Document:

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                                                                   Exhibit 10.73

                                PLEDGE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

                                      AMONG

                             BNP LEASING CORPORATION

                                    ("BNPLC")

                              BNP PARIBAS, AS AGENT

                                    ("AGENT")

                             NETWORK APPLIANCE, INC.

                                     ("NAI")

                                       AND

                        PARTICIPANTS AS DESCRIBED HEREIN

                                 OCTOBER 2, 2000

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                               TABLE OF CONTENTS

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ARTICLE I      DEFINITIONS AND INTERPRETATION......................................................2

        Section 1.1   Capitalized Terms Used But Not Defined in This Agreement.....................2

        Section 1.2   Definitions..................................................................2

               Account.............................................................................2
               Account Office......................................................................2
               Agent...............................................................................2
               BNPLC...............................................................................2
               BNPLC's Corresponding Obligations to Participants...................................2
               Cash Collateral.....................................................................2
               Certificate of Deposit..............................................................2
               Collateral..........................................................................2
               Collateral Imbalance................................................................2
               Collateral Percentage...............................................................3
               Default.............................................................................3
               Deposit Taker.......................................................................3
               Deposit Taker Losses................................................................3
               Deposit Taker's Acknowledgment and Agreement........................................3
               Disqualified Deposit Taker..........................................................3
               Event of Default....................................................................3
               Excluded Deposit Taker Losses.......................................................4
               Initially Qualified Deposit Taker...................................................4
               Lien................................................................................5
               Material Lease Default..............................................................5
               Minimum Collateral Value............................................................5
               NAI.................................................................................6
               NAI's Purchase Agreement Obligations................................................6
               Notice of Security Interest.........................................................6
               Other Liable Party..................................................................6
               Participants........................................................................6
               Participation Agreement.............................................................6
               Percentage..........................................................................6
               Qualified Pledge....................................................................6
               Secured Obligations.................................................................6
               Supplement..........................................................................6
               Transaction Documents...............................................................6
               Transition Account..................................................................6
               UCC.................................................................................6
               Unaffiliated Deposit Taker..........................................................7
               Value...............................................................................7
        Section 1.3   Attachments..................................................................7

        Section 1.4   Amendment of Defined Instruments.............................................7
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                               TABLE OF CONTENTS

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        Section 1.5   References and Titles........................................................7

ARTICLE II     SECURITY INTEREST...................................................................7

        Section 2.1   Pledge and Grant of Security Interest........................................7

        Section 2.2   Return of Collateral After the Secured Obligations are
                      Satisfied in Full............................................................8

ARTICLE III    DESIGNATION OF MINIMUM COLLATERAL  PERCENTAGE AND INITIAL DEPOSIT TAKER.............8

        Section 3.1   Minimum Collateral Percentage................................................8

        Section 3.2   Initial Deposit Taker........................................................8

ARTICLE IV     PROVISIONS CONCERNING DEPOSIT TAKERS................................................8

        Section 4.1   Qualification of Deposit Takers Generally....................................8

        Section 4.2   Additional Requirement Prior to the Base Rent Commencement
                      Date (All Buildings).........................................................9

        Section 4.3   Replacement of Participants Proposed by NAI..................................9

        Section 4.4   Mandatory Substitutions for Unaffiliated Deposit Takers
                      and Disqualified Deposit Takers.............................................10

        Section 4.5   Voluntary Substitution of Deposit Takers....................................10

        Section 4.6   Delivery of Notice of Security Interest by NAI and Agent....................11

        Section 4.7   Constructive Possession of Collateral.......................................11

        Section 4.8   Attempted Setoff by Deposit Takers..........................................11

        Section 4.9   Deposit Taker Losses........................................................12

        Section 4.10  Losses Resulting from Failure of Deposit Taker to Comply
                      with this Agreement.........................................................12

        Section 4.11  Losses Resulting from Failure of an Unaffiliated Deposit
                      Taker to Comply with this Agreement.........................................12

ARTICLE V      DELIVERY AND MAINTENANCE OF CASH COLLATERAL........................................12

        Section 5.1   Delivery of Funds by NAI....................................................12

        Section 5.2   Transition Account..........................................................13

        Section 5.3   Allocation of Cash Collateral Among Deposit Takers..........................13

        Section 5.4   Issuance and Redemption of Certificates of Deposit..........................13

        Section 5.5   Status of the Accounts Under the Reserve Requirement
                      Regulations.................................................................14
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                               TABLE OF CONTENTS

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        Section 5.6   Acknowledgment by NAI that Requirements of this Agreement
                      are Commercially Reasonable.................................................14

ARTICLE VI     WITHDRAWAL OF CASH COLLATERAL......................................................14

        Section 6.1   Withdrawal of Collateral Prior to the Designated Sale Date..................14

        Section 6.2   Withdrawal and Application of Cash Collateral to Reduce or
                      Satisfy the Secured Obligations to the Participants.........................15

        Section 6.3   Withdrawal and Application of Cash Collateral to Reduce or
                      Satisfy the Secured Obligations to BNPLC....................................15

        Section 6.4   Withdrawal of Cash Collateral From Accounts Maintained by
                      Disqualified Deposit Takers.................................................16

ARTICLE VII      REPRESENTATIONS AND COVENANTS OF NAI.............................................16

        Section 7.1   Representations of NAI......................................................16

        Section 7.2   Covenants of NAI............................................................17

ARTICLE VIII  AUTHORIZED ACTION BY AGENT..........................................................18

        Section 8.1   Power of Attorney...........................................................18

ARTICLE IX     DEFAULT AND REMEDIES...............................................................18

        Section 9.1   Remedies....................................................................18

ARTICLE X      OTHER RECOURSE.....................................................................19

        Section 10.1  Recovery Not Limited........................................................19

ARTICLE XI     PROVISIONS CONCERNING AGENT........................................................19

        Section 11.1  Appointment and Authority...................................................20

        Section 11.2  Exculpation, Agent's Reliance, Etc..........................................20

        Section 11.3  Participant's Credit Decisions..............................................20

        Section 11.4  Indemnity...................................................................21

        Section 11.5  Agent's Rights as Participant and Deposit Taker.............................21

        Section 11.6  Investments.................................................................21

        Section 11.7  Benefit of Article XI.......................................................21

        Section 11.8  Resignation.................................................................22

ARTICLE XII    MISCELLANEOUS......................................................................22
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        Section 12.1  Provisions Incorporated From Other Operative Documents......................22

        Section 12.2  Cumulative Rights, etc......................................................22

        Section 12.3  Survival of Agreements......................................................22

        Section 12.4  Other Liable Party..........................................................22

        Section 12.5  Termination.................................................................23

        Section 12.6  Amendment and Restatement...................................................23
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Attachment 1          Form of Certificate of Deposit

Attachment 2          Supplement to Pledge Agreement (Phase IV - Land)

Attachment 3          Form of Notice of Security Interest

Attachment 4          Alternate Form of Notice of Security Interest (Unaffiliated
                      Deposit Taker)

Attachment 5          Examples of Calculations

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

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

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

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

Schedule 1            Financial Covenants and Negative Covenants
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                                PLEDGE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

        This PLEDGE AGREEMENT (PHASE IV - IMPROVEMENTS) (this "AGREEMENT") is
made as of October 2, 2000 (the "EFFECTIVE DATE"), by NETWORK APPLIANCE, INC., a
California corporation ("NAI"); BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"); BNP PARIBAS ("BNPLC'S PARENT"), as a "PARTICIPANT"; and BNP PARIBAS,
acting in its capacity as agent for BNPLC and the Participants (in such
capacity, "AGENT"), is made and dated as of the Effective Date.

                                    RECITALS

        A. NAI and BNPLC are parties to: (i) a Common Definitions and Provisions
Agreement (Phase IV - Improvements) dated as of the Effective Date (the "COMMON
DEFINITIONS AND PROVISIONS AGREEMENT (PHASE IV - IMPROVEMENTS)"); and (ii) a
Purchase Agreement (Phase IV - Improvements) dated as of the Effective Date (the
"PURCHASE AGREEMENT"), pursuant to which NAI has agreed to make a "SUPPLEMENTAL
PAYMENT" or "ISSUE 97-10 PREPAYMENT" (both as defined in the Common Definitions
and Provisions Agreement (Phase IV - Improvements)), in consideration of the
rights granted to NAI by the Purchase Agreement.

        B. NAI, BNPLC, and BNPLC's Parent previously executed a Pledge Agreement
(Phase IV - Improvements) dated as of December 20, 1999 (the "PRIOR PLEDGE
AGREEMENT"), to which The Bank of Nova Scotia, Comerica Bank-California, FBTC
Leasing Corp., The Industrial Bank of Japan, KeyBank National Association, and
Wells Fargo Bank, N.A. (collectively, the "NON-BNP PARTICIPANTS") were made a
party pursuant to various Supplements to Pledge Agreement dated February 22,
2000. Concurrently herewith, the Non-BNP Participants have agreed to terminate
and release their interests in the Prior Participation Agreement and all
Operative Documents executed in connection therewith. NAI, BNPLC, and BNPLC's
Parent have agreed to amend, restate and replace the Prior Pledge Agreement with
this Agreement as provided in Section 12.6 below.

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

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

                                    AGREEMENT

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

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                    ARTICLE I DEFINITIONS AND INTERPRETATION

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

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

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

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

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

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

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

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

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

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

        "COLLATERAL IMBALANCE" shall mean on any date prior to the Designated
Sale Date that the Value (without duplication) of Accounts maintained by and
Certificates of Deposit issued by the Deposit Taker for any Participant (other
than a Disqualified Deposit Taker) does not equal such Participant's Percentage,
multiplied by the lesser of (1) the Minimum Collateral Value in effect on such
date, or (2) the aggregate Value of all Collateral subject to this Agreement on
such date. For purposes of determining whether a Collateral Imbalance exists,
the Value of any Accounts maintained by a bank that

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is acting as Deposit Taker for two or more Participants will be deemed to be
held for them in proportion to their respective Percentages, and the Value of
any Accounts maintained by a bank as Deposit Taker for both a Participant and
BNPLC (as in the case of BNPLC's Parent acting as Deposit Taker for itself, as a
Participant, and for BNPLC) will be deemed to be held for the Participant only
to the extent necessary to prevent or mitigate a Collateral Imbalance and
otherwise for BNPLC.

        "COLLATERAL PERCENTAGE" shall mean one hundred percent (100%).

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

        "DEPOSIT TAKER" for BNPLC shall mean BNPLC's Parent and for each
Participant shall mean the Participant itself; provided, that each of BNPLC and
the Participants, for itself only, may from time to time designate another
Deposit Taker as provided in Sections 3.2, 4.2, 4.4 and 4.5 below.

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

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

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

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

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

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

                      (c) the failure of the pledge or security interest
               contemplated herein in the Transition Account or any Account,
               Certificate of Deposit or Cash Collateral to be a Qualified
               Pledge (regardless of the characterization of the Transition
               Account or any Accounts, Certificates of Deposit or Cash
               Collateral as deposit accounts, instruments or general
               intangibles under the UCC), if within five Business Days after
               NAI becomes aware of such failure, NAI does not (1) notify Agent,
               BNPLC and the Participants of such failure, and (2) cure such
               failure, and (3) to the extent required by Section 7.2.9, pay

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               to BNPLC any additional Base Rent that has accrued under the
               Improvements Lease because of (or that would have accrued if
               BNPLC had been aware of) such failure, together with interest at
               the Default Rate on any such additional Base Rent;

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

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

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

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

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

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

        "INITIALLY QUALIFIED DEPOSIT TAKER" means (1) BNP Paribas, acting
through any branch, office or agency that can lawfully maintain an Account as a
Deposit Taker hereunder, (2) The Bank of New York, acting through any branch,
office or agency that can lawfully maintain an Account as a Deposit Taker
hereunder, and (3) any of the fifty largest (measured by total assets) U.S.
banks, or one of the one

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hundred largest (measured by total assets) banks in the world, with debt ratings
of at least A- (in the case of long term debt) and A-1 (in the case of short
term debt) or the equivalent thereof by Standard and Poor's Corporation, and
(ii) A3 (in the case of long term debt) and P-2 (in the case of short term debt)
or the equivalent thereof by Moody's Investor Service, Inc. The parties believe
it improbable that the ratings systems used by Standard and Poor's Corporation
and by Moody's Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, NAI shall be entitled to
select and use a comparable ratings systems as a substitute for the S&P Rating
or the Moody Rating, as the case may be, for purposes of determining the status
of any bank as an Initially Qualified Deposit Taker.

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

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

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

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

        "MINIMUM COLLATERAL VALUE" shall mean (1) as of the Designated Sale Date
or any prior date, an amount equal to the Collateral Percentage multiplied by
the Stipulated Loss Value determined as of that date in accordance with the
Improvements Lease; and (2) as of any date after the Designated Sale

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Date, an amount equal to the Break Even Price plus any unpaid interest accrued
on past due amounts payable pursuant to Paragraph 1(a) of the Purchase
Agreement.

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

        "NAI'S PURCHASE AGREEMENT OBLIGATIONS" shall mean all of NAI's
obligations under the Purchase Agreement, including NAI's obligation to pay any
Supplemental Payment as required under subparagraph 1(A) of the Purchase
Agreement, (ii) NAI's obligation to pay any Issue 97-10 Prepayment as required
by subparagraph 4(C) of the Purchase Agreement, and (iii) any damages incurred
by BNPLC because of (A) NAI's breach of the Purchase Agreement or (B) the
rejection by NAI of the Purchase Agreement in any bankruptcy or insolvency
proceeding.

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

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

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

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

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

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

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

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

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

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

        "UCC" shall mean the Uniform Commercial Code as in effect in the State
of California from time to time, and the Uniform Commercial Code as in effect in
any other jurisdiction which governs the

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<PAGE>   12

perfection or non-perfection of the pledge of and security interests in the
Collateral created by this Agreement.

        "UNAFFILIATED DEPOSIT TAKER" means (1) the bank designated as provided
in Section 3.2 to act as the initial Deposit Taker for BNPLC and the
Participants, or (2) any other Deposit Taker designated as provided in Article
IV prior to the Base Rent Commencement Date (All Buildings) (and thus having to
meet the requirements of Section 4.2).

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

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

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

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

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

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

        Section 1.5 References and Titles. All references in this Agreement to
Attachments, Articles, Sections, subsections, and other subdivisions refer to
the Attachments, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any subdivision are for convenience only and do not constitute any part of
any such subdivision and shall be disregarded in construing the language
contained in this Agreement. The words "this Agreement", "herein", "hereof",
"hereby", "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited. The
phrases "this Article," "this Section" and "this subsection" and similar phrases
refer only to the Articles, Sections or subsections hereof in which the phrase
occurs. The word "or" is not exclusive, and the word "including" (in all of its
forms) means "including without limitation". Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless the
context otherwise requires.

                          ARTICLE II SECURITY INTEREST

        Section 2.1 Pledge and Grant of Security Interest. As security for the
Secured Obligations, NAI hereby pledges and assigns to Agent (for the ratable
benefit of BNPLC and the Participants) and grants to Agent (for the ratable
benefit of BNPLC and the Participants) a continuing security interest and

                                      -7-
<PAGE>   13

lien in and against all right, title and interest of NAI in and to the following
property, whether now owned or hereafter acquired by NAI (collectively and
severally, the "COLLATERAL"):

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

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

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

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

                  ARTICLE III DESIGNATION OF MINIMUM COLLATERAL
                      PERCENTAGE AND INITIAL DEPOSIT TAKER

        Section 3.1 Minimum Collateral Percentage. At all times the Collateral
Percentage shall be one hundred percent (100%).

        Section 3.2 Initial Deposit Taker. NAI has requested that BNPLC and the
Participants each designate The Bank of New York as its initial Deposit Taker,
and BNPLC and the Participants have agreed to do so with the understanding of
all parties that such Deposit Taker is an Unaffiliated Deposit Taker for
purposes of this Agreement. Contemporaneously with the execution of this
Agreement, such Deposit Taker is receiving a Notice of Security Agreement and
responding with a Deposit Taker's Acknowledgment and Agreement, as contemplated
in subsections 4.1.1 and 4.1.2 below.

                 ARTICLE IV PROVISIONS CONCERNING DEPOSIT TAKERS

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

                                      -8-
<PAGE>   14

               4.1.1 Such Person must have received from Agent and NAI a
        completed, executed Notice of Security Interest (a "NOTICE OF SECURITY
        INTEREST"), either in the form of ATTACHMENT 3 or in the form of
        ATTACHMENT 4 as described in Section 4.6, which specifically identifies
        any and all Accounts in which such Person shall hold Cash Collateral
        delivered to it pursuant to this Agreement and which designates Account
        Offices with respect to all such Accounts in New York or California.

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

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

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

        Section 4.2 Additional Requirement Prior to the Base Rent Commencement
Date (All Buildings). Prior to the Base Rent Commencement Date (All Buildings),
no Deposit Taker may be an Affiliate of BNPLC. However, on or after the Base
Rent Commencement Date (All Buildings): (1) BNPLC and BNPLC's Parent may each
designate BNPLC's Parent as its Deposit Taker pursuant to Section 4.5; (2) any
other Participant may designate itself as its Deposit Taker pursuant to Section
4.5, provided that the other Participant is not itself a Disqualified Deposit
Taker; and (3) pursuant to Section 4.6, Agent and NAI must promptly upon request
execute and deliver any properly completed Notice of Security Interest requested
by BNPLC or the applicable Participant to facilitate the designations
contemplated in this sentence.

        Section 4.3 Replacement of Participants Proposed by NAI. So long as no
Event of Default has occurred and is continuing, BNPLC shall not unreasonably
withhold its approval for a substitution under the Participation Agreement of a
new Participant proposed by NAI for any Participant, the Deposit Taker for whom
would no longer meet the requirements for an Initially Qualified Deposit Taker;
provided, however, that (A) the proposed substitution can be accomplished
without a release or breach by BNPLC of its rights and obligations under the
Participation Agreement; (B) the new Participant will agree (by executing a
Supplement and a supplement to the Participation Agreement as contemplated
therein and by other agreements as may be reasonably required by BNPLC and NAI)
to become a party to the Participation Agreement and to this Agreement, to
designate an Initially Qualified Deposit Taker as the Deposit Taker for it under
this Agreement and to accept a Percentage under the Participation Agreement
equal to the Percentage of the Participant to be replaced; (C) the new
Participant (or NAI) will provide the funds to pay the termination fee required
by Section 6.4 of the

                                      -9-
<PAGE>   15

Participation Agreement to accomplish the substitution; (D) NAI (or the new
Participant) agrees in writing to indemnify and defend BNPLC for any and all
Losses incurred by BNPLC in connection with or because of the substitution,
including the cost of preparing supplements to the Participation Agreement and
this Agreement and including any cost of defending and paying any claim asserted
by the Participant to be replaced because of the substitution (but not including
any liability of BNPLC to such Participant for damages caused by BNPLC's bad
faith or gross negligence in the performance of BNPLC's obligations under the
Participation Agreement prior to the substitution); (E) the new Participant
shall be a reputable financial institution having a net worth of no less than
seven and one half percent (7.5%) of total assets and total assets of no less
than $10,000,000,000.00 (all according to then recent audited financial
statements); and (F) in no event will BNPLC be required to approve a
substitution pursuant to this Section 4.3 which will replace a Participant that
is an Affiliate of BNPLC. BNPLC shall attempt in good faith to assist (and cause
BNPLC's Parent to attempt in good faith to assist) NAI in identifying a new
Participant that NAI may propose to substitute for an existing Participant
pursuant to this Section, as NAI may reasonably request from time to time.
However, in no event shall BNPLC itself, or any of its Affiliates, be required
to take the Percentage of any Participant to be replaced.

        Section 4.4 Mandatory Substitutions for Unaffiliated Deposit Takers and
Disqualified Deposit Takers.

               4.4.1 As of the Base Rent Commencement Date (All Buildings), the
        party for whom each Unaffiliated Deposit Taker is acting (i.e., BNPLC or
        the applicable Participant) shall designate a substitute Deposit Taker
        who is not an Unaffiliated Deposit Taker and cause the substitute to
        satisfy the requirements set forth in Section 4.1. (The substitutions
        required by this subsection will result in a transfer of Collateral from
        interest bearing accounts maintained with Unaffiliated Deposit Takers to
        non-interest bearing Accounts maintained with Deposit Takers that are
        not Unaffiliated Deposit Takers.)

               4.4.2 If, after the Base Rent Commencement Date (All Buildings),
        any Deposit Taker shall cease to satisfy the requirements set forth in
        Section 4.1, the party for whom such Disqualified Deposit Taker has been
        designated as Deposit Taker (i.e., BNPLC or the applicable Participant)
        shall promptly (1) provide notice thereof to Agent and NAI, and (2)
        designate a substitute Deposit Taker and cause the substitute to satisfy
        the requirements set forth in Section 4.1.

               4.4.3 Pending the designation of a substitute Deposit Taker when
        required by this Section 4.4 and the satisfaction by it of the
        requirements set forth in Section 4.1, Agent may withdraw Collateral
        held by the Deposit Taker to be replaced and deposit such Collateral
        with other Deposit Takers, subject to Section 5.3 below. If at any time
        no Deposit Takers have been designated that meet the requirements of
        Section 4.1 and, if applicable, Section 4.2, then Agent shall itself
        select one or more Deposit Takers for BNPLC and the Participants meeting
        such requirements.

        Section 4.5 Voluntary Substitution of Deposit Takers. With the written
approval of Agent, which approval will not be unreasonably withheld, BNPLC or
any Participant may at any time designate for itself a new Deposit Taker (in
replacement of any prior Deposit Taker acting for it hereunder); provided, the
Person so designated has satisfied the requirements set forth in Section 4.1;
and, provided

                                      -10-
<PAGE>   16

further, unless the designation of a new Deposit Taker is required by Section
4.4, at the time of the replacement such Person must be an Initially Qualified
Deposit Taker.

        Section 4.6 Delivery of Notice of Security Interest by NAI and Agent. To
the extent required for the designation of a new Deposit Taker by BNPLC or any
Participant pursuant to Section 4.5, or to permit the substitution or
replacement of a Deposit Taker for BNPLC or any Participant as provided in
Sections 4.4 and 4.5, NAI and Agent shall promptly execute and deliver any
properly completed Notice of Security Interest requested by BNPLC or the
applicable Participant. The form of Notice of Security Agreement attached as
ATTACHMENT 3 shall be used for any Deposit Taker other than an Unaffiliated
Deposit Taker. The form of Notice of Security Agreement attached as ATTACHMENT 4
shall be used for any Unaffiliated Deposit Taker.

        In the case of any Notice of Security Agreement to be used for an
Unaffiliated Deposit Taker, the form attached as ATTACHMENT 4 shall be completed
by the insertion (as suggested by the clause in brackets at the end of the
Acknowledgment and Agreement which is part of such form) of a description of how
interest will be calculated on Collateral held by such Unaffiliated Deposit
Taker from time to time. The Notice and Agreement used for the initial Deposit
Taker (designated as provided in Section 3.2) confirms that such Deposit Taker
will pay interest at a rate, initially, equal to 6.1%. NAI acknowledges,
however, that such Notice and Agreement also gives the initial Deposit Taker the
right to adjust such rate from time to time, and neither BNPLC nor Agent nor any
Participant has assured NAI of any minimum rate of interest or of any method of
calculating interest on Collateral held from time to time by any other
Unaffiliated Deposit Taker. Any party (be it BNPLC or any Participant or Agent)
designating another Unaffiliated Deposit Taker to act as a replacement of the
initial Deposit Taker, as provided in other provisions of this Agreement, will
attempt in good faith to persuade the replacement to pay interest on Collateral
at a reasonable rate for time deposits, but no such party shall have any
liability hereunder, nor shall NAI have any defense hereunder or under the other
Operative Documents, because of the refusal of the replacement to pay a rate of
interest satisfactory to NAI.

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

        Section 4.8 Attempted Setoff by Deposit Takers. By delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, without in each case first obtaining
the prior written authorization of Agent, Secured Obligations owed to it against
any Collateral held by it from time to time. Further, by delivery of a Deposit
Taker's Acknowledgment and Agreement, each Deposit Taker shall be required to
agree not to setoff or attempt a setoff, without in each case first obtaining
the prior written authorization of both NAI and Agent, obligations owed to it
other than Secured Obligations against any Collateral held by it from time to
time. Any Deposit Taker for BNPLC or a Participant shall not be permitted by
BNPLC or the applicable Participant, as the case may be, to violate such
agreements. However, NAI acknowledges

                                      -11-
<PAGE>   17

and agrees (without limiting its right to recover damages from a Deposit Taker
that violates such agreements) that Agent shall not be responsible for, or be
deemed to have taken any action against NAI because of, any Deposit Taker's
violation of such agreements; and, neither BNPLC nor any Participant shall be
responsible for, or be deemed to have taken any action against NAI because of,
any violation of such agreements by a Deposit Taker for another party.

        Section 4.9 Deposit Taker Losses. Agent shall not be responsible for any
Deposit Taker Losses (including Excluded Deposit Taker Losses). However, Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant (other
than Excluded Deposit Taker Losses) shall reduce the amount of BNPLC's
Corresponding Obligations to Participants which are payable to such Participant
as provided in Section 2.2 of the Participation Agreement. Further, when Deposit
Taker Losses with respect to a Deposit Taker for a particular Participant (other
than Excluded Deposit Taker Losses) are incurred in excess of the payments of
Secured Obligations that such Participant would then have been entitled to
receive under the Participation Agreement but for such Deposit Taker Losses,
such Participant must immediately pay the excess to Agent as additional
Collateral hereunder, failing which NAI may recover any damages suffered by it
because of the Deposit Taker Losses from such Deposit Taker or such Participant.

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

        Section 4.11 Losses Resulting from Failure of an Unaffiliated Deposit
Taker to Comply with this Agreement. Neither Agent, nor BNPLC nor any
Participant shall be responsible to NAI or any other party hereto for Excluded
Deposit Taker Losses or for any Losses resulting from the acts or omissions of
any Unaffiliated Deposit Taker, including Losses caused by a failure of an
Unaffiliated Deposit Taker to comply with the terms of this Agreement.

              ARTICLE V DELIVERY AND MAINTENANCE OF CASH COLLATERAL

        Section 5.1 Delivery of Funds by NAI. On each Base Rent Date, NAI must
deliver to Agent, subject to the pledge and security interest created hereby,
funds as Cash Collateral then needed (if any) to cause the Value of the
Collateral to be no less than the Minimum Collateral Value. Each delivery of
funds required by the preceding sentence must be received by Agent no later than
12:00 noon (San Francisco time) on the date it is required; if received after
12:00 noon it will be considered for purposes of this Agreement and the other
Operative Documents as received on the next following Business Day. At least
five Business Days prior to any Base Rent Date upon which it is expected that
NAI will be

                                      -12-
<PAGE>   18

required to deliver additional funds pursuant to this Section, NAI shall notify
BNPLC, Agent and each of the Participants thereof and of the amount NAI expects
to deliver to Agent as Cash Collateral on the applicable Base Rent Date. In
addition to required deliveries of Cash Collateral as provided in the foregoing
provisions, NAI may on any date (whether or not a Base Rent Date) deliver
additional Cash Collateral to Agent as necessary to prevent any Default from
becoming an Event of Default. Upon receipt of any funds delivered to it by NAI
as Cash Collateral, Agent shall immediately deposit the same with the Deposit
Takers in accordance with the requirements of Sections 5.3 and 5.4 below.

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

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

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

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

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

        Section 5.4 Issuance and Redemption of Certificates of Deposit. Upon the
receipt of any deposit of Cash Collateral from Agent, each Deposit Taker shall
issue or cause to be issued a Certificate of Deposit evidencing the Account into
which such deposit is made and deliver such Certificate of Deposit to (or upon
the written direction of) Agent for the benefit of BNPLC and the Participants.
Each Certificate of Deposit shall be issued in an amount equal to the Value of
the Account which it evidences and shall otherwise be in the form indicated in
ATTACHMENT 1 to this Agreement. When Cash Collateral is deposited into an
Account that is already evidenced by an outstanding Certificate of Deposit held
by Agent, and when any Unaffiliated Deposit Taker is expected to add interest to
the principal balance of an Account that is already evidenced by an outstanding
Certificate of Deposit held by Agent, Agent will surrender the outstanding
Certificate of Deposit to the Deposit Taker that issued it

                                      -13-
<PAGE>   19

and will direct in writing that Deposit Taker to issue or cause the issue of a
new Certificate of Deposit in exchange, evidencing the total amount of Cash
Collateral then in the Account after the deposit or the addition of the
interest. A Deposit Taker that has issued or caused to be issued a Certificate
of Deposit may require the surrender of the Certificate of Deposit as a
condition to a withdrawal from the Account evidenced thereby, including any
withdrawal required or permitted by this Agreement. Upon surrender of a
Certificate of Deposit in connection with a withdrawal of less than all of the
Cash Collateral in the Account evidenced thereby, the applicable Deposit Taker
will concurrently issue or cause to be issued as directed in writing by the
Agent a new Certificate of Deposit to Agent, evidencing the balance of the Cash
Collateral remaining on deposit in the Account after the withdrawal.
Notwithstanding the foregoing, if any Certificate of Deposit held by Agent shall
be destroyed, lost or stolen, the Deposit Taker that issued the Certificate,
upon the written request of Agent, shall issue or cause to be issued a new
Certificate of Deposit to Agent in lieu of and in substitution for the
Certificate of Deposit so destroyed, lost or stolen. However, as applicant for
the substitute Certificate of Deposit, Agent must indemnify (at no cost to NAI)
the applicable Deposit Taker against any liability on the Certificate of Deposit
destroyed, lost or stolen, and Agent shall furnish to the Deposit Taker an
affidavit of an officer of Agent setting forth the fact of destruction, loss or
theft and confirming the status of Agent as holder of the Certificate of Deposit
immediately prior to the destruction, loss or theft. If any Certificate of
Deposit held by Agent shall become mutilated, the Deposit Taker that issued or
caused to be issued the Certificate, upon the written request of Agent, shall
issue or cause to be issued a new Certificate of Deposit to Agent in exchange
and substitution for the mutilated Certificate of Deposit. Agent shall hold all
Certificates of Deposit for the benefit of BNPLC and the Participants, subject
to the pledge and security interest created hereby.

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

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

                    ARTICLE VI WITHDRAWAL OF CASH COLLATERAL

NAI may not withdraw Cash Collateral, except as follows:

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

                                      -14-
<PAGE>   20

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

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

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

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

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

        Section 6.2 Withdrawal and Application of Cash Collateral to Reduce or
Satisfy the Secured Obligations to the Participants. To reduce the "Break Even
Price" or "Supplemental Payment" required under (and as defined in) the Purchase
Agreement (and, thus, to reduce the Secured Obligations), NAI may require Agent
to withdraw Cash Collateral then held by or for Agent pursuant to this Agreement
on the Designated Sale Date and to deliver the same on the Designated Sale Date
or on any date thereafter prior to an Event of Default (which delivery shall be
free and clear of all liens and security interests hereunder) directly to the
Participants in proportion to their respective rights to payment of BNPLC's
Corresponding Obligations to Participants and for application thereto or the
reduction thereof pursuant to Section 2.6 of the Participation Agreement;
provided, that:

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

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

               6.2.3 in any event, no withdrawals or payments directly to
        Participants shall be required by this Section 6.2 (or permitted over
        the objection of BNPLC) in excess of those required to satisfy BNPLC's
        Corresponding Obligations to Participants or to reduce such obligations
        to zero under the Participation Agreement.

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

                                      -15-
<PAGE>   21

and BNPLC of the required withdrawal and payment to BNPLC at least ten days
prior to the date upon which it is to occur.

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

                ARTICLE VII REPRESENTATIONS AND COVENANTS OF NAI

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

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

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

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

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

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

                                      -16-
<PAGE>   22

        order of, and no notice to or filing with any court, governmental
        authority or third party is required in connection with the pledge or
        grant by NAI of the security interest contemplated herein or the
        exercise by Agent of its rights and remedies hereunder.

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

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

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

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

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

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

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

               7.2.7 NAI will not take any action which would in any manner
        impair the value or enforceability of Agent's pledge of or security
        interest in any Collateral, nor will NAI fail to take any action which
        is required to prevent (and which NAI knows is required to prevent) an
        impairment of the value or enforceability of Agent's pledge of or
        security interest in any Collateral.

                                      -17-
<PAGE>   23

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

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

                     ARTICLE VIII AUTHORIZED ACTION BY AGENT

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

                         ARTICLE IX DEFAULT AND REMEDIES

        Section 9.1 Remedies. In addition to all other rights and remedies
granted to Agent, BNPLC or the Participants by this Agreement, the Improvements
Lease, the Purchase Agreement, the Participation Agreement, the UCC and other
Applicable Laws, Agent may, upon the occurrence and

                                      -18-
<PAGE>   24

during the continuance of any Event of Default, exercise any one or more of the
following rights and remedies, all of which will be in furtherance of its rights
as a secured party under the UCC:

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

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

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

                            ARTICLE X OTHER RECOURSE

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

                     ARTICLE XI PROVISIONS CONCERNING AGENT

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

                                      -19-
<PAGE>   25

        Section 11.1 Appointment and Authority. BNPLC and each Participant
hereby irrevocably authorizes Agent, and Agent hereby undertakes, to take all
actions and to exercise such powers under this Agreement as are specifically
delegated to Agent by the terms hereof, together with all other powers
reasonably incidental thereto. The relationship of Agent to the Participants is
only that of one commercial bank acting as collateral agent for others, and
nothing herein shall be construed to constitute Agent a trustee or other
fiduciary for any Participant or anyone claiming through or under a Participant
nor to impose on Agent duties and obligations other than those expressly
provided for in this Agreement. With respect to any matters not expressly
provided for in this Agreement and any matters which this Agreement places
within the discretion of Agent, Agent shall not be required to exercise any
discretion or take any action, and it may request instructions from BNPLC and
Participants with respect to any such matter, in which case it shall be required
to act or to refrain from acting (and shall be fully protected and free from
liability to all Participants in so acting or refraining from acting) upon the
instructions of the Majority, as defined in the Participation Agreement,
including itself as a Participant and BNPLC; provided, however, that Agent shall
not be required to take any action which exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to this Agreement
or the other documents referenced herein or to Applicable Law.

        Section 11.2 Exculpation, Agent's Reliance, Etc.. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that each
shall be liable for its own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent (1) may treat the rights of any
Participant under its Participation Agreement as continuing until Agent receives
written notice of the assignment or transfer of those rights in accordance with
such Participation Agreement, signed by such Participant and in form
satisfactory to Agent; (2) may consult with legal counsel (including counsel for
NAI), independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, unless the
action taken or omitted constitutes misconduct; (3) makes no warranty or
representation and shall not be responsible for any statements, warranties or
representations made in or in connection with this Agreement or the other
documents referenced herein; (4) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of the Transaction Documents on the part of any party thereto, or to
inspect the property (including the books and records) of any party thereto; (5)
shall not be responsible to any Participant for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document or any instrument or document furnished in connection therewith; (6)
may rely upon the representations and warranties of NAI, Participants and
Deposit Takers in exercising its powers hereunder; and (7) shall incur no
liability under or in respect of the Transaction Documents by acting upon any
notice, consent, certificate or other instrument or writing (including any
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.

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

                                      -20-
<PAGE>   26

        Section 11.4 Indemnity. Each Participant agrees to indemnify Agent (to
the extent not reimbursed by NAI within ten days after demand) from and against
such Participant's Percentage of any and all Losses of any kind or nature
whatsoever which to any extent (in whole or in part) may be imposed on, incurred
by, or asserted against Agent growing out of, resulting from or in any other way
associated with any of the Collateral, the Transaction Documents and the
transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LOSSES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED,
IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,
PROVIDED ONLY THAT NO PARTICIPANT SHALL BE OBLIGATED UNDER THIS SECTION TO
INDEMNIFY AGENT FOR THAT PORTION, IF ANY, OF ANY LOSS WHICH IS PROXIMATELY
CAUSED BY AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED IN A FINAL JUDGMENT RENDERED AGAINST AGENT. Cumulative of the
foregoing, each Participant agrees to reimburse Agent promptly upon demand for
such Participant's Percentage share of any costs and expenses to be paid to
Agent by NAI hereunder to the extent that Agent is not timely reimbursed by NAI
as provided in subsection 7.2.8. As used in this Section the term "Agent" shall
refer not only to the Person designated as such in the introductory paragraph of
this Agreement, but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.

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

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

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

                                      -21-
<PAGE>   27

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

                            ARTICLE XII MISCELLANEOUS

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

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

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

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

                                      -22-
<PAGE>   28

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

        Section 12.6 Amendment and Restatement. This Agreement amends, restates
and replaces the Prior Pledge Agreement referenced in the recitals at the
beginning of this Agreement.

                          [The signature pages follow.]

                                      -23-
<PAGE>   29

        IN WITNESS WHEREOF, NAI, BNPLC, Agent and the Participants whose
signatures appear below have caused this Pledge Agreement (Phase IV -
Improvements) to be executed as of October 2, 2000.

                                       "NAI"

                                       NETWORK APPLIANCE, INC.

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

<PAGE>   30

[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective as of October 2, 2000]

                                       "BNPLC"

                                       BNP LEASING CORPORATION

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

<PAGE>   31

[Continuation of signature pages to Pledge Agreement (Phase IV - Improvements)
dated to be effective as of October 2, 2000]

                                       "AGENT"

                                       BNP PARIBAS

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

                                       "PARTICIPANT"

                                       BNP PARIBAS

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

<PAGE>   32

                                  ATTACHMENT 1
                               TO PLEDGE AGREEMENT

        The form of Certificate of Deposit used to evidence any Account
maintained with a Deposit Taker that is not an Unaffiliated Deposit Taker will
be as set forth in Annex 1 attached to and made a part of the ATTACHMENT 1. The
form of Certificate of Deposit used to evidence any Account maintained with an
Unaffiliated Deposit Taker will be as set forth in Annex 2 attached to and made
a part of the ATTACHMENT 1.

        As the Annexes attached to this ATTACHMENT indicate, Accounts maintained
with Unaffiliated Deposit Takers (before the Base Rent Commencement Date (All
Buildings)) are expected to earn interest, whereas Accounts maintained by
Deposit Takers (after the Base Rent Commencement Date (All Buildings)) are
expected to be non-interest bearing. (See subparagraph 3(b) of the Improvements
Lease where the impact of non-interest bearing Accounts on Base Rent accruing
thereunder is explained.)

<PAGE>   33

                                     ANNEX 1
                       TO ATTACHMENT 1 TO PLEDGE AGREEMENT

                             CERTIFICATE OF DEPOSIT

                                 (No. _________)

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

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

PAYABLE TO
THE ORDER OF:         BNP Paribas, as Agent under the Pledge Agreement
                      (Phase IV-Improvements) dated as of October 2, 2000, among
                      Network Appliance, Inc., BNP Leasing Corporation, BNP
                      Paribas and any other financial institutions which are
                      from time to time Participants under such Pledge Agreement
                      (Phase IV-Improvements) and BNP Paribas, acting in its
                      capacity as agent for BNPLC and the Participants

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

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

                                       -----------------------------------------
                                                 Authorized Signature

                                      -2-
<PAGE>   34

                                     ANNEX 2
                       TO ATTACHMENT 1 TO PLEDGE AGREEMENT

                             CERTIFICATE OF DEPOSIT

                                 (No. _________)

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

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

PAYABLE TO
THE ORDER OF:         BNP Paribas, as Agent under the Pledge Agreement
                      (Phase IV-Improvements) dated as of October 2, 2000, among
                      Network Appliance, Inc., BNP Leasing Corporation, BNP
                      Paribas and any other financial institutions which are
                      from time to time Participants under such Pledge Agreement
                      (Phase IV-Improvements) and BNP Paribas, acting in its
                      capacity as agent for BNPLC and the Participants

                                                                      Dollars
--------------------------------------------------------------------------------
in current funds, with interest as provided below, upon the first business day
that is at least seven days after presentment of this certificate properly
endorsed.

Interest will accrue on the deposit evidenced by this certificate from the date
first written above to the first business day of the first calendar month after
the date first written above at the rate of _____ percent (___%) per annum.

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

                                       -----------------------------------------
                                                 Authorized Signature

<PAGE>   35

                                  ATTACHMENT 2
                               TO PLEDGE AGREEMENT

                         SUPPLEMENT TO PLEDGE AGREEMENT

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

BNP Paribas
_______________
_______________
_______________

Network Appliance, Inc.
_______________
_______________
_______________

        1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Supplement have the respective meanings given to those terms in the Pledge
Agreement.

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

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

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

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

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

<PAGE>   36

                                  ATTACHMENT 3
                               TO PLEDGE AGREEMENT

                           NOTICE OF SECURITY INTEREST

                               [__________, 20__]

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

        1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Notice have the respective meanings given to those terms in the Pledge
Agreement.

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

                     Account               Account              Account
                       Type                 Office              Number
                 -----------------       -------------         ----------

                 Time Deposit
                                         -------------         ----------

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

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

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

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

<PAGE>   37

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

               (c) issue and redeem Certificates of Deposit evidencing such
        Account, as directed by Agent pursuant to the Pledge Agreement,
        including Sections 5.4 and 5.5 of the Pledge Agreement which provide as
        follows:

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

                      Section 5.5 Status of the Accounts Under the Reserve
               Requirement Regulations. Deposit Takers shall be permitted to
               structure the Accounts as nonpersonal time deposits under 12
               C.F.R., Part II, Chapter 204 (commonly known as "Regulation D").
               Accordingly, each Deposit Taker may require at least seven days
               advance notice of any withdrawal or transfer of funds from
               Accounts it maintains and may limit the number of withdrawals or
               transfers from such Accounts to no more than six in any calendar
               month, notwithstanding anything to the contrary herein or in any
               deposit

                                      -2-
<PAGE>   38

               agreement that NAI and any Deposit Taker may enter into with
               respect to any Account....;

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

               (e) upon receipt of notice from Agent that an Event of Default
        has occurred, transfer and deliver to Agent or its nominee, together
        with all necessary endorsements, all or such portion of the Collateral
        held by Deposit Taker as Agent shall direct; provided, however, that in
        connection therewith Deposit Taker may require compliance by Agent with
        the provisions in Sections 5.4 and 5.5 of the Pledge Agreement for
        redemption of any outstanding Certificate of Deposit which evidences the
        Account.

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

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

                                       "AGENT"
                                       BNP Paribas

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

                                       "NAI"
                                       Network Appliance, Inc.

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

                                      -3-
<PAGE>   39

                          ACKNOWLEDGMENT AND AGREEMENT
                                OF DEPOSIT TAKER

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

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

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

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

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

               (e) Deposit Taker shall not allow the withdrawal of funds from
        such Account by any Person other than Agent, or (ii) WITHOUT IN EACH
        CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, setoff or
        attempt to setoff any amount (including Secured Obligations owed to
        Deposit Taker, if any) against any Collateral held from time to time by
        Deposit Taker.

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

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

                                       [Date]

                                      -4-
<PAGE>   40

                                     ANNEX 1
                         TO NOTICE OF SECURITY INTEREST

                             CERTIFICATE OF DEPOSIT

                                 (No. _________)

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

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

PAYABLE TO
THE ORDER OF:         BNP PARIBAS, as Agent under the Pledge Agreement
                      (Phase IV-Improvements) dated as of October 2, 2000, among
                      Network Appliance, Inc., BNP Leasing Corporation, BNP
                      Paribas and any other financial institutions which are
                      from time to time Participants under such Pledge Agreement
                      (Phase IV-Improvements) and BNP Paribas, acting in its
                      capacity as agent for BNPLC and the Participants

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

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

                                       -----------------------------------------
                                                Authorized Signature

<PAGE>   41

                                  ATTACHMENT 4

                               TO PLEDGE AGREEMENT

                           NOTICE OF SECURITY INTEREST

                               [__________, 20__]

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

        1. Reference is made to the Pledge Agreement (Phase IV - Improvements)
(the "PLEDGE AGREEMENT") dated as of October 2, 2000 among Network Appliance,
Inc. ("NAI"), BNP Leasing Corporation ("BNPLC"), BNP Paribas and any other
financial institutions which are from time to time Participants under such
Pledge Agreement (collectively, the "PARTICIPANTS") and BNP Paribas, acting in
its capacity as agent for BNPLC and the Participants (in such capacity,
"AGENT"). Unless otherwise defined herein, all capitalized terms used in this
Notice have the respective meanings given to those terms in the Pledge
Agreement.

        2. NAI has informed Agent that NAI has established with the addressee of
this Notice ("DEPOSIT TAKER") the following Account in the name of Agent to be
maintained at the following Account Office:

                     Account               Account              Account
                       Type                 Office              Number
                 -----------------       -------------         ----------

                 Time Deposit
                                         -------------         ----------

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

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

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

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

<PAGE>   42

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

                (c) cause Certificates of Deposit evidencing such Account to be
        issued and redeemed, as directed by Agent in writing pursuant to this
        Notice and in accordance with Sections 5.4 and 5.5 of the Pledge
        Agreement, which provide as follows:

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

                        Section 5.5 Status of the Accounts Under the Reserve
                Requirement Regulations. Deposit Takers shall be permitted to
                structure the Accounts as nonpersonal time deposits under 12
                C.F.R., Part II, Chapter 204 (commonly known as "Regulation D").
                Accordingly, each Deposit Taker may require at least seven days
                advance notice of any withdrawal or transfer of funds from
                Accounts it maintains and may limit the number of withdrawals or
                transfers from such Accounts to no more than six in any calendar
                month, notwithstanding anything to the contrary herein or in any
                deposit

                                      -2-
<PAGE>   43
                agreement that NAI and any Deposit Taker may enter into with
                respect to any Account....;

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

                (e) upon receipt of written notice from Agent that an Event of
        Default has occurred, transfer and deliver to Agent or its nominee,
        together with all necessary endorsements, all or such portion of the
        Collateral held by Deposit Taker as Agent shall direct; provided,
        however, that in connection therewith Agent shall comply with the
        provisions in Sections 5.4 and 5.5 of the Pledge Agreement for
        redemption of any outstanding Certificate of Deposit which evidences the
        Account.

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

        6. Concerning the Deposit Taker, Agent and NAI agree as follows:

                (a) Compensation

                        (i) Contemporaneously with the time of execution of this
                Notice, NAI or Agent is executing a separate fee schedule or
                agreement submitted by Deposit Taker, describing the fees NAI or
                Agent, as applicable, will pay to Deposit Taker for maintaining
                the Account as described herein.

                        (ii) Agent and NAI, jointly and severally, shall be
                liable for and shall reimburse and indemnify Deposit Taker and
                hold Deposit Taker harmless from and against any and all claims,
                losses, liabilities, costs, damages or expenses (including
                reasonable attorneys' fees and expenses) (collectively,
                "Losses") arising from or in connection with or related to this
                Notice or being Deposit Taker hereunder (including but not
                limited to Losses incurred by Deposit Taker in connection with
                its successful defense, in whole or in part, of any claim of
                gross negligence or willful misconduct on its part), provided,
                however, that nothing contained herein shall require Deposit
                Taker to be indemnified for Losses caused by its gross
                negligence or willful misconduct.

                (b) Certain Rights of the Deposit Taker

                        (i) The duties, responsibilities and obligations of
                Deposit Taker shall be limited to those expressly set forth
                herein and no duties, responsibilities or obligations

                                      -3-
<PAGE>   44

                shall be inferred or implied. Deposit Taker shall not be subject
                to, nor required to comply with, any other agreement between or
                among any or all of the other parties hereto or to which any
                such party is a party, even though reference thereto may be made
                herein, or to comply with any direction or instruction (other
                than those contained herein or delivered in accordance with this
                Notice) from any party any entity acting on its behalf. Deposit
                Taker shall not be required to, and shall not, expend or risk
                any of its own funds or otherwise incur any financial liability
                in the performance of any of its duties hereunder.

                        (ii) If at any time Deposit Taker is served with any
                judicial or administrative order, judgment, decree, writ or
                other form of judicial or administrative process which in any
                way affects the Account (including but not limited to orders of
                attachment or garnishment or other forms of levies or
                injunctions or stays relating to the transfer of Account),
                Deposit Taker is authorized to comply therewith as it or its
                legal counsel of its own choosing deems necessary; and if
                Deposit Taker complies with any such judicial or administrative
                order, judgment, decree, writ or other form of judicial or
                administrative process, Deposit Taker shall not be liable to any
                of the parties hereto or to any other person or entity even
                though such order, judgment, decree, writ or process may be
                subsequently modified or vacated or otherwise determined to have
                been without legal force or effect.

                        (iii) Deposit Taker shall not be liable for any action
                taken or omitted or for any loss or injury resulting from its
                actions or its performance or lack of performance of its duties
                hereunder in the absence of gross negligence or willful
                misconduct on its part. In no event shall Deposit Taker be
                liable (x) for acting in accordance with or relying upon any
                instruction, notice, demand, certificate or document from Agent
                or any officer of Agent acting or purporting to act on behalf of
                Agent, (y) for any consequential, punitive or special damages,
                (z) for the acts or omissions of its nominees, correspondents,
                designees, subagents or subcustodians.

                        (iv) Deposit Taker may consult with legal counsel as to
                any matter relating to this Notice, and Deposit Taker shall not
                incur any liability in acting in good faith in accordance with
                any advice from such counsel. All reasonable fees charged by
                such counsel in connection with any such consultation shall be
                subject to reimbursement by Agent and NAI pursuant to
                subparagraph 6(a)(ii) above.

                        (v) Deposit Taker shall not incur any liability for not
                performing any act or fulfilling any duty, obligation or
                responsibility hereunder by reason of any occurrence beyond the
                control of Deposit Taker (including but not limited to any act
                or provision of any present or future law or regulation or
                governmental authority, any act of God or war, or the
                unavailability of the Federal Reserve Bank wire or telex or
                other wire or communication facility).

                        (vi) Deposit Taker shall not be responsible in any
                respect for the form, execution, validity, value or genuineness
                of documents or securities deposited hereunder, or for any
                description therein, or for the identity, authority or rights of
                persons executing or delivering or purporting to execute or
                deliver any such document, security or endorsement.

                                      -4-
<PAGE>   45

                        (vii) In the event of any ambiguity or uncertainty
                hereunder or in any notice, instruction or other communication
                received by Deposit Taker hereunder, Deposit Taker may, in its
                sole discretion, refrain from taking any action other than
                retain possession of the Account, unless Deposit Taker receives
                written instructions, signed by Agent, which eliminates such
                ambiguity or uncertainty.

                (c)     Notices and Payment Instructions.

                        (i) Notices, instructions or other communications shall
                be in writing and shall be sent to the addresses set forth below
                by any of the following means: (A) personal service, with proof
                of delivery retained; (B) telecopy (if confirmed in writing sent
                by United States first class mail, return receipt requested); or
                (C) registered or certified first class mail, return receipt
                requested. Any party may change its address set forth below by
                notice given to the other parties in the manner described in
                this subparagraph.

                            Address of Agent:

                            BNP Paribas, San Francisco
                            180 Montgomery Street
                            San Francisco, California 94104
                            Attention: Gavin Holles
                            Telecopy: (415) 296-8954

                            And for any type of funding notices, with a copy to:

                            BNP Paribas, San Francisco
                            180 Montgomery Street
                            San Francisco, California 94104
                            Attention: Paggie Wong/Tom Kunz
                            Telecopy: (415) 956-4230

                            Address of NAI:

                            Network Appliance, Inc.
                            Attn: Leslie Paulides
                            2770 San Thomas Expressway
                            Santa Clara, CA 95051
                            Telecopy: (408) 367-3452

                            Address of Deposit Taker

                            The Bank of New York
                            Insurance Trust & Escrow - 21W
                            Attention: Sharon Young
                            101 Barclay Street
                            New York, New York 10286
                            Telecopy : (212) 815-7181

                                      -5-
<PAGE>   46

                        (ii) Notices to Deposit Taker shall be deemed to be
                given when actually received by Deposit Taker's Corporate Trust
                Department. Deposit Taker is authorized to comply with and rely
                upon any notices, instructions or other communications believed
                by it to have been sent or given by the Agent or by a person or
                persons authorized by the Agent. Whenever under the terms hereof
                the time for giving a notice or performing an act falls upon a
                Saturday, Sunday, or banking holiday, such time shall be
                extended to the next day on which Deposit Taker is open for
                business.

                        (iii) All funds to be deposited into the Account shall
                be paid in immediately available funds by wire transfer to:

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

                or in such other manner as Deposit Taker may designate in a
                notice to Agent and NAI.

                        (iv) All funds to paid from the Account by Deposit Taker
                to Agent shall be paid in immediately available funds by wire
                transfer to:

                             Federal Reserve Bank of New York
                             ABA 026007689 BNP Paribas
                             /BNP/ BNP San Francisco
                             /AC/ 14334000176
                             /Ref/ NAI Collateral Withdrawal

                (d)     Resignation and Removal

                        (i) Agent may remove Deposit Taker at any time by giving
                to NAI and to Deposit Taker thirty (30) calendar days' prior
                notice in writing signed by Agent. Deposit Taker may resign at
                any time by giving to Agent and NAI fifteen (15) calendar days'
                prior written notice thereof.

                        (ii) Upon the effective date of any removal or
                resignation of Deposit Taker, Agent must surrender any
                outstanding Certificate of Deposit that evidences the Account to
                Deposit Taker, whereupon Deposit Taker shall deliver the funds
                then held by it in the Account to Agent in accordance with
                payment instructions herein. Although Agent may be required by
                the Pledge Agreement to promptly distribute such funds to one or
                more successor Deposit Takers, Deposit Taker shall have no
                liability or responsibility whatsoever for the proper
                distribution of application by Agent of any such funds paid to
                Agent by Deposit Taker or for the designation or appointment of
                any successor Deposit Takers.

                        (iii) Upon delivery of the funds deposited in the
                Account to Agent as provided in the preceding subparagraph,
                Deposit Taker shall have no further duties, responsibilities or
                obligations hereunder.

                                      -6-
<PAGE>   47

        7.      NAI and Agent further agree with Deposit Taker as follows:

                (a) Governing Law. This Notice shall be interpreted, construed,
        enforced and administered in accordance with the internal substantive
        laws (and not the choice of law rules) of the State of New York. Each of
        the parties hereto (i.e., Agent, NAI and Deposit Taker) hereby submits
        to the personal jurisdiction of and each agrees that all proceedings
        relating hereto shall be brought in courts located within the City and
        State of New York or elsewhere in the United States as Deposit Taker may
        select. Each of the parties hereto also hereby waives the right to trial
        by jury and to assert counterclaims in any such proceedings. To the
        extent that in any jurisdiction any party hereto may be entitled to
        claim, for itself or its assets, immunity from suit, execution,
        attachment (whether before or after judgment) or other legal process,
        each hereby irrevocably agrees not to claim, and hereby waives, such
        immunity. Each party hereto also waives personal service of process and
        consents to service of process by certified or registered mail, return
        receipt requested, directed to it at the address last specified for
        notices hereunder, and such service shall be deemed completed ten (10)
        calendar days after the same is so mailed.

                (b) Amendment. Except as otherwise permitted herein, this Notice
        may be modified only by a written amendment signed by all the parties
        hereto, and no waiver of any provision hereof shall be effective unless
        expressed in a writing signed by the party to be charged.

                (c) Waiver. The rights and remedies conferred by this Notice
        upon the parties hereto shall be cumulative, and the exercise or waiver
        of any such right or remedy shall not preclude or inhibit the exercise
        of any additional rights or remedies. The waiver of any right or remedy
        hereunder shall not preclude the subsequent exercise of such right or
        remedy.

                (d) Representations and Warranties. Each party hereto hereby
        represents and warrants (a) that this Notice been duly authorized,
        executed and delivered on its behalf and constitutes its legal, valid
        and binding obligation and (b) that the execution, delivery and
        performance of the terms of this Notice by such party do not and will
        not violate any applicable law or regulation.

                (e) Unenforceability. The invalidity, illegality or
        unenforceability of any provision of this Notice shall in no way affect
        the validity, legality or enforceability of any other provision; and if
        any provision is held to be enforceable as a matter of law, the other
        provisions shall not be affected thereby and shall remain in full force
        and effect.

                (f) Entire Agreement. As between NAI and Agent, on the one hand,
        and Deposit Taker, on the other, this Notice (including the
        Acknowledgment and Agreement of Deposit Taker attached hereto and made a
        part hereof) shall constitute the entire agreement of the parties with
        respect to the subject matter hereof and supersedes all prior oral or
        written agreements in regard thereto. As between NAI and Agent, however,
        nothing contained in this Notice will be construed to impair the rights
        of Agent under the Pledge Agreement.

                (g) Termination. This Notice shall terminate upon the
        distribution of all property from the Account as provided herein.

                                      -7-
<PAGE>   48

                (h) Counterparts. This Notice may be executed by each of the
        parties hereto in any number of counterparts, each of which counterpart,
        when so executed and delivered, shall be deemed to be an original and
        all such counterparts shall together constitute one and the same
        agreement.

                (i) Taxes. The Deposit Taker does not have any interest in the
        property deposited in the Account hereunder but is serving as the bailee
        of Agent only and having only possession thereof. Pursuant to
        subparagraph 6(a)(ii) above, Deposit Taker shall be entitled to be
        reimbursed and indemnified upon request for any transfer taxes or other
        taxes relating to the Accounts incurred in connection herewith. Any
        payments of income from the Account shall be subject to withholding
        regulations then in force with respect to United States taxes. The other
        parties hereto will provide the Deposit Taker with appropriate W-9 forms
        for tax I.D., number certifications, or W-8 forms for non-resident alien
        certifications. It is understood that the Deposit Taker shall be
        responsible for income reporting only with respect to income earned on
        the Account and is not responsible for any other reporting.

                (j) Survival. The provisions of paragraphs 6(a) and 7(i) shall
        survive the termination of this Notice or the resignation or removal of
        the Deposit Taker.

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

                                                      "AGENT"
                                                      BNP Paribas

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

                                                      "NAI"
                                                      Network Appliance, Inc.

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

                                      -8-
<PAGE>   49

                          ACKNOWLEDGMENT AND AGREEMENT
                                OF DEPOSIT TAKER

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

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

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

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

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

                (e) Deposit Taker shall not allow the withdrawal of funds from
        such Account by any Person other than Agent, or (ii) WITHOUT IN EACH
        CASE FIRST OBTAINING THE PRIOR WRITTEN AUTHORIZATION OF AGENT, setoff or
        attempt to setoff any amount (including Secured Obligations owed to
        Deposit Taker, if any) against any Collateral held from time to time by
        Deposit Taker.

        Deposit Taker further agrees that the Account described in the foregoing
Notice of Security Agreement will bear interest at the rate or rates specified
by Deposit Taker in the Certificates of Deposit it from time to time issues or
cause to be issued to evidence such Account. The rate or rates specified by
Deposit Taker in the Certificates of Deposit issued by it will be established as
follows:

[DESCRIBE HOW RATES FOR CD'S WILL BE ESTABLISHED. THESE WILL BE THE RATES USED
TO "FILL IN THE BLANK" FOR THE INTEREST RATE PROVISION OF EACH CERTIFICATE OF
DEPOSIT.]

        All accrued unpaid interest earned on the Account will be added to the
principal balance of the Account on the first Business Day of each calendar
month. If for any reason Agent shall withdraw or be paid all principal in the
Account on a day other than the first Business Day of any calendar month, then
any accrued, unpaid interest on the Account to the date of such withdrawal or
payment will also be paid to Agent by Deposit Taker on the date of such
withdrawal or payment.

                                      -9-
<PAGE>   50

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

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

                                        [Date]

                                      -10-
<PAGE>   51

                                     ANNEX 1
                         TO NOTICE OF SECURITY INTEREST

                             CERTIFICATE OF DEPOSIT

                                 (No. _________)

                               [_________, _____]

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

PAYABLE TO
THE ORDER OF:           BNP PARIBAS, as Agent under the Pledge Agreement (Phase
                        IV-Improvements) dated as of October 2, 2000, among
                        Network Appliance, Inc., BNP Leasing Corporation, BNP
                        Paribas and any other financial institutions which are
                        from time to time Participants under such Pledge
                        Agreement (Phase IV-Improvements) and BNP Paribas,
                        acting in its capacity as agent for BNPLC and the
                        Participants

                                                                         Dollars
---------------------------------------------------------------------- ---------
in current funds, with interest as provided below, upon the first business day
that is at least seven days after presentment of this certificate properly
endorsed.

        Interest will accrue on the deposit evidenced by this certificate from
the date first written above to the first business day of the first calendar
month after the date first written above at the rate of _____ percent (___%) per
annum.

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

                                          --------------------------------------
                                                   Authorized Signature

<PAGE>   52

                                  ATTACHMENT 5
                               TO PLEDGE AGREEMENT

                        EXAMPLES OF CALCULATIONS REQUIRED
                         TO AVOID A COLLATERAL IMBALANCE

        The examples below are provided to illustrate the calculations required
for allocations of Cash Collateral in a manner that will avoid a Collateral
Imbalance. The examples are not intended to reflect actual numbers under this
Agreement or actual Percentages of BNPLC or any of the Participants; nor are the
examples intended to provide a formula for the allocations that would be
appropriate in every case.

                                  EXAMPLE NO. 1

Assumptions:

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

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

<TABLE>
        <S>                                                                     <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 (All
        Buildings) was $12,000,000 (reflecting a Collateral Percentage of 100%
        times Stipulated Loss Value).

4.      On the Base Rent Commencement Date (All Buildings), NAI had delivered to
        Agent Cash Collateral of $12,000,000, equal to the Minimum Collateral
        Value, as required by Section 5.1 of this Agreement.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, Agent would be required to allocate the $12,000,000 to the
Deposit Takers for BNPLC and the Participants as follows:

<TABLE>
        <S>                                                                               <C>
        A.   BNPLC's Deposit Taker (5% of Minimum Collateral Value)..........................$600,000
        B.   Participant A's Deposit Taker (50% of Minimum Collateral Value)...............$6,000,000
        C.   Participant B's  Deposit Taker (45% of Minimum Collateral Value)..............$5,400,000
                                                                                           ----------
        TOTAL ............................................................................$12,000,000
</TABLE>

<PAGE>   53

                                  EXAMPLE NO. 2

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

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

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

<TABLE>
        <S>                                                                               <C>
        A.   BNPLC's Deposit Taker (5% of Minimum Collateral Value)..........................$600,000
        B.   Participant A's Deposit Taker (40% of Minimum Collateral Value).............. $4,800,000
        C.   Participant B's Deposit Taker (35% of Minimum Collateral Value).............. $4,200,000
        D.   Participant C's  Deposit Taker (20% of Minimum Collateral Value ............. $2,400,000
                                                                                           ----------
        TOTAL ............................................................................$12,000,000
</TABLE>

                                      -2-
<PAGE>   54

                                  ATTACHMENT 6
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT TO
                         WITHDRAW EXCESS CASH COLLATERAL

                                [________, _____]

BNP Paribas
[address of BNP]

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

               ____________________________ Dollars ($__________)

on the following date:

                                __________, ____

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

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

               ____________________________ Dollars ($__________),

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

               ____________________________ Dollars ($__________).

Such Minimum Collateral Value equals the Collateral Percentage of:

<PAGE>   55

                           __________ percent (___%),

times the Stipulated Loss Value of:

               ____________________________ Dollars ($__________).

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

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

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

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

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

                                       Network Appliance, Inc.

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

[cc BNPLC and all Participants]

                                      -2-
<PAGE>   56

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

                               [_________, _____]

Deposit Takers on the
Attached Distribution List

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                                __________, ____

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

<TABLE>
<CAPTION>
      Deposit Taker                                 Account No.                          Amount
<S>                                       <C>                                      <C>
1.____________________                    _________________________________        $__________________

2.____________________                    _________________________________        $__________________

3.____________________                    _________________________________        $__________________

4.____________________                    _________________________________        $__________________

                                          TOTAL WITHDRAWALS:                       $__________________
</TABLE>

                                          BNP Paribas, AS AGENT

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

[cc BNPLC and NAI]

                                      -3-
<PAGE>   57

                                  ATTACHMENT 7
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT OF
                         DIRECT PAYMENTS TO PARTICIPANTS

                               [_________, _____]

BNP Paribas
[address of BNP]

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                   ________________________ Dollars ($_______)

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

                                __________, ____

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

                           __________ percent (___%),

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

               ____________________________ Dollars ($__________).

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

        Please remember that the express terms of Certificates of Deposit issued
pursuant to the Pledge Agreement require presentment of the Certificates of
Deposit seven days before Cash Collateral is to be withdrawn from the Accounts
they evidence. Accordingly, you must present Certificates of Deposit to

<PAGE>   58

Deposit Takers seven days prior to the withdrawal of Cash Collateral required by
this notice. For your convenience, we have attached a letter as Annex 1 to this
notice that you might execute and send to Deposit Takers to advise them of your
intent to withdraw and of your presentment of Certificates of Deposit as
required in connection therewith. The attached letter also sets forth the
amounts NAI believes you must withdraw from each Account to comply with
subsection 6.2.2 of the Pledge Agreement.

                                        Network Appliance, Inc.
                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

[cc BNPLC and all Participants]

                                      -2-
<PAGE>   59

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

                               [_________, _____]

Deposit Takers on the
Attached Distribution List

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                                __________, ____

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

<TABLE>
<CAPTION>
      Deposit Taker                                 Account No.                          Amount
<S>                                       <C>                                      <C>
1.______________________                  _________________________________        $__________________

2.______________________                  _________________________________        $__________________

3.______________________                  _________________________________        $__________________

4.______________________                  _________________________________        $__________________

                                          TOTAL WITHDRAWALS:                       $__________________
</TABLE>

                                          BNP Paribas, AS AGENT

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

[cc BNPLC and NAI]

                                      -3-
<PAGE>   60

                                  ATTACHMENT 8
                               TO PLEDGE AGREEMENT

                         NOTICE OF NAI'S REQUIREMENT OF
                             DIRECT PAYMENT TO BNPLC

                               [_________, _____]

BNP Paribas
[address of BNP]

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                   ________________________ Dollars ($_______)

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

                                __________, ____

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

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

<PAGE>   61

                                       Network Appliance, Inc.

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

[cc BNPLC]

                                      -2-
<PAGE>   62

                                     ANNEX 1
                        TO NAI'S NOTICE OF REQUIREMENT OF
                             DIRECT PAYMENT TO BNPLC

                               [_________, _____]

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

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                   ________________________ Dollars ($_______)

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

                              BNP PARIBAS, AS AGENT

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

[cc BNPLC and NAI]

                                      -3-
<PAGE>   63

                                  ATTACHMENT 9
                               TO PLEDGE AGREEMENT

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

                               [_________, _____]

BNP Paribas
[address of BNP]

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

        Deposit Taker                     Account No.
 ____________________________          ___________________

 ____________________________          ___________________

Cash Collateral in the following amount:

                   ________________________ Dollars ($_______)

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

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

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

<PAGE>   64

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

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

                                       Network Appliance, Inc.
                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

[cc BNPLC]

                                      -2-
<PAGE>   65

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

                               [_________, _____]

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

        Re:     Pledge Agreement (Phase IV - Improvements) dated as of October
                2, 2000 among Network Appliance, Inc., BNP Leasing Corporation,
                BNP Paribas and any other financial institutions which are from
                time to time Participants under such Pledge Agreement (Phase IV
                - Improvements) and BNP Paribas, acting in its capacity as agent
                for BNPLC and the Participants

Gentlemen:

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

                   ________________________ Dollars ($_______)

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

                                  BNP PARIBAS, AS AGENT

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

[cc BNPLC and NAI]

                                      -3-
<PAGE>   66

                                   Schedule 1

                   Financial Covenants and Negative Covenants

        This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase IV - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of October 2, 2000 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase IV - Land) (the
"LAND LEASE" and, together with the Improvements Lease, the "LEASES") dated to
be effective as of the Effective Date, between BNPLC and NAI, (c) the Pledge
Agreement (Phase IV - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and BNP
Paribas, as a Participant and as agent for any financial institutions that
become Participants thereunder from time to time, and (d) the Pledge Agreement
(Phase IV - Land) (collectively with the Pledge Agreement (Improvements), the
"PLEDGE AGREEMENTS") dated to be effective as of the Effective Date, among
BNPLC, NAI, and BNP Paribas, as a Participant and as agent for any financial
institutions that become Participants thereunder from time to time.

                             PART I - DEFINED TERMS

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

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

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

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

        "DEBT" as used in this Exhibit shall have the meaning assigned to it in
        the Common Definitions and Provisions Agreements, where "Debt" of any
        Person is defined to mean (without duplication of any item): (a)
        indebtedness of such Person for borrowed money; (b) indebtedness of such
        Person for the deferred purchase price of property or services (except
        trade payables and accrued expenses constituting current liabilities in
        the ordinary course of business); (c) the face amount of any outstanding
        letters of credit issued for the account of such Person; (d) obligations
        of such Person arising under acceptance facilities; (e) guaranties,
        endorsements (other than for collection in the ordinary course of
        business) and other contingent obligations of such Person to purchase,
        to provide funds for payment, to provide funds to invest in any Person,
        or otherwise to assure a creditor against loss; (f) obligations of
        others secured by any Lien on property of such Person; (g) obligations
        of such

                                      -4-
<PAGE>   67

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

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

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

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

        "QUICK RATIO" means the ratio of:

                        (A) the sum (without duplication of any item) of the
                following assets of NAI and its Subsidiaries (determined on a
                consolidated basis): Collateral delivered and pledged under the
                Pledge Agreements in accordance with the requirements thereof
                (if any); plus unencumbered cash; plus unencumbered short term
                cash investments; plus other unencumbered marketable securities
                which are classified as short term investments in accordance
                with GAAP; plus unencumbered accounts receivable, computed net
                of reserves for uncollectible amounts as determined in
                accordance with GAAP, to

                        (B) the sum (without duplication of any item) of (1) all
                liabilities of NAI and its Subsidiaries (determined on a
                consolidated basis) treated as current liabilities in accordance
                with

                                      -5-
<PAGE>   68

        GAAP, plus (2) other obligations included in total Debt of NAI and its
        Subsidiaries (determined on a consolidated basis), the payment of which
        is due on demand or will become due within one year after the date on
        which the applicable determination of Quick Ratio is required hereunder.

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

                PART II - FINANCIAL COVENANTS FOR LEASE AGREEMENT

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

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

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

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

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

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

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

                           PART III - OTHER COVENANTS

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

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

                                      -6-
<PAGE>   69

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

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

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

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

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

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

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

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

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

                                      -7-
<PAGE>   70

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

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

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

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

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

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

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

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

                                      -8-
<PAGE>   71

to an aggregated of $10,000,000.00, (e) loans to employees, officers, directors
to finance or refinance the purchase of equity securities of NAI.

        J. Dividends, Distributions. Declare or pay any dividend or distribution
either in cash, stock or any other property on NAI's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of
any class of NAI's stock now or hereafter outstanding.

                                      -9-<PAGE>   1
                                                                   EXHIBIT 10.74

                                 LEASE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

                                     BETWEEN

                             BNP LEASING CORPORATION

                                    ("BNPLC")

                                       AND

                             NETWORK APPLIANCE, INC.

                                     ("NAI")

                                 OCTOBER 2, 2000

                             (SUNNYVALE, CALIFORNIA)

<PAGE>   2

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
                                                                                          Page

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

2.      USE AND CONDITION OF THE PROPERTY.................................................4
        (a)    Use........................................................................4
        (b)    Condition of the Property..................................................4
        (c)    Consideration for and Scope of Waiver......................................5

3.      RENT..............................................................................5
        (a)    Base Rent Generally........................................................5
        (b)    Impact of Collateral Upon Formulas.........................................5
        (c)    Calculation of Base Rent...................................................6
        (d)    Additional Rent............................................................8
        (e)    Arrangement Fee............................................................8
        (f)    Commitment Fees............................................................8
        (g)    Administrative Agency Fees.................................................9
        (h)    Issue 97-10 Prepayments....................................................9
        (i)    No Demand or Setoff........................................................9
        (j)    Default Interest and Order of Application..................................9

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

5.      PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY....................12
        (a)    Impositions...............................................................12
        (b)    Increased Costs; Capital Adequacy Charges.................................12
        (c)    NAI's Payment of Other Losses; General Indemnification....................13
        (d)    Exceptions and Qualifications to Indemnities..............................15

6.      CONSTRUCTION.....................................................................17
        (a)    Construction Advances; Outstanding Construction Allowance.................17
</TABLE>

                                        i

<PAGE>   3
<TABLE>
<CAPTION>

<S>     <C>                                                                             <C>
        (b)    Calculation of Carrying Costs.............................................17
        (c)    Limits on the Amount of Carrying Costs....................................19
        (d)    NAI's Right to Control the Construction Project...........................19
        (e)    Landlord's Election to Continue Construction..............................19
        (f)    Powers Coupled With an Interest...........................................21
        (g)    Final Completion Notice...................................................21

7.      STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC.........................21

8.      ENVIRONMENTAL....................................................................22
        (a)    Environmental Covenants by NAI............................................22
        (b)    Right of BNPLC to do Remedial Work Not Performed by NAI...................23
        (c)    Environmental Inspections and Reviews.....................................23
        (d)    Communications Regarding Environmental Matters............................23

9.      INSURANCE REQUIRED AND CONDEMNATION..............................................24
        (a)    Liability Insurance.......................................................24
        (b)    Property Insurance........................................................25
        (c)    Failure to Obtain Insurance...............................................26
        (d)    Condemnation..............................................................26
        (e)    Waiver of Subrogation.....................................................27

10.     APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS...............................27
        (A)    Collection and Application of Insurance and Condemnation
               Proceeds Generally........................................................27
        (b)    Advances of Escrowed Proceeds to NAI......................................27
        (c)    Application of Escrowed Proceeds as a Qualified Prepayment................28
        (d)    Special Provisions Applicable After a CMA Termination Event or
               an Event of Default.......................................................28
        (e)    NAI's Obligation to Restore...............................................28
        (f)    Takings of All or Substantially All of the Property on or after
               the Base Rent Commencement Date (All Buildings)...........................29

11.     ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NAI CONCERNING THE
        PROPERTY.........................................................................29
        (a)    Compliance with Covenants and Laws........................................29
        (b)    Operation of the Property.................................................29
        (c)    Debts for Construction, Maintenance, Operation or Development.............31
        (d)    Repair, Maintenance, Alterations and Additions............................31
        (e)    Permitted Encumbrances and Development Documents..........................32
        (f)    Books and Records Concerning the Property.................................32

12.     FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO SCHEDULE 1..32

13.     FINANCIAL STATEMENTS AND OTHER REPORTS...........................................32
        (a)    Financial Statements; Required Notices; Certificates......................32
</TABLE>

                                       ii

<PAGE>   4

<TABLE>
<CAPTION>

<S>     <C>                                                                             <C>
14.     ASSIGNMENT AND SUBLETTING BY NAI.................................................34
        (a)    BNPLC's Consent Required..................................................34
        (b)    Standard for BNPLC's Consent to Assignments and Certain Other
               Matters...................................................................34
        (c)    Consent Not a Waiver......................................................34

15.     ASSIGNMENT BY BNPLC..............................................................35
        (a)    Restrictions on Transfers.................................................35
        (b)    Effect of Permitted Transfer or other Assignment by BNPLC.................35

16.     BNPLC'S RIGHT OF ACCESS..........................................................35

17.     EVENTS OF DEFAULT................................................................36

18.     REMEDIES.........................................................................38
        (a)    Basic Remedies............................................................38
        (b)    Notice Required So Long As the Purchase Option and NAI's
               Initial Remarketing Rights and Obligations Continue Under the
               Purchase Agreement........................................................39
        (c)    Enforceability............................................................40
        (d)    Remedies Cumulative.......................................................40

19.     DEFAULT BY BNPLC.................................................................41

20.     QUIET ENJOYMENT..................................................................41

21.     SURRENDER UPON TERMINATION.......................................................41

22.     HOLDING OVER BY NAI..............................................................41

23.     INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS...............42

24.     AMENDMENT AND RESTATEMENT........................................................42

                             EXHIBITS AND SCHEDULES

Exhibit A...............................................................Legal Description
Exhibit B..........................................................Insurance Requirements
Schedule 1.....................................Financial Covenants and Other Requirements
</TABLE>

                                      iii

<PAGE>   5

                                 LEASE AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

        This LEASE AGREEMENT (PHASE IV - IMPROVEMENTS) (this "IMPROVEMENTS
LEASE"), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
made and dated as of October 2, 2000, the Effective Date, ("EFFECTIVE DATE" and
other capitalized terms used and not otherwise defined in this Improvements
Lease are intended to have the meanings assigned to them in the Common
Definitions and Provisions Agreement (Phase IV - Improvements) executed by BNPLC
and NAI contemporaneously with this Improvements Lease. By this reference, the
Common Definitions and Provisions Agreement (Phase IV - Improvements) is
incorporated into and made a part of this Improvements Lease for all purposes.)

                                    RECITALS

        Pursuant to the Existing Contract, which covered the Land described in
Exhibit A, BNPLC has acquired the Land and the Improvements and any
appurtenances thereto from Seller.

        NAI and BNPLC have previously executed that Lease Agreement (Phase IV -
Improvements) dated as of December 20, 1999 (the "PRIOR LEASE AGREEMENT"). NAI
and BNPLC have agreed to amend, restate and replace the Prior Lease Agreement
with this Improvements Lease as provided in Paragraph 24 below.

        BNPLC and NAI have reached agreement as to the terms and conditions upon
which BNPLC is willing to lease the Improvements to NAI, and by this
Improvements Lease BNPLC and NAI desire to evidence such agreement.

                                GRANTING CLAUSES

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

        (1) any and all Improvements; and

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

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

        To the extent, but only to the extent, that assignable rights or
interests in, to or under the following have been acquired by BNPLC under the
Existing Contract or acquired by BNPLC pursuant to Paragraph 7 below, BNPLC also
hereby grants and assigns to NAI for the term of

<PAGE>   6

this Improvements Lease the right to use and enjoy (and, in the case of contract
rights, to enforce) such rights or interests of BNPLC:

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

        (b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances (including the right to receive rents
under and to otherwise enforce the Premises Lease) and Development Documents;
and

        (c) any permits, licenses, franchises, certificates, and other rights
and privileges against third parties related to the Real Property.

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

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

                          GENERAL TERMS AND CONDITIONS

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

        1.     TERM.

               (a) Scheduled Term. The term of this Improvements Lease (the
"TERM") shall commence on and include the Effective Date, and end on the first
Business Day of November, 2005, unless sooner terminated as expressly herein
provided.

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

               (c) Election by BNPLC to Terminate After an Issue 97-10 Election.
By notice to NAI BNPLC shall be entitled to terminate this Improvements Lease,
as BNPLC deems

                                       2
<PAGE>   7

appropriate in its sole and absolute discretion, at any time after receiving a
notice given by NAI to make any Issue 97-10 Election. Upon any termination of
this Improvements Lease by BNPLC pursuant to this subparagraph, NAI shall become
obligated to pay to BNPLC an Issue 97-10 Prepayment, which obligation will
survive the termination of this Improvements Lease.

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

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

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

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

               (e) Extension of the Term. The Term may be extended at the option
of NAI for two successive periods of five years each; provided, however, that
prior to any such extension the following conditions must have been satisfied:
(A) at least 180 days prior to the commencement of any such extension, BNPLC and
NAI must have agreed in writing upon, and received the consent and approval of
BNPLC's Parent and all other Participants to (1) a corresponding extension not
only to the date for the expiration of the Term specified above in this Section,
but also to the date specified in clause (1) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase IV -
Improvements), and (2) an adjustment to the Rent that NAI will be required to
pay for the extension, it being expected that the Rent for the extension may be
different than the Rent required for the original Term, and it being understood
that the Rent for any extension must in all events be satisfactory to both BNPLC
and NAI, each in its sole and absolute discretion; (B) no Event of Default shall
have occurred and be continuing at the time of NAI's exercise of its option to
extend; (C) prior to any such extension, NAI must have completed the
Construction Project in accordance with the Construction Management Agreement
and must not have made any Issue 97-10 Election; and (D) immediately prior to
any such extension, this Improvements Lease must remain in effect. With respect
to the condition that BNPLC and NAI must have agreed upon the Rent required for
any extension of the Term, neither NAI nor BNPLC is willing to submit itself to
a risk of liability or loss of rights hereunder for being judged unreasonable.
Accordingly, both NAI and BNPLC hereby disclaim any obligation express or
implied to be reasonable in negotiating the Rent for any such extension. Subject
to the changes to the Rent payable during any extension of

                                       3
<PAGE>   8

the Term as provided in this Paragraph, if NAI exercises its option to extend
the Term as provided in this Paragraph, this Improvements Lease shall continue
in full force and effect, and the leasehold estate hereby granted to NAI shall
continue without interruption and without any loss of priority over other
interests in or claims against the Property that may be created or arise after
the Effective Date and before the extension.

        2.     USE AND CONDITION OF THE PROPERTY.

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

                      (i) construction and development of the Construction
        Project;

                      (ii) administrative and office space;

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

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

                      (v) other lawful purposes (including NAI's research and
        development or production of products that are not of substantially the
        same type and character as those regularly sold by NAI in the ordinary
        course of its business as of the Effective Date) approved in advance and
        in writing by BNPLC, which approval will not be unreasonably withheld
        after completion of the Construction Project (but NAI acknowledges that
        BNPLC's withholding of such approval shall be reasonable if BNPLC
        determines in good faith that (1) giving the approval may materially
        increase BNPLC's risk of liability for any existing or future
        environmental problem, or (2) giving the approval is likely to
        substantially increase BNPLC's administrative burden of complying with
        or monitoring NAI's compliance with the requirements of this
        Improvements Lease or other Operative Documents).

        Nothing in this subparagraph will prevent a tenant under a Premises
Lease executed by NAI, as Landlord, prior to or concurrently with the Effective
Date, from using the space covered thereby for purposes expressly authorized by
the terms and conditions of such Premises Lease.

                (b) Condition of the Property. NAI ACKNOWLEDGES THAT IT HAS
CAREFULLY AND FULLY INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY IN ITS
PRESENT STATE, AS IS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE CONDITION OF SUCH PROPERTY OR AS TO THE USE WHICH MAY BE MADE
THEREOF. NAI ALSO ACCEPTS THE PROPERTY WITHOUT ANY COVENANT, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, BY BNPLC OR ITS AFFILIATES REGARDING THE TITLE
THERETO OR THE RIGHTS OF ANY PARTIES IN POSSESSION OF ANY PART THEREOF, EXCEPT
AS EXPRESSLY SET FORTH IN PARAGRAPH 20. BNPLC SHALL NOT BE RESPONSIBLE FOR ANY
LATENT OR OTHER DEFECT OR CHANGE OF CONDITION IN THE LAND OR IN IMPROVEMENTS,
FIXTURES AND PERSONAL PROPERTY FORMING A PART OF THE PROPERTY OR FOR ANY
VIOLATIONS WITH RESPECT

                                       4
<PAGE>   9

THERETO OF APPLICABLE LAWS. FURTHER, THOUGH NAI MAY OBTAIN FROM THIRD PARTIES
ANY FACILITIES OR SERVICES TO WHICH NAI IS ENTITLED BY REASON OF THE ASSIGNMENT
AND LEASE OF PERSONAL PROPERTY SET FORTH ON PAGE 2 OF THIS IMPROVEMENTS LEASE,
BNPLC SHALL NOT BE REQUIRED TO FURNISH TO NAI ANY FACILITIES OR SERVICES OF ANY
KIND, INCLUDING WATER, STEAM, HEAT, GAS, AIR CONDITIONING, ELECTRICITY, LIGHT OR
POWER.

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

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

        3.     RENT.

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

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

                                       5
<PAGE>   10

from time to time, NAI may report Base Rent as if there had been no such
reduction and as if the Collateral provided in accordance with the Pledge
Agreement had been maintained, after the Base Rent Commencement Date (All
Buildings), in Accounts that bore interest at the Effective Rate.

               (c) Calculation of Base Rent. Payments of Base Rent shall be
calculated as follows:

                      (i) Amount Payable for Base Rent Periods BEFORE the Base
        Rent Commencement Date (All Buildings). The Base Rent for any Base Rent
        Period that ends on or prior to the Base Rent Commencement Date (All
        Buildings) shall equal the sum of (1) the Base Rent (Existing Buildings)
        accruing for such period, (2) any Base Rent (Building 6) accruing for
        such period, (3) any Base Rent (Building 7) accruing for such period,
        (4) any Base Rent (Building 8) accruing for such period, and (5) any
        additional Base Rent required by subparagraph 3.(c)(ii).

        For any Base Rent Period ending on or before the Base Rent Commencement
Date (All Buildings) the Base Rent (Existing Buildings) shall equal:

        -       the Stipulated Loss Value (Existing Buildings) on the first day
                of such Base Rent Period, times

        -       a rate equal to the Secured Spread, plus the Effective Rate for
                such Base Rent Period, times

        -       a fraction, the numerator of which is the number of days in such
                Base Rent Period and the denominator of which is three hundred
                sixty.

        No Base Rent (Building 6) will accrue for any Base Rent Period that ends
on or prior to the Base Rent Commencement Date (Building 6), but thereafter for
any Base Rent Period ending on or before the Base Rent Commencement Date (All
Buildings) the Base Rent (Building 6) shall equal:

        -       the Stipulated Loss Value (Building 6) on the first day of such
                Base Rent Period, times

        -       a rate equal to the Secured Spread, plus the Effective Rate for
                such Base Rent Period, times

        -       a fraction, the numerator of which is the number of days in such
                Base Rent Period and the denominator of which is three hundred
                sixty.

        No Base Rent (Building 7) will accrue for any Base Rent Period that ends
on or prior to the Base Rent Commencement Date (Building 7), but thereafter for
any Base Rent Period ending on or before the Base Rent Commencement Date (All
Buildings) the Base Rent (Building 7) shall equal:

                                       6
<PAGE>   11

        -       the Stipulated Loss Value (Building 7) on the first day of such
                Base Rent Period, times

        -       a rate equal to the Secured Spread, plus the Effective Rate for
                such Base Rent Period, times

        -       a fraction, the numerator of which is the number of days in such
                Base Rent Period and the denominator of which is three hundred
                sixty.

        No Base Rent (Building 8) will accrue for any Base Rent Period that ends
on or prior to the Base Rent Commencement Date (Building 8), but thereafter for
any Base Rent Period ending on or before the Base Rent Commencement Date (All
Buildings) the Base Rent (Building 8) shall equal:

        -       the Stipulated Loss Value (Building 8) on the first day of such
                Base Rent Period, times

        -       a rate equal to the Secured Spread, plus the Effective Rate for
                such Base Rent Period, times

        -       a fraction, the numerator of which is the number of days in such
                Base Rent Period and the denominator of which is three hundred
                sixty.

                      (ii) Additional Amount Payable On the Base Rent
        Commencement Date (All Buildings). In addition to any Base Rent
        (Building 6), any Base Rent (Building 7) and any Base Rent (Building 8)
        payable as provided in subparagraph 3.(c)(i), Base Rent shall be payable
        on the Base Rent Commencement Date (All Buildings) equal to the
        difference (if any) between (a) the total amount that would have been
        added to the Outstanding Construction Allowance as Carrying Costs on
        such date if not for the limit set forth in subparagraph 6.(c), and (b)
        the Carrying Costs actually added on such date to the Outstanding
        Construction Allowance.

                      (iii) Base Rent Formula for Periods After the Base Rent
        Commencement Date (All Buildings). Each payment of Base Rent for any
        Base Rent Period that commences on or after the Base Rent Commencement
        Date (All Buildings) shall equal:

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

        -       the Secured Spread, times

        -       a fraction, the numerator of which is the number of days in such
                Base Rent Period and the denominator of which is three hundred
                sixty.

                      (iv) Payment Required Upon Sale under the Purchase
        Agreement. Notwithstanding the foregoing, if NAI or any Applicable
        Purchaser purchases BNPLC's interest in the Property pursuant to the
        Purchase Agreement, any accrued unpaid Base

                                       7
<PAGE>   12

        Rent (or component thereof) and all outstanding Additional Rent shall be
        due on the date of purchase in addition to the purchase price and other
        sums due BNPLC under the Purchase Agreement.

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

               (e) Arrangement Fee. On the first Advance Date, an Arrangement
Fee (the "ARRANGEMENT FEE") will be paid to BNPLC from the Construction Advance
made on that date (and thus be included in Stipulated Loss Value) in the amount
provided in the letter dated as of August 21, 2000 from BNPLC to NAI.

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

                      (i) For each Construction Period ending before the first
        anniversary of the Effective Date, Commitment Fees shall equal:

        -      the sum of:

                      (A) thirty basis points (30/100 of 1%), times an amount
                          (not less than zero) equal to:

                                    (1) the First Year Commitment, less

                                    (2) the Funded Construction Allowance on
                          the first day of such Construction Period; plus

                      (B) thirty basis points (30/100 of 1%), times an amount
                          equal to:

                                    (1) the Maximum Construction Allowance, less

                                    (2) the greater of (I) the First Year
                          Commitment, or (II) the Funded Construction
                          Allowance on the first day of such Construction
                          Period; times

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

        -      three hundred sixty.

                      (ii) For each Construction Period ending on or after the
        first anniversary of the Effective Date, Commitment Fees shall equal:

                                       8
<PAGE>   13

        -      thirty basis points (30/100 of 1%), times an amount equal to:

                      (A)    the Maximum Construction Allowance (as reduced on
                             the day prior to the first anniversary of the
                             Effective Date, to the extent required by the
                             proviso in the definition thereof in the Common
                             Definitions and Provisions Agreement), less

                      (B)    the Funded Construction Advances on the first day
                             of such Construction Period; times

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

        -      three hundred sixty.

NAI shall pay Commitment Fees in arrears on the first Business Day of November,
February, May, and August of each calendar year, beginning with the first
Business Day of November 2000 and continuing regularly throughout the Term so
long as Commitment Fees have accrued and remain unpaid. However, if any
Commitment Fees shall have accrued and remain unpaid on the Designated Sale
Date, such accrued unpaid Commitment Fees shall be due on the Designated Sale
Date.

               (g) Administrative Agency Fees. On the first Advance Date, an
administrative agency fee (an "ADMINISTRATIVE AGENCY FEE") will be paid to BNPLC
from the Construction Advance made on that date (and thus be included in
Stipulated Loss Value) in the amount provided in the letter dated as of August
21, 2000 from BNPLC to NAI. Also, on each anniversary of the Effective Date, NAI
shall pay to BNPLC an administrative agency fee (also, an "ADMINISTRATIVE AGENCY
FEE") in the amount set forth in the letter agreement dated as of August 21,
2000 from BNPLC to NAI.

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

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

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

                                       9
<PAGE>   14

        4.     NATURE OF THIS AGREEMENT.

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

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

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

                                       10
<PAGE>   15

rights to which NAI may now or hereafter be entitled by law (including any such
rights arising because of any implied "warranty of suitability" or other
warranty under Applicable Laws) (i) to quit, terminate or surrender this
Improvements Lease or the Property or any part thereof or (ii) to any abatement,
suspension, deferment or reduction of the Rent.

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

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

               (d) Characterization of this Improvements Lease. For purposes of
determining the appropriate financial accounting for this Improvements Lease and
for purposes of

                                       11
<PAGE>   16

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

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

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

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

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

                                       12
<PAGE>   17

                      (i) If after the Effective Date there shall be any
        increase in the cost to BNPLC's Parent or any other Participant agreeing
        to make or making, funding or maintaining advances to BNPLC in
        connection with the Property because of any Banking Rules Change, then
        NAI shall from time to time, pay to BNPLC for the account of BNPLC's
        Parent or such other Participant, as the case may be, additional amounts
        sufficient to compensate BNPLC's Parent or the Participant for such
        increased cost. An increase in costs resulting from any imposition or
        increase of reserve requirements applicable to Collateral held from time
        to time by BNPLC's Parent or other Participants pursuant to the Pledge
        Agreement would be an increase covered by the preceding sentence. A
        certificate as to the amount of such increased cost, submitted to BNPLC
        and NAI by BNPLC's Parent or the other Participant, shall be conclusive
        and binding upon NAI, absent clear and demonstrable error.

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

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

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

               (i)     All Losses (including Environmental Losses) asserted
                       against or incurred or suffered by BNPLC or other
                       Interested Parties at any time and from time to time by
                       reason of, in connection with or arising out of (A)
                       their ownership or alleged ownership of any interest in
                       the Property or the

                                       13
<PAGE>   18

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

                (ii)    THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE
                        BENEFIT OF BNPLC AND OTHER INTERESTED PARTIES, INCLUDING
                        THE INDEMNITY SET FORTH IN THE PRECEDING SUBPARAGRAPH
                        5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE SUBJECT
                        MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR
                        ARISE OUT OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC
                        OR ANOTHER INTERESTED PARTY. FURTHER, SUCH INDEMNITIES
                        AND RELEASES WILL APPLY EVEN IF INSURANCE OBTAINED BY
                        NAI OR REQUIRED OF NAI BY THIS IMPROVEMENTS LEASE OR
                        OTHER OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER
                        LOSSES AGAINST OR FOR WHICH THE INDEMNITIES AND RELEASES
                        ARE PROVIDED. NAI'S LIABILITY, HOWEVER, FOR ANY FAILURE
                        TO OBTAIN INSURANCE REQUIRED BY THIS IMPROVEMENTS LEASE
                        OR OTHER OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO
                        LOSSES AGAINST WHICH INDEMNITIES ARE PROVIDED HEREIN, IT
                        BEING UNDERSTOOD THAT SUCH INSURANCE IS INTENDED TO DO
                        MORE THAN PROVIDE A SOURCE OF PAYMENT FOR LOSSES AGAINST
                        WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
                        INDEMNIFICATION BY THIS IMPROVEMENTS LEASE.

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

                                       14
<PAGE>   19

                        incurred to evaluate lien releases and other information
                        submitted by NAI with requests for Construction
                        Advances.

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

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

                (d)     Exceptions and Qualifications to Indemnities.

                       (i) BNPLC acknowledges and agrees that nothing in
        subparagraph 4.(a) or the preceding subparagraphs of this Paragraph 5
        shall be construed to require NAI to pay or reimburse an Interested
        Party for (w) any costs or expenses incurred by BNPLC or any transferee
        to accomplish any Permitted Transfers described in clauses (2), (3),
        (4), (6) or (7) of the definition thereof in the Common Definitions and
        Provisions Agreement (Phase IV - Improvements), (x) Excluded Taxes, (y)
        Losses

                                       15
<PAGE>   20

        incurred or suffered by such Interested Party that are proximately
        caused by (and attributed by any applicable principles of comparative
        fault to) the Established Misconduct of that Interested Party, or (z)
        Losses incurred or suffered by Participants in connection with their
        negotiation or execution of the Participation Agreement or Pledge
        Agreement (or supplements making them parties thereto) or in connection
        with any due diligence they may undertake before entering into the
        Participation Agreement or Pledge Agreement. Further, without limiting
        BNPLC's rights (as provided in other provisions of this Improvements
        Lease and other Operative Documents) to include the following in the
        calculation of the Outstanding Construction Allowance, Stipulated Loss
        Value, the Break Even Price and the Maximum Permitted Prepayment (as
        applicable) or to collect Base Rent, Issue 97-10 Prepayments, a
        Supplemental Payment and other amounts, the calculation of which depends
        upon the Outstanding Construction Allowance, Stipulated Loss Value, the
        Break Even Price, and the Maximum Permitted Prepayment, BNPLC
        acknowledges and agrees that nothing in subparagraph 4.(a) or the
        preceding subparagraphs of this Paragraph 5 shall be construed to
        require NAI to pay or reimburse an Interested Party for

                a)      costs previously paid by BNPLC with the proceeds of the
                        Prior Funding Advances, or

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

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

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

                                       16
<PAGE>   21

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

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

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

                b)      Any Construction-Period Indemnity Payment NAI is excused
                        from paying by this subparagraph 5.(d)(ii), together
                        with interest thereon at the Default Rate, will be
                        included in the calculation of the Break Even Price
                        under (and as defined in) the Purchase Agreement.

        6.     CONSTRUCTION.

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

               (b) Calculation of Carrying Costs. Subject to the limitation set
forth in subparagraph 6.(c), the total Carrying Costs for any Construction
Period shall equal the sum of any Carrying Costs (Building 6) accruing for such
period, any Carrying Costs (Building 7) accruing for such period and any
Carrying Costs (Building 8) accruing for such period.

                                       17
<PAGE>   22

        No Carrying Costs (Building 6) will accrue for any Construction Period
that commences on or after the Base Rent Commencement Date (Building 6), but for
any earlier Construction Period the Carrying Costs (Building 6) shall equal:

        -       the sum on the first day of such Construction Period of (i)
                Stipulated Loss Value (Building 6) under (and as defined in) the
                Common Definitions and Provisions Agreement (Phase IV -
                Improvements) and (ii) the Building 6 Land Percentage of
                Stipulated Loss Value under (and as defined in) the Other Common
                Definitions and Provisions Agreement, times

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

        -       a fraction, the numerator of which is the number of days in such
                Construction Period and the denominator of which is three
                hundred sixty.

        No Carrying Costs (Building 7) will accrue for any Construction Period
that commences on or after the Base Rent Commencement Date (Building 7), but for
any earlier Construction Period the Carrying Costs (Building 7) shall equal:

        -       the sum on the first day of such Construction Period of (i)
                Stipulated Loss Value (Building 7) under (and as defined in) the
                Common Definitions and Provisions Agreement (Phase IV -
                Improvements) and (ii) the Building 7 Land Percentage of
                Stipulated Loss Value under (and as defined in) the Other Common
                Definitions and Provisions Agreement, times

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

        -       a fraction, the numerator of which is the number of days in such
                Construction Period and the denominator of which is three
                hundred sixty.

        No Carrying Costs (Building 8) will accrue for any Construction Period
that commences on or after the Base Rent Commencement Date (Building 8), but for
any earlier Construction Period the Carrying Costs (Building 8) shall equal:

        -       the sum on the first day of such Construction Period of (i)
                Stipulated Loss Value (Building 8) under (and as defined in) the
                Common Definitions and Provisions Agreement (Phase IV -
                Improvements) and (ii) the Building 8 Land Percentage of
                Stipulated Loss Value under (and as defined in) the Other Common
                Definitions and Provisions Agreement, times

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

        -       a fraction, the numerator of which is the number of days in such
                Construction Period and the denominator of which is three
                hundred sixty.

                                       18
<PAGE>   23

                (c) Limits on the Amount of Carrying Costs. Notwithstanding the
foregoing, because the Construction Allowance available to NAI under the
Construction Management Agreement is limited in amount to the Maximum
Construction Allowance, and because Carrying Costs are to be charged against the
Construction Allowance, Carrying Costs added to the Outstanding Construction
Allowance on the Base Rent Commencement Date (All Buildings) shall not exceed
the amount that can be added without causing the Funded Construction Allowance
to exceed the Maximum Construction Allowance. If, because of an extension of the
Base Rent Commencement Deadline by BNPLC (as described in the definition thereof
in the Common Definitions and Provisions Agreement (Phase IV - Improvements)) or
because of any Landlord's Election to Continue Construction, the Funded
Construction Allowance already exceeds the Maximum Construction Allowance on the
Base Rent Commencement Date (All Buildings), then no Carrying Costs will be
added to the Outstanding Construction Allowance on the Base Rent Commencement
Date (All Buildings).

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

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

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

                (ii)    Continuation of Construction. BNPLC may perform or cause
                        to be performed any work to complete or continue the
                        construction of the

                                       19
<PAGE>   24

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

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

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

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

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

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

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

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

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

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

                                       20
<PAGE>   25

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

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

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

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

        7.     STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC. All
Improvements constructed during the term of this Improvements Lease shall be
owned by BNPLC and shall constitute "Property" covered by this Improvements
Lease. Further,

                                       21
<PAGE>   26

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

        8.     ENVIRONMENTAL.

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

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

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

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

                      (iv) If requested by BNPLC in connection with any Remedial
        Work required by this subparagraph, NAI shall retain independent
        environmental consultants acceptable to BNPLC to evaluate any
        significant new information generated during NAI's implementation of the
        Remedial Work and to discuss with NAI whether such new information
        indicates the need for any additional measures that NAI should take to
        protect the health and safety of persons (including employees,
        contractors and

                                       22
<PAGE>   27

        subcontractors and their employees) or to protect the environment. NAI
        shall implement any such additional measures to the extent required with
        respect to the Property by Environmental Laws or otherwise believed by
        BNPLC to be reasonably required and to the extent not inconsistent with
        the other provisions of this Improvements Lease.

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

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

               (d) Communications Regarding Environmental Matters.

                      (i) NAI shall immediately advise BNPLC of (1) any
        discovery of any event or circumstance which would render any of the
        representations of NAI herein or in the Closing Certificate concerning
        environmental matters materially inaccurate or misleading if made at the
        time of such discovery and assuming that NAI was aware of all relevant
        facts, (2) any Remedial Work (or change in Remedial Work) required or
        undertaken by NAI or its Affiliates in response to any (A) discovery of
        any Hazardous Substances on, under or about the Property other than
        Permitted Hazardous Substances or (B) any claim for damages resulting
        from Hazardous Substance Activities, (3) NAI's discovery of any
        occurrence or condition on any real property adjoining or in the
        vicinity of the Property which could cause the Property or any part
        thereof to be subject to any ownership, occupancy, transferability or
        use restrictions under Environmental Laws, or (4) any investigation or
        inquiry of any failure or alleged failure by NAI to comply with

                                       23
<PAGE>   28

        Environmental Laws affecting the Property by any governmental authority
        responsible for enforcing Environmental Laws. In such event, NAI shall
        deliver to BNPLC within thirty days after BNPLC's request, a preliminary
        written environmental plan setting forth a general description of the
        action that NAI proposes to take with respect thereto, if any, to bring
        the Property into compliance with Environmental Laws or to correct any
        breach by NAI of this Paragraph 8, including any proposed Remedial Work,
        the estimated cost and time of completion, the name of the contractor
        and a copy of the construction contract, if any, and such additional
        data, instruments, documents, agreements or other materials or
        information as BNPLC may request.

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

                      (iii) Prior to NAI's submission of a Material
        Environmental Communication to any governmental or regulatory agency or
        third party, NAI shall, to the extent practicable, deliver to BNPLC a
        draft of the proposed submission (together with the proposed date of
        submission), and in good faith assess and consider any comments of BNPLC
        regarding the same. Promptly after BNPLC's request, NAI shall meet with
        BNPLC to discuss the submission, shall provide any additional
        information requested by BNPLC and shall provide a written explanation
        to BNPLC addressing the issues raised by comments (if any) of BNPLC
        regarding the submission, including a reasoned analysis supporting any
        decision by NAI not to modify the submission in accordance with comments
        of BNPLC.

        9.     INSURANCE REQUIRED AND CONDEMNATION.

               (a)     Liability Insurance.

                      (i) Prior to the Base Rent Commencement Date (All
        Buildings), NAI shall maintain commercial general liability insurance
        against claims for bodily and personal injury, death and property damage
        occurring in or upon or resulting from any occurrence in or upon the
        Property under one or more insurance policies that satisfy the
        requirements set forth in Exhibit B. Without limiting the generality of
        the foregoing, NAI certifies to BNPLC that NAI is, contemporaneously
        with the execution of this Lease and the other Operative Documents,
        obtaining such insurance.

                      (ii) On and after the Base Rent Commencement Date (All
        Buildings), NAI will continue to maintain, or cause to be maintained,
        commercial general liability insurance against claims for bodily and
        personal injury, death and property damage occurring in or upon or
        resulting from any occurrence in or upon the Property, but in such
        amounts, with such insurance companies and upon such terms and
        conditions (including self-insurance, whether by deductible, retention,
        or otherwise) as are consistent with NAI's normal insurance practices
        for other similar properties. In any event, policies

                                       24
<PAGE>   29

        under which NAI maintains such insurance will provide, by endorsement or
        otherwise, that BNPLC and other Interested Parties are also insured
        thereunder against such claims with coverage that is not limited by any
        negligence or allegation of negligence on their part and with coverage
        that is primary, not merely excess over or contributory with the other
        commercial general liability coverage they may themselves maintain.

                      (iii) NAI shall deliver and maintain with BNPLC for each
        liability insurance policy required by this Lease written confirmation
        of the policy and the scope of the coverage provided thereby issued by
        the applicable insurer or its authorized agent. With respect to
        insurance maintained prior to the Base Rent Commencement Date (All
        Buildings), such confirmation must also be in form consistent with the
        requirements set forth in Exhibit B.

                (b)    Property Insurance.

                      (i) Prior to the Base Rent Commencement Date (All
        Buildings), NAI will keep the Property insured against fire and other
        casualty under one or more property insurance policies that satisfy the
        requirements set forth in Exhibit B. Without limiting the generality of
        the foregoing, NAI certifies to BNPLC that NAI is, contemporaneously
        with the execution of this Lease and the other Operative Documents,
        obtaining such insurance.

                      (ii) On and after the Base Rent Commencement Date (All
        Buildings), NAI will continue to keep, or cause to be kept, all
        Improvements and Tangible Personal Property insured against fire and
        other casualty, but in such amounts, with such insurance companies and
        upon such terms and conditions (including self-insurance, whether by
        deductible, retention, or otherwise) as are consistent with NAI's normal
        insurance practices for other similar properties. In any event, policies
        under which NAI maintains such insurance will show BNPLC as an insured
        as its interest may appear and will provide that the protection afforded
        to BNPLC thereunder is primary (such that any policies maintained by
        BNPLC itself will be excess, secondary and noncontributing) and is not
        to be reduced or impaired by acts or omissions of NAI or any other
        beneficiary or insured.

                      (iii) NAI shall deliver and maintain with BNPLC for each
        property insurance policy required by this Lease written confirmation of
        the policy and the scope of the coverage provided thereby issued by the
        applicable insurer or its authorized agent. With respect to insurance
        maintained prior to the Base Rent Commencement Date (All Buildings),
        such confirmation must also be in form consistent with the requirements
        set forth in Exhibit B.

                      (iv) If any of the Property is destroyed or damaged by
        fire or any other casualty against which insurance shall have been
        required hereunder, (A) BNPLC may, but shall not be obligated to, make
        proof of loss if not made promptly by NAI after notice from BNPLC, (B)
        each insurance company concerned is hereby authorized and directed to
        make payment for such loss directly to BNPLC (or, if so instructed by
        BNPLC, to NAI) for application as required by Paragraph 10, and (C)
        BNPLC shall be entitled, in its

                                       25
<PAGE>   30

        own name or in the name of NAI or in the name of both, at any time after
        a CMA Termination Event or when an Event of Default shall have occurred
        and be continuing, but not otherwise without NAI's prior consent, to
        settle, adjust or compromise any and all claims for loss, damage or
        destruction under any policy or policies of insurance. If any such claim
        is for less than $500,000, if no CMA Termination Event shall have
        occurred and if no Event of Default shall have occurred and be
        continuing, NAI shall have the right to settle, adjust or compromise the
        claim as NAI deems appropriate so long, although even then NAI must
        apply any proceeds of the claim received by it as required by Paragraph
        10.

                      (v) BNPLC shall not be in any event or circumstances
        liable or responsible for failure to collect, or to exercise diligence
        in the collection of, any insurance proceeds.

                      (vi) If any casualty shall result in damage to or loss or
        destruction of the Property, NAI shall give prompt notice thereof to
        BNPLC and Paragraph 10 shall apply.

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

               (d) Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Property or any portion
thereof, each party shall notify the other (provided, however, BNPLC shall have
no liability for its failure to provide such notice) of the pendency of such
proceedings. NAI shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, its attorneys and experts and
cooperate with them as requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds of sale in lieu of
condemnation with respect to the Property and all judgments, decrees and awards
for injury or damage to the Property shall be paid to BNPLC as Escrowed
Proceeds, and all such proceeds will be applied as provided in Paragraph 10.
BNPLC is hereby authorized, in the name of NAI, at any time after a CMA
Termination Event or when an Event of Default shall have occurred and be
continuing, or otherwise with NAI's prior consent, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award
concerning condemnation of any of the Property. BNPLC shall not be in any event
or circumstances liable or responsible for failure to collect, or to exercise
diligence in the collection of, any such proceeds, judgments, decrees or awards.

                                       26
<PAGE>   31

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

        10.    APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS.

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

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

                      (ii) Second, the proceeds remaining after such
        reimbursement to BNPLC (hereinafter, the "REMAINING PROCEEDS") will be
        applied, as hereinafter more particularly provided, either as a
        Qualified Prepayment or to reimburse NAI or BNPLC for the actual
        out-of-pocket costs of repairing or restoring the Property. Until,
        however, any Remaining Proceeds received by BNPLC are applied by BNPLC
        as a Qualified Prepayment or applied by BNPLC to reimburse costs of
        repairs to or restoration of the Property pursuant to this Paragraph 10,
        BNPLC shall hold and maintain such Remaining Proceeds as Escrowed
        Proceeds in an interest bearing account, and all interest earned on such
        account shall be added to and made a part of such Escrowed Proceeds.

               (b) Advances of Escrowed Proceeds to NAI. Except as otherwise
provided below in this Paragraph 10, BNPLC shall advance all Remaining Proceeds
held by it as Escrowed Proceeds to reimburse NAI for the actual out-of-pocket
cost to NAI of repairing or restoring the Property in accordance with the
requirements of this Improvements Lease and the other Operative Documents as the
applicable repair or restoration progresses and upon

                                       27
<PAGE>   32

compliance by NAI with such terms, conditions and requirements as may be
reasonably imposed by BNPLC. In no event, however, shall BNPLC be required to
pay Escrowed Proceeds to NAI in excess of the actual out-of-pocket cost to NAI
of the applicable repair or restoration, as evidenced by invoices or other
documentation satisfactory to BNPLC, it being understood that BNPLC may retain
and apply any such excess as a Qualified Prepayment.

               (c) Application of Escrowed Proceeds as a Qualified Prepayment.
Provided NAI has completed the Construction Project pursuant to the Construction
Management Agreement and no Event of Default shall have occurred and be
continuing, BNPLC shall apply any Remaining Proceeds paid to it (or other
amounts available for application as a Qualified Prepayment) as a Qualified
Prepayment on any date that BNPLC is directed to do so by a notice from NAI;
however, if such a notice from NAI specifies an effective date for a Qualified
Prepayment that is less than five Business Days after BNPLC's actual receipt of
the notice, BNPLC may postpone the date of the Qualified Prepayment to any date
not later than five Business Days after BNPLC's receipt of the notice. In any
event, except when BNPLC is required by the preceding sentence to apply
Remaining Proceeds or other amounts as a Qualified Prepayment on an Advance Date
or a Base Rent Date, BNPLC may deduct Breakage Costs incurred in connection with
any Qualified Prepayment from the Remaining Proceeds or other amounts available
for application as the Qualified Prepayment, and NAI will reimburse BNPLC upon
request for any such Breakage Costs that BNPLC incurs but does not deduct.

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

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

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

                                       28
<PAGE>   33

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

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

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

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

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

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

               (b) Operation of the Property. During the Term, NAI shall operate
the Property in a good and workmanlike manner and substantially in compliance
with all Applicable Laws and will pay or cause to be paid all fees or charges of
any kind in connection therewith. (If NAI does not promptly correct any failure
of the Property to comply with Applicable Laws that is the subject of a written
notice given to NAI or BNPLC by any governmental authority, then for purposes of
the preceding sentence, NAI shall be considered not to have maintained the
Property "substantially in accordance with Applicable Laws" whether or not the
noncompliance would be substantial in the absence of the notice.) During the
Term, NAI shall not use or occupy, or allow the use or occupancy of, the
Property in any manner which violates any

                                       29
<PAGE>   34

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

        Notwithstanding the foregoing, NAI may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest NAI shall not be deemed in
default hereunder because of the violation of such Applicable Law, if NAI
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if NAI promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by NAI and any claims asserted against BNPLC or
the Property because of such violation must be paid by NAI, all prior to the
earlier of (i) the date that any criminal prosecution is instituted or overtly
threatened against BNPLC or any of its directors, officers or employees because
of such violation, (ii) the date that any action is taken by any governmental
authority against BNPLC or any property owned by BNPLC (including the Property)
because of such violation, or (iii) a Designated Sale Date upon which, for any
reason, NAI or an Affiliate of NAI or any Applicable Purchaser shall not
purchase BNPLC's interest in the Property pursuant to the Purchase Agreement for
a price to BNPLC (when taken together with any additional payments made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

                                       30
<PAGE>   35

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

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

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

                                       31
<PAGE>   36

               (e) Permitted Encumbrances and Development Documents. NAI shall
during the Term comply with and will cause to be performed all of the covenants,
agreements and obligations imposed upon the owner of any interest in the
Property by the Permitted Encumbrances (including the Premises Lease) or the
Development Documents. Without limiting the foregoing, NAI shall cause all
amounts to be paid when due, the payment of which is secured by any Lien against
the Property created by the Permitted Encumbrances. Without the prior consent of
BNPLC, NAI shall not enter into, initiate, approve or consent to any
modification of any Permitted Encumbrance or Development Document that would
create or expand or purport to create or expand obligations or restrictions
which would encumber BNPLC's interest in the Property. (Whether BNPLC must give
any such consent requested by NAI during the Term of this Improvements Lease
shall be governed by subparagraph 3(A) of the Closing Certificate and
Agreement.)

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

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

        13.    FINANCIAL STATEMENTS AND OTHER REPORTS.

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

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

                      (ii) as soon as available and in any event within sixty
        days after the end of each of the first three quarters of each fiscal
        year of NAI, the consolidated balance sheet of NAI and its Consolidated
        Subsidiaries as of the end of such quarter and the consolidated income
        statement and the consolidated statement of cash flows of NAI and

                                       32
<PAGE>   37

        its Consolidated Subsidiaries for the period commencing at the end of
        the previous fiscal year and ending with the end of such quarter, all in
        reasonable detail and all prepared in accordance with GAAP and certified
        by the chief financial officer or controller of NAI (subject to year-end
        adjustments);

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

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

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

                      (vi) upon request by BNPLC, a statement in writing
        certifying that the Operative Documents are unmodified and in full
        effect (or, if there have been modifications, that the Operative
        Documents are in full effect as modified, and setting forth such
        modifications) and the dates to which the Base Rent has been paid and
        either stating that to the knowledge of NAI no Default or Event of
        Default under this Improvements Lease has occurred and is continuing or,
        if a Default or Event of Default under this Improvements Lease has
        occurred and is continuing, a brief statement as to the nature thereof;
        it being intended that any such statement by NAI may be relied upon by
        any prospective purchaser or mortgagee of the Property and by the
        Participants

                      (vii) as soon as possible after, and in any event within
        ten days after NAI becomes aware that, any of the following has
        occurred, with respect to which the potential aggregate liability to NAI
        relating thereto is $500,000 or more, a notice signed by a senior
        financial officer of NAI setting forth details of the following and the
        response, if any, which NAI or its ERISA Affiliate proposes to take with
        respect thereto (and a copy of any report or notice required to be filed
        with or given to PBGC by NAI or an ERISA Affiliate with respect to any
        of the following or the events or conditions leading up to the
        following): (A) the assertion, to secure any Unfunded Benefit
        Liabilities, of any

                                       33
<PAGE>   38

        Lien against the assets of NAI, against the assets of any Plan or
        Multiemployer Plan or against any interest of BNPLC or NAI in the
        Property, or (B) the taking of any action by the PBGC or any other
        governmental authority against NAI to terminate any Plan of NAI or any
        ERISA Affiliate of NAI or to cause the appointment of a trustee or
        receiver to administer any such Plan; and

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

BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.

        14.    ASSIGNMENT AND SUBLETTING BY NAI.

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

               (b) Standard for BNPLC's Consent to Assignments and Certain Other
Matters. Consents and approvals of BNPLC which are required by this Paragraph 14
will not be unreasonably withheld or delayed, but NAI acknowledges that BNPLC's
withholding of such consent or approval shall be reasonable if BNPLC determines
in good faith that (1) giving the approval may materially increase BNPLC's risk
of liability for any existing or future environmental problem, or (2) giving the
approval is likely to increase BNPLC's administrative burden of complying with
or monitoring NAI's compliance with the requirements of this Improvements Lease.

               (c) Consent Not a Waiver. No consent by BNPLC to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this Improvements
Lease or NAI's interest hereunder, and no assignment or subletting of the
Property or any part thereof in accordance with this Improvements Lease or
otherwise with BNPLC's consent, shall release NAI from liability

                                       34
<PAGE>   39

hereunder; and any such consent shall apply only to the specific transaction
thereby authorized and shall not relieve NAI from any requirement of obtaining
the prior consent of BNPLC to any further sale, assignment, transfer, mortgage,
pledge or hypothecation of this Improvements Lease or any interest of NAI
hereunder.

        15.    ASSIGNMENT BY BNPLC.

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

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

        16.    BNPLC'S RIGHT OF ACCESS.

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

               (b) If NAI fails to perform any act or to take any action
required of it by this Improvements Lease or the Closing Certificate, or to pay
any money which NAI is required by this Improvements Lease or the Closing
Certificate to pay, and if such failure or action constitutes an Event of
Default or renders BNPLC or any director, officer, employee or Affiliate of
BNPLC at risk of criminal prosecution or renders BNPLC's interest in the
Property or any part thereof at risk of forfeiture by forced sale or otherwise,
then in addition to any other remedies specified herein or otherwise available,
BNPLC may, perform or cause to be performed such act or take such action or pay
such money. Any expenses so incurred by BNPLC, and any money so paid by BNPLC,
shall be a demand obligation owing by NAI to BNPLC. Further,

                                       35
<PAGE>   40

BNPLC, upon making such payment, shall be subrogated to all of the rights of the
person, corporation or body politic receiving such payment. But nothing herein
shall imply any duty upon the part of BNPLC to do any work which under any
provision of this Improvements Lease NAI may be required to perform, and the
performance thereof by BNPLC shall not constitute a waiver of NAI's default.
BNPLC may during the progress of any such work permitted by BNPLC hereunder on
or in the Property keep and store upon the Property all necessary materials,
tools, and equipment. BNPLC shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business, or other damage to NAI or the
subtenants or invitees of NAI by reason of making such repairs or the
performance of any such work on or in the Property, or on account of bringing
materials, supplies and equipment into or through the Property during the course
of such work (except for any liability in excess of the liability insurance
limits established in Exhibit B resulting from death or injury or damage to the
property of third parties caused by the Established Misconduct of BNPLC or its
officers, employees, or agents in connection therewith), and the obligations of
NAI under this Improvements Lease shall not thereby be excused in any manner.

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

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

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

               (b) NAI shall fail to cause any representation or warranty of
NAI contained herein or in the Construction Management Agreement or the Closing
Certificate that was false or misleading in any material respect when made to be
made true and not misleading (other than as described in the other clauses of
this Paragraph 17), or NAI shall fail to comply with any term, provision or
covenant of this Improvements Lease or of the Construction Management Agreement
or the Closing Certificate (other than as described in the other clauses of this

                                       36
<PAGE>   41

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

               (c) NAI shall abandon the Property.

               (d) NAI or any Subsidiary shall fail to make any payment or
payments of principal, premium or interest, of Debt of NAI described in the next
sentence when due (taking into consideration the time NAI may have to cure such
failure, if any, under the documents governing such Debt). As used in this
clause 14(a)(v), "DEBT" shall include only Debt (as defined in the Common
Definitions and Provisions Agreement (Phase IV - Improvements)) of NAI or any of
its Subsidiaries now existing or arising in the future (a) payable to BNPLC or
any Affiliate of BNPLC, or (B) payable to any other Person and with respect to
which $3,000,000 or more is actually due and payable because of acceleration or
otherwise.

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

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

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

                                       37
<PAGE>   42

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

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

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

        18.    REMEDIES.

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

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

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

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

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

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

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

                                       38
<PAGE>   43

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

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

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

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

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

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

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

               (b) Notice Required So Long As the Purchase Option and NAI's
Initial Remarketing Rights and Obligations Continue Under the Purchase
Agreement. So long as NAI remains in possession of the Property and there has
been no termination of the Purchase Option and NAI's Initial Remarketing Rights
and Obligations as provided Paragraph 4 of the Purchase Agreement, BNPLC's right
to exercise remedies provided in subparagraph 18.(a) will be subject to the
condition precedent that BNPLC shall have notified NAI, at a time when an Event
of

                                       39
<PAGE>   44

Default shall have occurred and be continuing, of BNPLC's intent to exercise
remedies provided in subparagraph 18.(a) at least sixty days prior to exercising
the remedies. The condition precedent is intended to provide NAI with an
opportunity to exercise the Purchase Option or NAI's Initial Remarketing Rights
and Obligations before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is then continuing,
BNPLC may proceed immediately to exercise remedies provided in subparagraph
18.(a) at any time after the earlier of (i) sixty days after BNPLC has given
such a notice to NAI, (ii) any date upon which NAI relinquishes possession of
the Property, or (iii) any termination of the Purchase Option and NAI's Initial
Remarketing Rights and Obligations.

               (c) Enforceability. This Paragraph 18 shall be enforceable to the
maximum extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.

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

                                       40
<PAGE>   45

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

        Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.

        20.    QUIET ENJOYMENT. Provided NAI pays the Base Rent and all
Additional Rent payable hereunder as and when due and payable and keeps and
fulfills all of the terms, covenants, agreements and conditions to be performed
by NAI hereunder, BNPLC shall not during the Term disturb NAI's peaceable and
quiet enjoyment of the Property; however, such enjoyment shall be subject to the
terms, provisions, covenants, agreements and conditions of this Improvements
Lease, to Permitted Encumbrances, to Development Documents and to any other
claims not constituting Liens Removable by BNPLC. If any Lien Removable by BNPLC
is claimed against the Property, BNPLC will remove the Lien Removable by BNPLC
promptly. Any breach by BNPLC of this Paragraph shall render BNPLC liable to NAI
for any monetary damages proximately caused thereby, but as more specifically
provided in subparagraph 4.(b) above, no such breach shall entitle NAI to
terminate this Improvements Lease or excuse NAI from its obligation to pay Rent.

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

        22.    HOLDING OVER BY NAI. Should NAI not purchase BNPLC's right,
title and interest in the Property as provided in the Purchase Agreement, but
nonetheless continue to hold the Property after the termination of this
Improvements Lease without BNPLC's consent,

                                       41
<PAGE>   46

whether such termination occurs by lapse of time or otherwise, such holding over
shall constitute and be construed as a tenancy from day to day only, at a daily
Base Rent equal to: (i) Stipulated Loss Value on the day in question, times (ii)
the Default Rate for such day; divided by (iii) three hundred and sixty;
subject, however, to all of the terms, provisions, covenants and agreements on
the part of NAI hereunder. No payments of money by NAI to BNPLC after the
termination of this Improvements Lease shall reinstate, continue or extend the
Term of this Improvements Lease and no extension of this Improvements Lease
after the termination thereof shall be valid unless and until the same shall be
reduced to writing and signed by both BNPLC and NAI.

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

        24.     AMENDMENT AND RESTATEMENT. This Improvements Lease amends,
restates and replaces the Prior Lease Agreement referenced in the recitals at
the beginning of this Agreement.

                          [The signature pages follow.]

                                       42
<PAGE>   47

        IN WITNESS WHEREOF, NAI and BNPLC have caused this Improvements Lease to
be executed as of October 2, 2000.

                                      "NAI"

                                      NETWORK APPLIANCE, INC.

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

                                       43
<PAGE>   48

[Continuation of signature pages to Improvements Lease dated to be effective as
                              of October 2, 2000.]

                                        "BNPLC"

                                        BNP LEASING CORPORATION

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

                                       44
<PAGE>   49

                                    Exhibit A

                                LEGAL DESCRIPTION

The real property located in the City of Sunnyvale, County of Santa Clara, State
of California, described as follows:

TRACT 1:

All of Parcel 2, as shown upon that certain Map entitled, "Parcel Map lying
within the City of Sunnyvale, being a resubdivision of a portion of Parcel B, as
shown upon that certain Parcel Map recorded in Book 345 of Maps, at page 20,
Santa Clara County Records", which Map was filed for record in the Office of the
Recorder of the County of Santa Clara, State of California, on November 17,
1976, in Book 383 of Maps, at page 35.

TRACT 2:

Together with an easement for vehicles parking over the following described
property:

A 7-foot strip of land for parking easement purposes over a portion of Parcel A,
as said Parcel A is shown on that certain Parcel Map filed for record on
November 10, 1974 in Book 292 of Maps, at page 41, records of said County, and
being more particularly described as follows:

Commencing at the Northeast corner of said Parcel A; thence North 75 (degrees)
8'27" West 500.00 feet along the Northeasterly line of said Parcel A; thence
South 14 (degrees) 51'33" West 7.00 feet; thence parallel to Northeasterly line
of said Parcel A, South 75 (degrees) 08'27" East 500.00 feet to the Southeast
line of said Parcel A, North 14 (degrees) 51'33" East 7.00 feet to the point of
beginning.

APN:  110-32-002
ARB:  110-3-65.02

TRACT 3:

Parcel 1, as shown on that certain Parcel Map which filed for record in the
office of the recorder of the County of Santa Clara, State of California on July
7, 1994, in Book 657 of Parcel Maps, Page 9.

APN:  110-32-6
ARB:  110-3-x65

TRACT 4:

Parcel 2, as shown on that certain Parcel Map which filed for record in the
office of the recorder of the County of Santa Clara, State of California on July
7, 1994, in Book 657 of Parcel Maps, Page 9.

APN:  110-32-7
ARB:  110-3-x65

<PAGE>   50

TRACT 5:

Parcel 2, as shown on that certain parcel Map which filed for record in the
office of the recorder of the County of Santa Clara, State of California on
October 7, 1998, in Book 708 of Parcel Maps, Pages 51 and 52.

APN:  110-32-12
ARB:  110-03-65.11

                               Exhibit A - Page 2

<PAGE>   51

                                    Exhibit B

                             INSURANCE REQUIREMENTS

I.      LIABILITY INSURANCE:

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

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

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

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

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

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

                      (a) in any policy containing a general aggregate limit,
                      ISO form amendment "Aggregate Limits of Insurance Per
                      Location" CG 2504 1185 or equivalent substitute form;
<PAGE>   52

                      (b) a waiver of subrogation, using ISO form CG 2404 1093
                      or equivalent substitute form (and under the commercial
                      umbrella, if any), in favor of "BNP Leasing Corporation
                      and other Interested Parties (as defined in the Common
                      Definitions and Provisions Agreement (Phase IV -
                      Improvements) between Network Appliance, Inc. and BNP
                      Leasing Corporation dated October 2, 2000)";

                      (c) ISO additional insured form CG 2026 1185 or equivalent
                      substitute form, without modification (and under the
                      commercial umbrella, if any), designating as additional
                      insureds "BNPLC and other Interested Parties, as defined
                      in the Common Definitions and Provisions Agreement (Phase
                      IV - Improvements) between Network Appliance, Inc. and BNP
                      Leasing Corporation dated October 2, 2000)"; and

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

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

II.     PROPERTY INSURANCE: From and after the commencement of any construction
of Improvements on or about the Land or the delivery of any materials in
anticipation of such construction:

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

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

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

               (3)     loss of use or consequential loss;

                               Exhibit B - Page 2
<PAGE>   53

               (4)    pollutant cleanup and removal;

               (5)    freezing;

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

               (7)    construction ordinance or law;

               (8)    mechanical or electrical breakdown;

               (9)    debris removal additional limit;

               (10)   preservation of property;

               (11)   fire department service charge;

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

               (13)   loss of rental income;

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

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

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

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

                               Exhibit B - Page 3
<PAGE>   54

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

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

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

                      (a)    a waiver of subrogation in favor of "BNPLC and
                             other Interested Parties, as defined in the Common
                             Definitions and Provisions Agreement (Phase IV -
                             Improvements) between Network Appliance, Inc. and
                             BNP Leasing Corporation dated October 2, 2000)";

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

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

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

III.    OTHER INSURANCE RELATED REQUIREMENTS:

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

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

                               Exhibit B - Page 4
<PAGE>   55

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

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

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

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

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

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

                               Exhibit B - Page 5
<PAGE>   56

                                   Schedule 1

                               FINANCIAL COVENANTS

        This Schedule 1 is attached to and made a part of (a) the Lease
Agreement (Phase IV - Improvements) (the "IMPROVEMENTS LEASE") dated to be
effective as of October 2, 2000 (the "EFFECTIVE DATE"), between BNP Leasing
Corporation, a Delaware corporation ("BNPLC") and Network Appliance, Inc., a
California corporation ("NAI"), (b) the Lease Agreement (Phase IV - Land) (the
"LAND LEASE" and, together with the Improvements Lease, the "LEASES") dated to
be effective as of the Effective Date, between BNPLC and NAI, (c) the Pledge
Agreement (Phase IV - Improvements) (the "PLEDGE AGREEMENT (IMPROVEMENTS)")
dated to be effective as of the Effective Date, among BNPLC, NAI, and BNP
Paribas, as a Participant and as agent for any financial institutions that
become Participants thereunder from time to time, and (d) the Pledge Agreement
(Phase IV - Land) (collectively with the Pledge Agreement (Improvements), the
"PLEDGE AGREEMENTS") dated to be effective as of the Effective Date, among
BNPLC, NAI, and BNP Paribas, as a Participant and as agent for any financial
institutions that become Participants thereunder from time to time.

                             PART I - DEFINED TERMS

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

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

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

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

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

<PAGE>   57

        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).

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

        "QUICK RATIO" means the ratio of:

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

                              Schedule 1 - Page 2
<PAGE>   58

        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 FOR LEASE AGREEMENT

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

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

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

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

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

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

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

                              Schedule 1 - Page 3
<PAGE>   59

                           PART III - OTHER COVENANTS

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

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

               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

                              Schedule 1 - Page 4

<PAGE>   60

to this clause shall not at any time exceed five percent (5%) of Consolidated
Tangible Net Worth at such time; and (b) such Liens do not constitute Liens
against NAI's interest in any material Subsidiary or blanket Liens against all
or substantially all of the inventory, receivables, general intangibles or
equipment of NAI or of any material Subsidiary of NAI (for purposes of this
clause, a "MATERIAL SUBSIDIARY" means any subsidiary whose assets represent a
substantial part of the total assets of NAI and its Subsidiaries, determined on
a consolidated basis in accordance with GAAP); and

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

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

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

        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.

                              Schedule 1 - Page 5
<PAGE>   61

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

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

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

        J. Dividends, Distributions. Declare or pay any dividend or distribution
either in cash, stock or any other property on NAI's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of
any class of NAI's stock now or hereafter outstanding.

                              Schedule 1 - Page 6
<PAGE>   62

                   COMMON DEFINITIONS AND PROVISIONS AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

                                     BETWEEN

                             BNP LEASING CORPORATION

                                       AND

                             NETWORK APPLIANCE, INC.

                           DATED AS OF OCTOBER 2, 2000

<PAGE>   63

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
                                                                                          Page
<S>                                                                                      <C>
ARTICLE I - LIST OF DEFINED TERMS

Absolute NAI Construction Obligations.....................................................1
Active Negligence.........................................................................3
Additional Rent...........................................................................3
Adjusted EBIT.............................................................................3
Administrative Agency Fee.................................................................3
Advance Date..............................................................................3
Affiliate.................................................................................3
Applicable Laws...........................................................................3
Applicable Purchaser......................................................................3
Arrangement Fee...........................................................................4
Attorneys' Fees...........................................................................4
Balance of Unpaid Construction-Period Indemnity Payments..................................4
Banking Rules Change......................................................................4
Base Rate.................................................................................4
Base Rent.................................................................................4
Base Rent (Building 6)....................................................................4
Base Rent (Building 7)....................................................................4
Base Rent (Building 8)....................................................................4
Base Rent (Existing Buildings)............................................................4
Base Rent Commencement Date (All Buildings)...............................................4
Base Rent Commencement Date (Building 6)..................................................5
Base Rent Commencement Date (Building 7)..................................................5
Base Rent Commencement Date (Building 8)..................................................5
Base Rent Commencement Deadline...........................................................5
Base Rent Date............................................................................5
Base Rent Period..........................................................................6
BNPLC.....................................................................................6
BNPLC's Parent............................................................................6
Break Even Price..........................................................................6
Breakage Costs............................................................................6
Building 6................................................................................6
Building 6 Land Percentage................................................................6
Building 7................................................................................7
Building 8................................................................................7
Building 8 Land Percentage................................................................7
Business Day..............................................................................7
Capital Adequacy Charges..................................................................7
Capital Lease.............................................................................7
Carrying Costs............................................................................7
Carrying Costs (Building 6)...............................................................7
Carrying Costs (Building 7)...............................................................7
Closing Certificate.......................................................................7
</TABLE>

                                       i
<PAGE>   64

<TABLE>
<CAPTION>

<S>                                                                                      <C>
CMA Suspension Event......................................................................8
CMA Suspension Notice.....................................................................8
CMA Suspension Period.....................................................................8
CMA Termination Event.....................................................................8
Code......................................................................................8
Collateral................................................................................8
Collateral Percentage.....................................................................8
Common Definitions and Provisions Agreement (Phase IV - Improvements).....................8
Completion Notice (Building 6)............................................................8
Completion Notice (Building 7)............................................................8
Completion Notice (Building 8)............................................................8
Completion Notice (Final).................................................................8
Construction Advance Request..............................................................9
Construction Advances.....................................................................8
Construction Allowance....................................................................9
Construction Management Agreement.........................................................9
Construction Milestone....................................................................9
Construction Period.......................................................................9
Construction Project......................................................................9
Construction-Period Indemnity Payments....................................................9
Current AS IS Market Value................................................................9
Debt.....................................................................................10
Default..................................................................................11
Default Rate.............................................................................11
Defaulting Participant...................................................................11
Defective Work...........................................................................11
Deposit Taker............................................................................11
Deposit Taker Losses.....................................................................11
Designated Sale Date.....................................................................11
Development Documents....................................................................12
Direct Payments to Participants..........................................................12
Effective Date...........................................................................12
Effective Rate...........................................................................12
Environmental Cutoff Date................................................................13
Environmental Laws.......................................................................13
Environmental Losses.....................................................................13
Environmental Reports....................................................................13
ERISA....................................................................................13
ERISA Affiliate..........................................................................14
Escrowed Proceeds........................................................................14
Established Misconduct...................................................................14
Eurocurrency Liabilities.................................................................15
Eurodollar Rate Reserve Percentage.......................................................15
Event of Default.........................................................................15
Excluded Deposit Taker Losses............................................................15
Excluded Taxes...........................................................................15
</TABLE>

                                       ii
<PAGE>   65

<TABLE>
<CAPTION>

<S>                                                                                     <C>
Existing Buildings.......................................................................16
Existing Buildings Land Percentage.......................................................16
Existing Contract........................................................................16
Fed Funds Rate...........................................................................16
First Year Commitment....................................................................16
FOCB Notice..............................................................................16
Funded Construction Allowance............................................................16
Funding Advances.........................................................................16
Future Work..............................................................................16
GAAP.....................................................................................16
Hazardous Substance......................................................................16
Hazardous Substance Activity.............................................................17
Impositions..............................................................................17
Improvements.............................................................................17
Improvements Lease.......................................................................17
Interested Party.........................................................................18
Issue 97-1 Non-performance-related Subjective Event of Default...........................18
Issue 97-10 Election.....................................................................18
Issue 97-10 Prepayment...................................................................18
Land.....................................................................................19
Landlord's Election to Continue Construction.............................................19
LIBOR....................................................................................19
Lien.....................................................................................19
Liens Removable by BNPLC.................................................................19
Losses...................................................................................20
Material Environmental Communication.....................................................20
Maximum Construction Allowance...........................................................20
Maximum Permitted Prepayment.............................................................20
Maximum Permitted Termination Fees.......................................................20
Maximum Remarketing Obligation...........................................................21
Minimum Extended Remarketing Price.......................................................21
Multiemployer Plan.......................................................................21
NAI......................................................................................21
NAI's Extended Remarketing Period........................................................21
NAI's Extended Remarketing Right.........................................................21
NAI's Initial Remarketing Rights and Obligations.........................................21
Notice of NAI's Intent to Terminate......................................................21
Operative Documents......................................................................21
Other Common Definitions and Provisions Agreement........................................21
Other Lease Agreement....................................................................21
Other Purchase Agreement.................................................................22
Outstanding Construction Allowance.......................................................22
Participant..............................................................................22
Participation Agreement..................................................................22
PBGC.....................................................................................22
Period...................................................................................22
</TABLE>

                                      iii
<PAGE>   66

<TABLE>
<CAPTION>

<S>                                                                                     <C>
Permitted Encumbrances...................................................................22
Permitted Hazardous Substance Use........................................................23
Permitted Hazardous Substances...........................................................23
Permitted Transfer.......................................................................23
Person...................................................................................24
Personal Property........................................................................24
Plan.....................................................................................24
Pledge Agreement.........................................................................24
Pre-Commencement Casualty................................................................24
Preemptive Notice........................................................................24
Premises Lease...........................................................................24
Prime Rate...............................................................................25
Prior Funding Advances...................................................................24
Prior Work...............................................................................25
Project Costs............................................................................25
Projected Cost Overruns..................................................................26
Property.................................................................................26
Purchase Agreement.......................................................................26
Purchase Documents.......................................................................26
Purchase Option..........................................................................26
Qualified Affiliate......................................................................26
Qualified Prepayments....................................................................26
Qualifying Security Interest.............................................................27
Real Property............................................................................27
Reimbursable Construction-Period Costs...................................................27
Remedial Work............................................................................27
Rent.....................................................................................27
Residual Risk Percentage.................................................................27
Responsible Financial Officer............................................................28
Sale Closing Documents...................................................................28
Scope Change.............................................................................28
Secured Spread...........................................................................28
Seller...................................................................................28
Stipulated Loss Value....................................................................28
Stipulated Loss Value (Building 6).......................................................29
Stipulated Loss Value (Building 7).......................................................29
Stipulated Loss Value (Building 8).......................................................29
Stipulated Loss Value (Existing Buildings)...............................................29
Subsidiary...............................................................................29
Supplemental Payment.....................................................................30
Term.....................................................................................30
Third Party Contract.....................................................................30
Third Party Price........................................................................30
Third Party Sale Notice..................................................................30
Third Party Sale Proposal................................................................30
Third Party Target Price.................................................................30
</TABLE>

                                       iv
<PAGE>   67
<TABLE>
<CAPTION>

<S>                                                                                     <C>
Transaction Expenses.....................................................................30
Unfunded Benefit Liabilities.............................................................30
Upfront Syndication Fees.................................................................30
Voluntary NAI Construction Contributions.................................................30
Voluntary Retention of the Property......................................................30
Work.....................................................................................30

ARTICLE II - PROVISIONS USED IN COMMON:

NOTICES..................................................................................31

SEVERABILITY.............................................................................32

NO MERGER................................................................................33

NO IMPLIED WAIVER........................................................................33

ENTIRE AND ONLY AGREEMENTS...............................................................33

BINDING EFFECT...........................................................................33

TIME IS OF THE ESSENCE...................................................................33

GOVERNING LAW............................................................................34

PARAGRAPH HEADINGS.......................................................................34

NEGOTIATED DOCUMENTS.....................................................................34

TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT.....................................34

OTHER TERMS AND REFERENCES...............................................................34

EXECUTION IN COUNTERPARTS................................................................35

NOT A PARTNERSHIP, ETC...................................................................35

AMENDMENT AND RESTATEMENT................................................................35
</TABLE>

                                       v

<PAGE>   68

                   COMMON DEFINITIONS AND PROVISIONS AGREEMENT
                            (PHASE IV - IMPROVEMENTS)

        This Common Definitions and Provisions Agreement (Phase IV -
Improvements), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
dated as of October 2, 2000, the Effective Date.

                                    RECITALS

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

        NAI and BNPLC previously executed that Common Definitions and Provisions
Agreement (Phase IV -Improvements) dated December 20, 1999 (the "PRIOR COMMON
DEFINITIONS AND PROVISIONS AGREEMENT"). NAI and BNPLC have agreed to amend,
restate and replace the Prior Common Definitions and Provisions Agreement with
this Common Definitions and Provisions Agreement (Phase IV-Improvements) as
provided in Paragraph 15 of Article II below.

                                   AGREEMENTS

                        ARTICLE I - LIST OF DEFINED TERMS

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

        "ABSOLUTE NAI CONSTRUCTION OBLIGATIONS" means the following:

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

        (2) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
BNPLC would not have incurred or suffered but for any act or any omission of NAI
or of any NAI's contractors or subcontractors during the period that the
Construction Management Agreement remains in force or during any other period
that NAI remains in possession or control of the Construction Project

<PAGE>   69

(excluding, however, as described below certain Losses consisting of claims
related to any failure by NAI to complete the Construction Project);

        (3) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any fraud, misapplication of funds
(including the proceeds of Prior Funding Advances and Construction Advances),
illegal acts, or willful misconduct on the part of the NAI or its employees or
agents or any other party for whom NAI is responsible; and

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

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

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

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 2
<PAGE>   70

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

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

        "ADMINISTRATIVE AGENCY FEE" shall have the meaning assigned to it in
subparagraph 3.(g) of the Improvements Lease.

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

        "ADVANCE DATE" means, regardless of whether any Construction Advance
shall actually be made thereon, October 16, 2000 and the first Business Day of
every calendar month thereafter to and including the Base Rent Commencement Date
(All Buildings).

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

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

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 3
<PAGE>   71

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

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

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

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

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

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

        "BASE RENT (BUILDING 6)" means a component of Base Rent calculated as
described in subparagraph 3.(c) of the Improvements Lease.

        "BASE RENT (BUILDING 7)" means a component of Base Rent calculated as
described in subparagraph 3.(c) of the Improvements Lease.

        "BASE RENT (BUILDING 8)" means a component of Base Rent calculated as
described in subparagraph 3.(c) of the Improvements Lease.

        "BASE RENT (EXISTING BUILDINGS)" means a component of Base Rent
calculated as described in subparagraph 3.(c) of the Improvements Lease.

        "BASE RENT COMMENCEMENT DATE (ALL BUILDINGS)" means the later of (1) the
Base Rent Commencement Date (Building 6), (2) the Base Rent Commencement Date
(Building 7), or (3) the Base Rent Commencement Date (Building 8). If, contrary
to the expectations of BNPLC and NAI as of the Effective Date, the Base Rent
Commencement Date (Building 6), the Base Rent

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 4
<PAGE>   72

Commencement Date (Building 7) and the Base Rent Commencement Date (Building 8)
all occur on the same day, that day shall constitute the Base Rent Commencement
Date (All Buildings).

        "BASE RENT COMMENCEMENT DATE (BUILDING 6)" means the earlier of (A) the
first Business Day of the first calendar month to follow by twenty days or more
the day upon which any Completion Notice (Building 6) or Completion Notice
(Final) is given, or (B) the Base Rent Commencement Deadline.

        "BASE RENT COMMENCEMENT DATE (BUILDING 7)" means the earlier of (A) the
first Business Day of the first calendar month to follow by twenty days or more
the day upon which any Completion Notice (Building 7) or Completion Notice
(Final) is given, or (B) the Base Rent Commencement Deadline.

        "BASE RENT COMMENCEMENT DATE (BUILDING 8)" means the earlier of (A) the
first Business Day of the first calendar month to follow by twenty days or more
the day upon which any Completion Notice (Building 8) or Completion Notice
(Final) is given, or (B) the Base Rent Commencement Deadline.

        "BASE RENT COMMENCEMENT DEADLINE" means the earlier of (1) the first
Business Day of November, 2002, or (2) the first Business Day of the first
calendar month upon which the Funded Construction Allowance shall equal or
exceed the Maximum Construction Allowance. For example, if on the first Business
Day of November, 2001 construction of the Construction Project is continuing,
the Funded Construction Allowance is $22,055,000 (before adding any Carrying
Costs for the preceding month) and the Maximum Construction Allowance is
$22,065,000, and if Carrying Costs of $17,500 would be added to the Funded
Construction Allowance on such day if the Construction Allowance were not
limited to the Maximum Construction Allowance, then (absent an extension by
BNPLC as described below) such day shall be the Base Rent Commencement Deadline
and on such day $10,000 will be added to the Funded Construction Allowance as
Carrying Cost and $7,500 will be payable as Base Rent pursuant to subparagraph
3.(c)(i) of the Improvements Lease. Notwithstanding the forgoing, if for any
reason (including a termination of the Construction Management Agreement) NAI
has not completed the Construction Project thirty days in advance of the
scheduled Base Rent Commencement Deadline determined pursuant to the first
sentence of this definition, BNPLC shall be entitled (but not obligated) to
extend the Base Rent Commencement Deadline one or more times and at any time
before the Construction Project actually is complete and ready for occupancy. To
so extend the Base Rent Commencement Deadline, BNPLC shall notify NAI thereof
and of the date to which the Base Rent Commencement Deadline is extended, which
may be the first Business Day of any calendar month designated by BNPLC in the
notice of extension, provided that BNPLC will not so designate any date more
than sixty days after the date upon which the Construction Project is expected
by BNPLC (at the time of the designation) to be complete.

        "BASE RENT DATE" means October 16, 2000 and the first Business Day of
every calendar month thereafter. (Any first Business Day of a calendar month
that falls on or before the Base Rent Commencement Date (All Buildings) shall
constitute both a Base Rent Date and an Advance Date.)

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 5
<PAGE>   73

        "BASE RENT PERIOD" means a period for which Base Rent must be paid under
the Improvements Lease. The first Base Rent Period shall begin on and include
the Effective Date and end on but not include the first Base Rent Date. Each
successive Base Rent Period shall begin on and include the Base Rent Date upon
which the preceding Base Rent Period ends and shall end on but not include the
next following Base Rent Date (i.e., the first Business Day of the next calendar
month).

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

        "BNPLC'S PARENT" means BNPLC's Affiliate, BNP Paribas, a bank organized
and existing under the laws of France and any successors of such bank.

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

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

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

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

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

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

        "BUILDING 6" means the building described as Building 6 in Exhibit B to
the Construction Management Agreement, which is to be constructed as part of the
Improvements as provided therein.

        "BUILDING 6 LAND PERCENTAGE" means twenty percent (20%), which is the
percentage of the Land that NAI has determined will primarily serve Building 6
after construction contemplated in the Construction Management Agreement is
complete.

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 6
<PAGE>   74

        "BUILDING 7" means the building described as Building 7 in Exhibit B to
the Construction Management Agreement, which is to be constructed as part of the
Improvements as provided therein.

        "BUILDING 7 LAND PERCENTAGE" means twenty percent (20%), which is the
percentage of the Land that NAI has determined will primarily serve Building 7
after construction contemplated in the Construction Management Agreement is
complete.

        "BUILDING 8" means the building described as Building 8 in Exhibit B to
the Construction Management Agreement, which is to be constructed as part of the
Improvements as provided therein.

        "BUILDING 8 LAND PERCENTAGE" means twenty percent (20%), which is the
percentage of the Land that NAI has determined will primarily serve Building 8
after construction contemplated in the Construction Management Agreement is
complete.

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

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

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

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

        "CARRYING COSTS (BUILDING 6)" means the portion of Carrying Costs
related to Building 6, calculated as provided in subparagraph 6.(b) of the
Improvements Lease.

        "CARRYING COSTS (BUILDING 7)" means the portion of Carrying Costs
related to Building 7, calculated as provided in subparagraph 6.(b) of the
Improvements Lease.

        "CARRYING COSTS (BUILDING 7)" means the portion of Carrying Costs
related to Building 7, calculated as provided in subparagraph 6.(b) of the
Improvements Lease.

        "CLOSING CERTIFICATE" means the Closing Certificate and Agreement dated
as of October 2, 2000 executed by NAI in favor of BNPLC, as such Closing
Certificate may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.

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<PAGE>   75

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

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

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

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

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

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

        "COLLATERAL PERCENTAGE" shall mean one hundred percent (100%).

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

        "COMPLETION NOTICE (BUILDING 6)" means a notice given by NAI to BNPLC as
described in subparagraph 1(B) of the Construction Management Agreement,
advising BNPLC when the construction of the portion of the Improvements
designated by NAI as "Building 6" are substantially complete and ready for
occupancy by NAI.

        "COMPLETION NOTICE (BUILDING 7)" means a notice given by NAI to BNPLC as
described in subparagraph 1(B) of the Construction Management Agreement,
advising BNPLC when the construction of the portion of the Improvements
designated by NAI as "Building 7" are substantially complete and ready for
occupancy by NAI.

        "COMPLETION NOTICE (BUILDING 8)" means a notice given by NAI to BNPLC as
described in subparagraph 1(B) of the Construction Management Agreement,
advising BNPLC when the construction of the portion of the Improvements
designated by NAI as "Building 8" are substantially complete and ready for
occupancy by NAI.

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

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 8
<PAGE>   76

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

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

        "CONSTRUCTION MANAGEMENT AGREEMENT" means the Construction Management
Agreement dated as of October 2, 2000 between BNPLC and NAI, as such Management
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.

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

        "CONSTRUCTION PERIOD" means the period beginning on and including the
first Advance Date (i.e., October 16, 2000) and ending on the next following
Advance Date, and each successive period of approximately one month thereafter.
Each successive Construction Period after the first Construction Period shall
begin on and include the day on which the preceding Construction Period ends and
shall end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the earlier of the Base
Rent Commencement Date (All Buildings) or any Designated Sale Date upon which
NAI or any Applicable Purchaser shall purchase BNPLC's interest in the Property
pursuant to the Purchase Agreement.

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

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

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

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

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<PAGE>   77

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

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

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

        "DEBT" of any Person means (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such Person
for the deferred purchase price of property or services (except trade payables
and accrued expenses constituting current liabilities in the ordinary course of
business); (c) the face amount of any outstanding letters of credit issued for
the account of such Person; (d) obligations of such Person arising under
acceptance facilities; (e) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to provide funds to invest in
any Person, or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations of such
Person as lessee under Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any lease of property or related documents
(including a separate purchase agreement) which provide that such Person or any
of its Affiliates must purchase or cause another Person to purchase any interest
in the leased property and thereby guarantee a minimum residual value of the
leased property to the lessor. For purposes of this definition, the amount of
the obligations described in clause (h) of the preceding sentence with respect
to any lease classified according to GAAP as an

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<PAGE>   78

"OPERATING LEASE," shall equal the sum of (1) the present value of rentals and
other minimum lease payments required in connection with such lease [calculated
in accordance with SFAS 13 and other GAAP relevant to the determination of the
whether such lease must be accounted for as an operating lease or capital
lease], plus (2) the fair value of the property covered by the lease; provided,
however, that such amount shall not exceed the price, as of the date a
determination of Debt is required hereunder, for which the lessee can purchase
the leased property pursuant to any valid ongoing purchase option if, upon such
a purchase, the lessee shall be excused from paying rentals or other minimum
lease payments that would otherwise accrue after the purchase.

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

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

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

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

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

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

        "DESIGNATED SALE DATE" means the earlier of:

               (1) the first Business Day of November 2005; or

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

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 11

<PAGE>   79

        must designate a Business Day that is more than thirty days after the
        date of such notice; or

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

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

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

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

        "EFFECTIVE DATE" means October 2, 2000.

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 12
<PAGE>   80

        Notwithstanding the foregoing, for the first short Base Rent Period
beginning on the Effective Date and ending on October 16, 2000, the Effective
Rate shall be the rate determined by BNPLC to equal its average internal daily
cost of funds (expressed as a rate) over such period.

        Any determination by BNPLC of the Effective Rate under this definition
shall, in the absence of clear and demonstrable error, be conclusive and binding
upon NAI.

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

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

        "ENVIRONMENTAL LOSSES" means Losses suffered or incurred by BNPLC or any
other Interested Party, directly or indirectly, relating to or arising out of,
based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable Environmental Laws
relating to the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity that occurs or is
alleged to have occurred on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Interested Party which directly or indirectly relates to, arises from, is based
on, or results from any of the matters described in clauses (i), (ii), or (iii)
of this definition or any allegation of any such matters. For purposes of
determining whether Losses constitute "Environmental Losses," as the term is
used in the Improvements Lease, any actual or alleged Hazardous Substance
Activity or violation of Environmental Laws relating to the Property will be
presumed to have occurred prior to the Environmental Cutoff Date unless NAI
establishes by clear and convincing evidence to the contrary that the relevant
Hazardous Substance Activity or violation of Environmental Laws did not occur or
commence prior to the Environmental Cutoff Date.

        "ENVIRONMENTAL REPORTS" means collectively the following reports
(whether one or more), which were provided by NAI to BNPLC prior to the
Effective Date: Phase I Environmental Site Assessment for 1330-1350 Geneva and
1345-1347 Crossman Avenue, Sunnyvale, California, dated November 1999 by Romig
Consulting Engineers.

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 13
<PAGE>   81

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

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

        "ESTABLISHED MISCONDUCT" of a Person means, and is limited to: (1) if
the Person is bound by the Operative Documents or the Participation Agreement, a
breach by such Person of the express provisions of the Operative Documents or
the Participation Agreement, as applicable, that continues beyond any period for
cure provided therein, and (2) conduct of such Person or its Affiliates that has
been determined to constitute wilful misconduct or Active Negligence in or as a
necessary element of a final judgment rendered against such Person by a court
with jurisdiction to make such determination. Established Misconduct of one
Interested Party shall not be attributed to a second Interested Party unless the
second Interested Party is an Affiliate of the first. Negligence which does not
constitute Active Negligence shall not in any event constitute Established
Misconduct. For purposes of this definition, "conduct of a Person" will include
(1) the conduct of an employee of that Person, but only to the extent that the
employee is acting within the scope of his employment by that Person, as
determined in or as a necessary element of a final judgment rendered against
such Person by a court with jurisdiction to make such determination, and (2) the
conduct of an agent of that Person (such as an independent

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 14
<PAGE>   82

environmental consultant engaged by that Person), but only to the extent that
the agent is, as determined in or as a necessary element of a final judgment
rendered against such Person by a court with jurisdiction to make such
determination, (x) acting within the scope of the authority granted to him by
such Person, (y) not acting with the consent or approval of or under the
direction of NAI or NAI's Affiliates, employees or agents, and (z) not acting in
good faith to mitigate Losses that such Person may suffer because of a breach or
repudiation by NAI of the Improvements Lease or the Purchase Documents.

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

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

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

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

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 15
<PAGE>   83

        "EXISTING BUILDINGS" means the buildings presently located on the Land,
other than the two buildings to be demolished as described in Exhibit B to the
Construction Management Agreement to make way for the new Building 6, Building 7
and Building 8.

        "EXISTING BUILDINGS LAND PERCENTAGE" means forty percent (40%), which is
the percentage of the Land that NAI has determined will primarily serve the
Existing Buildings after construction contemplated in the Construction
Management Agreement is complete.

        "EXISTING CONTRACT" means the Purchase Agreement covering the Land
between NAI and Seller, dated September 9, 1999.

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

        "FIRST YEAR COMMITMENT" means $__________.

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

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

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

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

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

        "HAZARDOUS SUBSTANCE" means (i) any chemical, compound, material,
mixture or substance that is now or hereafter defined or listed in, regulated
under, or otherwise classified

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 16
<PAGE>   84

pursuant to, any Environmental Laws as a "hazardous substance," "hazardous
material," "hazardous waste," "extremely hazardous waste or substance,"
"infectious waste," "toxic substance," "toxic pollutant," or any other
formulation intended to define, list or classify substances by reason of
deleterious properties, including ignitability, corrosiveness, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic
gas usable for fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos containing material; and
(v) any other material that, because of its quantity, concentration or physical
or chemical characteristics, poses a significant present or potential hazard to
human health or safety or to the environment if released into the workplace or
the environment.

        "HAZARDOUS SUBSTANCE ACTIVITY" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of water), discharge, deposit, placement, generation, processing,
construction, treatment, abatement, removal, disposal, disposition, handling or
transportation of any Hazardous Substance from, under, in, into or on the
Property, including the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of water under, in,
into or onto the Property and any resulting residual Hazardous Substance
contamination in, on or under the Property. "HAZARDOUS SUBSTANCE ACTIVITY" also
means any existence of Hazardous Substances on the Property that would cause the
Property or the owner or operator thereof to be in violation of, or that would
subject the Property to any remedial obligations under, any Environmental Laws,
including CERCLA and RCRA, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances pertaining to
the Property.

        "IMPOSITIONS" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Improvements Lease or which are imposed upon BNPLC or the
Property because of the ownership, leasing, occupancy, sale or operation of the
Property, or any part thereof or interest therein, or relating to or required to
be paid by any of the Permitted Encumbrances or the Development Documents,
excluding only Excluded Taxes. "IMPOSITIONS" shall include real estate taxes
imposed because of a change of use or ownership of the Property on or prior to
the date of any sale by BNPLC pursuant to the Purchase Agreement.

        "IMPROVEMENTS" means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.

        "IMPROVEMENTS LEASE" means the Lease Agreement (Phase IV -
Improvements") dated as of October 2, 2000 between BNPLC, as landlord, and NAI,
as tenant, pursuant to which NAI

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 17

<PAGE>   85

has agreed to lease BNPLC's interest in the Property, as such Lease Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

        "INTERESTED PARTY" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) NAI or any Person
that cannot lawfully claim an interest in the Property except through or under a
conveyance from NAI, or (c) any Applicable Purchaser under the Purchase
Agreement and any Person that cannot lawfully claim an interest in the Property
except through or under a conveyance from such Applicable Purchaser.

        "ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT" means
an Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by NAI of a provision in any
Operative Document, the occurrence of which breach cannot be objectively
determined, or (B) any other event described in subparagraph 17.(e) of the
Improvements Lease, the occurrence of which event cannot be objectively
determined. For example, an Event of Default under subparagraph 17.(e) of the
Improvements Lease resulting solely from a failure of NAI to "generally" pay its
debts as such debts become due (in contrast to a failure of NAI to pay Rent to
BNPLC as it becomes due under the Improvements Lease) would constitute an Issue
97-1 Non-performance-related Subjective Event of Default. In no event, however,
will the term "ISSUE 97-1 NON-PERFORMANCE-RELATED SUBJECTIVE EVENT OF DEFAULT"
include an Event of Default resulting from (1) a failure of NAI to make any
payment required to BNPLC under the Operative Documents, (2) a breach by NAI of
the provisions set forth in Schedule 1 attached to the Improvements Lease (which
set forth financial covenants), (3) any failure of NAI to use, maintain and
insure the Property in accordance with the requirements of the Improvements
Lease, or (4) any failure of NAI to pay the full amount of any Supplemental
Payment on the Designated Sale Date as required by the Purchase Agreement.
Except as provided in subparagraph 1(A)(2)(c)(i) of the Purchase Agreement, the
characterization of any Event of Default as an Issue 97-1
Non-performance-related Subjective Event of Default will not affect the rights
or remedies available to BNPLC because of the Event of Default.

        "ISSUE 97-10 ELECTION" means any of the following elections by NAI: (1)
an election to terminate the Construction Management Agreement as provided in
subparagraph 5(D) thereof; and (2) an election to terminate NAI's Initial
Remarketing Rights and Obligations as provided in subparagraph 4(B) of the
Purchase Agreement.

        "ISSUE 97-10 PREPAYMENT" means a payment to BNPLC, required by
subparagraph 3.(i) of the Improvements Lease or by subparagraphs 4(B) or 4(C) of
the Purchase Agreement, equal in each case to (A) the Maximum Permitted
Prepayment, computed as of the date on which the payment becomes due, less (B)
the accreted value of any prior payments actually received by BNPLC from NAI
constituting Issue 97-10 Prepayments or Voluntary NAI Construction
Contributions. For purposes of the preceding sentence, "accreted value" of a
payment shall

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 18
<PAGE>   86

mean the amount of the payment plus an amount equal to the interest that would
have accrued on the payment if it bore interest at the Effective Rate.

        "LAND" means the land covered by the land described in Exhibit A
attached to the Closing Certificate, the Improvements Lease and the Purchase
Agreement.

        "LANDLORD'S ELECTION TO CONTINUE CONSTRUCTION" shall have the meaning
assigned to it in subparagraph 6.(e) of the Improvements Lease.

        "LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC's Parent
to be the average rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars are offered or
available to BNPLC's Parent in the London interbank market at approximately
11:00 a.m. (London time) on the second Business Day preceding the first day of
such period. BNPLC shall instruct BNPLC's Parent to consider deposits, for
purposes of making the determination described in the preceding sentence, that
are offered: (i) for delivery on the first day of such Construction Period or
Base Rent Period, as the case may be, (ii) in an amount equal or comparable to
the total (projected on the applicable date of determination by BNPLC's Parent)
Stipulated Loss Value on the first day of such period, and (iii) for a time
equal or comparable to the length of such period. If BNPLC's Parent so chooses,
it may determine LIBOR for any period by reference to the rate reported by the
British Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business Day preceding the
first day of such period. If for any reason BNPLC's Parent determines that it is
impossible or unreasonably difficult to determine LIBOR with respect to a given
Construction Period or Base Rent Period in accordance with the foregoing, or if
BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain Funding Advances during any
Construction Period or Base Rent Period for which Carrying Costs or Base Rent is
computed by reference to LIBOR, then "LIBOR" for that period shall equal the
Base Rate for that period. All determinations of LIBOR by BNPLC's Parent shall,
in the absence of clear and demonstrable error, be binding and conclusive upon
NAI.

        "LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part III
of Schedule 1 attached to the Improvements Lease, "LIEN" includes any Liens
under ERISA relating to Unfunded Benefit Liabilities of which NAI is required to
notify BNPLC under subparagraph 13.(a)(vii) of the Improvements Lease
(irrespective of whether NAI actually notifies BNPLC as required thereunder).

        "LIENS REMOVABLE BY BNPLC" means, and is limited to, Liens encumbering
the Property that are asserted (1) other than as contemplated in the Operative
Documents, by BNPLC itself, (2) by third parties lawfully claiming through or
under BNPLC (which for purposes of the Improvements Lease shall include any
judgment liens established against the Property because of a judgment rendered
against BNPLC and shall also include any liens

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 19
<PAGE>   87

established against the Property to secure past due Excluded Taxes), or (3) by
third parties lawfully claiming under a deed or other instrument duly executed
by BNPLC; provided, however, Liens Removable by BNPLC shall not include (A) any
Permitted Encumbrances or Development Documents (regardless of whether claimed
through or under BNPLC), (B) the Operative Documents or any other document
executed by BNPLC with the knowledge of (and without objection by) NAI's counsel
contemporaneously with the execution and delivery of the Operative Documents,
(C) Liens which are neither lawfully claimed through or under BNPLC (as
described above) nor claimed under a deed or other instrument duly executed by
BNPLC, (D) Liens claimed by NAI or claimed through or under a conveyance made by
NAI, (E) Liens arising because of BNPLC's compliance with Applicable Law, the
Operative Documents, Permitted Encumbrances, the Development Documents or any
written request made by NAI, (F) Liens securing the payment of property taxes or
other amounts assessed against the Property by any governmental authority, other
than to secure the payment of past due Excluded Taxes or to secure damages
caused by (and attributed by any applicable principles of comparative fault to)
BNPLC's own Established Misconduct, (G) Liens resulting from or arising in
connection with any breach by NAI of the Operative Documents; or (H) Liens
resulting from or arising in connection with any Permitted Transfer that occurs
more than thirty days after any Designated Sale Date upon which, for any reason,
NAI or an Affiliate of NAI or any Applicable Purchaser shall not purchase
BNPLC's interest in the Property pursuant to the Purchase Agreement for a cash
price to BNPLC (when taken together with any Supplemental Payment made by NAI
pursuant to Paragraph 1(A)(2) of the Purchase Agreement, in the case of a
purchase by an Applicable Purchaser) equal to the Break Even Price.

        "LOSSES" means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs and expenses (including Attorneys'
Fees and the fees of outside accountants and environmental consultants), of any
and every kind or character, foreseeable and unforeseeable, liquidated and
contingent, proximate and remote.

        "MATERIAL ENVIRONMENTAL COMMUNICATION" means a communication between NAI
or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.

        "MAXIMUM CONSTRUCTION ALLOWANCE" means an amount equal to $126,000,000,
less the Prior Funding Advances under and as defined in this Agreement;
provided, however, if on the day prior to the first anniversary of the Effective
Date the First Year Commitment exceeds the Funded Construction Allowance, then
the Maximum Construction Allowance will be reduced automatically and without
further notice by an amount equal to such excess.

        "MAXIMUM PERMITTED TERMINATION FEES" shall have the meaning indicated in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.

        "MAXIMUM PERMITTED PREPAYMENT" as of any date means the amount equal to
the lesser of the following:

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 20
<PAGE>   88

        (1) eighty-nine and nine-tenths of one percent (89.9%) of the
aggregate of (i) all Project Costs paid or incurred on or prior to such date,
plus (ii) ninety-seven percent (97%) of (a) Carrying Costs added to the
Outstanding Construction Allowance on or prior to such date, and (b) Commitment
Fees reimbursed pursuant to the Construction Management Agreement on or prior to
such date, plus (iii) any Upfront Syndication Fees paid to Participants pursuant
to the Closing Certificate and Agreement and reimbursed pursuant to the
Construction Management Agreement on or prior to such date; or

        (2) eighty-nine and nine-tenths of one percent (89.9%) of Stipulated
Loss Value on such date.

        "MAXIMUM REMARKETING OBLIGATION" shall have the meaning indicated in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

        "MINIMUM EXTENDED REMARKETING PRICE" shall have the meaning assigned to
it in subparagraph 2(B) of the Purchase Agreement.

        "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
3(37) of ERISA to which contributions have been made by NAI or any ERISA
Affiliate during the preceding six years and which is covered by Title IV of
ERISA.

        "NAI" means Network Appliance, Inc., a California corporation.

        "NAI'S EXTENDED REMARKETING PERIOD" shall have the meaning assigned to
it in subparagraph 2(A) of the Purchase Agreement.

        "NAI'S EXTENDED REMARKETING RIGHT" shall have the meaning assigned to it
in subparagraph 2(A) of the Purchase Agreement.

        "NAI'S INITIAL REMARKETING RIGHTS AND OBLIGATIONS" shall have the
meaning assigned to it in subparagraph 1(A)(2) of the Purchase Agreement.

        "NOTICE OF NAI'S INTENT TO TERMINATE" shall have the meaning assigned to
it in subparagraph 5(D) of the Construction Management Agreement.

        "OPERATIVE DOCUMENTS" means the Closing Certificate, the Improvements
Lease, the Construction Management Agreement, the Purchase Agreement, the Pledge
Agreement and this Common Definitions and Provisions Agreement (Phase IV -
Improvements).

        "OTHER COMMON DEFINITIONS AND PROVISIONS AGREEMENT" means the Common
Definitions and Provisions Agreement (Phase IV - Land), dated as of October 2,
2000, between BNPLC and NAI, as such Common Definitions and Provisions Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

        "OTHER LEASE AGREEMENT" means the Lease Agreement (Phase IV - Land),
dated as of October 2, 2000, between BNPLC and NAI, as such Lease Agreement may
be extended,

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 21
<PAGE>   89

supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.

        "OTHER PURCHASE AGREEMENT" means the Purchase Agreement (Phase IV -
Land), dated October 2, 2000, between BNPLC and NAI, as such Purchase Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.

        "OUTSTANDING CONSTRUCTION ALLOWANCE" shall have the meaning assigned to
it in subparagraph 6.(a) of the Improvements Lease.

        "PARTICIPANT" means BNPLC's Parent and any other Person that, upon
becoming a party to the Participation Agreement and the Pledge Agreement by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Improvements
Lease and the Purchase Documents. As of the Effective Date, the only Participant
is BNPLC's Parent, but BNPLC may agree after the Effective Date to share in
risks and rewards of the Improvements Lease and the Purchase Documents with
other Participants. However, no Person other than BNPLC's Parent and its
Affiliates shall qualify as a Participant for purposes of the Operative
Documents or other agreements concerning the Property to which NAI is a party
unless such Person, during the continuance of an Event of Default or otherwise
with NAI's prior written approval (which approval will not be unreasonably
withheld), became a party to the Pledge Agreement and to the Participation
Agreement by executing supplements to those agreements as contemplated therein.

        "PARTICIPATION AGREEMENT" means the Participation Agreement between
BNPLC and BNPLC's Parent dated as of the Effective Date, pursuant to which
BNPLC's Parent has agreed to participate in the risks and rewards to BNPLC of
the Improvements Lease and the other Operative Documents, as such Participation
Agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms. It is understood, however, that
because the Participation Agreement expressly makes NAI a third party
beneficiary of the Participant's obligations thereunder to make advances to
BNPLC in connection with Construction Advances under the Construction Management
Agreement, NAI's consent will be required to any amendment of the Participation
Agreement that purports to limit or excuse such obligations.

        "PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

        "PERIOD" means a Construction Period or a Base Rent Period, as the
context requires.

        "PERMITTED ENCUMBRANCES" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of NAI
(including the Other Lease Agreement, the Other Purchase Agreement and all
documents executed by BNPLC pursuant to the Other Purchase Agreement), (iii) the
Premises Lease, (iv) any Liens securing the payment of Impositions which are not
delinquent or claimed to be delinquent or which are being contested in
accordance with

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 22
<PAGE>   90

subparagraph 5.(a) of the Improvements Lease, and (iv)
mechanics' and materialmen's liens for amounts not past due or claimed to be
past due or which are being contested in accordance with subparagraph 11.(c) of
the Improvements Lease.

        "PERMITTED HAZARDOUS SUBSTANCE USE" means the use, generation, storage
and offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:

        (1)    exceed that reasonably required for the construction of the
               Construction Project in accordance with the Improvements Lease
               and the Construction Management Agreement or for the operation of
               the Property for the purposes expressly permitted under
               subparagraph 2.(a) of the Improvements Lease; or

        (2)    include any disposal, discharge or other release of Hazardous
               Substances from the Property in any manner that might allow such
               substances to reach surface water or groundwater, except (i)
               through a lawful and properly authorized discharge (A) to a
               publicly owned treatment works or (B) with rainwater or storm
               water runoff in accordance with Applicable Laws and any permits
               obtained by NAI that govern such runoff; or (ii) any such
               disposal, discharge or other release of Hazardous Substances for
               which no permits are required and which are not otherwise
               regulated under applicable Environmental Laws.

Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.

        "PERMITTED HAZARDOUS SUBSTANCES" means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by NAI and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2.(a) of the Improvements Lease, in
either case in strict compliance with all Environmental Laws and with due care
given the nature of the Hazardous Substances involved. Without limiting the
generality of the foregoing, Permitted Hazardous Substances shall include usual
and customary office, laboratory and janitorial products.

        "PERMITTED TRANSFER" means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to BNP Paribas (through its
San Francisco Branch or otherwise), as BNPLC's Parent, or any other Qualified
Affiliate of BNPLC, provided that NAI must be notified before any such
conveyance to BNP Paribas or another Qualified Affiliate of (A) any interest in
the Property or any portion thereof by an assignment or other document which
will be recorded in the real property records of Santa Clara County, California
or (B) BNPLC's entire interest in the Land and the Property; (3) any assignment
or conveyance by BNPLC or its permitted successors or assigns to any present or
future Participant of any lien or security interest against the Property (in
contrast to a conveyance of BNPLC's fee estate in the Land and Improvements) or
of any interest in Rent,

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 23
<PAGE>   91

payments required by or under the Purchase Documents or payments to be generated
from the Property after the Term, provided that such assignment or conveyance is
made expressly subject to the rights of NAI under the Operative Documents; (4)
any agreement to exercise or refrain from exercising rights or remedies under
the Operative Documents made by BNPLC with any present or future Participant;
(5) any assignment or conveyance by BNPLC requested by NAI or required by any
Permitted Encumbrance, by the Purchase Agreement, by the Existing Contract, by
any other Development Contract or by Applicable Laws; or (6) any assignment or
conveyance after a Designated Sale Date on which NAI shall not have purchased or
caused an Applicable Purchaser to purchase BNPLC's interest in the Property and,
if applicable, after the expiration of the thirty day cure period specified in
Paragraph 4(D) of the Purchase Agreement.

        "PERSON" means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.

        "PERSONAL PROPERTY" shall have the meaning assigned to it on page 2 of
the Improvements Lease.

        "PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by NAI or any ERISA
Affiliate of NAI during the preceding six years and which is covered by Title IV
of ERISA, other than a Multiemployer Plan.

        "PLEDGE AGREEMENT" means the Pledge Agreement (Phase IV - Improvements)
dated as of the date hereof between BNPLC and NAI, pursuant to which NAI may
pledge certificates of deposit as security for NAI's obligations under the
Purchase Agreement (and for the corresponding obligations of BNPLC to the
Participants under the Participation Agreement), as such Pledge Agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.

        "PRE-COMMENCEMENT CASUALTY" shall have the meaning assigned to it in
subparagraph 1(A)(2)(a) of the Construction Management Agreement.

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

        "PREMISES LEASE" means the sublease of space within the Improvements,
between NAI, as landlord, and Lockheed Martin, a Maryland corporation as tenant,
executed of even date herewith, and any subleases or other transfers under and
permitted by the terms of any such lease.

        "PRIOR FUNDING ADVANCES" means $6,200,000, which equals the advances
made prior to the Effective Date by BNPLC's Parent (directly or through one or
more of its Affiliates) or by Participants to or on behalf of BNPLC to cover the
cost of BNPLC's acquisition of the Property and other costs related to the
documents that are being amended, restated and replaced by the Operative
Documents. (The total of Prior Funding Advances under and as defined herein and
under and as defined in the Other Common Definitions and Provisions Agreement
equals $62,000,000, which is the sum as of the Effective Date of the outstanding
Stipulated Loss Values

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 24
<PAGE>   92

under and as defined in the leases agreements that are being amended, restated
and replaced by the Improvements Lease and by the Other Lease.)

        "PRIME RATE" means the prime interest rate or equivalent charged by
BNPLC's Parent in the United States of America as announced or published by
BNPLC's Parent from time to time, which need not be the lowest interest rate
charged by BNPLC's Parent. If for any reason BNPLC's Parent does not announce or
publish a prime rate or equivalent, the prime rate or equivalent announced or
published by either CitiBank, N.A. or any New York branch or office of Credit
Commercial de France as selected by BNPLC shall be used to compute the rate
describe in the preceding sentence. The prime rate or equivalent announced or
published by such bank need not be the lowest rate charged by it. The Prime Rate
may change from time to time after the Effective Date without notice to NAI as
of the effective time of each change in rates described in this definition.

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

        "PROJECT COSTS" means the following:

        (a) costs incurred for the Work (as defined in the Construction
Management Agreement), including not only hard costs incurred for the new
Improvements described in Exhibit C attached to the Construction Management
Agreement, but also the following costs to the extent reasonably incurred in
connection with the Construction Project:

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

        -       site preparation costs, and

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

        (b) costs incurred to maintain insurance required by (and consistent
with the requirements of) the Improvements Lease prior to the Base Rent
Commencement Date (All Buildings), and costs of repairing any damage to the
Improvements by fire or other casualty prior to the Base Rent Commencement Date
(All Buildings), to the extent such cost is not covered by insurance proceeds
made available to NAI as provided in the Improvements Lease;

        (c) a fraction of the cost of any title insurance policy or binder
provided to BNPLC in connection with its acquisition of the Land and
Improvements, the numerator of which fraction is the difference computed by
subtracting the price paid by BNPLC for the Land from the maximum dollar amount
of coverage provided by the title insurance, and the denominator of which
fraction is equal to such maximum dollar amount of coverage;

        (d) Impositions that have accrued or become due under the
Improvements Lease prior to the Base Rent Commencement Date (All Buildings); and

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<PAGE>   93

        (e) cancellation or termination fees or other compensation payable by
NAI or BNPLC pursuant to any contract concerning the Construction Project made
by NAI or BNPLC with any general contractor, architect, engineer or other third
party because of any election by NAI or BNPLC to cancel or terminate such
contract.

Project Costs will include costs incurred by BNPLC to continue or complete the
Construction Project after any Landlord's Election to Continue Construction as
provided in subparagraph 6.(e) of the Improvements Lease. Also, Project Costs
includes the costs covered by Prior Funding Advances, other than initial
transaction costs that GAAP does not permit BNPLC to capitalize as part of its
investment in the Property, such as costs of preparing, negotiating and
executing the documents that are being amended, restated and replaced by the
Operative Documents.

        "PROJECTED COST OVERRUNS" shall have the meaning assigned to it in
subparagraph 4(A) of the Construction Management Agreement.

        "PROPERTY" means the Personal Property and the Real Property,
collectively. The fee interest in the Land itself will not be included in the
Property. Any rights, titles and interests acquired by BNPLC under the Existing
Contract, to the extent not covered by the Improvements Lease and thus not
encompassed within this definition of Property, are intended to be covered by
the Other Lease Agreement and encompassed within the term "Property" as defined
in the Other Common Definitions and Provisions Agreement.

        "PURCHASE AGREEMENT" means the Purchase Agreement (Phase IV -
Improvements) dated as of October 2, 2000 between BNPLC and NAI, as such
Purchase Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time in accordance with its terms.

        "PURCHASE DOCUMENTS" means collectively (1) the Purchase Agreement, (2)
the Memorandum of Purchase Agreement executed by BNPLC and NAI as of the
Effective Date and recorded to provide notice of the Purchase Agreement; and (3)
the Pledge Agreement and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by NAI, BNPLC or
the other parties to the Pledge Agreement pursuant to and as expressly provided
therein.

        "PURCHASE OPTION" shall have the meaning assigned to it in subparagraph
1(A)(1) of the Purchase Agreement.

        "QUALIFIED AFFILIATE" means any Person that is one hundred percent
(100%) owned, directly or indirectly, by BNP Paribas or any successor of such
bank; provided, that such Person can make (and has in writing made) the same
representations to NAI that BNPLC has made in Paragraphs 3(D) and 3(E) of the
Closing Certificate; and, provided, further, that such Person is not insolvent.

        "QUALIFIED PREPAYMENTS" means (A) any Issue 97-10 Prepayments received
by BNPLC, (B) any Voluntary NAI Construction Contributions received by BNPLC
pursuant to subparagraph 4(C) of the Construction Management Agreement, and (C)
any payments received by BNPLC from time to time during the Term (1) under any
property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction placed upon the use or

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 26
<PAGE>   94

development of the Property or for the condemnation of the Property or any
portion thereof, (3) because of any judgment, decree or award for injury or
damage to the Property or (4) under any title insurance policy or otherwise as a
result of any title defect or claimed title defect with respect to the Property;
provided, however, that (x) in determining the amount of "Qualified
Prepayments", there shall be deducted all expenses and costs of every kind, type
and nature (including taxes, Breakage Costs and Attorneys' Fees) incurred by
BNPLC with respect to the collection or application of such payments, (y)
"Qualified Prepayments" shall not include any payment to BNPLC by a Participant
or an Affiliate of BNPLC that is made to compensate BNPLC for the Participant's
or Affiliate's share of any Losses BNPLC may incur as a result of any of the
events described in the preceding clauses (1) through (4) and (z) "Qualified
Prepayments" shall not include any payments received by BNPLC that BNPLC has
paid or is obligated to pay to NAI for the restoration or repair of the Property
or that BNPLC is holding as Escrowed Proceeds pursuant to Paragraph 10 of the
Improvements Lease or any other provision of the Improvements Lease. For
purposes of computing the total Qualified Prepayments (and other amounts
dependent upon Qualified Prepayments, such as Stipulated Loss Value and the
Outstanding Construction Allowance) paid to or received by BNPLC as of any date,
payments described in the preceding clauses (1) through (4) will be considered
as Escrowed Proceeds, not Qualified Prepayments, until they are actually applied
as Qualified Prepayments by BNPLC as provided in the Paragraph 10 of the
Improvements Lease.

        "QUALIFYING SECURITY INTEREST" means a first priority perfected security
interest under the Pledge Agreement.

        "REAL PROPERTY" shall have the meaning assigned to it on page 1 of the
Improvements Lease.

        "REIMBURSABLE CONSTRUCTION-PERIOD COSTS" shall have the meaning assigned
to it in Paragraph 2 of the Construction Management Agreement.

        "REMEDIAL WORK" means any investigation, monitoring, clean-up,
containment, remediation, removal, payment of response costs, or restoration
work and the preparation and implementation of any closure or other required
remedial plans that any governmental agency or political subdivision requires or
approves (or could reasonably be expected to require if it was aware of all
relevant circumstances concerning the Property), whether by judicial order or
otherwise, because of the presence of or suspected presence of Hazardous
Substances in, on, under or about the Property or because of any prior Hazardous
Substance Activity. Without limiting the generality of the foregoing, Remedial
Work also means any obligations imposed upon or undertaken by NAI pursuant to
Development Documents or any recommendations or proposals made therein.

        "RENT" means the Base Rent and all Additional Rent.

        "RESIDUAL RISK PERCENTAGE" means the lowest percentage to which NAI can
agree without causing NAI to have to account for the Improvements Lease as a
"capital lease" rather than an "operating lease" under GAAP because of the
impact such percentage has on the calculation of the Supplemental Payment under
the Purchase Agreement. Notwithstanding the foregoing, however, regardless of
any impact it may have on the proper accounting for the

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 27
<PAGE>   95

Improvements Lease, NAI and BNPLC agree that the Residual Risk Percentage shall
not be less than fifteen percent (15%) and shall not be more than eighteen
percent (18%).

        "RESPONSIBLE FINANCIAL OFFICER" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of NAI.

        "SALE CLOSING DOCUMENTS" shall have the meaning assigned to it in
subparagraph 1(C) of the Purchase Agreement.

        "SCOPE CHANGE" shall have the meaning assigned to it in subparagraph
1(A)(1)(b) of the Construction Management Agreement.

        "SECURED SPREAD" means thirty basis points (30/100 of 1%).

        "SELLER" means Trinet Essential Facilities XII, Inc., a Maryland
corporation.

        "STIPULATED LOSS VALUE" as of any date means the amount equal to the sum
of the Prior Funding Advances plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
such date, minus all funds actually received by BNPLC and applied as Qualified
Prepayments on or prior to such date. Under no circumstances will any payment of
Base Rent, the Arrangement Fee, the Upfront Syndication Fees, or Administrative
Agency Fees or Commitment Fees reduce Stipulated Loss Value.

        The formulas in the Lease for calculating Base Rent accruing prior to
the Base Rent Commencement Date (All Buildings) require that Stipulated Loss
Value be allocated among Stipulated Loss Value (Existing Buildings), Stipulated
Loss Value (Building 6), Stipulated Loss Value (Building 7) and Stipulated Loss
Value (Building 8). For the purpose of such allocations, the sums required under
this definition to calculate total Stipulated Loss Value (i.e., Prior Funding
Advances, Construction Advances, Carrying Costs and Qualified Prepayments) will
be allocated as follows:

               (1) Prior Funding Advances, Construction Advances and Carrying
        Costs have been or will be allocated among Stipulated Loss Value
        (Existing Buildings), Stipulated Loss Value (Building 6), Stipulated
        Loss Value (Building 7) and Stipulated Loss Value (Building 8) in a
        manner that is intended to fairly reflect the cost of the Existing
        Buildings, Building 6, Building 7 and Building 8, respectively. In the
        case of Prior Funding Advances, the allocation has been made $5,320,000
        to Existing Buildings, $293,333.33 to Building 6, $293,333.33 to
        Building 7 and $293,333.34 to Building 8. In the case of the first of
        $1,150,000 to be made as described in subparagraph 2(A) of the
        Construction Management Agreement, the allocation will be made
        $383,333.33 to Building 6, $383,333.33 to Building 7 and $383,333.34 to
        Building 8. In the case of each subsequent Construction Advance
        thereafter, the allocation will be made among Building 6, Building 7 and
        Building 8 as set forth by NAI in the Construction Advance Request
        submitted by NAI for such advance (as contemplated in the form of
        request attached as an exhibit to the Construction Management
        Agreement), subject to BNPLC's approval. (If BNPLC does not approve, it
        may substitute its own good faith determination of an allocation more
        accurately reflecting the costs of such buildings.) In the case of
        Carrying Costs that accrue for any Construction Period, Carrying Costs
        (Building 6) will be

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 28
<PAGE>   96

        allocated to Building 6,Carrying Costs (Building 7) will be allocated to
        Building 7 and Carrying Costs (Building 8) will be allocated to Building
        8.

               (2) The application of Qualified Prepayments, if any, will be
        allocated among Stipulated Loss Value (Existing Buildings), Stipulated
        Loss Value (Building 6), Stipulated Loss Value (Building 7) and
        Stipulated Loss Value (Building 8) as determined by NAI, subject to the
        approval of BNPLC, in a manner that fairly reflects the impact upon the
        values of the Existing Buildings, Building 6, Building 7 and Building 8,
        respectfully, of the event or circumstances that generated such
        Qualified Prepayments. (For example, insurance proceeds paid because of
        a fire damaging only Building 6 would, if applied as Qualified
        Prepayments, reduce Stipulated Loss Value (Building 6) dollar for
        dollar.)

               (3) In any Completion Notice delivered relative to Building 6,
        Building 7 or Building 8, NAI will specify its determination of the
        applicable component of Stipulated Loss Value allocated to such
        building, which determinations will be binding upon NAI for purposes of
        the Operative Documents unless BNPLC notifies NAI of BNPLC's disapproval
        of such determinations, in which case BNPLC shall itself be entitled to
        make such determinations.

               (4) In any event, if NAI has not notified BNPLC of how NAI
        believes Stipulated Loss Value should be allocated among Stipulated Loss
        Value (Existing Buildings), Stipulated Loss Value (Building 6),
        Stipulated Loss Value (Building 7) and Stipulated Loss Value (Building
        8) at the time a determination thereof is needed under the Operative
        Documents, BNPLC shall itself be entitled to make such determination in
        good faith on the basis of any information then available to BNPLC, and
        any such determination by BNPLC shall, in the absence of clear and
        demonstrable error, be binding and conclusive for purposes of the
        Operative Documents.

        "STIPULATED LOSS VALUE (BUILDING 6)" as of any date means the portion of
Stipulated Loss Value allocated to Building 6, determined as provided in the
definition of Stipulated Loss Value above.

        "STIPULATED LOSS VALUE (BUILDING 7)" as of any date means the portion of
Stipulated Loss Value allocated to Building 7, determined as provided in the
definition of Stipulated Loss Value above.

        "STIPULATED LOSS VALUE (BUILDING 8)" as of any date means the portion of
Stipulated Loss Value allocated to Building 8, determined as provided in the
definition of Stipulated Loss Value above.

        "STIPULATED LOSS VALUE (EXISTING BUILDINGS)" as of any date means the
portion of Stipulated Loss Value allocated to the Existing Buildings, determined
as provided in the definition of Stipulated Loss Value above.

        "SUBSIDIARY" means, with respect to any Person, any Affiliate of which
at least a majority of the securities or other ownership interests having
ordinary voting power then

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 29
<PAGE>   97

exercisable for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by such Person.

        "SUPPLEMENTAL PAYMENT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(c) of the Purchase Agreement.

        "TERM" shall have the meaning assigned to it in subparagraph 1.(a) of
the Improvements Lease.

        "THIRD PARTY CONTRACT" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Construction Management Agreement.

        "THIRD PARTY PRICE" shall have the meaning assigned to it in
subparagraph 1(A)(2) of the Purchase Agreement.

        "THIRD PARTY SALE NOTICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

        "THIRD PARTY SALE PROPOSAL" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

        "THIRD PARTY TARGET PRICE" shall have the meaning assigned to it in
subparagraph 2(C) of the Purchase Agreement.

        "TRANSACTION EXPENSES" means costs incurred in connection with the
preparation and negotiation of the Operative Documents and related documents and
the consummation of the transactions contemplated therein.

        "UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan or
Multiemployer Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA) under
the Plan or Multiemployer Plan exceeds the market value of all Plan or
Multiemployer assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan or Multiemployer Plan and in accordance
with the provisions of ERISA for calculating the potential liability of NAI or
any ERISA Affiliate of NAI under Title IV of ERISA.

        "UPFRONT SYNDICATION FEES" shall have the meaning assigned to it in
subparagraph 2(M) of the Closing Certificate and Agreement.

        "VOLUNTARY NAI CONSTRUCTION CONTRIBUTIONS" shall have the meaning
assigned to it in subparagraph 4(C) of the Construction Management Agreement.

        "VOLUNTARY RETENTION OF THE PROPERTY" means an affirmative election made
by BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(A)(2)(a) of the Purchase Agreement.

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

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 30
<PAGE>   98

                      ARTICLE II - RULES OF INTERPRETATION

        The following provisions will apply to and govern the interpretation of
each of the Operative Documents:

        1. NOTICES. The provision of any Operative Document, or of any
Applicable Laws with reference to the sending, mailing or delivery of any notice
or demand under any Operative Document or with reference to the making of any
payment required under any Operative Document, shall be deemed to be complied
with when and if the following steps are taken:

               (i) All Rent and other amounts required to be paid by NAI to
        BNPLC shall be paid to BNPLC in immediately available funds by wire
        transfer to:

                     Federal Reserve Bank of New York
                     ABA  026007689 BNP Paribas
                     /BNP/ BNP San Francisco
                     /AC/ 14334000176
                     /Ref/ NAI Sunnyvale Synthetic Improvements Lease (Phase IV)

        or at such other place and in such other manner as BNPLC may designate
        in a notice to NAI.

               (ii) All Collateral required to be paid by NAI to the Agent shall
        be paid in immediately available funds by wire transfer to:

                     Federal Reserve Bank of New York
                     ABA  026007689 BNP Paribas
                     /BNP/ BNP San Francisco
                     /AC/ 14334000176
                     /Ref/ NAI Collateral Payment

        or at such other place and in such other manner as Agent may designate
        in a notice to NAI.

               (iii) All advances paid to NAI by BNPLC under the Construction
        Management Agreement or in connection therewith shall be paid to NAI in
        immediately available funds at such place and in such manner as NAI may
        reasonably designate from time to time by notice to BNPLC signed by a
        Responsible Financial Officer of NAI.

               (iv) All notices, demands, approvals, consents and other
        communications to be made under any Operative Document to or by the
        parties thereto must, to be effective for purpose of such Operative
        Document, be in writing. Notices, demands and other communications
        required or permitted under any Operative Document are to be sent to the
        addresses set forth below (or in the case of communications to
        Participants, at the addresses set forth in Schedule 1 to the
        Participation Agreement) and shall be given by any of the following
        means: (A) personal service, with proof of delivery or attempted
        delivery retained; (B) electronic communication, whether by telex,
        telegram or

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 31
<PAGE>   99

        telecopying (if confirmed in writing sent by United States first class
        mail, return receipt requested); or (C) registered or certified first
        class mail, return receipt requested. Such addresses may be changed by
        notice to the other parties given in the same manner as provided above.
        Any notice or other communication sent pursuant to clause (A) or (B)
        hereof shall be deemed received upon such personal service or upon
        dispatch by electronic means, and, if sent pursuant to clause (C) shall
        be deemed received five days following deposit in the mail.

                      Address of BNPLC:

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

                      With a copy to:

                      BNP Paribas, San Francisco
                      180 Montgomery Street
                      San Francisco, California 94104
                      Attention: Gavin Holles
                      Telecopy: (415) 296-8954

                      And for draw requests and funding notices, with a copy to:

                      BNP Paribas, San Francisco
                      180 Montgomery Street
                      San Francisco, California 94104
                      Attention: Paggie Wong/Tom Kunz
                      Telecopy: (415) 956-4230

                      Address of NAI:

                      Network Appliance, Inc.
                      Attn: Leslie Paulides
                      2770 San Thomas Expressway
                      Santa Clara, CA 95051
                      Telecopy: (408) 367-3452

        2. SEVERABILITY. If any term or provision of any Operative Document
or the application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of such document, or
the application of such term or provision other than to the extent to which it
is invalid or unenforceable, shall not be affected thereby.

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 32
<PAGE>   100

        3. NO MERGER. There shall be no merger of the Improvements Lease or
of the leasehold estate created by the Improvements Lease with any other
interest in the Property by reason of the fact that the same person may acquire
or hold, directly or indirectly, the Improvements Lease or the leasehold estate
created hereby and any other interest in the Property, unless all Persons with
an interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur. There shall be no
merger of the Purchase Agreement or of the purchase options or obligations
created by the Purchase Agreement with any other interest in the Property by
reason of the fact that the same person may acquire or hold, directly or
indirectly, the Improvements Lease or the leasehold estate created hereby and
any other interest in the Property, unless all Persons with an interest in the
Property that would be adversely affected by any such merger specifically agree
in writing that such a merger shall occur.

        4. NO IMPLIED WAIVER. The failure of BNPLC or NAI to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in any Operative Document shall not be
construed as a waiver or a relinquishment thereof for the future. The failure of
Agent to insist at any time upon the strict performance of any covenant or
agreement or to exercise any option, right, power or remedy contained in the
Pledge Agreement shall not be construed as a waiver or a relinquishment thereof
for the future. The waiver of or redress for any breach of any Operative
Document by any party thereto shall not prevent a similar subsequent act from
constituting a violation. Any express waiver of any provision of any Operative
Document shall affect only the term or condition specified in such waiver and
only for the time and in the manner specifically stated therein. No waiver by
any party to any Operative Document of any provision therein shall be deemed to
have been made unless expressed in writing and signed by the party to be bound
by the waiver. A receipt by BNPLC of any Rent with knowledge of the breach by
NAI of any covenant or agreement contained in the Improvements Lease or any
other Operative Document shall not be deemed a waiver of such breach. A receipt
by Agent of any Collateral or other payment under the Pledge Agreement with
knowledge of the breach by NAI of any covenant or agreement contained in the
Pledge Agreement shall not be deemed a waiver of such breach.

        5. ENTIRE AND ONLY AGREEMENTS. The Operative Documents supersede any
prior negotiations and agreements between BNPLC, Agent and NAI concerning the
Property or the Collateral, and no amendment or modification of any Operative
Document shall be binding or valid unless expressed in a writing executed by all
parties to such Operative Document.

        6. BINDING EFFECT. Except to the extent, if any, expressly provided to
the contrary in any Operative Document with respect to assignments thereof, all
of the covenants, agreements, terms and conditions to be observed and performed
by the parties to the Operative Documents shall be applicable to and binding
upon their respective successors and, to the extent assignment is permitted
thereunder, their respective assigns.

        7. TIME IS OF THE ESSENCE. Time is of the essence as to all obligations
of NAI and BNPLC and all notices required of NAI and BNPLC under the Operative
Documents.

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 33
<PAGE>   101

        8. GOVERNING LAW. Each Operative Document shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflict or choice of laws (subject, however, in the case of the Pledge
Agreement to any contrary provisions of the "UCC," as defined in the Pledge
Agreement).

        9. PARAGRAPH HEADINGS. The paragraph and section headings contained
in the Operative Documents are for convenience only and shall in no way enlarge
or limit the scope or meaning of the various and several provisions thereof.

        10. NEGOTIATED DOCUMENTS. All the parties to each Operative Document and
their counsel have reviewed and revised or requested revisions to such Operative
Document, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party shall not apply to the construction or
interpretation of any Operative Documents or any amendments thereof.

        11. TERMS NOT EXPRESSLY DEFINED IN AN OPERATIVE DOCUMENT. As used in any
Operative Document, a capitalized term that is not defined therein or in this
Common Definitions and Provisions Agreement (Phase IV - Improvements), but is
defined in another Operative Document, shall have the meaning ascribed to it in
the other Operative Document.

        12. OTHER TERMS AND REFERENCES. Words of any gender used in each
Operative Document shall be held and construed to include any other gender, and
words in the singular number shall be held to include the plural and vice versa,
unless the context otherwise requires. References in any Operative Document to
Paragraphs, subparagraphs, Sections, subsections or other subdivisions shall
refer to the corresponding Paragraphs, subparagraphs, Sections, subsections or
subdivisions of that Operative Document, unless specific reference is made to
another document or instrument. References in any Operative Document to any
Schedule or Exhibit shall refer to the corresponding Schedule or Exhibit
attached to that Operative Document, which shall be made a part thereof by such
reference. All capitalized terms used in each Operative Document which refer to
other documents shall be deemed to refer to such other documents as they may be
renewed, extended, supplemented, amended or otherwise modified from time to
time, provided such documents are not renewed, extended or modified in breach of
any provision contained in the Operative Documents or, in the case of any other
document to which BNPLC is a party or of which BNPLC is an intended beneficiary,
without the consent of BNPLC. All accounting terms used but not specifically
defined in any Operative Document shall be construed in accordance with GAAP.
The words "this [Agreement]", "herein", "hereof", "hereby", "hereunder" and
words of similar import when used in each Operative Document refer to that
Operative Document as a whole and not to any particular subdivision unless
expressly so limited. The phrases "this Paragraph", "this subparagraph", "this
Section", "this subsection" and similar phrases used in any Operative Document
refer only to the Paragraph, subparagraph, Section, subsection or other
subdivision described in which the phrase occurs. As used in the Operative
Documents the word "or" is not exclusive. As used in the Operative Documents,
the words "include", "including" and similar terms shall be construed as if
followed by "without limitation to".

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 34
<PAGE>   102

        13. EXECUTION IN COUNTERPARTS. To facilitate execution, each Operative
Document may be executed in as many identical counterparts as may be required.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart. All counterparts, taken together, shall collectively constitute a
single instrument. It shall not be necessary in making proof of any Operative
Document to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any
signature page to any counterpart may be detached from such counterpart without
impairing the legal effect of the signatures thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature pages.

        14. NOT A PARTNERSHIP, ETC. NOTHING IN ANY OPERATIVE DOCUMENT IS
INTENDED TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT ENTERPRISE
BETWEEN BNPLC AND NAI. NEITHER THE EXECUTION OF ANY OPERATIVE DOCUMENT NOR THE
ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED HEREIN BY BNPLC, NOR ANY
OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR PURSUANT TO ANY OPERATIVE
DOCUMENT IS INTENDED TO BE OR TO CREATE ANY FIDUCIARY OBLIGATIONS OF BNPLC TO
NAI.

        15. AMENDMENT AND RESTATEMENT. This Common Definitions and Provisions
Agreement (Phase IV - Improvements) amends, restates and replaces the Prior
Common Definitions and Provisions Agreement referenced in the recitals at the
beginning of this Common Definitions and Provisions Agreement (Phase IV -
Improvements).

                          [The signature pages follow.]

  Common Definitions and Provisions Agreement (Phase IV - Improvements) Page 35
<PAGE>   103

        IN WITNESS WHEREOF, NAI and BNPLC have caused this Common Definitions
and Provisions Agreement (Phase IV - Improvements) to be executed as of October
2, 2000.

                                      "NAI"

                                      NETWORK APPLIANCE, INC.

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

<PAGE>   104

[Continuation of signature pages to Common Definitions and Provisions Agreement
        (Phase IV - Improvements) dated to be effective October 2, 2000]

                                     "BNPLC"

                                     BNP LEASING CORPORATION

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

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