OF AGENT, Secured Obligations owed to it against
any Collateral held by it from time to time. Further, by delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, WITHOUT IN EACH CASE FIRST OBTAINING
THE PRIOR WRITTEN AUTHORIZATION OF BOTH NAI AND AGENT, obligations owed to it
other than Secured Obligations against any Collateral held by it from time to
time. Any Deposit Taker for BNPLC or a Participant shall not be permitted by
BNPLC or the applicable Participant, as the case may be, to violate such
agreements. However, NAI acknowledges and agrees (without limiting its right to
recover damages from a Deposit Taker that violates such agreements) that Agent
shall not be responsible for, or be deemed to have taken any action against NAI
because of, any Deposit Taker's violation of such agreements; and, neither BNPLC
nor any Participant shall be responsible for, or be deemed to have taken any
action against NAI because of, any violation of such agreements by a Deposit
Taker for another party.

        Section 4.9 Deposit Taker Losses. Agent shall not be responsible for any
Deposit Taker Losses. However, Deposit Taker Losses with respect to a Deposit
Taker for a particular Participant shall reduce the amount of BNPLC's
Corresponding Obligations to Participants which are payable to such Participant
as provided in Section 2.2 of the Participation Agreement. Further, when Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant are
incurred in excess of the payments of Secured Obligations that such Participant
would then have been entitled to receive under the Participation Agreement but
for such Deposit Taker Losses, such Participant must immediately pay the excess
to Agent

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<PAGE>   16

as additional Collateral hereunder, failing which NAI may recover any damages
suffered by it because of the Deposit Taker Losses from such Deposit Taker or
such Participant.

        Section 4.10 Losses Resulting from Failure of Deposit Taker to Comply
with this Agreement. Any Participant, the Deposit Taker for whom has failed to
comply with the requirements of this Agreement or any Notices of Security
Interest and any Deposit Taker's Acknowledgments and Agreements (the
"RESPONSIBLE PARTICIPANT") must defend, indemnify, and hold harmless BNPLC,
Agent and the other Participants from and against any Losses resulting from such
failure. Without limiting the foregoing, if the failure of a Deposit Taker for a
Responsible Participant to comply strictly with the terms of this Agreement
(including, without limitation, the provisions of Section 5.4 concerning the
issuance and redemption of Certificates of Deposit and the requirement that any
cash deposits be held in a deposit account located in either New York or
California) causes, in whole or in part, the security interest of Agent in the
Collateral held by such Deposit Taker to be unperfected, then any and all Losses
suffered as a result of such nonperfection shall be borne solely by the
Responsible Participant and shall not be shared by BNPLC, Agent or the other
Participants.

              ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL

        Section 5.1 Delivery of Funds by NAI. On each Base Rent Date, NAI must
deliver to Agent, subject to the pledge and security interest created hereby,
funds as Cash Collateral then needed (if any) to cause the Value of the
Collateral to be no less than the Minimum Collateral Value. Each delivery of
funds required by the preceding sentence must be received by Agent no later than
12:00 noon (San Francisco time) on the date it is required; if received after
12:00 noon it will be considered for purposes of the Improvements Lease as
received on the next following Business Day. At least five Business Days prior
to any Base Rent Date upon which it is expected that NAI will be required to
deliver additional funds pursuant to this Section, NAI shall notify BNPLC, Agent
and each of the Participants thereof and of the amount NAI expects to deliver to
Agent as Cash Collateral on the applicable Base Rent Date. In addition to
required deliveries of Cash Collateral as provided in the foregoing provisions,
NAI may on any date (whether or not a Base Rent Date) deliver additional Cash
Collateral to Agent as necessary to prevent any Default from becoming an Event
of Default. Upon receipt of any funds delivered to it by NAI as Cash Collateral,
Agent shall immediately deposit the same with the Deposit Takers in accordance
with the requirements of Sections 5.3 and 5.4 below.

        Section 5.2 Transition Account. Pending deposit in the Accounts or other
application as provided herein, all Cash Collateral received by Agent shall be
credited to and held by Agent in an account (the "TRANSITION ACCOUNT") styled
"NAI Collateral Account, held for the benefit of BNP Leasing Corporation and the
Participants," separate and apart from all other property and funds of NAI or
other Persons, and no other property or funds shall be deposited in the
Transition Account. The books and records of Agent shall reflect that the
Transition Account and all Cash Collateral on deposit therein are owned by NAI,
subject to a pledge and security interest in favor of Agent for the benefit of
BNPLC and Participants.

        Section 5.3 Allocation of Cash Collateral Among Deposit Takers. Funds
received by Agent from NAI as Cash Collateral will be allocated for deposit
among the Deposit Takers as follows:

        first, to the extent possible the funds will be allocated as required to
        rectify and prevent any Collateral Imbalance; and

        second, the funds will be allocated to the Deposit Taker for BNPLC,
        unless the Deposit Taker for BNPLC has become a Disqualified Deposit
        Taker, in which case the funds will be allocated to other Deposit Takers
        who are not Disqualified Deposit Takers as Agent deems appropriate.

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<PAGE>   17

Further, if for any reason a Collateral Imbalance is determined by Agent to
exist, Agent shall, as required to rectify or mitigate the Collateral Imbalance,
promptly reallocate Collateral among Deposit Takers by withdrawing Cash
Collateral from some Accounts and redepositing it in other Accounts. (If any
party to this Agreement believes that the Value of the Accounts held by a
particular Deposit Taker causes a Collateral Imbalance to exist, that party will
promptly notify BNPLC, NAI and Agent.) Subject to the foregoing, and provided
that Agent does not thereby create or exacerbate a Collateral Imbalance, Agent
may withdraw and redeposit Cash Collateral in order to reallocate the same among
Deposit Takers from time to time as Agent deems appropriate. For purposes of
illustration only, examples of the allocations required by this Section are set
forth in ATTACHMENT 5.

        Section 5.4 Issuance and Redemption of Certificates of Deposit. Upon the
receipt of any deposit of Cash Collateral from Agent, each Deposit Taker shall
issue a Certificate of Deposit evidencing the Account into which such deposit is
made and deliver such Certificate of Deposit to Agent for the benefit of BNPLC
and the Participants. Each Certificate of Deposit shall be issued in an amount
equal to the Value of the Account which it evidences and shall otherwise be in
the form set forth as ATTACHMENT 1 to this Agreement. Upon depositing any Cash
Collateral into an Account that is already evidenced by an outstanding
Certificate of Deposit, Agent will surrender the outstanding Certificate of
Deposit, and in exchange the Deposit Taker receiving the deposit will issue a
new Certificate of Deposit, evidencing the total amount of Cash Collateral in
the Account after the deposit. A Deposit Taker that has issued a Certificate of
Deposit may require the surrender of the Certificate of Deposit as a condition
to a withdrawal from the Account evidenced thereby, including any withdrawal
required or permitted by this Agreement. Upon surrender of a Certificate of
Deposit in connection with a withdrawal of less than all of the Cash Collateral
in the Account evidenced thereby, the applicable Deposit Taker will concurrently
issue a new Certificate of Deposit to Agent, evidencing the balance of the Cash
Collateral remaining on deposit in the Account after the withdrawal.
Notwithstanding the foregoing, if any Certificate of Deposit held by Agent shall
be destroyed, lost or stolen, the Deposit Taker that issued the Certificate,
upon the written request of Agent, shall issue a new Certificate of Deposit to
Agent in lieu of and in substitution for the Certificate of Deposit so
destroyed, lost or stolen. However, as applicant for the substitute Certificate
of Deposit, Agent must indemnify (at no cost to NAI) the applicable Deposit
Taker against any liability on the Certificate of Deposit destroyed, lost or
stolen, and Agent shall furnish to the Deposit Taker an affidavit of an officer
of Agent setting forth the fact of destruction, loss or theft and confirming the
status of Agent as holder of the Certificate of Deposit immediately prior to the
destruction, loss or theft. If any Certificate of Deposit held by Agent shall
become mutilated, the Deposit Taker that issued the Certificate, upon the
written request of Agent, shall issue a new Certificate of Deposit to Agent in
exchange and substitution for the mutilated Certificate of Deposit. Agent shall
hold all Certificates of Deposit for the benefit of BNPLC and the Participants,
subject to the pledge and security interest created hereby.

        Section 5.5 Status of the Accounts Under the Reserve Requirement
Regulations. Deposit Takers shall be permitted to structure the Accounts as
nonpersonal time deposits under 12 C.F.R., Part II, Chapter 204 (commonly known
as "Regulation D"). Accordingly, each Deposit Taker may require at least seven
days advance notice of any withdrawal or transfer of funds from Accounts it
maintains and may limit the number of withdrawals or transfers from such
Accounts to no more than six in any calendar month, notwithstanding anything to
the contrary herein or in any deposit agreement that NAI and any Deposit Taker
may enter into with respect to any Account. As necessary to satisfy the seven
days notice requirement with respect to withdrawals by Agent when required by
NAI pursuant to the provisions below, Agent shall notify Deposit Takers promptly
after receipt of any notice from NAI described in subsection 6.1.2 or 6.2.1 or
in Section 6.3.

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<PAGE>   18

        Section 5.6 Acknowledgment by NAI that Requirements of this Agreement
are Commercially Reasonable. NAI acknowledges and agrees that the requirements
set forth herein concerning receipt, deposit, withdrawal, allocation,
application and distribution of Cash Collateral by Agent, including the
requirements and time periods set forth in the next Article, are commercially
reasonable.

                    ARTICLE VI WITHDRAWAL OF CASH COLLATERAL

NAI may not withdraw Cash Collateral, except as follows:

        Section 6.1 Withdrawal of Collateral Prior to the Designated Sale Date.
NAI may require Agent to present Certificates of Deposit for payment and
withdraw Cash Collateral from Accounts on any date prior to the Designated Sale
Date and to deliver such Cash Collateral to NAI (which delivery shall be free
and clear of all liens and security interests hereunder); provided, however,
that in each case:

               6.1.1 Such withdrawal and delivery of the Cash Collateral to NAI
        will not cause the Value of the remaining Collateral to be less than the
        Minimum Collateral Value.

               6.1.2 by a notice in the form of ATTACHMENT 6, NAI must give
        Agent, BNPLC and the Participants notice of the required withdrawal at
        least ten days prior to the date upon which the withdrawal is to occur.

               6.1.3 No Default or Event of Default shall have occurred and be
        continuing at the time NAI gives the notice required by the preceding
        subsection or on the date upon which the withdrawal is required.

               6.1.4 NAI must pay to Agent any and all costs incurred by Agent
        in connection with the withdrawal.

               6.1.5 Agent shall determine the Accounts from which to make any
        withdrawal required by NAI pursuant to this Section as necessary to
        prevent or mitigate any Collateral Imbalance.

        Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants. To reduce the "Break Even
Price" or "Supplemental Payment" required under (and as defined in) the Purchase
Agreement (and, thus, to reduce the Secured Obligations), NAI may require Agent
to withdraw Cash Collateral then held by or for Agent pursuant to this Agreement
on the Designated Sale Date and to deliver the same on the Designated Sale Date
or on any date thereafter prior to an Event of Default (which delivery shall be
free and clear of all liens and security interests hereunder) directly to the
Participants in proportion to their respective rights to payment of BNPLC's
Corresponding Obligations to Participants and for application thereto or the
reduction thereof pursuant to Section 2.2 of the Participation Agreement;
provided, that:

               6.2.1 by a notice in the form of ATTACHMENT 7, NAI must have
        notified Agent, BNPLC and each of the Participants of the required
        withdrawal and payment to Participants at least ten days prior to the
        date upon which it is to occur;

               6.2.2 the required withdrawal shall be made as determined by
        Agent, first, from the Accounts maintained by the Deposit Takers for the
        Participants, and then (to the extent necessary) from the Accounts
        maintained by the Deposit Taker for BNPLC; and

               6.2.3 in any event, no withdrawals or payments directly to
        Participants shall be required by this Section 6.2 (or permitted over
        the objection of BNPLC) in excess of those required to

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<PAGE>   19
         satisfy BNPLC's Corresponding Obligations to Participants or to reduce
         such obligations to zero under the Participation Agreement.

        Section 6.3 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to BNPLC. To satisfy NAI's Purchase Agreement
Obligations, NAI may require Agent to withdraw any Cash Collateral held by the
Deposit Taker for BNPLC pursuant to this Agreement on the Designated Sale Date
and to deliver the same on the Designated Sale Date or on any date thereafter
prior to an Event of Default (which delivery shall be free and clear of all
liens and security interests hereunder) directly to BNPLC as a payment on behalf
of NAI of amounts due under the Purchase Agreement; provided, that by a notice
in the form of ATTACHMENT 8, NAI must have notified Agent and BNPLC of the
required withdrawal and payment to BNPLC at least ten days prior to the date
upon which it is to occur.

        Section 6.4 Withdrawal of Cash Collateral From Accounts Maintained by
Disqualified Deposit Takers. NAI may from time to time prior to the Designated
Sale Date (regardless of the existence of any Default or Event of Default)
require Agent to withdraw any or all Cash Collateral from any Account maintained
by a Disqualified Deposit Taker and deposit it, still subject to the pledge and
grant of security interest hereunder, with other Deposit Takers who are not
Disqualified Deposit Takers (in accordance with the requirements of Sections 5.3
and 5.4) on any date prior to the Designated Sale Date; provided, that by a
notice in the form of ATTACHMENT 9, NAI must have notified Agent, BNPLC and each
of the Participants of the required withdrawal at least ten days prior to the
date upon which it is to occur.

                ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI

        Section 7.1 Representations of NAI. NAI represents to BNPLC, Agent and
the Participants as follows:

               7.1.1 NAI is the legal and beneficial owner of the Collateral
        (or, in the case of after-acquired Collateral, at the time NAI acquires
        rights in the Collateral, will be the legal and beneficial owner
        thereof). No other Person has (or, in the case of after-acquired
        Collateral, at the time NAI acquires rights therein, will have) any
        right, title, claim or interest (by way of Lien, purchase option or
        otherwise) in, against or to the Collateral, except for rights created
        hereunder.

               7.1.2 Agent has (or in the case of after-acquired Collateral, at
        the time NAI acquires rights therein, will have) a valid, first
        priority, perfected pledge of and security interest in the Collateral,
        regardless of the characterization of the Collateral as deposit
        accounts, instruments or general intangibles under the UCC, but assuming
        that the representations of each Deposit Taker in its Deposit Taker's
        Acknowledgment and Agreement are true.

               7.1.3 NAI has delivered to Agent, together with all necessary
        stock powers, endorsements, assignments and other necessary instruments
        of transfer, the originals of all documents, instruments and agreements
        evidencing Accounts, Certificates of Deposit or Cash Collateral.

               7.1.4 NAI's chief executive office is located at the address of
        NAI set forth in Article II of the Common Definitions and Provisions
        Agreement (Phase IV - Improvements) or at another address in California
        specified in a notice that NAI has given to Agent as required by Section
        7.2.4.

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<PAGE>   20

               7.1.5 To the knowledge of NAI, neither the ownership or the
        intended use of the Collateral by NAI, nor the pledge of Accounts or the
        grant of the security interest by NAI to Agent herein, nor the exercise
        by Agent of its rights or remedies hereunder, will (i) violate any
        provision of (a) Applicable Law, (b) the articles or certificate of
        incorporation, charter or bylaws of NAI, or (c) any agreement, judgment,
        license, order or permit applicable to or binding upon NAI, or (ii)
        result in or require the creation of any Lien, charge or encumbrance
        upon any assets or properties of NAI except as expressly contemplated in
        this Agreement. Except as expressly contemplated in this Agreement, to
        the knowledge of NAI no consent, approval, authorization or order of,
        and no notice to or filing with any court, governmental authority or
        third party is required in connection with the pledge or grant by NAI of
        the security interest contemplated herein or the exercise by Agent of
        its rights and remedies hereunder.

        Section 7.2 Covenants of NAI. NAI hereby agrees as follows:

               7.2.1 NAI, at NAI's expense, shall promptly procure, execute and
        deliver to Agent all documents, instruments and agreements and perform
        all acts which are necessary, or which Agent may reasonably request, to
        establish, maintain, preserve, protect and perfect the Collateral, the
        pledge thereof to Agent or the security interest granted to Agent
        therein and the first priority of such pledge or security interest or to
        enable Agent to exercise and enforce its rights and remedies hereunder
        with respect to any Collateral. Without limiting the generality of the
        preceding sentence, NAI shall (A) procure, execute and deliver to Agent
        all stock powers, endorsements, assignments, financing statements and
        other instruments of transfer requested by Agent, (B) deliver to Agent
        promptly upon receipt all originals of Collateral consisting of
        instruments, documents and chattel paper, (C) cause the security
        interest of Agent in any Collateral consisting of securities to be
        recorded or registered in the books of any financial intermediary or
        clearing corporation requested by Agent, and (D) reimburse Agent upon
        request for any legal opinion Agent may elect to obtain from a
        nationally recognized commercial law firm authorized to practice in New
        York concerning the enforceability, first priority and perfection of
        Agent's security interest in any Collateral maintained in New York, if
        BNPLC or any Participant should at any time elect to use a Deposit Taker
        that will maintain one or more Accounts in New York.

               7.2.2 NAI shall not use or consent to any use of any Collateral
        in violation of any provision of the this Agreement or any other
        Transaction Document or any Applicable Law.

               7.2.3 NAI shall pay promptly when due all taxes and other
        governmental charges, all Liens and all other charges now or hereafter
        imposed upon, relating to or affecting any Collateral.

               7.2.4 Without thirty days' prior written notice to Agent, NAI
        shall not change NAI's name or place of business (or, if NAI has more
        than one place of business, its chief executive office).

               7.2.5 NAI shall appear in and defend, on behalf of Agent, any
        action or proceeding which may affect NAI's title to or Agent's interest
        in the Collateral.

               7.2.6 Subject to the express rights of NAI under Article VI, NAI
        shall not surrender or lose possession of (other than to Agent or a
        Deposit Taker pursuant hereto), sell, encumber, lease, rent, option, or
        otherwise dispose of or transfer any Collateral or right or interest
        therein, and NAI shall keep the Collateral free of all Liens.

               7.2.7 NAI will not take any action which would in any manner
        impair the value or enforceability of Agent's pledge of or security
        interest in any Collateral, nor will NAI fail to take

[Phase IV - Improvements]              -15-

<PAGE>   21

        any action which is required to prevent (and which NAI knows is required
        to prevent) an impairment of the value or enforceability of Agent's
        pledge of or security interest in any Collateral.

[Phase IV - Improvements]              -16-

<PAGE>   22

               7.2.8 NAI shall pay (and shall indemnify and hold harmless Agent
        from and against) all Losses incurred by Agent in connection with or
        because of (A) the interest acquired by Agent in any Collateral pursuant
        to this Agreement, or (B) the negotiation or administration of this
        Agreement, whether such Losses are incurred at the time of execution of
        this Agreement or at any time in the future. Costs and expenses included
        in such Losses may include, without limitation, all filing and recording
        fees, taxes, UCC search fees and Attorneys' Fees incurred by Agent with
        respect to the Collateral.

               7.2.9 Without limiting the foregoing, within five Business Days
        after NAI becomes aware of any failure of the pledge or security
        interest contemplated herein in the Transition Account or any Account,
        Certificate of Deposit or Cash Collateral to be a valid, perfected,
        first priority pledge or security interest (regardless of the
        characterization of the Transition Account or any Accounts, Certificates
        of Deposit or Cash Collateral as deposit accounts, instruments or
        general intangibles under the UCC), NAI shall notify Agent, BNPLC and
        the Participants of such failure. In addition, if the failure would not
        exist but for NAI's delivery of Cash Collateral to Agent subject to
        prior Liens or other claims by one or more third parties, or but for the
        grant by NAI itself of any Lien or other interest in the Collateral to
        one or more third parties, then, in addition to any other remedies
        available to BNPLC or Agent under the circumstances, NAI must pay to
        BNPLC any additional Base Rent that has accrued under the Improvements
        Lease because of (or that would have accrued if BNPLC had been aware of)
        the failure, together with interest at the Default Rate on any such
        additional Base Rent.

                     ARTICLE VIII AUTHORIZED ACTION BY AGENT

        Section 8.1 Power of Attorney. NAI hereby irrevocably appoints Agent as
NAI's attorney-in-fact for the purpose of authorizing Agent to perform (but
Agent shall not be obligated to and shall incur no liability to NAI or any third
party for failure to perform) any act which NAI is obligated by this Agreement
to perform, and to exercise, consistent with the other provisions of this
Agreement, such rights and powers as NAI might exercise with respect to the
Collateral during any period in which a Default or Event of Default has occurred
and is continuing, including the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension, reorganization,
deposit, merger, consolidation or other agreement pertaining to, or deposit,
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any indebtedness of NAI relating to the Collateral;
and (f) execute UCC financing statements and other documents, instruments and
agreements required hereunder. NAI agrees that such care as Agent gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Agent's possession; provided, however, that Agent shall
not be obligated to NAI to give any notice or take any action to preserve rights
against any other Person in connection with the Secured Obligations or with
respect to the Collateral.

                         ARTICLE IX DEFAULT AND REMEDIES

        Section 9.1 Remedies. In addition to all other rights and remedies
granted to Agent, BNPLC or the Participants by this Agreement, the Improvements
Lease, the Purchase Agreement, the Participation Agreement, the UCC and other
Applicable Laws, Agent may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies, all of which will be in furtherance of its rights as a secured party
under the UCC:

[Phase IV - Improvements]              -17-

<PAGE>   23

                (a) Agent may collect, receive, appropriate or realize upon the
        Collateral or otherwise foreclose or enforce the pledge of or security
        interests in any or all Collateral in any manner permitted by Applicable
        Law or in this Agreement; and

                (b) Agent may notify any or all Deposit Takers to pay all or any
        portion of the Collateral held by such Deposit Taker(s) directly to
        Agent.

Agent shall distribute the proceeds of all Collateral received by Agent after
the occurrence of an Event of Default to BNPLC and the Participants for
application to the Secured Obligations. If any proceeds of Collateral remain
after all Secured Obligations have been paid in full, Agent will deliver or
direct the Deposit Takers to deliver such proceeds to NAI or other Persons
entitled thereto. In any case where notice of any sale or disposition of any
Collateral is required, NAI hereby agrees that seven (7) Business Days notice of
such sale or disposition is reasonable.

                            ARTICLE X OTHER RECOURSE

        Section 10.1 Recovery Not Limited. To the fullest extent permitted by
applicable law, NAI waives any right to require that Agent, BNPLC or the
Participants proceed against any other Person, exhaust any Collateral or other
security for the Secured Obligations, or to have any Other Liable Party joined
with NAI in any suit arising out of the Secured Obligations or this Agreement,
or pursue any other remedy in their power. NAI waives any and all notice of
acceptance of this Agreement. NAI further waives notice of the creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations of any Other Liable Party from time to time and any defense
arising by reason of any disability or other defense of any Other Liable Party
or by reason of the cessation from any cause whatsoever of the liability of any
Other Liable Party. Until all of the Secured Obligations shall have been paid in
full, NAI shall have no right to subrogation, reimbursement, contribution or
indemnity against any Other Liable Party and NAI waives the right to enforce any
remedy which Agent, BNPLC or any Participant has or may hereafter have against
any Other Liable Party, and waives any benefit of and any right to participate
in any other security whatsoever now or hereafter held by Agent, BNPLC or any
Participant. NAI authorizes Agent, BNPLC and the Participants, without notice or
demand and without any reservation of rights against NAI and without affecting
NAI's liability hereunder or on the Secured Obligations, from time to time to
(a) take or hold any other property of any type from any other Person as
security for the Secured Obligations, and exchange, enforce, waive and release
any or all of such other property, (b) after any Event of Default, apply or
require the application of the Collateral (in accordance with this Agreement) or
such other property in any order they may determine and to direct the order or
manner of sale thereof as they may determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
Other Liable Party with respect to any or all of the Secured Obligations or
other security for the Secured Obligations, and (d) release or substitute any
Other Liable Party.

                     ARTICLE XI PROVISIONS CONCERNING AGENT

        In the event of any conflict between the following and other provisions
in this Agreement, the following will control:

        Section 11.1 Appointment and Authority. BNPLC and each Participant
hereby irrevocably authorizes Agent, and Agent hereby undertakes, to take all
actions and to exercise such powers under this Agreement as are specifically
delegated to Agent by the terms hereof, together with all other powers
reasonably incidental thereto. The relationship of Agent to the Participants is
only that of one commercial bank acting as collateral agent for others, and
nothing herein shall be construed to constitute Agent a

[Phase IV - Improvements]              -18-

<PAGE>   24

trustee or other fiduciary for any Participant or anyone claiming through or
under a Participant nor to impose on Agent duties and obligations other than
those expressly provided for in this Agreement. With respect to any matters not
expressly provided for in this Agreement and any matters which this Agreement
places within the discretion of Agent, Agent shall not be required to exercise
any discretion or take any action, and it may request instructions from BNPLC
and Participants with respect to any such matter, in which case it shall be
required to act or to refrain from acting (and shall be fully protected and free
from liability to all Participants in so acting or refraining from acting) upon
the instructions of the Majority, as defined in the Participation Agreement,
including itself as a Participant and BNPLC; provided, however, that Agent shall
not be required to take any action which exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to this Agreement
or the other documents referenced herein or to Applicable Law.

        Section 11.2 Exculpation, Agent's Reliance, Etc. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement, INCLUDING THEIR NEGLIGENCE OF ANY KIND, EXCEPT THAT EACH
SHALL BE LIABLE FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Without
limiting the generality of the foregoing, Agent (1) may treat the rights of any
Participant under its Participation Agreement as continuing until Agent receives
written notice of the assignment or transfer of those rights in accordance with
such Participation Agreement, signed by such Participant and in form
satisfactory to Agent; (2) may consult with legal counsel (including counsel for
NAI), independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, unless the
action taken or omitted constitutes misconduct; (3) makes no warranty or
representation and shall not be responsible for any statements, warranties or
representations made in or in connection with this Agreement or the other
documents referenced herein; (4) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of the Transaction Documents on the part of any party thereto, or to
inspect the property (including the books and records) of any party thereto; (5)
shall not be responsible to any Participant for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document or any instrument or document furnished in connection therewith; (6)
may rely upon the representations and warranties of NAI, Participants and
Deposit Takers in exercising its powers hereunder; and (6) shall incur no
liability under or in respect of the Transaction Documents by acting upon any
notice, consent, certificate or other instrument or writing (including any
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.

        Section 11.3 Participant's Credit Decisions. Each Participant
acknowledges that it has, independently and without reliance upon Agent or any
other Participant, made its own analysis of NAI and the transactions
contemplated hereby and its own independent decision to enter into the
Transaction Documents to which it is a party. Each Participant also acknowledges
that it will, independently and without reliance upon Agent or any other
Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Transaction Documents.

        Section 11.4 Indemnity. Each Participant agrees to indemnify Agent (to
the extent not reimbursed by NAI within ten days after demand) from and against
such Participant's Percentage of any and all Losses of any kind or nature
whatsoever which to any extent (in whole or in part) may be imposed on, incurred
by, or asserted against Agent growing out of, resulting from or in any other way
associated with any of the Collateral, the Transaction Documents and the
transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LOSSES ARE IN ANY WAY OR TO ANY

[Phase IV - Improvements]              -19-

<PAGE>   25

EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY,
OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND
BY AGENT, PROVIDED ONLY THAT NO PARTICIPANT SHALL BE OBLIGATED UNDER THIS
SECTION TO INDEMNIFY AGENT FOR THAT PORTION, IF ANY, OF ANY LOSS WHICH IS
PROXIMATELY CAUSED BY AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, AS DETERMINED IN A FINAL JUDGMENT RENDERED AGAINST AGENT. Cumulative
of the foregoing, each Participant agrees to reimburse Agent promptly upon
demand for such Participant's Percentage share of any costs and expenses to be
paid to Agent by NAI hereunder to the extent that Agent is not timely reimbursed
by NAI as provided in subsection 7.2.8. As used in this Section the term "Agent"
shall refer not only to the Person designated as such in the introductory
paragraph of this Agreement, but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Person.

        Section 11.5 Agent's Rights as Participant and Deposit Taker. In its
capacity as a Participant, Banque Nationale de Paris shall have the same rights
and obligations as any Participant and may exercise such rights as though it
were not Agent. In its capacity as a Deposit Taker, Banque Nationale de Paris
shall have the same rights and obligations as any Deposit Taker and may exercise
such rights as though it were not Agent. Banque Nationale de Paris and any of
its Affiliates may accept deposits from, lend money to, act as Trustee under
indentures of, and generally engage in any kind of business with NAI or its
Affiliates, all as if Banque Nationale de Paris were not designated as the Agent
hereunder and without any duty to account therefor to any other Participant.

        Section 11.6 Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute any funds which it has received
hereunder, or whenever Agent in good faith determines that there is any dispute
among BNPLC and Participants about how such funds should be distributed, Agent
may choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Agent is otherwise required to
invest funds pending distribution, Agent shall invest such funds pending
distribution, all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
BNPLC or Participants shall be held by Agent pending such distribution solely as
Agent hereunder, and Agent shall have no equitable title to any portion thereof.

        Section 11.7 Benefit of Article XI. The provisions of this Article
(other than the following Section 11.8) are intended solely for the benefit of
Agent, BNPLC and Participants, and NAI shall not be entitled to rely on any such
provision or assert any such provision in a claim or defense against Agent,
BNPLC or any Participant. Agent, BNPLC and Participants may waive or amend such
provisions as they desire without any notice to or consent of NAI.

        Section 11.8 Resignation. Agent may resign at any time by giving written
notice thereof to BNPLC, Participants and NAI. Upon any such resignation the
Majority (as defined in the Participation Agreement) shall have the right to
appoint a successor Agent, subject to NAI's consent, such consent not to be
unreasonably withheld. A successor must be appointed for any retiring Agent, and
such Agent's resignation shall become effective when such successor accepts such
appointment. If, within thirty days after the date of the retiring Agent's
resignation, no successor Agent has been appointed and has accepted such
appointment, then the retiring Agent may appoint a successor Agent, which shall
be a commercial bank organized or licensed to conduct a banking or trust
business under the laws of the United States of America or of any state thereof.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
the retiring Agent shall be discharged from its duties and obligations under
this

[Phase IV - Improvements]              -20-

<PAGE>   26

Agreement. After any retiring Agent's resignation hereunder, the provisions
of this Article 10.1 shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.

                            ARTICLE XII MISCELLANEOUS

        Section 12.1 Provisions Incorporated From Other Operative Documents.
Reference is made to the Common Definitions and Provisions Agreement (Phase IV -
Improvements), to the Purchase Agreement and to the Participation Agreement for
a statement of the terms thereof. Without limiting the generality of the
foregoing, the provisions of Article II of the Common Definitions and Provisions
Agreement (Phase IV - Improvements) are incorporated into this Agreement for all
purposes as if set forth in this Article.

        Section 12.2 Cumulative Rights, etc. Except as herein expressly provided
to the contrary, the rights, powers and remedies of Agent, BNPLC and the
Participants under this Agreement shall be in addition to all rights, powers and
remedies given to them by virtue of any Applicable Law, any other Transaction
Document or any other agreement, all of which rights, powers, and remedies shall
be cumulative and may be exercised successively or concurrently without
impairing their respective rights hereunder. NAI waives any right to require
Agent, BNPLC or any Participant to proceed against any Person or to exhaust any
Collateral or to pursue any remedy in Agent's, BNPLC's or such Participant's
power.

        Section 12.3 Survival of Agreements. All representations and warranties
of NAI herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Transaction Documents and the creation of the Secured Obligations and
continue until terminated or released as provided herein.

        Section 12.4 Other Liable Party. Neither this Agreement nor the exercise
by Agent or the failure of Agent to exercise any right, power or remedy
conferred herein or by law shall be construed as relieving any Other Liable
Party from liability on the Secured Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any other agreement evidencing or securing the Secured
Obligations to which NAI or any Other Liable Party may be a party, and
notwithstanding the reorganization, death, incapacity or bankruptcy of any Other
Liable Party, or any other event or proceeding affecting any Other Liable Party.

        Section 12.5 Termination. Following the Designated Sale Date, upon
satisfaction in full of all Secured Obligations and upon written request for the
termination hereof delivered by NAI to Agent, (i) this Agreement and the pledge
and security interest created hereby shall terminate and all rights to the
Collateral shall revert to NAI and (ii) Agent will, upon NAI's request and at
NAI's expense execute and deliver to NAI such documents as NAI shall reasonably
request to evidence such termination and release.

                                [The signature pages follow.]

[Phase IV - Improvements]              -21-

<PAGE>   27

        IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Agreement to be executed as of December
___, 1999.

                                        "NAI"

                                        NETWORK APPLIANCE, INC.

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

<PAGE>   28

[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective December ___, 1999]

                                        "BNPLC"

                                        BNP LEASING CORPORATION

                                        By:
                                           -------------------------------------
                                           Lloyd G. Cox, Vice President

<PAGE>   29

[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective December ___, 1999]

                                        "AGENT"

                                        BANQUE NATIONALE DE PARIS

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

                                        "PARTICIPANT"

                                        BANQUE NATIONALE DE PARIS

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

<PAGE>   30

                                  ATTACHMENT 1
                               TO PLEDGE AGREEMENT

                             CERTIFICATE OF DEPOSIT

                                 (No. _________)

[_________, _____]

[NAME OF THE ISSUING
DEPOSIT TAKER AND THE
ADDRESS OF ITS APPLICABLE
ACCOUNT OFFICE]

PAYABLE TO
THE ORDER OF:   BANQUE NATIONALE DE PARIS, as Agent under the Pledge Agreement
                (Phase IV - Improvements) dated December ____, 1999, among
                Network Appliance, Inc., BNP Leasing Corporation, Banque
                Nationale de Paris and any other financial institutions which
                are from time to time Participants under such Pledge Agreement
                (Phase IV - Improvements) and Banque Nationale de Paris, acting
                in its capacity as agent for BNPLC and the Participants

__________________Dollars in current funds, without interest, seven days after
presentment of this certificate properly endorsed.

     The bank issuing this certificate acknowledges and certifies that on the
date indicated above the payee deposited the dollar amount indicated above, and
that such amount shall be payable as provided above.

________________________________________________
     Authorized Signature

<PAGE>   31

                                  ATTACHMENT 2
                              TO PLEDGE AGREEMENT

                         SUPPLEMENT TO PLEDGE AGREEMENT

                               [__________, ____]

Banque Nationale de Paris
_________________________
_________________________
_________________________

Network Appliance, Inc.
_________________________
_________________________
_________________________

        1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated December ____, 1999 among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"). Unless otherwise defined herein, all capitalized terms used
in this Supplement have the respective meanings given to those terms in the
Pledge Agreement.

        2. The undersigned hereby certifies to Agent and NAI that the
undersigned has become a party to the Participation Agreement by executing a
supplement as provided therein and that its Percentage thereunder is ______%.

        3. The undersigned, by executing and delivering this Supplement to NAI
and Agent, hereby agrees to become a party to the Pledge Agreement and agrees to
be bound by all of the terms thereof applicable to Participants. The Deposit
Taker for the undersigned shall be _________________, until such time as another
Deposit Taker for the undersigned shall be designated in accordance with
Sections 4.4 or 4.5 of the Pledge Agreement. The undersigned certifies to Agent
and NAI that such Deposit Taker is an Initially Qualified Deposit Taker and
satisfies the requirements for a Deposit Taker set forth in Section 4.1 of the
Pledge Agreement.

        IN WITNESS WHEREOF, the undersigned has executed this Supplement as of
the day and year indicated above.

                                        [                                      ]
                                         --------------------------------------
                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

<PAGE>   32

                                  ATTACHMENT 3
                               TO PLEDGE AGREEMENT

          NOTICE OF NAI'S ELECTION TO CHANGE THE COLLATERAL PERCENTAGE

                               [_________, _____]

Banque Nationale de Paris
[address of BNP]

 Re:           Pledge Agreement (Phase IV - Improvements) (the "PLEDGE
               AGREEMENT") dated December ____, 1999 among Network Appliance,
               Inc., BNP Leasing Corporation, Banque Nationale de Paris and any
               other financial institutions which are from time to time
               Participants under such Pledge Agreement and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

 Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement referenced above. This letter
constitutes notice to you, as Agent under the Pledge Agreement, that pursuant to
Section 3.1 of the Pledge Agreement, NAI elects to change the Collateral
Percentage to:

                           __________ percent (___%),

on the following Base Rent Date:

                                __________, ____

 NAI expects that multiplying the new Collateral Percentage specified above
against Stipulated Loss Value of:

                      ____________________________ Dollars ($__________),

will result in an expected new Minimum Collateral Value of:

                      ____________________________ Dollars ($__________).

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A NOTICE OF AN INCREASE IN
THE COLLATERAL PERCENTAGE, BECAUSE OF WHICH NAI WILL BE REQUIRED TO DELIVER
ADDITIONAL CASH COLLATERAL TO SATISFY THE MINIMUM COLLATERAL VALUE REQUIREMENTS
IN SECTION 5.1 OF THE PLEDGE AGREEMENT:

 Because of the increase in the Collateral Percentage which will result from
this notice and the corresponding increase in the Minimum Collateral Value, NAI
will deliver additional Cash Collateral to you as required by Section 5.1 of the
Pledge Agreement no later than 12:00 noon (San Francisco time) on the Base Rent
Date specified above, in the amount of:

<PAGE>   33

              ____________________________ Dollars ($__________).]

 To assure you that NAI has satisfied the conditions to its right to change the
Collateral Percentage as provided in this notice, and to induce you to rely upon
this notice in discharging your responsibilities under the Pledge Agreement, NAI
certifies to you that:

        1. NAI is giving this notice to you, BNPLC and the Participants at least
 ten Business Days prior to the Base Rent Date specified above, and such Base
 Rent Date is the commencement of a Base Rent Period.

        2. No Event of Default or other event or circumstance that would,
 pursuant to Section 3.2 of the Pledge Agreement, preclude NAI from designating
 the new Collateral Percentage above has occurred and is continuing, and NAI
 does not anticipate that on the Base Rent Date specified above there will have
 occurred and be continuing any such Event of Default or other event or
 circumstance.

        3. No Mandatory Collateral Period shall be in effect as of the effective
date specified above.

NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS ABOVE ARE
NOT CORRECT. HOWEVER, WE ASK THAT YOU NOTIFY NAI IMMEDIATELY IF FOR ANY REASON
YOU BELIEVE THIS NOTICE IS DEFECTIVE.

                                        Network Appliance, Inc.

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

[cc BNPLC and all Participants]

[Phase IV - Improvements]              -2-

<PAGE>   34

                                  ATTACHMENT 4
                               TO PLEDGE AGREEMENT

                           NOTICE OF SECURITY INTEREST

                               [_________, _____]

[Name of Deposit Taker]
[Address of Deposit Taker]

 1. Reference is made to the Pledge Agreement (Phase IV - Improvements) (the
"PLEDGE AGREEMENT") dated December ____, 1999 among Network Appliance, Inc.
("NAI"), BNP Leasing Corporation ("BNPLC"), Banque Nationale de Paris and any
other financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and Banque Nationale de
Paris, acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"). Unless otherwise defined herein, all capitalized terms used
in this Notice have the respective meanings given to those terms in the Pledge
Agreement.

 2. NAI has informed Agent that NAI has established with the addressee of this
Notice (the "DEPOSIT TAKER") the following non-interest bearing Account(s) to be
maintained at the following Account Office(s):

<TABLE>
<CAPTION>
    Account           Account       Account
     Type             Office        Number
    -------           -------       -------
<S>                 <C>             <C>
 Time Deposit       __________      __________
 Time Deposit       __________      __________
 Time Deposit       __________      __________
</TABLE>

NAI has further informed Agent that NAI intends to maintain Cash Collateral in
such Account(s), and that to evidence such Account(s) and the amount of Cash
Collateral held therein from time to time, NAI has authorized the Deposit Taker
to issue Certificates of Deposit payable to the order of Agent as provided in
the Pledge Agreement.

        3. NAI and Agent hereby notify Deposit Taker that, pursuant to the
Pledge Agreement, NAI has granted to Agent, for the ratable benefit of BNPLC and
the Participants as security for the Secured Obligations, a pledge of and
security interest in all Accounts and other Collateral maintained by NAI with
Deposit Taker, including the Account(s) described in Section 2 above.

        4. In furtherance of such grant, NAI and Agent hereby authorize and
direct Deposit Taker to:

               (a) hold all Collateral for Agent and as Agent's bailee, separate
        and apart from all other property and funds of NAI and all other Persons
        and to permit no other funds to be deposited or credited to the
        Account(s);

<PAGE>   35

               (b) make a notation in its books and records of the interest of
        Agent in the Collateral and that the Account(s) and all deposits therein
        or sums credited thereto are subject to a pledge and security interest
        in favor of Agent;

               (c) issue and redeem Certificates of Deposit evidencing the
        Account(s), as directed by Agent pursuant to the Pledge Agreement;

               (d) take such other steps as Agent may reasonably request to
        record, maintain, validate and perfect its pledge of and security
        interest in the Collateral; and

               (e) upon receipt of notice from Agent that an Event of Default
        has occurred, transfer and deliver to Agent or its nominee, together
        with all necessary endorsements, all or such portion of the Collateral
        held by Deposit Taker as Agent shall direct; provided, however, that in
        connection therewith the Deposit Taker may require compliance by Agent
        with the provisions in Section 5.4 of the Pledge Agreement for
        redemption of any outstanding Certificates of Deposit which evidence the
        Account(s).

        5. NAI and Agent agree that (a) the possession by Deposit Taker of all
money, instruments, chattel paper and other property constituting Collateral
shall be deemed to be possession by Agent or a person designated by Agent, for
purposes of perfecting the security interest granted to Agent hereunder pursuant
to Section 9305, 8313 or 8213 of the UCC (as the case may be), and (b)
notifications by Deposit Taker to other Persons holding any such property, and
Acknowledgments, receipts or confirmations from such Persons delivered to
Deposit Taker, shall be deemed notifications to, or Acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Deposit Taker for the benefit of Agent for the purposes of perfecting
such security interests under applicable law.

        6. As contemplated by the Pledge Agreement, please acknowledge Deposit
Taker's receipt of, and consent to, this notice and confirm the representations
and agreements set forth in the Acknowledgment and Agreement attached hereto by
executing the same and returning this letter to Agent. For your files, a copy of
this letter is enclosed which you may retain. The authorizations and directions
set forth herein may not be revoked or modified without the written consent of
Agent.

                                        "AGENT"

                                        BANQUE NATIONALE DE PARIS

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

                                        "NAI"

                                        Network Appliance, Inc.

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

[Phase IV - Improvements]              -2-

<PAGE>   36

                          ACKNOWLEDGMENT AND AGREEMENT
                                OF DEPOSIT TAKER

        Deposit Taker hereby acknowledges receipt of, and consents to, the above
notice, acknowledges that it will hold the Collateral for Agent and as Agent's
bailee, agrees to comply with the authorizations and directions set forth above
and represents to and agrees with NAI and Agent as follows:

               (a) Deposit Taker is a commercial bank, organized under the laws
        of the United States of America or a state thereof or under the laws of
        another country which is doing business in the United States of America.
        Deposit Taker is authorized to maintain deposit accounts for others
        through the Account Offices specified in the above notice, and Deposit
        Taker will not move the accounts described in the above notice to other
        offices without the prior written authorization of Agent and NAI.

               (b) Deposit Taker has a combined capital, surplus and undivided
        profits of at least $500,000,000.

               (c) The information set forth above regarding the Account(s) is
        accurate. Such Account(s) is (are) currently open and Deposit Taker has
        no prior notice of any other pledge, security interest, Lien, adverse
        claim or interest in such Account(s).

               (e) Deposit Taker shall promptly notify NAI and Agent if the
        representations made by Deposit Taker above cease to be true and
        correct.

               (f) Deposit Taker shall not (i) allow the withdrawal of funds
        from any Account by any Person other than Agent, or (ii) WITHOUT IN EACH
        CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, setoff or
        attempt to setoff any Secured Obligations owed to Deposit Taker against
        any Collateral held from time to time by Deposit Taker, or (iii) WITHOUT
        IN EACH CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF BOTH NAI
        AND AGENT, setoff or attempt to setoff any obligations owed to Deposit
        Taker other than Secured Obligations, against any Collateral held from
        time to time by Deposit Taker.

                                       [                                       ]
                                        ---------------------------------------

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

                                        [Date]

<PAGE>   37

                                  ATTACHMENT 5
                               TO PLEDGE AGREEMENT

                        EXAMPLES OF CALCULATIONS REQUIRED
                         TO AVOID A COLLATERAL IMBALANCE

        The examples below are provided to illustrate the calculations required
for allocations of Cash Collateral in a manner that will avoid a Collateral
Imbalance. The examples are not intended to reflect actual numbers under this
Agreement or actual Percentages of BNPLC or any of the Participants; nor are the
examples intended to provide a formula for the allocations that would be
appropriate in every case. The examples also reflect adjustments that would be
appropriate if the Collateral Percentage were adjusted from time to time from
and after the Base Rent Commencement Date, although this Agreement provides that
such percentage is not to increase above zero until the second anniversary of
the Effective Date (expected to be well after the Base Rent Commencement Date),
except in a Mandatory Collateral Period, during which such percentage would be
100%.

                                  EXAMPLE NO. 1

Assumptions:

1.      Two Participants ("Participant A" and "Participant B") are parties to
        the Participation Agreement with BNPLC. Participant A's Percentage is
        50% and Participant B's Percentage is 45%, leaving BNPLC with a
        Percentage of 5%.

2.      On the Base Rent Commencement Date, Funding Advances (including those to
        cover Carrying Costs under the Improvements Lease) totaled $12,000,000,
        resulting in a Stipulated Loss Value of $12,000,000, allocable as
        follows:

<TABLE>
<S>             <C>                                                           <C>
        A.      BNPLC's Parent (providing BNPLC's share) (5%) .........       $   600,000
        B.      Participant A (50%) ...................................         6,000,000
        C.      Participant B (45%) ...................................         5,400,000
                                                                              -----------

                TOTAL .................................................       $12,000,000
</TABLE>

3.      The Minimum Collateral Value on the Base Rent Commencement Date was
        $7,200,000 (reflecting a Collateral Percentage of 60% times Stipulated
        Loss Value).

4.      On the Base Rent Commencement Date, NAI had delivered to Agent Cash
        Collateral of $7,200,000, equal to the Minimum Collateral Value, as
        required by Section 5.1 of this Agreement.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the $7,200,000 to the
Deposit Takers for BNPLC and the Participants as follows:

<TABLE>
<S>                                                                                    <C>
        A        BNPLC's Deposit Taker (5% of Minimum Collateral Value) ...........     $  360,000
        B        Participant A's Deposit Taker (50% of Minimum Collateral Value) ..      3,600,000
        C        Participant B's Deposit Taker (45% of Minimum Collateral Value) ..      3,240,000
                                                                                        ----------

               TOTAL ..............................................................     $7,200,000
</TABLE>

                                  EXAMPLE NO. 2

<PAGE>   38

Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:

1.      Effective as of the first Base Rent Date, NAI increased its Collateral
        Percentage from 60% to 80%, raising the Minimum Collateral Value to
        $9,600,000. Because of such increase, NAI also delivered an additional
        $2,400,000 as Cash Collateral to Agent on the first Base Rent Date,
        bringing the total of all Cash Collateral delivered by NAI to $9,600,000
        as required by Section 5.1 of this Agreement.

2.      Also effective as of the first Base Rent Date, a new Participant
        approved by NAI ("Participant C") became a party to this Agreement and
        the Participation Agreement, taking a Percentage of 20%. Simultaneously,
        Participant A and Participant B entered into supplements to the
        Participation Agreement which reduced their Percentages to 40% and 35%,
        respectively.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPLC and the Participants with the
following amounts:

<TABLE>
<S>                                                                                       <C>
        A.  BNPLC's Deposit Taker (5% of Minimum Collateral Value) ................       $  480,000
        B.  Participant A's Deposit Taker (40% of Minimum Collateral Value) .......        3,840,000
        C.  Participant B's Deposit Taker (35% of Minimum Collateral Value) .......        3,360,000
        D.  Participant C's  Deposit Taker (20% of Minimum Collateral Value) ......        1,920,000
                                                                                          ----------

               TOTAL ..............................................................       $9,600,000
</TABLE>

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$2,400,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

<TABLE>
<S>                                                                                                   <C>
        A.  BNPLC's Deposit Taker ($480,000 less $360,000 already on deposit) .................       $  120,000
        B.  Participant A's Deposit Taker ($3,840,000 less $3,600,000 already on deposit) .....          240,000
        C.  Participant B's Deposit Taker ($3,360,000 less $3,240,000 already on deposit) .....          120,000
        D.  Participant C's  Deposit Taker ($1,920,000 less $0 already on deposit) ............        1,920,000
                                                                                                      ----------

               TOTAL ..........................................................................       $2,400,000
</TABLE>

                                  EXAMPLE NO. 3

Assumptions:  Assume the same facts as in Example No. 2, except that:

1.      Instead of increasing its Collateral Percentage from 60% to 80%, NAI
        increased its Collateral Percentage to 70% on the first Base Rent Date,
        raising the Minimum Collateral Value to $8,400,000. Because of such
        increase, NAI delivered an additional $1,200,000 as additional Cash
        Collateral to Agent on the first Base Rent Date, bringing the total of
        all Cash Collateral delivered by NAI to $8,400,000 as required by
        Section 5.1 of this Agreement.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPLC and the Participants with the
following amounts:

[Phase IV - Improvements]              -2-

<PAGE>   39

<TABLE>
<S>                                                                                       <C>
        A.  BNPLC's Deposit Taker (5% of Minimum Collateral Value) ................       $  420,000
        B.  Participant A's Deposit Taker (40% of Minimum Collateral Value) .......        3,360,000
        C.  Participant B's Deposit Taker (35% of Minimum Collateral Value) .......        2,940,000
        D.  Participant C's  Deposit Taker (20% of Minimum Collateral Value) ......        1,680,000
                                                                                          ----------

               TOTAL ..............................................................       $8,400,000
</TABLE>

Thus, to prevent a Collateral Imbalance, Agent would have to allocate the
$1,200,000 of additional Cash Collateral it received on the first Base Rent Date
as follows:

<TABLE>
<S>                                                                                                    <C>
        A. BNPLC's Deposit Taker ($420,000 less $360,000 already on deposit) ...................       $    60,000
        B. Participant A's Deposit Taker ($3,360,000 less $3,600,000 already on deposit) .......          (240,000)
        C. Participant B's Deposit Taker ($2,940,000 less $3,240,000 already on deposit) .......          (300,000)
        D. Participant C's  Deposit Taker ($1,680,000 less $0 already on deposit) ..............         1,680,000
                                                                                                       -----------

               TOTAL ...........................................................................       $ 1,200,000
</TABLE>

NOTE: THE NEGATIVE AMOUNTS (IN PARENTHESIS) ABOVE REPRESENT REQUIRED WITHDRAWALS
RATHER THAN DEPOSITS. AS EXAMPLE NO. 3 ILLUSTRATES, TO AVOID A COLLATERAL
IMBALANCE AGENT MAY FROM TIME TO TIME HAVE TO WITHDRAW CASH COLLATERAL HELD BY
THE DEPOSIT TAKER FOR ONE PARTICIPANT AND DEPOSIT IT IN AN ACCOUNT MAINTAINED BY
A DEPOSIT TAKER FOR ANOTHER PARTICIPANT.

[Phase IV - Improvements]              -3-

<PAGE>   40

                                  ATTACHMENT 6
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT TO
                         WITHDRAW EXCESS CASH COLLATERAL

                               [_________, _____]

Banque Nationale de Paris
[address of BNP]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December __,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.1 of the Pledge
Agreement, NAI requires you to withdraw from the Accounts and return to NAI the
following amount:

               ____________________________ Dollars ($__________)

on the following date:

                                __________, ____

        To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that:

               1. Your withdrawal and delivery of the amount specified above to
        NAI will not cause the Value of the remaining Collateral to be less than
        the Minimum Collateral Value. After giving effect to such withdrawal,
        the Collateral remaining in the Accounts maintained by the Deposit
        Takers will be:

               ____________________________ Dollars ($__________),

<PAGE>   41

        and the Minimum Collateral Value on the date specified above will equal:

               ____________________________ Dollars ($__________).

        Such Minimum Collateral Value equals the Collateral Percentage of:

                           __________ percent (___%),

        times the Stipulated Loss Value of:

               ____________________________ Dollars ($__________).

               2. NAI is giving this notice to you, BNPLC and the Participants
        at least ten days prior to the Base Rent Date specified above.

               3. No Default or Event of Default has occurred and is continuing
        as of the date of this notice, and NAI does not anticipate that any
        Default or Event of Default will have occurred and be continuing on the
        date upon which the withdrawal is required.

               4. NAI agrees that you may determine the Accounts from which to
        make any withdrawal required by NAI pursuant to this Section as
        necessary to prevent or mitigate any Collateral Imbalance.

        NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS
        ABOVE ARE NOT CORRECT OR IF THE DATE FOR WITHDRAWAL SPECIFIED ABOVE IS
        LESS THAN TEN DAYS AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK
        THAT YOU NOTIFY NAI IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS
        NOTICE IS DEFECTIVE.

[Phase IV - Improvements]              -2-

<PAGE>   42

        Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Takers seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to avoid a Collateral
Imbalance.

                                        Network Appliance, Inc.

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

[cc BNPLC and all Participants]

[Phase IV - Improvements]              -3-

<PAGE>   43

                                     Annex 1
                        TO NAI'S NOTICE OF REQUIREMENT TO
                         WITHDRAW CASH EXCESS COLLATERAL

                               [_________, _____]

Deposit Takers on the
Attached Distribution List

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.1
of the Pledge Agreement, NAI requires Agent to withdraw from the Accounts and
return to NAI the amounts listed below on the following date:

                                __________, ____

        Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:

<TABLE>
<CAPTION>
 Deposit Taker                           Account No.                        Amount
 -------------                           -----------                        ------
<S>                               <C>                                   <C>
1.
  ____________________              ______________________              $_____________

2.
  ____________________              ______________________              $_____________

3.
  ____________________              ______________________              $_____________

4.
  ____________________              ______________________              $_____________

                                    TOTAL WITHDRAWALS:                  $_____________
</TABLE>

                                        BANQUE NATIONALE DE PARIS, AS AGENT

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

[cc BNPLC and NAI]

[Phase IV - Improvements]              -4-

<PAGE>   44

                                  ATTACHMENT 7
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT OF
                         DIRECT PAYMENTS TO PARTICIPANTS

                               [_________, _____]

Banque Nationale de Paris
[address of BNP]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.2 of the Pledge
Agreement, NAI requires you to withdraw from the Accounts and pay directly to
the Participants (in proportion to their respective Percentages) the following
amount:

               ____________________________ Dollars ($__________)

on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):

                                __________, ____

        The amount specified above equals the following percentage (equal to the
aggregate of all Participant's Percentages):

                           __________ percent (___%),

times the total of all Cash Collateral presently pledged under the Pledge
Agreement:

               ____________________________ Dollars ($__________).

<PAGE>   45

        To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you, BNPLC and the
Participants at least ten days prior to the date of required withdrawal and
payment specified above.

        Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to Deposit
Takers seven days prior to the withdrawal of Cash Collateral required by this
notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to comply with
subsection 6.2.2 of the Pledge Agreement.

                                        Network Appliance, Inc.

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

[cc BNPLC and all Participants]

[Phase IV - Improvements]              -2-

<PAGE>   46

                                     Annex 1
                        TO NAI'S NOTICE OF REQUIREMENT TO
                          WITHDRAW CASH COLLATERAL FOR
                         DIRECT PAYMENTS TO PARTICIPANTS

                               [_________, _____]

Deposit Takers on the
Attached Distribution List

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.2
of the Pledge Agreement, NAI requires Agent to withdraw from the Accounts and
pay to the Participants (in proportion to their respective Percentages) the
amounts listed below on the following date:

                                __________, ____

        Accordingly, on such date, the undersigned intends to withdraw the
following amounts from the following Accounts, and with this letter the
undersigned is presenting Certificates of Deposit as required in connection with
such withdrawal:

<TABLE>
<CAPTION>
 Deposit Taker                           Account No.                        Amount
 -------------                           -----------                        ------
<S>                               <C>                                   <C>
1.
  ____________________              ______________________              $_____________

2.
  ____________________              ______________________              $_____________

3.
  ____________________              ______________________              $_____________

4.
  ____________________              ______________________              $_____________

                                    TOTAL WITHDRAWALS:                  $_____________
</TABLE>

                                        BANQUE NATIONALE DE PARIS, AS AGENT

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

[cc BNPLC and NAI]

[Phase IV - Improvements]              -3-

<PAGE>   47

                                  ATTACHMENT 8
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT OF
                             DIRECT PAYMENT TO BNPLC

                               [_________, _____]

Banque Nationale de Paris
[address of BNP]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.3 of the Pledge
Agreement, NAI requires you to withdraw from the Account maintained by the
Deposit Taker for BNPLC and pay directly to BNPLC on behalf of NAI as a payment
required by the Purchase Agreement the following amount:

               ____________________________ Dollars ($__________)

on the following date (which, NAI acknowledges, must be the Designated Sale Date
or a date thereafter prior to an Event of Default):

                                __________, ____

        To assure you that NAI has satisfied the conditions to its right to
require such withdrawal, and to induce you to comply with this notice, NAI
certifies to you that NAI is giving this notice to you and BNPLC at least ten
days prior to the date of required withdrawal and payment specified above.

        Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to the
Deposit Taker for BNPLC seven days prior to the withdrawal of Cash Collateral
required by this notice. For your convenience, we have attached a letter as
Annex 1 to this notice that you might execute and send to the Deposit Taker for
BNPLC to advise it of your intent to withdraw and of your presentment of
Certificates of Deposit as required in connection therewith. The attached letter
also sets forth the amount NAI believes you must withdraw to comply with Section
6.3 of the Pledge Agreement.

                                                   Network Appliance, Inc.

                                                   By:
                                                      -------------------------
                                                          Name:
                                                               ----------------
                                                          Title:
                                                                ---------------
[cc BNPLC]

<PAGE>   48
                                     Annex 1
                        TO NAI'S NOTICE OF REQUIREMENT OF
                             DIRECT PAYMENT TO BNPLC

                               [_________, _____]

[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.3
of the Pledge Agreement, NAI requires Agent to withdraw from the Account
maintained by you, as Deposit Taker for BNPLC, the sum of:

               ____________________________ Dollars ($__________)

and pay the same to BNPLC as a payment required by the Purchase Agreement on the
following date:

                                __________, ____

        Accordingly, on such date, the undersigned intends to withdraw such
amount from the following Account maintained by you as Deposit Taker for BNPLC,
and with this letter the undersigned is presenting Certificate(s) of Deposit as
required in connection with such withdrawal.

                                        BANQUE NATIONALE DE PARIS, AS AGENT

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

[cc BNPLC and NAI]

[Phase IV - Improvements]              -2-
<PAGE>   49

                                  ATTACHMENT 9
                               TO PLEDGE AGREEMENT

                   NOTICE OF NAI'S REQUIREMENT OF A WITHDRAWAL
                             OF CASH COLLATERAL FROM
                          A DISQUALIFIED DEPOSIT TAKER

                               [_________, _____]

Banque Nationale de Paris
[address of BNP]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice to you, as Agent
under the Pledge Agreement, that pursuant to Section 6.4 of the Pledge
Agreement, NAI requires you to withdraw from the following Account maintained by
the following Deposit Taker:

                  Deposit Taker                              Account No.
                  -------------                              -----------

Cash Collateral in the following amount:

               ____________________________ Dollars ($__________)

and to deposit such Cash Collateral with other Deposit Takers who are not
Disqualified Deposit Takers no later than ten days after the date upon which you
receive this notice.

        To assure you that NAI has the right to require such withdrawal, and to
induce you to comply with this notice, NAI certifies to you that the Deposit
Taker specified above has become a Disqualified Deposit Taker because it no
longer satisfies the requirements listed in Section 4.1 of the Pledge Agreement.
Specifically, such Deposit Taker no longer satisfies the following requirements:

[NAI MUST INSERT HERE A DESCRIPTION OF WHICH REQUIREMENTS THE DEPOSIT TAKER NO
LONGER SATISFIES AND HOW NAI HAS DETERMINED THAT THE REQUIREMENTS ARE NO LONGER
SATISFIED, ALL IN SUFFICIENT DETAIL TO

<PAGE>   50

PERMIT THE PARTICIPANT FOR WHOM SUCH DEPOSIT TAKER HAS BEEN MAINTAINING AN
ACCOUNT TO RESPOND IF IT BELIEVES THAT NAI IS IN ERROR.]

        Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to the
Deposit Taker specified above seven days prior to the withdrawal of Cash
Collateral required by this notice. For your convenience, we have attached a
letter as Annex 1 to this notice that you might execute and send to such Deposit
Taker to advise it of your intent to withdraw and of your presentment of
Certificates of Deposit as required in connection therewith. The attached letter
also sets forth the amount NAI believes you must withdraw to comply with Section
6.4 of the Pledge Agreement.

                                        Network Appliance, Inc.

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

[cc BNPLC]

[Phase IV - Improvements]              -2-
<PAGE>   51

                                     Annex 1
                 TO NAI'S NOTICE OF REQUIREMENT OF A WITHDRAWAL
                             OF CASH COLLATERAL FROM
                          A DISQUALIFIED DEPOSIT TAKER

                               [_________, _____]

[Name of the Deposit Taker for BNPLC]
[Address of such Deposit Taker]

        Re:    Pledge Agreement (Phase IV - Improvements) dated December ____,
               1999 among Network Appliance, Inc., BNP Leasing Corporation,
               Banque Nationale de Paris and any other financial institutions
               which are from time to time Participants under such Pledge
               Agreement (Phase IV - Improvements) and Banque Nationale de
               Paris, acting in its capacity as agent for BNPLC and the
               Participants

Gentlemen:

        Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Phase IV - Improvements) referenced
above (the "PLEDGE AGREEMENT"). This letter constitutes notice from the
undersigned, as Agent under the Pledge Agreement, that pursuant to Section 6.4
of the Pledge Agreement, NAI has advised Agent that you are a Disqualified
Deposit Taker, and NAI requires Agent to withdraw from the Account maintained by
you, as a Deposit Taker under the Pledge Agreement, the sum of:

               ____________________________ Dollars ($__________)

no later than the following date:

                                __________, ____

        Accordingly, on such date, the undersigned intends to withdraw such
amount from the Account maintained by you as Deposit Taker (Account No.
__________), and with this letter the undersigned is presenting Certificate(s)
of Deposit as required in connection with such withdrawal.

                                        BANQUE NATIONALE DE PARIS, AS AGENT

                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------
[cc BNPLC and NAI]

[Phase IV - Improvements]              -3-
<PAGE>   52

                                   Schedule 1

                   Financial Covenants and Negative Covenants

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

                             PART I - DEFINED TERMS

        In this Schedule 1, capitalized terms used but not defined herein shall
have the meaning assigned to them in the Leases or the Common Definitions and
Provisions Agreements referenced in the Leases; and the following capitalized
terms shall have the following meanings:

        "ADJUSTED NET INCOME" means, for any fiscal period of NAI, the aggregate
        net income earned (or net losses incurred) during such period by NAI and
        its Subsidiaries (determined on a consolidated basis), plus any
        Permitted Non-Cash Charges deducted in determining such net income (or
        net loss).

        "ADJUSTED EBIT" means, for any accounting period, net income (or net
        loss) of NAI and its Subsidiaries (determined on a consolidated basis),
        plus the amounts (if any) which, in the determination of net income (or
        net loss) for such period, have been deducted for (a) interest expense,
        (b) income tax expense (c) rent expense under leases of property, and
        (d) Permitted Non-Cash Charges.

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

        "CONSOLIDATED TANGIBLE NET WORTH" means the excess of (1) the total
        assets, other than Intangible Assets, of NAI and its Subsidiaries
        (determined on a consolidated basis) over (2) the total liabilities of
        NAI and its Subsidiaries (determined on a consolidated basis).

        "DEBT" as used in this Exhibit shall have the meaning assigned to it in
        the Common Definitions and Provisions Agreements, where "Debt" of any
        Person is defined to mean (without duplication of any item): (a)
        indebtedness of such Person for borrowed money; (b) indebtedness of such
        Person for the deferred purchase price of property or services (except
        trade payables and accrued expenses constituting current liabilities in
        the ordinary course of business); (c) the face amount of any outstanding
        letters of credit issued for the account of such Person; (d) obligations
        of such

[Phase IV - Improvements]              -4-

<PAGE>   53

        Person arising under acceptance facilities; (e) guaranties, endorsements
        (other than for collection in the ordinary course of business) and other
        contingent obligations of such Person to purchase, to provide funds for
        payment, to provide funds to invest in any Person, or otherwise to
        assure a creditor against loss; (f) obligations of others secured by any
        Lien on property of such Person; (g) obligations of such Person as
        lessee under Capital Leases; and (h) the obligations of such Person,
        contingent or otherwise, under any lease of property or related
        documents (including a separate purchase agreement) which provide that
        such Person or any of its Affiliates must purchase or cause another
        Person to purchase any interest in the leased property and thereby
        guarantee a minimum residual value of the leased property to the lessor.
        For purposes of this definition, the amount of the obligations described
        in clause (h) of the preceding sentence with respect to any lease
        classified according to GAAP as an "operating lease," shall equal the
        sum of (1) the present value of rentals and other minimum lease payments
        required in connection with such lease [calculated in accordance with
        SFAS 13 and other GAAP relevant to the determination of the whether such
        lease must be accounted for as an operating lease or capital lease],
        plus (2) the fair value of the property covered by the lease; provided,
        however, that such amount shall not exceed the price, as of the date a
        determination of Debt is required hereunder, for which the lessee can
        purchase the leased property pursuant to any valid ongoing purchase
        option if, upon such a purchase, the lessee shall be excused from paying
        rentals or other minimum lease payments that would otherwise accrue
        after the purchase.

        "FIXED CHARGES" means, for any accounting period, the sum (without
        duplication of any item) of the following charges or costs incurred or
        paid by NAI and its Subsidiaries (determined on a consolidated basis):
        (a) gross interest expense, plus (b) amortization of principal or debt
        discount in respect of all Debt during such period, plus (c) rent
        payable under all leases of property during such period, plus (d) taxes
        payable during such period.

        "INTANGIBLE ASSETS" means assets of NAI and its Subsidiaries (determined
        on a consolidated basis) that are properly classified as "INTANGIBLE
        ASSETS" in accordance with GAAP and, in any event, shall include
        goodwill, patents, trade names, trademarks, copyrights, franchises,
        experimental expense, organization expense, unamortized debt discount
        and expense, and deferred charges (other than prepaid insurance, prepaid
        taxes and current deferred taxes to the extent any such prepaid or
        deferred items are classified on the balance sheet of NAI and its
        consolidated Subsidiaries as current assets in accordance with GAAP and
        with the concurrence of NAI's independent public accountants).

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

        "PERMITTED NON-CASH CHARGES" means the amounts (if any) which, in the
        determination of net income (or net loss) for any relevant fiscal
        period, have been deducted by NAI or its Subsidiaries for non-cash
        charges made to write down goodwill or research and development costs in
        connection with acquisitions permitted by this Schedule 1.

        "QUICK RATIO" means the ratio of:

                        (A) the sum (without duplication of any item) of the
                following assets of NAI and its Subsidiaries (determined on a
                consolidated basis): Collateral delivered and pledged under the
                Pledge Agreements in accordance with the requirements thereof
                (if any); plus

[Phase IV - Improvements]              -5-
<PAGE>   54

                unencumbered cash; plus unencumbered short term cash
                investments; plus other unencumbered marketable securities which
                are classified as short term investments in accordance with
                GAAP; plus unencumbered accounts receivable, computed net of
                reserves for uncollectible amounts as determined in accordance
                with GAAP, to

                        (B) the sum (without duplication of any item) of (1) all
                liabilities of NAI and its Subsidiaries (determined on a
                consolidated basis) treated as current liabilities in accordance
                with GAAP, plus (2) other obligations included in total Debt of
                NAI and its Subsidiaries (determined on a consolidated basis),
                the payment of which is due on demand or will become due within
                one year after the date on which the applicable determination of
                Quick Ratio is required hereunder.

        "ROLLING FOUR QUARTER PERIOD" means a period of four consecutive fiscal
        quarters of NAI, the last of which quarters ends after December 31,
        1999.

                          PART II - FINANCIAL COVENANTS

NAI covenants that it shall not at any time suffer or permit:

1.      Minimum Unencumbered Cash and Cash Equivalents. The sum (without
        duplication of any item) of the unrestricted cash, Collateral delivered
        and pledged under the Pledge Agreements in accordance with the
        requirements thereof (if any), unencumbered short term cash investments
        and unencumbered marketable securities classified as short term
        investments according to GAAP of NAI and its Subsidiaries (determined on
        a consolidated basis) to be less than total Debt of NAI and its
        Subsidiaries (determined on a consolidated basis).

2.      Minimum Tangible Net Worth. Consolidated Tangible Net Worth to be less
        than the sum of: (a) ninety percent of the Consolidated Tangible Net
        Worth as of October 30, 1998; plus (b) seventy-five percent of NAI's net
        income (computed without deduction for net losses in any fiscal quarter)
        earned in each fiscal quarter since October 30, 1998; plus (c)
        one-hundred percent of the net proceeds of sales of stock in NAI or its
        Subsidiaries (other than sales to NAI or its Subsidiaries) after October
        30, 1998; less (d) Permitted Non-Cash Charges for any period after
        October 30, 1998.

3.      Minimum Quick Ratio. The Quick Ratio to be less than 1.50 to 1.00.

4.      Minimum Fixed Charge Coverage. The ratio of (a) Adjusted EBIT for any
        Rolling Four Quarter Period to (b) Fixed Charges for the same Rolling
        Four Quarter Period, to be less than 1.50 to 1.00.

5.      Minimum Profitability. Adjusted Net Income to be less than $1.00 in more
        than one fiscal quarter of any Rolling Four Quarter Period.

6.      Maximum Leverage Ratio. the ratio of (a) total Debt of NAI and its
        Subsidiaries (determined on a consolidated basis) at the end of any
        Rolling Four Quarter Period to (b) the Adjusted EBIT for the same Four
        Quarter Rolling Period, to exceed 3.00 to 1.00.

[Phase IV - Improvements]              -6-
<PAGE>   55
                PART III - TESTS FOR MANDATORY COLLATERAL PERIODS

        If, as of the end of the latest fiscal quarter of NAI ending before any
Collateral Test Date, NAI shall have both:

                (A) failed to maintain a ratio of (1) the sum (without
        duplication of any item) of Collateral delivered and pledged under the
        Pledge Agreements in accordance with the requirements thereof (if any),
        unencumbered cash, unencumbered short term cash investments and
        unencumbered marketable securities classified as short term investments
        according to GAAP of NAI and its Subsidiaries (determined on a
        consolidated basis) to (2) all Debt of NAI and its Subsidiaries
        (determined on a consolidated basis), of at least 1.5 to 1.00; and

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

such Collateral Test Date shall constitute a "FAILED COLLATERAL TEST DATE" for
purposes of the determination of Mandatory Collateral Periods. A Mandatory
Collateral Period shall commence on each Failed Collateral Test, and such
Mandatory Collateral Period shall continue until the second of any two
subsequent CONSECUTIVE Collateral Test Dates, neither of which constitutes a
Failed Collateral Test Date.

For purposes of illustration only, assume that the following dates are
consecutive Collateral Test Dates, some of which are Failed Collateral Test
Dates and some of which are not, as indicated opposite each date:

<TABLE>
<CAPTION>
                     Date                        Failed Collateral Test Date?
                     ----                        ----------------------------
<S>                                                         <C>
                February 15, 2001                            Yes
                May 12, 2001                                 No
                August 16, 2001                              Yes
                November 11, 2001                            No
                February 18, 2002                            No
                May 14, 2002                                 Yes
                August 18, 2002                              Yes
                November 18, 2002                            No
                February 15, 2003                            No
</TABLE>

Under these assumptions, the entire period from February 15, 2001 to February
18, 2002 falls within one or more Mandatory Collateral Periods. Also, the entire
period commencing May 14, 2002 and ending February 15, 2003 falls within one or
more Mandatory Collateral Periods. The period from February 18, 2002 to May 14,
2002 does not constitute Mandatory Collateral Period.

                            PART IV - OTHER COVENANTS

Without limiting NAI's obligations under the other provisions of the Operative
Documents, during the Term, NAI shall not, without the prior written consent of
BNPLC in each case:

        A. Liens. Create, incur, assume or suffer to exist, or permit any of its
Consolidated Subsidiaries to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
provided that the following shall be permitted except to the extent that they
would encumber any interest in the Property in violation of other provisions of
the

[Phase IV - Improvements]              -7-
<PAGE>   56

Operative Documents:

                1. Liens for taxes or assessments or other government charges or
        levies if not yet due and payable or if they are being contested in good
        faith by appropriate proceedings and for which appropriate reserves are
        maintained;

                2. Liens imposed by law, such as mechanic's, materialmen's,
        landlord's, warehousemen's and carrier's Liens, and other similar Liens,
        securing obligations incurred in the ordinary course of business which
        are not past due for more than thirty (30) days, or which are being
        contested in good faith by appropriate proceedings and for which
        appropriate reserves have been established;

                3. Liens under workmen's compensation, unemployment insurance,
        social security or similar laws (other than ERISA);

                4. Liens, deposits or pledges to secure the performance of bids,
        tenders, contracts (other than contracts for the payment of money),
        leases, public or statutory obligations, surety, stay, appeal,
        indemnity, performance or other similar bonds, or other similar
        obligations arising in the ordinary course of business;

                5. judgment and other similar Liens against assets other than
        the Property or any part thereof in an aggregate amount not in excess of
        $3,000,000 arising in connection with court proceedings; provided that
        the execution or other enforcement of such Liens is effectively stayed
        and the claims secured thereby are being actively contested in good
        faith by appropriate proceedings;

                6. easements, rights-of-way, restrictions and other similar
        encumbrances which, in the aggregate, do not materially interfere with
        the occupation, use and enjoyment by NAI or any such Consolidated
        Subsidiary of the property or assets encumbered thereby in the normal
        course of its business or materially impair the value of the property
        subject thereto;

                7. Liens securing obligations of such a Consolidated Subsidiary
        to NAI or to another such Consolidated Subsidiary;

                8. Liens not otherwise permitted by this subparagraph A (and not
        encumbering the Property or any Collateral) incurred in connection with
        the incurrence of additional Debt or asserted to secure Unfunded Benefit
        Liabilities, provided that (a) the sum of the aggregate principal amount
        of all outstanding obligations secured by Liens incurred pursuant to
        this clause shall not at any time exceed five percent (5%) of
        Consolidated Tangible Net Worth at such time; and (b) such Liens do not
        constitute Liens against NAI's interest in any material Subsidiary or
        blanket Liens against all or substantially all of the inventory,
        receivables, general intangibles or equipment of NAI or of any material
        Subsidiary of NAI (for purposes of this clause, a "material Subsidiary"
        means any subsidiary whose assets represent a substantial part of the
        total assets of NAI and its Subsidiaries, determined on a consolidated
        basis in accordance with GAAP); and

                9. Liens incurred in connection with any renewals, extensions or
        refundings of any Debt secured by Liens described in the preceding
        clauses of this subparagraph A, provided that there is no increase in
        the aggregate principal amount of Debt secured thereby from that which
        was outstanding as of the date of such renewal, extension or refunding
        and no additional property is encumbered.

[Phase IV - Improvements]              -8-
<PAGE>   57

        B. Transactions with Affiliates. Enter into or permit any Subsidiary of
NAI to enter into any material transactions (including, without limitation, the
purchase, sale or exchange of property or the rendering of any service) with any
Affiliates of NAI except on terms (1) that would not cause or result in a
Default by NAI under the financial covenants set forth in Part II of this
Schedule, and (2) that are no less favorable to NAI or the relevant Subsidiary
than those that would have been obtained in a comparable transaction on an arm's
length basis from an unrelated Person.

        C. Compliance. Fail to preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; or fail to comply with the provisions of all documents
pursuant to which NAI is organized and/or which govern NAI's continued existence
and with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to NAI and/or its business.

        D. Insurance. Fail to maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of NAI,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to BNPLC, or fail to deliver to BNPLC from
time to time at BNPLC's request schedules setting forth all insurance then in
effect.

        E. Facilities. fail to keep all properties useful or necessary to NAI's
business in good repair and condition, or to from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall be
fully and efficiently preserved and maintained.

        F. Taxes and Other Liabilities. Fail to pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as NAI may in good faith contest
or as to which a bona fide dispute may arise, and (b) for which NAI has made
provisions, to BNPLC's satisfaction, for eventual payment thereof in the event
that NAI is obligated to make such payment.

        G. Capital Expenditures. Make any additional investment in fixed assets
in any fiscal year in excess of an aggregate of twenty percent (20%) of NAI's
total assets as of the end of the prior fiscal year.

        H. Merger, Consolidation, Transfer of Assets. Merge into or consolidate
with any other entity (unless NAI is the surviving entity and remains in
compliance of all provisions of the Operative Documents); or make any
substantial change in the nature of NAI's business as conducted as of the date
hereof; or sell, lease, transfer or otherwise dispose of all or a substantial or
material portion of NAI's assets except in the ordinary course of its business.

        I. Loans, Advances, Investments. Make any loans or advances to or
investments in any person or entity, except (a) any of the foregoing existing as
of, and disclosed to BNPLC prior to, the date hereof, (b) loans to employees for
travel advances, relocation loans and other loans in the ordinary course of
business, (c) investments in accordance with NAI's investment policy, as in
effect from time to time, (d) existing investments in subsidiaries and joint
ventures which have been disclosed to BNPLC in writing prior to the date hereof,
and new investments in subsidiaries and joint ventures in amounts up to an
aggregated of $10,000,000.00, (e) loans to employees, officers, directors to
finance or refinance the purchase of equity securities of NAI.

        J. Dividends, Distributions. Declare or pay any dividend or distribution
either in cash, stock

[Phase IV - Improvements]              -9-
<PAGE>   58

or any other property on NAI's stock now or hereafter outstanding, nor redeem,
retire, repurchase or otherwise acquire any shares of any class of NAI's stock
now or hereafter outstanding.

[Phase IV - Improvements]              -10-<PAGE>   1

                                                                   EXHIBIT 10.56

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

                                   $62,000,000
                             PARTICIPATION AGREEMENT
                                    PHASE IV

                                     BETWEEN

                             BNP LEASING CORPORATION

                                    ("BNPLC")

                                       AND

                           BANQUE NATIONALE DE PARIS,

                                (A "PARTICIPANT")

                       EFFECTIVE AS OF DECEMBER ___, 1999

                      (NETWORK APPLIANCE, INC. - PHASE IV)
              (SUNNYVALE, SANTA CLARA COUNTY, CALIFORNIA PROPERTY)

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

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
RECITALS.....................................................................................1

AGREEMENTS...................................................................................1
1.0     DEFINITIONS..........................................................................1
        1.1.   Bank Specific Charges.........................................................1
        1.2.   Common Definitions and Provisions Agreements..................................2
        1.3.   Critical Event................................................................2
        1.4.   Deposit Taker.................................................................2
        1.5.   Deposit Taker Losses..........................................................2
        1.6.   Direct Payments...............................................................2
        1.7.   Distributable Payment.........................................................2
        1.8.   Late Payment Rate.............................................................2
        1.9.   Leases........................................................................2
        1.10.  Majority......................................................................2
        1.11.  Net Cash Flow.................................................................2
        1.12.  Net Sales Proceeds............................................................2
        1.13.  Operative Documents...........................................................3
        1.14.  Participants..................................................................3
        1.15.  Participation Agreement Supplement............................................3
        1.16.  Participation Amount..........................................................3
        1.17.  Percentage....................................................................4
        1.18.  Pledge Agreements.............................................................4
        1.19.  Property......................................................................4
        1.20.  Protective Advances...........................................................4
        1.21.  Purchase Agreements...........................................................4
2.0     PAYMENTS FROM BNPLC TO EACH PARTICIPANT..............................................4
        2.1.   Payments Computed by Reference to  Net Cash Flow and Net Sales Proceeds.......4
        2.2.   Payments Computed by Reference to Bank Specific Charges.......................4
        2.3.   [Intentionally deleted].......................................................4
        2.4.   [Intentionally deleted].......................................................4
        2.5.   Timing; Manner of Payment.....................................................4
        2.6.   Meaning of Actually Received..................................................5
3.0     PAYMENTS FROM THE PARTICIPANTS TO BNPLC..............................................5
        3.1.   Initial Funding Advance.......................................................5
        3.2.   [Intentionally deleted].......................................................5
        3.3.   Protective Advances...........................................................5
               3.3.1. General................................................................5
               3.3.2. Exceptions.............................................................6
        3.4.   Method of Payment.............................................................6
4.0     OTHER ADJUSTMENTS, DEDUCTIONS AND INVESTMENTS........................................6
        4.1.   [Intentionally deleted].......................................................6
        4.2.   Setoff........................................................................6
        4.3.   [Intentionally deleted].......................................................6
        4.4.   Sharing of Payments...........................................................6
</TABLE>

                                       i

<PAGE>   3

<TABLE>
<S>                                                                                       <C>
        4.5.   Withholding Taxes.............................................................7
        4.6.   Order of Application..........................................................7
        4.7.   Investments Pending Dispute Resolution; Overnight Investments.................7
5.0     NATURE OF THIS AGREEMENT.............................................................8
        5.1.   No Conveyance.................................................................8
        5.2.   Not a Partnership, Etc........................................................8
6.0     AMENDMENTS; WAIVERS; EXERCISE OF RIGHTS AND REMEDIES AGAINST NAI.....................9
        6.1.   Limitations...................................................................9
        6.2.   General......................................................................11
        6.3.   Conflicts and Purchase Agreements Defaults...................................11
        6.4.   Refusal to Give Consents; Failure to Fund; Failure of a Deposit Taker to
               Satisfy Minimum Ratings......................................................11
7.0     REQUIRED REPAYMENTS.................................................................12
8.0     NAI INFORMATION; INDEPENDENT ANALYSIS...............................................12
9.0     PERFORMANCE THROUGH REPRESENTATIVES.................................................12
10.0    DUTY OF CARE........................................................................12
11.0    REPRESENTATIONS BY EACH PARTICIPANT.................................................13
        11.1.  Nature of this Agreement.....................................................13
        11.2.  No Default or Violation......................................................13
        11.3.  No Suits.....................................................................13
        11.4.  Organization.................................................................13
        11.5.  Enforceability...............................................................13
        11.6.  No Funding With Plan Assets..................................................13
12.0    REPRESENTATIONS BY BNPLC............................................................14
        12.1.  No Default or Violation......................................................14
        12.2.  No Suits.....................................................................14
        12.3.  Organization.................................................................14
        12.4.  Enforceability...............................................................14
        12.5.  Liens Removable by BNPLC.....................................................14
        12.6.  BNPLC's Status as a Subsidiary of a Bank Holding Company.....................14
13.0    ASSIGNMENTS.........................................................................14
        13.1.  By the Participants Generally................................................14
        13.2.  By BNPLC.....................................................................15
        13.3.  Execution of Participation Agreement Supplements.............................15
        13.4.  Regulation A.................................................................15
        13.5.  Costs........................................................................15
14.0    GOVERNING LAW; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL..........................15
15.0    TERMINATION.........................................................................16
16.0    MISCELLANEOUS.......................................................................16
        16.1.  Reliance by Others...........................................................16
        16.2.  Waivers, Etc.................................................................16
        16.3.  Severability.................................................................16
        16.4.  Notices......................................................................16
        16.5.  Construction.................................................................17
        16.6.  Headings.....................................................................17
        16.7.  Entire Agreement.............................................................17
        16.8.  Further Assurances...........................................................17
        16.9.  Impairment of Operative Documents............................................17
        16.10. Books and Records............................................................18
        16.11. Definition of Knowledge......................................................18
</TABLE>

                                       ii

<PAGE>   4

<TABLE>
<S>                                                                                       <C>
        16.12. Attorneys' Fees..............................................................18
</TABLE>

                                      iii

<PAGE>   5

                             Exhibits and Schedules

<TABLE>
<S>                                                    <C>
Schedule 1.................................................Names and Addresses of Participants
Exhibit A..............................................Participation Agreement Supplement Form
</TABLE>

                                       iv

<PAGE>   6

                             PARTICIPATION AGREEMENT

     This Agreement (this "AGREEMENT") is made as of December ___, 1999, by and
between BNP LEASING CORPORATION ("BNPLC"), a Delaware corporation, and the
Participants (as defined below).

                                    RECITALS:

     A. BNPLC and Network Appliance, Inc. ("NAI") have entered into the
following agreements, each dated as of December ___, 1999, relating to the
Improvements: a Lease Agreement (Phase IV - Improvements) (the "PHASE IV
IMPROVEMENTS LEASE"); a Purchase Agreement (Phase IV - Improvements) (the "PHASE
IV IMPROVEMENTS PURCHASE AGREEMENT"); a Common Definitions and Provisions
Agreement (Phase IV - Improvements) (the "PHASE IV IMPROVEMENTS CDPA"); and a
Closing Certificate and Agreement (the "CLOSING CERTIFICATE"). Also, BNPLC, NAI,
the Participants and Banque Nationale de Paris, in its capacity as agent for
BNPLC and the Participants (in such capacity, "AGENT") have entered into a
Pledge Agreement (Phase IV - Improvements) dated as of December ___, 1999 (the
"PHASE IV IMPROVEMENTS PLEDGE AGREEMENT").

     B. BNPLC and NAI have also entered into the following agreements, each
dated as of December ___, 1999, relating to the Land: a Lease Agreement (Phase
IV - Land) (the "PHASE IV LAND LEASE"); a Purchase Agreement (Phase IV - Land)
(the "PHASE IV LAND PURCHASE Agreement"); a Common Definitions and Provisions
Agreement (Phase IV - Land) (the "PHASE IV LAND CDPA"); and the Closing
Certificate. Also, BNPLC, NAI, the Participants and Agent have entered into a
Pledge Agreement (Phase IV - Land) dated as of December ___, 1999 (the "PHASE IV
LAND PLEDGE AGREEMENT").

     C. By this Agreement, the parties desire to evidence the Participants'
agreement to participate with BNPLC in certain of the risks and rewards to BNPLC
of the aforementioned agreements, which participation is to be accomplished
through the exchange of promises to make payments computed by reference to the
sums paid or received by BNPLC from time to time with respect to the
aforementioned agreements, all as more particularly provided below.

                                   AGREEMENTS

     NOW, THEREFORE, BNPLC and the Participants hereby agree as follows:

1.0 DEFINITIONS. As used herein, capitalized terms defined above shall have the
meanings assigned to them above; capitalized terms that are defined in one, but
not both, of the Phase IV Improvements CDPA and the Phase IV Land CDPA and that
are used but not defined herein shall have the respective meanings assigned to
them in the Phase IV Improvements CDPA or Phase IV Land CDPA, as applicable;
capitalized terms that are defined in both of the Phase IV Improvements CDPA and
the Phase IV Land CDPA and that are and used but not defined herein shall have
the respective meanings assigned to them in the Phase IV Improvements CDPA and
the Phase IV Land CDPA (provided, if the meaning assigned to any such
capitalized term in the Phase IV Improvements CDPA is different than the meaning
assigned to it in the Phase IV Land CDPA, the term will be construed broadly for
purposes of this Agreement to include anything that would fall within one or
both of the definitions of the term in the Phase IV Improvements CDPA and the
Phase IV Land CDPA); and, the following capitalized terms shall have the
following meanings:

     1.1. "BANK SPECIFIC CHARGES" means payments made to BNPLC by or on behalf
of NAI for the account of a Participant or any other Interested Party under
subparagraph 5(c)(i) or 5(c)(ii) of the Leases or

                                      -i-

<PAGE>   7

as Upfront Syndication Fees. Bank Specific Charges include, for example,
payments made to compensate a Participant for an increase in costs related to
advances made by the Participant hereunder and attributable to a Banking Rules
Change after the Effective Date.

     1.2. "COMMON DEFINITIONS AND PROVISIONS AGREEMENTS" means the Phase IV
Improvements CDPA and the Phase IV Land CDPA.

     1.3. "CRITICAL EVENT" means any of the following:

          1.3.1. any failure by NAI to purchase BNPLC's interest in the Property
     or to cause an Applicable Purchaser to purchase BNPLC's interest in the
     Property when required under the Purchase Agreements; or

          1.3.2. any failure by NAI to pay Base Rent which continues for 10
     days.

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

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

     1.6. "DIRECT PAYMENTS", like the phrase "Direct Payments to Participants"
under the Purchase Agreements, means the amounts paid or required to be paid
directly to Participants on the Designated Sale Date as provided in Section 6.2
of the Pledge Agreements at the direction of and for NAI by Agent from all or
any part of the Collateral described therein.

     1.7. "DISTRIBUTABLE PAYMENT" means any payment ACTUALLY RECEIVED by BNPLC
under the Leases or other Operative Documents as (or in satisfaction of NAI's
obligations for) any of the following or interest on past due amounts thereof:
Base Rent; Qualified Prepayments; Bank Specific Charges; a Supplemental Payment;
or Net Sales Proceeds.

     1.8. "LATE PAYMENT RATE" means (a) for each day (other than as set forth in
clause (b) of this sentence) the Fed Funds Rate or (b) for the purpose of
computing interest on past due payments for each day following the fifth day
after such payments first became due, a rate of two percent (2%) per annum in
excess of the Prime Rate then in effect; provided, the Late Payment Rate shall
not, notwithstanding anything to the contrary herein contained, exceed the
maximum rate of interest permitted by applicable law.

     1.9. "LEASES" means the Phase IV Improvements Lease and the Phase IV Land
Lease.

     1.10. "MAJORITY" means, at the time any determination thereof is required,
any of the Participants and BNPLC, the aggregate Percentages of which equal or
exceed sixty-seven percent (67%) of the Percentages of BNPLC and of all the
Participants then entitled to vote under Section 6.1.

     1.11. "NET CASH FLOW" means payments made to BNPLC under the Leases or
other Operative Documents as (or in satisfaction of NAI's obligations for) Base
Rent, Qualified Prepayments, any Supplemental Payment or any interest on past
due Base Rent, Qualified Prepayments or a Supplemental Payment.

     1.12. "NET SALES PROCEEDS" means payments made to BNPLC under the Purchase
Agreements as (or in satisfaction of NAI's or an Applicable Purchaser's
obligations for) the purchase price for BNPLC's interest in Property or in
Escrowed Proceeds; but less and excluding (x) any such payments applied by

                                      -2-
<PAGE>   8

BNPLC to pay, or received by BNPLC as reimbursement for, bona fide costs of a
sale under the Purchase Agreements, and (y) any excess sales proceeds received
from an Applicable Purchaser that BNPLC is required by Paragraph 1(A)(2)(b) or
2(D) of the Purchase Agreements to pay over to NAI. Further, if BNPLC does not
sell the Property to NAI or an Applicable Purchaser pursuant to the Purchase
Agreements, then "NET SALES PROCEEDS" shall also include the excess, if any, of:

          1.12.1. all rents and sales, condemnation and insurance proceeds
     ACTUALLY RECEIVED by BNPLC (other than sales proceeds paid or to be paid by
     BNPLC to NAI pursuant to Paragraph 2(D) of the Purchase Agreements) from
     any sale or lease after the Designated Sale Date of any interest in, or
     because of any subsequent taking or damage to, the Property; over

          1.12.2. the sum of (i) all costs of collecting the rents and proceeds
     described in the preceding clause 1.12.1, plus (ii) all ad valorem taxes,
     insurance premiums and other Losses of every kind suffered or incurred by
     BNPLC with respect to the ownership, operation or maintenance of the
     Property.

However, for purposes of computing any excess described in the preceding
sentence, costs described in clause 1.12.2 shall not include BNPLC's general
overhead costs or any Protective Advances for which the Participants have
already paid BNPLC their respective Percentages thereof as required by Section
3.3.

     1.13. "OPERATIVE DOCUMENTS" means all of Operative Documents under and as
defined in the Phase IV Improvements CDPA and Operative Documents under and as
defined in the Phase IV Land CDPA. The term Operative Documents includes the
Phase IV Improvements Lease, the Phase IV Improvements Purchase Agreement, the
Phase IV Improvements Pledge Agreement, the Phase IV Improvements CDPA, the
Closing Certificate, the Phase IV Land Lease, the Phase IV Land Purchase
Agreement, the Phase IV Land Pledge Agreement, and the Phase IV Land CDPA.

     1.14. "PARTICIPANTS" means Banque Nationale de Paris and any other
financial institutions which may hereafter become parties to (i) this Agreement
(by joining with BNPLC in completing and executing a Participation Agreement
Supplement) and (ii) the Pledge Agreements, in each case pursuant to a Permitted
Transfer.

     1.15. "PARTICIPATION AGREEMENT SUPPLEMENT" means a Participation Agreement
Supplement in substantially the form attached hereto as Exhibit A, completed and
executed by BNPLC and a Participant, adding the Participant as a party to this
Agreement, changing a Participant's Percentage or removing a Participant as a
party to this Agreement.

     1.16. "PARTICIPATION AMOUNT" of BNPLC or any Participant means the
outstanding balance from time to time of the total investment made by BNPLC
under the Operative Documents or by the applicable Participant hereunder. The
Participation Amount of BNPLC and each Participant will be comparable to its
share of the outstanding principal balance that would be due from NAI from time
to time if BNPLC had made a loan (and the Participants had participated in the
loan) to NAI for NAI's acquisition of the Land and the Improvements as provided
in the Operative Documents, instead of BNPLC's having acquired the Property
itself and having leased the same to NAI as provided in the Operative Documents.
Absent a failure by any Participant to make a payment required by Section 3.2 or
some other unexpected contingency, it is expected that (a) the Participation
Amounts of BNPLC and the Participants will always be in proportion to their
respective Percentages set forth in SCHEDULE 1, and (b) the total Participation
Amounts of BNPLC and all Participants during the Term of the Leases shall equal
the Stipulated Loss Value computed from time to time under the Leases.

                                      -3-
<PAGE>   9

     1.17. "PERCENTAGE" of each Participant means, subject to change as provided
in Section 4.1 and to change by a Participation Agreement Supplement, the
percentage designated as the Participant's "Percentage" in SCHEDULE 1.
"PERCENTAGE" of BNPLC means a percentage that, at the time a determination of
such Percentage is required hereunder, is equal to 100% less the sum of the
Percentages of all the Participants.

     1.18. "PLEDGE AGREEMENTS" means the Phase IV Improvements Pledge Agreement
and the Phase IV Land Pledge Agreement.

     1.19. "PROPERTY" means all real and personal property covered from time to
time by the Phase IV Improvements Lease and the Phase IV Land Lease.

     1.20. "PROTECTIVE ADVANCES" shall mean any payments (including payments to
attorneys, accountants, experts and other advisors) made by or on behalf of
BNPLC at any time or from time to time because of, arising out of or related to,
in whole or in part: (1) the Property or the protection, preservation, operation
or ownership thereof; (2) any of the Operative Documents or the transactions
contemplated therein; or (3) BNPLC's status as a party to any of the Operative
Documents or anything done by BNPLC to enforce the obligations of NAI under the
Operative Documents (whether done upon BNPLC's own initiative or upon the
direction of the Majority). Protective Advances will include any and all
payments made by or on behalf of BNPLC for which NAI is obligated to indemnify
or reimburse BNPLC by Paragraph 5(c) of the Leases.

     1.21. "PURCHASE AGREEMENTS" means the Phase IV Improvements Purchase
Agreement and, from and the Phase IV Land Purchase Agreement.

2.0 PAYMENTS FROM BNPLC TO EACH PARTICIPANT.

     2.1. Payments Computed by Reference to Net Cash Flow and Net Sales
Proceeds. Upon the ACTUAL RECEIPT of any Net Cash Flow, Net Sales Proceeds or
interest thereon, BNPLC will pay each Participant an amount equal to such
Participant's Percentage times such Net Cash Flow, Net Sales Proceeds or
interest, as the case may be.

     2.2. Payments Computed by Reference to Bank Specific Charges. If BNPLC
ACTUALLY RECEIVES any Bank Specific Charges (or interest thereon) for the
account of a particular Participant, then BNPLC promises to promptly make a
payment to such Participant equal to such Bank Specific Charges (or interest
thereon). If requested by any Participant, BNPLC shall make a demand upon NAI
for payment of any Bank Specific Charges due for the account of such
Participant.

     2.3. [Intentionally deleted]

     2.4. [Intentionally deleted]

     2.5. Timing; Manner of Payment. Each payment required of BNPLC by this
Article 2 shall be made prior to 12:00 noon, San Francisco time, on the same day
that BNPLC actually receives the corresponding Distributable Payment (in good
funds), if BNPLC's receipt of the corresponding Distributable Payment occurs
prior to 12:00 noon, San Francisco time; if, however, BNPLC's receipt of the
Distributable Payment (in good funds) occurs on any day after 12:00 noon, San
Francisco time, the payments required from BNPLC to the Participants shall not
be due until 12:00 noon, San Francisco time, on the next Business Day. All
payments from BNPLC to the Participants shall be by transfer of federal funds
pursuant to the wiring instructions set forth in SCHEDULE 1. Each payment owing
to a Participant by BNPLC shall bear interest from the date it is due until it
is paid by BNPLC at the Late Payment Rate

                                      -4-
<PAGE>   10

calculated on the basis of a 360-day year. Any payment by BNPLC to a Participant
after the time of day specified herein for such payment shall be deemed not paid
until the next following Business Day for purposes of this Agreement.

     2.6. Meaning of Actually Received. As used herein with respect to payments,
"actually received" and words of like effect shall include not only payments
made directly from NAI or any Applicable Purchaser, but also amounts paid by
others on NAI's behalf, amounts realized by way of setoff, amounts realized upon
the disposition of collateral under the Pledge Agreement and any other documents
that may be given from time to time to secure NAI's obligations under Leases or
Purchase Agreements (net of the costs of disposition and further net of any
amounts that must be returned to NAI or any third party having an interest in
such collateral), and the fair market value of any property or services accepted
in lieu of a cash payment (though it is understood that nothing herein contained
shall require BNPLC to accept property or services in lieu of a cash payment
required by the Operative Documents and that BNPLC will not agree to accept
property or services in lieu of any cash Distributable Payment without the
Participants' prior written consent). Such phrase shall not, however, include
amounts received by BNPLC from any of the Participants or from any affiliate of
BNPLC unless the context otherwise indicates. In the event of any reduction in
Net Sales Proceeds "actually received" by BNPLC (as described in the preceding
sentences) because of a reduction in the Break Even Price attributable to any
Direct Payments or Deposit Taker Losses, BNPLC will be deemed for purposes of
this Agreement to have received additional Net Sales Proceeds from NAI equal to
such reduction. In such event, however, BNPLC will be entitled to a credit
against the payments that would otherwise be required to any Participant
hereunder equal to the aggregate amount, if any, of (1) Direct Payments which
are ACTUALLY RECEIVED by such Participant, and (2) Deposit Taker Losses with
respect to any Deposit Taker for such Participant.

3.0 PAYMENTS FROM THE PARTICIPANTS TO BNPLC.

     3.1. Initial Funding Advance. Each of the original Participants joining in
the execution of this Agreement promises to pay to BNPLC an initial payment as
set forth below such Participant's name on SCHEDULE 1, equal to the
Participant's Percentage times the sum of the Initial Funding Advances under and
as defined in the Leases. BNPLC shall have no obligation hereunder to any of the
original Participants that fails to pay such initial payment. Such initial
payment shall be due no later than 12:00 noon, San Francisco time, on the date
hereof.

     3.2. [Intentionally deleted].

     3.3. Protective Advances.

          3.3.1. General. If NAI fails to pay or reimburse any Protective
     Advance to BNPLC within ten days after BNPLC makes a demand or request
     therefor, BNPLC may notify the Participants of such failure. Promptly after
     receipt of any such notice, each Participant shall pay to BNPLC an amount
     equal to such Participant's Percentage times the Protective Advance
     described in the notice, EVEN IF THE PROTECTIVE ADVANCE WOULD NOT HAVE BEEN
     PAID BUT FOR ANY ACTUAL OR ALLEGED NEGLIGENCE OF BNPLC OR ITS AFFILIATES OR
     REPRESENTATIVES AND EVEN IF THE PROTECTIVE ADVANCE WOULD NOT HAVE BEEN PAID
     BUT FOR ANY ENVIRONMENTAL LOSSES OR OTHER MATTERS OR CIRCUMSTANCES FOR
     WHICH BNPLC MAY BE STRICTLY LIABLE. After any Participant has paid its
     respective Percentage times the Protective Advance to BNPLC, BNPLC shall be
     obligated to pay to such Participant an amount equal to its Adjusted
     Percentage (as defined below) times any subsequent Excess Reimbursement (as
     defined below) or interest thereon ACTUALLY RECEIVED by BNPLC from NAI for
     the Protective Advance. As used in this Agreement the "ADJUSTED

                                      -5-
<PAGE>   11

     PERCENTAGE" of any Participant shall equal (i) such Participant's
     Percentage, divided by (ii) the sum of BNPLC's Percentage and the
     Percentages of all Participants who have paid BNPLC their respective shares
     of the Protective Advance at issue. As used in this Agreement, the term
     "EXCESS REIMBURSEMENT" shall mean, for the Protective Advance at issue,
     amounts reimbursed or paid by NAI to or on behalf of BNPLC on account of
     such Protective Advance in excess of (i) such Protective Advance, times
     (ii) the Percentages of any Participants that have not paid BNPLC their
     respective Percentages of such Protective Advance.

          3.3.2. Exceptions. Notwithstanding the foregoing, no Participant shall
     be required to make any payment pursuant to this Section 3.3 related to a
     Protective Advance that (1) consists of a payment of Excluded Taxes, or (2)
     is paid only because of a transfer or assignment by BNPLC of its right to
     receive Distributable Payments or its rights and interests in and to the
     Property, the Operative Documents or this Agreement to BNPLC's Affiliates.
     Further, nothing in this Section 3.3 shall be construed to require a
     payment by a Participant for that portion or percentage, if any, of a
     Protective Advance required only because of (and attributed by any
     applicable principles of comparative fault to): (a) conduct of BNPLC or a
     Representative of BNPLC that has been determined to constitute gross
     negligence or wilful misconduct in or as a necessary element of a final
     judgment rendered against BNPLC or such Representative by a court with
     jurisdiction to make such determination; (b) any representation made by
     BNPLC in the Operative Documents that is false in any material respect and
     that BNPLC knew was false at the time of BNPLC's execution of the Operative
     Documents; or (c) Liens Removable by BNPLC. As used in this Agreement,
     "gross negligence" of BNPLC shall not include any negligent failure of
     BNPLC to act when the duty to act would not have been imposed but for
     BNPLC's status as owner of the Property or as a party to the Operative
     Documents.

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

4.0 OTHER ADJUSTMENTS, DEDUCTIONS AND INVESTMENTS.

     4.1. [Intentionally deleted]

     4.2. Setoff. In the event that one party to this Agreement has failed to
pay to a second party hereto any amount when due hereunder, the second party may
deduct such amount and interest thereon at the Late Payment Rate from any
payments due from it under this Agreement to the first party. Without
limitation, BNPLC may setoff amounts owed to it by any Defaulting Participant
against any termination fee payable to such Defaulting Participant pursuant to
Section 6.4 below if BNPLC shall elect to reduce such Defaulting Participant's
Percentage to zero as provided in Section 6.4.

     4.3. [Intentionally deleted]

     4.4. Sharing of Payments. Each Participant agrees that if for any reason it
shall obtain a payment made by or for NAI that reduces any Distributable
Payment, and if such payment will cause such Participant to receive more than it
would have received had such payment been made instead to BNPLC and generated
the payments by BNPLC contemplated in this Agreement, then (1) such Participant
shall promptly purchase interests in the rights of other parties to this
Agreement as necessary to cause BNPLC

                                      -6-
<PAGE>   12

and all Participants to share payments as they otherwise would have done under
this Agreement, and (2) such other adjustments shall be made from time to time
as shall be equitable to ensure that BNPLC and all Participants share all
payments of (or that operate to reduce) Distributable Payments as they otherwise
would have done under this Agreement. If, however, the payment received by the
purchasing Participant or any part thereof is later recovered from the
purchasing Participant, the purchase provided for in this Section shall be
rescinded, and the price paid by the purchasing Participant to other parties
shall be repaid by them to the purchasing Participant to the extent of such
recovery. Also, if the purchasing Participant is required by court order to pay
interest on the payment so recovered, then amounts repaid to the purchasing
Participant by the other parties will be repaid with interest, computed in the
same manner as the interest required by the court order. Nothing in this Section
shall in any way affect the right of BNPLC or any Participant to obtain payment
(whether by exercise of rights of banker's lien, set-off or counterclaim or
otherwise) of indebtedness or obligations other than those established by this
Agreement or any of the Operative Documents.

     4.5. Withholding Taxes. BNPLC may deduct any United States withholding tax
required on payments to a Participant hereunder from such payments, and the
Participant shall reimburse BNPLC for any such taxes BNPLC is required to pay
and that BNPLC has not deducted. If BNPLC is uncertain whether United States
withholding tax is required, BNPLC may, after notice to the applicable
Participant, deduct the withholding tax except during any period when BNPLC is
excused from such withholding because of the Participant's delivery to BNPLC of
(i) a statement in duplicate conforming to the requirements of United States
Treasury Regulation Section 1.1441-5(b) or (ii) two duly completed copies of
Internal Revenue Service Form W-8BEN or any successor form thereto ("FORM
W-8BEN") relating to the Participant and claiming complete exemption from
withholding tax on all amounts to be received by the Participant pursuant to
this Agreement or (iii) a valid United States Internal Revenue Service Form
W-8EC1 or any successor form thereto ("FORM W-8EC1") relating to the Participant
and claiming complete exemption from withholding tax on all amounts to be
received by the Participant pursuant to this Agreement. Any Participant shall,
if requested by BNPLC, deliver to BNPLC subsequent statements with respect to
such Treasury Regulation or two additional copies of Form W-8BEN or Form W-8EC1,
or the applicable replacement forms, on or before the date that any prior such
delivered statements or forms expire or become obsolete. If any such statement
or form delivered by a Participant to BNPLC becomes invalid or inapplicable as
to such Participant, such Participant shall promptly inform BNPLC. The
obligations of each Participant pursuant to this Section 4.5 shall survive the
termination of this Agreement.

     4.6. Order of Application. For purposes of this Agreement, BNPLC shall be
entitled, but not required, to apply any payments received from NAI under the
Operative Documents to satisfy (1) NAI's obligation to pay or reimburse
Protective Advances (and interest thereon), if any, and (2) costs incurred by
BNPLC because of any sale under the Purchase Agreements, before applying such
payments to satisfy NAI's other obligations, regardless of how NAI may have
designated such payments.

     4.7. Investments Pending Dispute Resolution; Overnight Investments.
Whenever BNPLC in good faith determines that it does not have all information
needed to determine how payments to the Participants must be made on account of
any Distributable Payments, or whenever BNPLC in good faith determines that
there is any dispute among the Participants about payments which must be made on
account of Distributable Payments, BNPLC may choose to defer the payments to
Participants which are the subject of such missing information or dispute.
However, to minimize any such deferral, BNPLC shall attempt diligently to obtain
any missing information needed to determine how payments to the Participants
must be made. Also, pending any such deferral, or if BNPLC is otherwise required
to invest funds pending distribution to the Participants, BNPLC shall endeavor
to invest the payments at issue. In addition, if BNPLC receives any
Distributable Payment after 12:00 noon, San Francisco time, on any day and will
not make payments to Participants in connection therewith until the next
Business Day pursuant to Section 2.5,

                                      -7-
<PAGE>   13

then BNPLC shall endeavor to invest such payments overnight; provided that BNPLC
shall have no liability to the Participants if BNPLC is unable to make such
investments. Investments by BNPLC shall be in the overnight federal funds market
pending distribution, and the interest earned on each dollar of principal so
invested shall be paid to the Person entitled to receive such dollar of
principal when the principal is paid to such Person.

5.0 NATURE OF THIS AGREEMENT.

     5.1. No Conveyance. THIS AGREEMENT IS INTENDED TO CREATE CONTRACTUAL RIGHTS
IN FAVOR OF EACH PARTICIPANT TO RECEIVE PAYMENTS FROM BNPLC, BUT IT IS NOT
INTENDED TO CONVEY OR ASSIGN TO THE PARTICIPANTS ANY INTEREST IN THE PROPERTY OR
IN THE OPERATIVE DOCUMENTS OR IN THE PAYMENTS TO BE MADE TO BNPLC THEREUNDER. IN
NO EVENT SHALL ANY PARTICIPANT EXERCISE OR ATTEMPT TO EXERCISE ANY RIGHT OR
REMEDY OF BNPLC UNDER THE OPERATIVE DOCUMENTS. NOTHING IN THIS AGREEMENT SHALL
BE CONSTRUED TO GRANT TO THE PARTICIPANTS ANY RIGHT TO ENFORCE NAI'S OBLIGATIONS
UNDER THE OPERATIVE DOCUMENTS OR TO COLLECT DIRECTLY FROM NAI ANY PAYMENTS DUE
FROM NAI THEREUNDER. ALTHOUGH BNPLC'S OBLIGATIONS FOR PAYMENTS TO THE
PARTICIPANTS HEREUNDER SHALL BE COMPUTED BY REFERENCE TO FUNDS ACTUALLY RECEIVED
AS DISTRIBUTABLE PAYMENTS, THIS AGREEMENT SHALL NOT BE CONSTRUED AS AN
ASSIGNMENT OF DISTRIBUTABLE PAYMENTS THEMSELVES OR ANY INTEREST THEREIN, IT
BEING UNDERSTOOD THAT (WITHOUT LIMITING OR EXPANDING THE DOLLAR AMOUNT OF SUCH
OBLIGATIONS) BNPLC MAY SATISFY SUCH OBLIGATIONS FROM OTHER FUNDS AVAILABLE TO
IT, THEREBY RESERVING DISTRIBUTABLE PAYMENTS FOR PAYMENT TO OTHER CREDITORS OR
FOR OTHER PURPOSES, AS BNPLC SHALL DETERMINE IN ITS SOLE DISCRETION.

     5.2. Not a Partnership, Etc. NEITHER THE EXECUTION OF THIS AGREEMENT, NOR
THE SHARING OF RISKS AND REWARDS UNDER THE OPERATIVE DOCUMENTS, NOR ANY
AGREEMENT TO SHARE IN PROFITS OR LOSSES ARISING AS A RESULT OF THE TRANSACTIONS
CONTEMPLATED THEREBY, IS INTENDED TO BE OR TO CREATE, AND THE FOREGOING SHALL BE
CONSTRUED NOT TO BE OR TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT
ENTERPRISE BETWEEN BNPLC AND ANY PARTICIPANT. NEITHER THE EXECUTION OF THIS
AGREEMENT NOR THE MANAGEMENT AND ADMINISTRATION OF THE OPERATIVE DOCUMENTS AND
THE RELATED DOCUMENTS BY BNPLC, NOR ANY OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC
UNDER OR PURSUANT TO THIS AGREEMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY
RELATIONSHIP BETWEEN BNPLC AND ANY PARTICIPANT.

                                      -8-
<PAGE>   14

6.0 AMENDMENTS; WAIVERS; EXERCISE OF RIGHTS AND REMEDIES AGAINST NAI.

     6.1. Limitations. Subject to Section 6.3, but notwithstanding anything else
to the contrary in this Agreement:

          6.1.1. BNPLC shall not:

               6.1.1.1. without the prior written consent of the Participants,
          execute any waiver, modification or amendment of the Operative
          Documents that would: (1) increase the amounts the Participants may be
          required to pay to BNPLC hereunder; or (2) reduce or postpone (or
          reasonably be expected to reduce or postpone) any payments that any
          Participant would, but for such modification or amendment, be expected
          to receive from BNPLC hereunder (including any extension of the Term
          of the Leases); (3) excuse or diminish NAI's obligations to provide
          Collateral under the Pledge Agreements during any "Mandatory
          Collateral Period" (as described in Part III of Schedule 1 attached to
          the Leases); or (4) except as otherwise expressly permitted by the
          Operative Documents, release BNPLC's interest in all or a substantial
          part of the Property or release any security interest in Collateral
          pledged under the Pledge Agreements; or

               6.1.1.2. without the prior written consent of a Majority, execute
          any other waiver, modification or amendment of the Operative
          Documents, except a waiver, modification or amendment that NAI
          requests pursuant to express provisions of the Operative Documents and
          that BNPLC believes in good faith it must execute to satisfy the
          requirements of the Operative Documents; or

               6.1.1.3. over the written objection of a Majority, affirmatively
          elect a Voluntary Retention of the Property pursuant to subparagraph
          1(A)(2)(a) of the Purchase Agreements.

     However, this subsection 6.1.1 shall not limit BNPLC's right to forebear
     from exercising rights against NAI to the extent BNPLC shall determine in
     good faith that such forbearance is appropriate and is permitted by the
     following subsections in this Section 6.1. Upon the direction of the
     Majority, BNPLC shall execute any waiver, modification or amendment of the
     Operative Documents requested by NAI; provided, that: (A) the waiver,
     modification or amendment is not prohibited by the forgoing provisions of
     this Agreement, (B) the waiver, modification or amendment does not (1)
     increase the amount BNPLC may be required to pay to NAI or anyone else, or
     (2) reduce or postpone (and cannot reasonably be expected to reduce or
     postpone) any payments that BNPLC would, but for such modification or
     amendment, be expected to receive, or (3) release BNPLC's interest in all
     or a substantial part of the Property; and (C) BNPLC is not excused from
     executing the waiver, modification or amendment by Section 6.3.

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

          6.1.3. Before taking possession of the Property because of any breach
     by NAI of the Operative Documents, filing any lawsuit against NAI,
     exercising foreclosure or offset rights against the

                                      -9-
<PAGE>   15

     Collateral under the Pledge Agreements, or exercising termination rights
     provided in subparagraph 1(c) of the Leases or subparagraph 4(B) of the
     Purchase Agreements, or if requested in writing by any Participant at any
     time when a Critical Event has occurred and is continuing, BNPLC shall call
     a meeting with the Participants to discuss what action by BNPLC, if any, is
     appropriate under the Operative Documents and what direction, if any, a
     Majority may give to BNPLC. Such meeting shall be scheduled during regular
     business hours in the offices of Banque Nationale de Paris, San Francisco,
     or another appropriate location in San Francisco, California, not earlier
     than five and not later than twenty Business Days after BNPLC's receipt of
     the written request from any Participant. BNPLC shall attempt in good faith
     and with reasonable diligence to comply with the direction of a Majority
     if, when a Critical Event or an Event of Default have occurred and be
     continuing, a Majority shall direct BNPLC in writing to do any one or more
     of the following, as applicable under the circumstances: (a) send any
     default notices required before a Critical Event can become an Event of
     Default, (b) bring a lawsuit against NAI to enforce the Operative
     Documents, or (c) exercise termination rights provided in subparagraph 1(c)
     of the Leases or subparagraph 4(B) of the Purchase Agreements. However, if
     BNPLC is not a member of the Majority voting pursuant to this subsection
     6.1.3 in favor of any such action, then BNPLC may require that it first
     receive the written agreement (in form reasonably acceptable to BNPLC) of
     the members of the Majority so voting to indemnify BNPLC from and against
     all costs, liabilities and claims that may be incurred by or asserted
     against BNPLC because of the action the Majority directs BNPLC to take. In
     no event shall any Participant instigate any suit or other action directly
     against NAI with respect to the Operative Documents or the Property, even
     if the Participant would, but for this Agreement, be entitled to do so as a
     party or third party beneficiary under the Operative Documents or
     otherwise.

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

Notwithstanding the foregoing, any Participants that have failed to fund any
amount due hereunder, and that have not corrected such failure within five
Business Days after being notified thereof, shall have no

                                      -10-
<PAGE>   16

voting or consent rights under this Section 6.1 and no rights to require BNPLC
to call a meeting pursuant to subsection 6.1.3 until such failure is corrected.

     6.2. General. Subject to the limitations set forth in Section 6.1:

          6.2.1. BNPLC shall have the exclusive right to take any action and to
     exercise any available powers, rights and remedies to enforce the
     obligations of NAI under the Operative Documents, or to refrain from taking
     any such action or exercising any such power, right or remedy.

          6.2.2. BNPLC shall be entitled to (i) give any consent, waiver or
     approval requested by NAI with respect to any construction or other
     approval contemplated in the Leases or (ii) waive or consent to any adverse
     title claims affecting the Property, provided that, in either case, BNPLC
     believes in good faith that such action will not have a material adverse
     effect upon NAI's obligations or ability to make the payments required
     under the Operative Documents or upon the rights and remedies, taken as
     whole, of BNPLC under the Operative Documents or of the Participants'
     hereunder.

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

     6.4. Refusal to Give Consents; Failure to Fund; Failure of a Deposit Taker
to Satisfy Minimum Ratings. If any Participant declines to consent to any
amendment, modification, waiver, release or consent for which the Participant's
consent is requested or required by reason of this Agreement, or if any
Participant fails to pay any amount owed by it hereunder, or if the Deposit
Taker for any Participant shall cease to be a Qualified Deposit Taker (as
defined in the Pledge Agreement), BNPLC shall have the right, but not the
obligation and without limiting any other remedy of BNPLC, to reduce such
Participant's Percentage to zero and to terminate such Participant's rights to
receive any further payments under Article 2 of this Agreement by paying to such
Participant a termination fee equal to the total amount it would be entitled to
receive from BNPLC hereunder if the date of such payment were the Designated
Sale Date and on such date NAI had itself purchased BNPLC's interest in the
Property pursuant to and in accordance with the Purchase Agreements. No
Participant's rights to receive payments equal to such Participant's Adjusted
Percentage of any Excess Reimbursement of a Protective Advance or interest
thereon as provided in Section 3.3 shall be impaired or affected by any
termination contemplated in this Section 6.4; accordingly,

                                      -11-
<PAGE>   17

BNPLC shall not, as a condition to such a termination, be required to reimburse
a Participant for any payments the Participant has made in connection with
Protective Advances pursuant to Section 3.3.

7.0 REQUIRED REPAYMENTS. Each Participant shall repay to BNPLC, upon written
request or demand by BNPLC (i) any sums paid by BNPLC to such Participant under
this Agreement from, or that were computed by reference to, any Distributable
Payment or other amounts which BNPLC shall be required to return or pay over to
another party, whether pursuant to any bankruptcy or insolvency law or
proceeding or otherwise and (ii) any interest or other amount that BNPLC is also
required to pay to another party with respect to such sums. Such repayment by a
Participant shall not constitute a release of such Participant's right to
receive payments from BNPLC hereunder upon BNPLC's receipt of any such
Distributable Payment or other amount (or any interest thereon) that BNPLC may
later recover.

8.0 NAI INFORMATION; INDEPENDENT ANALYSIS. Prior to the execution of this
Agreement, BNPLC has provided to the Participants copies of the executed
Operative Documents and of various certificates, legal opinions and other
documents delivered to BNPLC by or on behalf of NAI with the Operative
Documents. In the future, BNPLC shall provide (A) to all Participants copies of
all amendments of the Operative Documents and certificates and legal opinions,
if any, delivered by or on behalf of NAI in connection therewith, and (B) to any
Participant, as reasonably required to comply with a specific, reasonable
written request for information made by the Participant, copies of other
information readily available to BNPLC concerning NAI or Guarantor and the
transactions contemplated in the Operative Documents. However, BNPLC shall not
be liable for its failure to provide the Participants any of the foregoing
documents unless such failure constitutes gross negligence or wilful misconduct
on BNPLC's part. Each Participant has entered into this Agreement without
reliance upon representations made outside this Agreement by BNPLC or by any
Affiliate, agent or attorney of BNPLC and only after independently reviewing
such documents, independently making such inspections, independently consulting
with counsel and independently collecting and verifying such information, as the
Participant determined to be necessary or appropriate. Without limiting the
foregoing, each Participant has independently reviewed the Operative Documents
and independently made such inquiries and investigations of NAI and the Property
as the Participant determined to be necessary or appropriate before executing
this Agreement.

9.0 PERFORMANCE THROUGH REPRESENTATIVES. BNPLC may perform any of its duties
hereunder by or through officers, directors, employees, attorneys or agents
(collectively, "REPRESENTATIVES"), and BNPLC and its Representatives shall be
entitled to rely, and shall be fully protected in relying, upon any
communication or document believed by it or them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon the opinion of counsel selected by BNPLC. The Participants
acknowledge that Banque Nationale de Paris shall be entitled to act as agent for
BNPLC with respect to the administration of this Agreement, and to the extent it
does so, it shall be a Representative of BNPLC hereunder.

10.0 DUTY OF CARE. NEITHER BNPLC NOR ANY OF ITS REPRESENTATIVES SHALL BE LIABLE
OR RESPONSIBLE TO ANY PARTICIPANT OR ANY OTHER PERSON FOR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY BNPLC OR ANY OF ITS REPRESENTATIVES UNDER THIS AGREEMENT
OR THE OPERATIVE DOCUMENTS OR OTHERWISE (EVEN IF NEGLIGENT OR RELATED TO A
MATTER FOR WHICH BNPLC OR ANY OF ITS REPRESENTATIVES MAY OTHERWISE BE STRICTLY
LIABLE); provided, this provision will not excuse BNPLC from liability for
failing to make timely payments required of BNPLC to the Participants by the
express provisions of Article 2 or Section 3.3 or from liability for actions
taken or omitted to be taken by BNPLC which constitute gross negligence or
wilful misconduct. Without limiting the generality of the foregoing, BNPLC (1)
may consult with legal counsel (including counsel for NAI), independent public
accountants and other experts selected by it and shall not be liable for any
action

                                      -12-
<PAGE>   18

taken or omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts; (2) makes no warranty or representation
to the Participants except as provided in Article 12 and shall not be
responsible to the Participants for any statements, warranties or
representations made in or in connection with the Operative Documents; (3) shall
not have any duty to the Participants to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Operative Documents or to inspect the Property or the books and records of NAI;
(4) shall not be responsible to the Participants for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Operative Documents or any instrument or document furnished in connection
therewith; (5) may rely upon the representations and warranties of NAI and the
Participants in exercising its powers hereunder unless BNPLC shall have actual
knowledge that such representations and warranties are untrue; and (6) shall
incur no liability under or in respect of the Operative Documents by acting upon
any notice, consent, certificate or other instrument or writing (including any
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.

11.0 REPRESENTATIONS BY EACH PARTICIPANT. Each Participant represents that as of
the date it became a party to this Agreement:

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

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

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

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

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

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

                                      -13-
<PAGE>   19

12.0 REPRESENTATIONS BY BNPLC. BNPLC represents to each Participant, as of the
date such Participant became a party to this Agreement, that:

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

     12.2. No Suits. To BNPLC's knowledge, there are no judicial or
administrative actions, suits or proceedings involving the validity,
enforceability or priority of this Agreement and no such suits or proceedings
are threatened.

     12.3. Organization. BNPLC is duly incorporated and legally existing under
the laws of Delaware and is duly qualified to do business in the State of
California. BNPLC has all requisite power and all material governmental
certificates of authority, licenses, permits, qualifications and other
documentation necessary to perform its obligations under this Agreement. BNPLC
has obtained or will obtain, at NAI's expense pursuant to the provisions of the
Leases, all requisite power and all material governmental certificates of
authority, licenses, permits, qualifications and other documentation necessary
to own and lease the Property and to perform its obligations under the Operative
Documents.

     12.4. Enforceability. This Agreement and the Operative Documents constitute
legal, valid and binding obligations of BNPLC, enforceable in accordance with
their respective terms, subject to bankruptcy and other laws affecting
creditors' rights generally and general equitable principles. BNPLC's execution
and delivery of, and performance under, this Agreement and the Operative
Documents are within BNPLC's powers and have been duly authorized by all
requisite action and are not in contravention of the powers of the charter,
by-laws or other corporate papers of BNPLC; provided, BNPLC makes no
representation or warranty that conditions imposed by any state or local
Applicable Laws to the purchase, ownership, lease or operation of the Property
have been satisfied.

     12.5. Liens Removable by BNPLC. BNPLC shall not create or permit any Liens
Removable by BNPLC not claimed by, through or under any of the Participants
(other than BNPLC's Affiliates), without NAI's consent.

     12.6. BNPLC's Status as a Subsidiary of a Bank Holding Company. As of the
effective date of this Agreement, BNPLC is a "subsidiary" of a "bank holding
company" (as those terms are defined in Chapter 17 of Title 12 of the United
States Code).

13.0 ASSIGNMENTS.

     13.1. By the Participants Generally. Except as expressly provided below, no
Participant shall assign or attempt to assign any interest in or rights under
this Agreement without the prior written consent of BNPLC, which consent shall
not be unreasonably withheld so long as the Participant requesting the approval
is not in default hereunder; provided, this provision shall not prevent a
Participant from transferring its rights hereunder to its Affiliates or to any
other Participants who are already parties to this Agreement. Notwithstanding
any permitted assignment by a Participant, if the assignment is to any Person
that does not qualify as a "Participant" for purposes of the Leases itself
(which, as more particularly provided in the definition of Participant in the
Common Definitions and Provisions Agreements, may require the written approval
of such Person by NAI), then such Participant's obligations under this Agreement
shall remain unchanged, such Participant shall remain primarily responsible for
the performance of its obligations hereunder, and BNPLC may continue to deal
solely and directly with such

                                      -14-
<PAGE>   20

Participant in connection with all rights and obligations under this Agreement.
In the event, however, of a permitted assignment by a Participant to a Person
that does qualify as a "Participant" for purposes of the Leases itself,
accomplished by the execution of appropriate Participation Agreement Supplements
as herein provided, the assigning Participant shall not be liable for any
failure by the assignee to fulfill the obligations assumed hereunder by the
assignee by reason of such assignment.

     13.2. By BNPLC. Except as expressly provided herein, BNPLC shall not assign
or attempt to assign any rights under or interest in the Operative Documents or
this Agreement or any interest in the Property without the Participants' prior
written consent, which consent shall not be unreasonably withheld. By a
Participation Agreement Supplement, BNPLC may, without the prior written consent
of any other Participant, assign participations in the Operative Documents or
the payments required to BNPLC thereunder to any then existing Participant and
to other financial institutions or Affiliates of financial institutions approved
by NAI; provided, that the assignment of participations by BNPLC shall not
reduce the Percentage of BNPLC (or any Affiliate of BNPLC that may become the
owner of BNPLC's interest in the Property) to less than three percent (3%). In
addition, BNPLC may assign its right to receive Distributable Payments and its
rights and interests in and to the Property, the Operative Documents and this
Agreement to Affiliates of BNPLC that do not become Participants; provided,
however, that BNPLC's obligations under this Agreement shall remain unchanged,
BNPLC shall remain primarily responsible for the performance of its obligations
hereunder, and all Distributable Payments received by any such Affiliates as
assignee of BNPLC shall, for purposes of computing payments required to any
Participant hereunder, be considered as received by BNPLC. In addition, BNPLC
shall be permitted to transfer any rights or interests as BNPLC shall believe in
good faith to be necessary to satisfy the Operative Documents or Applicable
Laws.

     13.3. Execution of Participation Agreement Supplements. Promptly after the
execution of a Participation Agreement Supplement by BNPLC and any Participant,
BNPLC will provide a copy thereof to all other Participants, but the other
Participants need not join in or approve the Participation Agreement Supplement
for it to be effective.

     13.4. Regulation A. Notwithstanding Sections 13.1 or 13.2, a Participant
may assign and pledge all or any portion of its rights under this Agreement to
any Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circulars
issued by such Federal Reserve Bank.

     13.5. Costs. Each Participant shall pay all costs incurred by BNPLC in
connection with any permitted assignment by or through such Participant,
including, but not limited to, reasonable fees and disbursements of its counsel,
and any transfer taxes or other taxes assessed because of such assignment which
NAI is not required to pay under the Leases.

14.0 GOVERNING LAW; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE DEEMED A CONTRACT MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF CALIFORNIA AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF BNPLC AND THE PARTICIPANTS
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE
AND THE FEDERAL COURTS SITTING IN SAN FRANCISCO, CALIFORNIA, AND AGREES AND
CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING
RELATING TO THIS AGREEMENT BY ANY MEANS ALLOWED UNDER CALIFORNIA OR FEDERAL LAW.
EACH OF BNPLC AND THE PARTICIPANTS HEREBY WAIVES AND AGREES NOT TO

                                      -15-
<PAGE>   21

ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY SUCH PROCEEDING
WHICH IS BROUGHT IN A COURT IN SAN FRANCISCO, CALIFORNIA IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER. EACH OF BNPLC AND THE
PARTICIPANTS, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A
JURY TRIAL OF ANY DISPUTE RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH
DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

15.0 TERMINATION. This Agreement shall terminate on the first date on which all
obligations of NAI under the Operative Documents shall have been indefeasibly
paid or otherwise satisfied or excused, BNPLC shall have ceased to have any
rights in the Property and each party hereto shall have fully performed its
obligations hereunder to the other parties hereto. The agreements of BNPLC and
the Participants in Section 3.3 (which concerns payments by Participants of
their respective Percentages of Protective Advances) shall survive the
termination of this Agreement. Following any sale of the Property by BNPLC
pursuant to the Purchase Agreements and the payment to any Participant of all
amounts payable to such Participant hereunder (including, without limitation,
such Participant's Percentage of all Net Sales Proceeds payable by NAI and any
Applicable Purchaser on the Designated Sale Date), such Participant will execute
and deliver such a quitclaim and release (in recordable form) to NAI or any
Applicable Purchaser.

16.0 MISCELLANEOUS.

     16.1. Reliance by Others. None of the provisions of this Agreement shall
inure to the benefit of any Person other than the Participants and BNPLC and
BNPLC's Representatives; consequently, no Person other than the Participants and
BNPLC shall be entitled to rely upon or raise as a defense, in any manner
whatsoever, the failure of any Participant or BNPLC to comply with the
provisions of this Agreement. None of the Participants nor BNPLC shall incur any
liability to any other Person for any act of omission of another.

     Notwithstanding the foregoing, however, NAI shall be a third party
beneficiary of the representations of each Participant in Section 11, of the
limitations upon each Participant's right to assign in Section 13.1, of each
Participant's agreements concerning choice of law and other matters in Section
14, and of each Participant's agreement to provided a release and quitclaim of
the Property pursuant to the last sentence of Section 15. As a third party
beneficiary of the obligations of the Participants specified in the preceding
sentence, NAI shall have standing to bring a claim against any Participant in
NAI's own name if that Participant breaches such obligations. Further, BNPLC may
assign to NAI any claims it may have against a Participant because of the
Participant's breach of any of the provisions referenced in this paragraph or
because of any adverse title claim made against the Property by, through or
under the Participant.

     16.2. Waivers, Etc. No delay or omission by any party to exercise any right
under this Agreement shall impair any such right, nor shall it be construed to
be a waiver thereof. No waiver of any single breach or default under this
Agreement shall be deemed a waiver of any other breach or default. Any waiver,
consent, or approval under this Agreement must be in writing to be effective.

     16.3. Severability. The illegality or unenforceability of any provision of
this Agreement shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement.

     16.4. Notices. All notices, demands, approvals, consents and other
communications to be made hereunder to or by the parties hereto must, to be
effective for purpose of this Agreement, be in writing. Notices, demands and
other communications required or permitted hereunder are to be sent to the

                                      -16-
<PAGE>   22

addresses set forth in Schedule 1 to this Agreement and shall be given by any of
the following means: (A) personal service, with proof of delivery or attempted
delivery retained; (B) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by United States first class mail,
return receipt requested); or (C) registered or certified first class mail,
return receipt requested. Such addresses may be changed by notice to the other
parties given in the same manner as provided above. Any notice or other
communication sent pursuant to clause (A) or (C) hereof shall be deemed received
(whether or not actually received) upon first attempted delivery at the proper
notice address on any Business Day between 9:00 A.M. and 5:00 P.M., and any
notice or other communication sent pursuant to clause (B) hereof shall be deemed
received upon dispatch by electronic means.

     16.5. Construction. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural and vice versa, unless the context otherwise
requires. References herein to Articles, Sections, subsections or other
subdivisions shall refer to the corresponding Articles, Sections, subsections or
subdivisions of this Agreement, unless specific reference is made to another
document or instrument. References herein to any Schedule or Exhibit shall refer
to the corresponding Schedule or Exhibit attached hereto, which shall be made a
part hereof by such reference. All capitalized terms used in this Agreement
which refer to other documents shall be deemed to refer to such other documents
as they may be renewed, extended, supplemented, amended or otherwise modified
from time to time, provided such documents are not renewed, extended or modified
in breach of any provision contained herein or therein or, in the case of any
other document to which BNPLC is a party or of which BNPLC is an intended
beneficiary, without the consent of BNPLC. All accounting terms used but not
specifically defined herein shall be construed in accordance with GAAP. The
words "THIS AGREEMENT", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and words of
similar import when used in this Agreement refer to this Agreement as a whole
and not to any particular subdivision unless expressly so limited. The phrases
"THIS ARTICLE" and "THIS SECTION" and "THIS SUBSECTION" and similar phrases used
herein refer only to the Articles, Sections or subsections hereof in which the
phrase occurs. As used herein the word "OR" is not exclusive. As used herein the
words "INCLUDE", "INCLUDING" and similar terms shall be construed as if followed
by "without limitation to".

     16.6. Headings. The Article and Section headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several provisions hereof.

     16.7. Entire Agreement. This Agreement (a) embodies the entire agreement
between the parties, supersedes all prior agreements and understandings between
the parties, if any, relating to the subject matter hereof, and may be amended
only by an instrument in writing executed by an authorized representative of
each party to be bound by such amendment, and (b) has been executed in a number
of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement or
certificate; but, in making proof of this Agreement it shall not be necessary to
produce or account for more than one such counterpart signed by each party
thereto.

     16.8. Further Assurances. Subject to any restriction in the Operative
Documents, each of BNPLC and the Participants will promptly execute and deliver
all further instruments and documents and take all further action as any of them
may reasonably request in order to evidence the agreements made hereunder and
otherwise to effect the purposes of this Agreement.

     16.9. Impairment of Operative Documents. Nothing herein contained
(including the provisions governing the application of payments in Section 4.6
and the provisions authorizing assignments by BNPLC in Section 13.2) shall
impair or modify NAI's rights under the Operative Documents.

                                      -17-
<PAGE>   23

     16.10. Books and Records. BNPLC shall keep accurate books and records in
which full, true and correct entries shall be promptly made as to all payments
made and received concerning the Property and will permit all such books and
records (excluding any information that would otherwise be protected by BNPLC's
attorney client privilege) to be inspected and copied by the Participants and
their duly accredited representatives at all times during reasonable business
hours after five Business Days advance notice. This Section shall not be
construed as requiring BNPLC to regularly maintain separate books and records
relating exclusively to the Property; provided, however, that upon reasonable
request, BNPLC shall, at the requesting Participant's expense, construct or
abstract from its regularly maintained books and records information required by
this Section relating to the Property.

     16.11. Definition of Knowledge. Representations and warranties made in this
Agreement but limited to the "knowledge" of BNPLC or any Participant, as the
case may be, shall be limited to the present actual knowledge of the officers or
other employees of such party primarily responsible for reviewing and
negotiating this Agreement. Also, as used herein with respect to the existence
of any facts or circumstances after the date of this Agreement, "knowledge" of
BNPLC or a Participant, as the case may be, shall be limited to the present
actual knowledge at the time in question of the officers or other employees of
such party primarily responsible for administering this Agreement. However, none
of the officers or employees of any party to this Agreement shall be personally
liable for any representations or warranties made herein or for taking or
failing to take any action required hereby.

     16.12. Attorneys' Fees. If any party to this Agreement commences any legal
action or other proceeding against another party hereto to enforce any of the
terms of this Agreement, or because of any breach of the other party or dispute
hereunder, the successful or prevailing party shall be entitled to recover from
the nonprevailing party all Attorneys' Fees incurred in connection therewith,
whether or not such controversy, claim or dispute is prosecuted to a final
judgment. Any such Attorneys' Fees incurred by any party in enforcing a judgment
in its favor under this Agreement shall be recoverable separately from such
judgment, and the obligation for such Attorneys' Fees is intended to be
severable from other provisions of this Agreement and not to be merged into any
such judgment.

                          [The signature pages follow.]

                                      -18-
<PAGE>   24

     IN WITNESS WHEREOF, BNPLC and the Participants whose signatures appear
below have caused this Participation Agreement to be executed by their
respective, duly authorized representatives, as of the date first above written.

                                            "BNPLC"

                                            BNP LEASING CORPORATION

                                            By:
                                               ---------------------------------
                                               Lloyd G. Cox, Vice President

<PAGE>   25

[Continuation of signature pages to Participation Agreement effective as of
December ___, 1999]

                                            "PARTICIPANT"

                                            BANQUE NATIONALE DE PARIS

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

                                               Name:
                                                    ----------------------------

                                               Title:
                                                     ---------------------------

<PAGE>   26

                                                             SCHEDULE 1 - Page 1

A. BNPLC:  BNP LEASING CORPORATION,
           a Delaware corporation

        1.     Amount Retained:  $1,860,000

        2.     Initial Percentage:  3%

        3.     Address for Notices:

               BNP Leasing Corporation
               12201 Merit Drive
               Suite 860
               Dallas, Texas  75251

               Attention: Lloyd G. Cox

               Telephone: (972) 788-9191
               Facsimile: (972) 788-9140

        4.     Payment Instructions:

               Federal Reserve Bank of New York
               ABA 026007689 Banque Nationale de Paris
               /BNP/ BNP San Francisco
               /AC/
               /Ref/ Network Appliance/Sunnyvale Synthetic Leases/Phase IV

        5.     Operations Contact:

               BNP Leasing Corporation
               12201 Merit Drive
               Suite 860
               Dallas, Texas  75251

               Attention: Lloyd G. Cox

               Telephone: (972) 788-9191
               Facsimile: (972) 788-9140

<PAGE>   27

                                                             SCHEDULE 1 - Page 2

B. Participant:  BANQUE NATIONALE DE PARIS,
                 a banking corporation organized under the laws
                 of France

        1.     Amount of Participation: $60,140,000

        2.     Percentage:   97%

        3.     Address for Notices:

               Banque Nationale de Paris, San Francisco
               180 Montgomery Street
               San Francisco, CA  94104

               Attention: Rafael Lumanlan or Gavin Holles

               Telephone: (415) 956-0707
               Facsimile: (415) 296-8954

        4.     Payment Instructions:

               Federal Reserve Bank of New York
               ABA 026007689 Banque Nationale de Paris
               /BNP/ BNP San Francisco
               /AC/
               /Ref/ Network Appliance/Sunnyvale Synthetic Leases/Phase IV

        5.     Operations Contact:

               George Fung
               Banque Nationale de Paris
               180 Montgomery Street
               San Francisco, CA 94104

               Telephone: (415) 956-0707
               Facsimile: (415) 956-4230

        6.     "Initial Payment" Due from
               Participant to BNPLC:   An amount equal to ninety-seven percent
                                       (97%) of initial funding advanced under
                                       the Leases.

<PAGE>   28

                                    EXHIBIT A

                      SUPPLEMENT TO PARTICIPATION AGREEMENT

                               [          ,     ]
                                ----------  ----

BNP Leasing Corporation

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

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

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

     Reference is made to the Participation Agreement dated as of December ___,
1999 (as heretofore amended, the "PARTICIPATION AGREEMENT") between BNP Leasing
Corporation ("BNPLC"), Banque Nationale de Paris and other financial
institutions which are from time to time Participants under and as defined in
such Participation Agreement (collectively, the "PARTICIPANTS"). Unless
otherwise defined herein, all capitalized terms used in this Supplement have the
respective meanings given to those terms in the Participation Agreement.

[NOTE: THE NEXT TWO PARAGRAPHS, AND THE ADDENDUM TO SCHEDULE 1 ATTACHED TO THIS
EXHIBIT, WILL BE INCLUDED ONLY AS PART OF A SUPPLEMENT THAT ADDS A NEW
PARTICIPANT UNDER THE PARTICIPATION AGREEMENT:

     The undersigned hereby certifies to BNPLC that the undersigned has become a
party to the Pledge Agreements by executing a supplement as provided therein,
and that NAI has approved of the undersigned as a party to the Pledge Agreements
by executing and returning that supplement.

     The undersigned, by executing and delivering this Supplement to BNPLC,
hereby agrees to become a party to the Participation Agreement as a Participant
and agrees to be bound by all of the terms thereof applicable to Participants.
The undersigned hereby agrees that its Percentage under the Participation
Agreement shall be ___________ percent (____%), effective as of the date of this
letter. Contemporaneously with the execution of this letter, the undersigned is
paying to BNPLC the sum of $_____________ in consideration of the rights it is
acquiring as a Participant under the Participation Agreement with the foregoing
Percentages.

     Schedule 1 attached to the Participation Agreement is amended by the
addition of an Addendum (concerning the undersigned) in the form attached to
this Supplement.]

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT REDUCES AN
EXISTING PARTICIPANT'S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:

     In consideration of the payment of $____________ to the undersigned, the
receipt and sufficiency of which is hereby acknowledged by the undersigned, the
undersigned hereby agrees that its Percentage under the Participation Agreement
is reduced to ___________ percent (____%), effective as of the date of this
letter.]

[NOTE: THE NEXT PARAGRAPH WILL BE INCLUDED ONLY IN A SUPPLEMENT THAT INCREASES
AN EXISTING PARTICIPANT'S PERCENTAGE UNDER THE PARTICIPATION AGREEMENT:

<PAGE>   29

     The undersigned hereby agrees that its Percentage under the Participation
Agreement is increased to ___________ percent (____%), effective as of the date
of this letter. Contemporaneously with the execution of this letter, the
undersigned is paying BNPLC the sum of $_____________ in consideration of such
increase.]

     IN WITNESS WHEREOF, the undersigned has executed this Supplement as of the
day and year indicated above.

                                            [NAME]

                                            By:
                                               ---------------------------------
                                               Printed Name:

                                               Title:

Accepted and agreed:

BNP LEASING CORPORATION

By:
   --------------------------------
   Printed Name:

   Title:

<PAGE>   30

                             ADDENDUM TO SCHEDULE 1

Participant:

        1.     Amount of Participation: $

        2.     Percentage:    ___%

        3.     Address for Notices:

               Attention:

               Telephone:
               Facsimile:

        4.     Payment Instructions:

               Bank:

               Account:

               Account No.:

               ABA No.:

               Reference:

        5.     Operations Contact:

               Attention:

               Telephone:
               Facsimile:

                               Exhibit A - Page 3

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