{"id":41738,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/495-java-drive-sunnyvale-ca-agreement-of-purchase-and-sale.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"495-java-drive-sunnyvale-ca-agreement-of-purchase-and-sale","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/495-java-drive-sunnyvale-ca-agreement-of-purchase-and-sale.html","title":{"rendered":"495 Java Drive (Sunnyvale, CA) Agreement of Purchase and Sale – Network Appliance Corp. and 495 Java Drive Associates LP"},"content":{"rendered":"
AGREEMENT OF PURCHASE AND SALE\n\n\n\n              THIS AGREEMENT OF PURCHASE AND SALE (\"Agreement\") is entered into\nas of June 11, 1998, by and between Network Appliance, Inc., a Delaware\nCorporation (\"Buyer\"), and 495 Java Drive Associates, L.P., a California Limited\nPartnership (\"Seller\") and constitutes (i) a contract of purchase and sale\nbetween the parties and (ii) escrow instructions to Escrow Agent (as hereinafter\ndefined).\n\n         THE PARTIES ENTER INTO THIS AGREEMENT on the basis of the following\nfacts, understandings and intentions:\n\n         A. Seller owns and desires to sell to Buyer real property comprised of\napproximately 5.86 acres, located at 495 Java Drive, Sunnyvale, California, as\nmore particularly described on EXHIBIT A attached hereto (\"Land\") and the\nImprovements (defined below) being constructed by Seller, together with Seller's\ninterest in (i) all rights, privileges, easements and right-of-ways appurtenant\nthereto, (ii) all warranties in connection with the Improvements, (iii) to the\nextent assignable, all entitlements, permits and other intangible property used\nin connection therewith, and (iv) to the extent assignable, all contract rights,\nrelated to the ownership, use and operation thereof (collectively, including\nsuch Land and Improvements, the \"Property\"), and Buyer desires to purchase the\nProperty from Seller, on all of the terms, covenants and conditions provided\nherein.\n\n         B. For purposes of this Agreement, the following terms shall have the\nmeanings given below:\n\n                      1. \"Execution Date\" shall mean the date set forth at the\nbeginning hereof.\n\n                      2. \"Business Day\" shall mean any day other than a\nSaturday, Sunday or day on which banks in the state of California are authorized\nto be closed for business.\n\n                      3. \"Close of Escrow\" shall mean the consummation of the\npurchase of the Property by Buyer or Buyer's assignee from Seller and the\nrecordation of Seller's Grant Deed in accordance with the terms and provisions\nof this Agreement.\n\n                      4. \"Closing Date\" shall mean a date which is the earlier\nof (i) twenty (20) business days following the date the Improvements are\nsubstantially completed in accordance with the Work Letter or (ii) a date\nselected by Buyer, but not before January 1, 1999, with written notice thereof\nto Seller at least thirty (30) days in advance. Seller shall provide Buyer with\nat least thirty (30) days written notice of the date Seller expects to\nsubstantially complete the Improvements and written notice of the date such\nImprovements are substantially complete.\n\n                      5. \"Escrow Agent\" shall mean First American Title\nInsurance Company, 1636 North First Street, San Jose, California 95112.\n\n\n\n   2\n\n                      6. \"Title Company\" shall mean First American Title\nInsurance Company, 1636 North First Street, San Jose, California 95112.\n\n                      7. \"Improvements\" shall mean a four story building\nconsisting of approximately One Hundred Twenty-Six Thousand Seven Hundred Sixty\n(126,760) square feet referred to in the Work Letter.\n\n                      8. \"Work Letter\" shall mean that certain Work Letter\nattached hereto as EXHIBIT B. Capitalized terms used herein and defined in the\nWork Letter shall have the meaning given in the Work Letter.\n\n                      9. \"Lot Line Adjustment\" shall mean adjustment of the\nproperty line between the Property and the adjoining property at 475 Java Drive\nin order to accommodate a common driveway as shown on Seller's Plans (as defined\nin the Work Letter).\n\n                      10. \"CC&R's\" shall mean covenants, conditions and\nrestrictions for the purpose for operating the Property and the adjoining\nproperty at 475 Java Drive in a manner that allows a common driveway\nsubstantially in conformance with the Declaration Of Covenants, Conditions And\nRestrictions And Cross-Access Parking Agreement For 500 East Middlefield Road\nand 401 Ellis Street, Mountain View, California dated December 12, 1997 and\nrecorded as Document No. 13979683 of the Santa Clara County, California records,\nwith appropriate revisions to adapt such document to the Property.\n\n         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements\nof the parties as herein set forth, the parties hereto agree as follows:\n\n                  1. Purchase. Seller agrees to sell the Property to Buyer, and\nBuyer agrees to purchase the Property from Seller, on all of the terms,\ncovenants and conditions provided herein.\n\n\n\n                  2. Deposit.\n\n                      (a) Deposit. Within seven (7) Business Days following the\nExecution Date, Buyer shall deposit with Escrow Agent the sum of Five Million\nDollars ($5,000,000.00) in cash (\"Deposit\") as a deposit on account of the\nPurchase Price (as defined in Section 4). The Deposit shall be nonrefundable,\nexcept as provided in Section 3(b) below.\n\n                      (b) Interest Bearing Account. Escrow Agent shall deposit\nthe Deposit in an interest bearing account, pursuant to investment instructions\nfrom Buyer. All interest earned on the Deposit shall be for the account of\nBuyer.\n\n                  3. Liquidated Damages\/Default.\n\n                      (a) Buyer's Default. IN THE EVENT THAT THE SALE OF THE\nPROPERTY DOES NOT CLOSE AS A CONSEQUENCE OF A DEFAULT BY BUYER, AND IF SELLER IS\nNOT IN DEFAULT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND HAS PERFORMED ALL\nOBLIGATIONS OF SELLER TO BE \n\n\n\n   3\n\nPERFORMED HEREUNDER AS OF THE TIME OF BUYER'S DEFAULT, SELLER SHALL BE ENTITLED\nEITHER TO (i) RETAIN THE AMOUNT OF THE DEPOSIT AS LIQUIDATED DAMAGES, OR (ii)\nSPECIFIC PERFORMANCE OF BUYER'S OBLIGATION TO PURCHASE THE PROPERTY; PROVIDED,\nHOWEVER, IN THE EVENT SELLER ELECTS TO SEEK SPECIFIC PERFORMANCE AND IS\nUNSUCCESSFUL IN OBTAINING SPECIFIC PERFORMANCE SELLER SHALL BE ENTITLED TO\nRETAIN THE AMOUNT OF THE DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT\nSELLER'S ACTUAL DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE IF BUYER\nDEFAULTS, AND THE AMOUNT OF THE DEPOSIT (AND ACCRUED INTEREST THEREON) IS THE\nBEST ESTIMATE OF THE AMOUNT OF DAMAGES SELLER WOULD SUFFER. THE PARTIES\nACKNOWLEDGE THAT THE SUM REPRESENTED BY BUYER'S DEPOSIT (AND INTEREST ACCRUED\nTHEREON) CONSTITUTES A REASONABLE ESTIMATE OF SELLER'S DAMAGES UNDER THE\nPROVISIONS OF SECTION 1671 OF THE CALIFORNIA CIVIL CODE.\n\n                      (b) Seller's Default. IF SELLER REFUSES OR FAILS TO CONVEY\nTHE PROPERTY PURSUANT TO THIS AGREEMENT FOR ANY REASON EXCEPT A DEFAULT BY BUYER\nHEREUNDER, BUYER, AS ITS SOLE AND EXCLUSIVE REMEDY (EXCEPT AS PROVIDED IN\nSECTION 6(f) BELOW), SHALL BE ENTITLED EITHER TO (i) TERMINATE THIS AGREEMENT\nAND RECOVER THE DEPOSIT AND IF APPLICABLE THE LIQUIDATED DAMAGES COMPUTED\nPURSUANT TO SECTION 6(e) BELOW, OR (ii) SPECIFIC PERFORMANCE OF SELLER'S\nOBLIGATION TO CONVEY THE PROPERTY, PROVIDED THAT NO SUCH ACTION FOR SPECIFIC\nPERFORMANCE SHALL SEEK TO REQUIRE SELLER TO DO ANY OF THE FOLLOWING: (A) CHANGE\nTHE CONDITION OF THE PROPERTY OR RESTORE THE SAME AFTER ANY CASUALTY (EXCEPT AS\nEXPRESSLY PROVIDED IN SECTION 12), OR (B) EXPEND MONEY OR POST A BOND TO REMOVE\nA TITLE ENCUMBRANCE OR DEFECT (EXCEPT LINES OR ENCUMBRANCES CREATED BY SELLER)\nOR CORRECT ANY MATTER SHOWN ON A SURVEY OF THE PROPERTY. IN THE EVENT BUYER\nSEEKS SPECIFIC PERFORMANCE AND IS UNSUCCESSFUL IN OBTAINING SPECIFIC\nPERFORMANCE, BUYER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND RECOVER THE\nDEPOSIT. BUYER SHALL BE DEEMED TO HAVE ELECTED TO TERMINATE THIS AGREEMENT IF\nBUYER FAILS TO DELIVER TO SELLER WRITTEN NOTICE OF ITS INTENT TO ASSERT A CAUSE\nOF ACTION FOR SPECIFIC PERFORMANCE WITHIN THIRTY (30) DAYS FOLLOWING THE\nSCHEDULED CLOSING DATE OR, HAVING GIVEN SUCH NOTICE, FAILS TO FILE A LAWSUIT\nASSERTING SUCH CAUSE OF ACTION IN THE PROPER COURT WITHIN SIXTY (60) DAYS\nFOLLOWING THE SCHEDULED CLOSING DATE. THE PARTIES WITNESS THEIR AGREEMENT TO\nTHIS LIQUIDATED DAMAGES PROVISION AND THIS LIMITATION OF REMEDIES PROVISION BY\nTHEIR EXECUTION BELOW:\n\n         BUYER:   NETWORK APPLIANCE, INC.\n                  a Delaware Corporation\n\n                  By: \/s\/ CHRIS CARLTON\n                     --------------------\n\n\n\n   4\n\n                  Its: Vice President\n                      -----------------------\n\n                  By:\n                     ------------------------\n\n                  Its: \n                      -----------------------\n\n\n         SELLER:  495 Java Drive Associates, L.P.\n                  a California Limited Partnership\n\n                  By       M-D Venture, Inc.,\n                           a California Corporation,\n                           its general partner\n\n                           By: \/s\/ STEVE DOSTART\n                              ------------------------------\n                              Steve Dostart, Vice President\n\n                      (c) Cure Period for Default. Prior to termination of this\nAgreement by either party for default, the party alleging default shall give the\ndefaulting party written notice thereof, and the defaulting party shall have ten\n(10) days from receipt of such notice to cure such default.\n\n                  4. Purchase Price. Buyer shall pay Seller a purchase price\n(\"Purchase Price\") for the Property of Thirty-Three Million Seven Hundred Fifty\nThousand Dollars ($33,750,000.00), payable at the Close of Escrow, as follows:\n\n                      (a) Application of the Deposit; and\n\n                      (b) Paying the remainder in cash (\"Cash Payment\").\n\nThe Purchase Price shall be subject to adjustment pursuant to Section 6 below.\n\n                  5. Conditions Precedent. At or before Close of Escrow the\nfollowing conditions precedent (\"Conditions Precedent\") shall be either\nsatisfied or waived by Buyer as a condition to Buyer's obligation to proceed\nwith the purchase of the Property:\n\n                      (a) Title. The term \"Conditions of Title\" shall refer to\nthose exceptions to title (including, without limitation, Title Company's\nstandard printed exceptions to title with respect to an ALTA Owner's Extended\nForm policy of title insurance (an \"ALTA Policy\") listed on EXHIBIT C\nincorporated herein by reference, the lien for real property taxes not\ndelinquent, any current assessments (subject to Seller's obligation to pay\ndelinquent assessments or credit same to the Purchase Price at closing), the\neffect of the Lot Line Adjustment and the CC&R's and any other encumbrances or\nmatters of title caused or approved in writing by Buyer. On the Closing Date,\nTitle Company shall be unconditionally committed to issue (a) an American Land\nTitle Association (\"ALTA\") Extended Title Policy Form B (1970) for the Property\n(\"ALTA Title Policy\"), with a liability limit in the amount of the Purchase\nPrice and insuring fee title vested in Buyer, and (b) endorsements to the ALTA\nTitle Policy (i) to provide Buyer with assurance that the Property is the same\nas shown on the Survey, (ii) to \n\n\n\n   5\n\nprovide Buyer with assurance that the Property is contiguous with the property\nknown as 475 Java Drive, and (iii) such other endorsements as Buyer may\nreasonably request, including without limitation zoning, tax parcel, access, and\nowner's comprehensive (ALTA 100, modified for owner, or equivalent) endorsements\n(collectively, the \"Endorsements\"); provided, however, the availability of such\nEndorsements shall not be a Condition Precedent to Buyer's obligation hereunder.\nBuyer shall take title to the Property subject to the Conditions of Title.\n\n                      (b) Survey. Buyer has approved a certified ALTA survey of\nthe Property prepared by Kier & Wright dated April 15, 1998 (\"Survey\"). Any\nrevisions (including certification to Buyer) to the ALTA survey previously\nprovided to Buyer by Seller which are requested by Buyer shall be at Buyer's\nsole cost and expense. At Close of Escrow Seller shall deliver to Buyer the\nSurvey.\n\n                      (c) Property Documents. Buyer has reviewed and approved\nall of the reports listed on EXHIBIT D attached hereto and incorporation herein\n(\"Property Documents\"). As of the Close of Escrow there shall have been no\nmaterial adverse change in the physical condition of the Property as described\nin the Property Documents which would materially, adversely affect Buyer's use\nand occupancy of the Property and Seller shall deliver to Buyer its certificate\nrepresenting and warranting that (except as described in such certificate) (i)\nthere has been no such material adverse change in such physical condition\nbetween the Execution Date and the Close of Escrow, (ii) all Improvements\ncompleted by Seller prior to the Closing Date have been built in accordance with\nthe Seller Plans and in compliance with all applicable laws and the CC&Rs, (iii)\nall asbestos containing building materials contained in the improvements located\non the Land as of the date the Land was acquired by the Seller have been removed\nand transported to a suitable disposal site, in compliance with law and any\ncontracts concerning the removal, transportation, or disposal of asbestos\nlocated at or on the Land had been fully performed as of the Closing Date and\n(iv) there are no agreements which would be binding upon the Property or the\nBuyer following Close of Escrow except as expressly contemplated by this\nAgreement. (\"Seller's Closing Certificate\").\n\n                      (d) Completion of Improvements. Seller shall have\nsubstantially completed the Improvements in accordance with the Work Letter.\n\n                      (e) Seller's Performance. Seller shall have performed all\nof its obligations under this Agreement.\n\n                  6. Completion of Improvements.\n\n                      (a) Completion of Improvements. Seller shall be obligated\nto complete the Improvements in accordance with the Work Letter.\n\n                      (b) Milestones. The parties have set forth certain events\nwhich must occur prior to or during construction of the Improvements (each, a\n\"Milestone\"), which must be accomplished by Seller on or before certain\nprescribed dates or Buyer shall have the right to terminate this Agreement and\npursue certain remedies described in Section 6(e) below. The Milestones to which\nBuyer and Seller have agreed are as follows:\n\n\n\n   6\n\n                  (1) Construction of the foundation for the building (included\n                  within the Improvements) shall have commenced no later than\n                  June 10, 1998; and\n\n                  (2) The Improvements shall have been substantially completed\n                  (as defined in the Work Letter) in accordance with Seller's\n                  Plans, except for landscaping, on or before June 17, 1999.\n\nThe Milestone dates set forth above shall be extended as follows: (A) One day\nfor each day of delay caused by Buyer Delays (as defined in the Work Letter),\n(B) One day for each day of Force Majeure Events (as defined in the Work\nLetter), however, the maximum number of days that any such Milestone can be\nextended for such Force Majeure Delays shall be limited to a total of sixty (60)\ndays except that no such limit shall apply in the event Seller's Plans are\nchanged in response to a request by Buyer under circumstances where Seller has\ninformed Buyer in writing that Seller believes such change is material and would\nnot be acceptable to Seller if Seller were building the Improvements on a\nspeculative basis rather than for Buyer, and (C)\n\n         By the amount of time required to complete any arbitration process\nresulting from disputes between Seller and Buyer arising prior to the Milestone,\nto the extent the arbitration process (and the issue being arbitrated) actually\ncauses a delay in achieving such Milestones. The aggregate extension of the\nMilestone dates provided for herein shall be referred to as the \"Milestone\nExtension Period\". The parties acknowledge that Seller has satisfied the\nMilestone set forth in clause (i) above.\n\n                      (c) Changes requested by Buyer. Buyer has reviewed and\napproved the Seller Plans (as defined in the Work Letter) for construction of\nthe Improvements. Buyer shall have the right to submit written requests for\nchanges to the existing plans for the Improvements which changes shall be\nsubject to Seller's written consent. Seller shall not unreasonably withhold it's\nconsent to such changes so long as (i) such changes do not extend the time\nperiod for substantial completion of the Improvements by more than ninety (90)\ndays as reasonably determined by Seller (Buyer acknowledges that the date\ncontemplated for substantial completion of the Improvements as of the date\nhereof without giving effect to any Milestone Extension Period or any requests\nby Buyer hereunder is March 17, 1999), and (ii) Buyer approves in writing\nSeller's estimated adjustment to the Purchase Price caused by such changes.\n\n                      (d) Adjustment to Purchase Price.\n\n                           (1) If any changes requested by Buyer and approved by\nSeller pursuant to this Section 6 increase or decrease the cost of constructing\nthe Improvements the Purchase Price shall be adjusted accordingly. Such costs\nshall include but not be limited to Seller's carrying costs (including real\nproperty taxes, cost of financing on all costs associated with the Property at a\nrate of Comerica Bank's Prime Rate plus 1%, etc.) and hard and soft costs;\nprovided, however, such costs shall not include any mark-up charged by Seller.\n\n                           (2) In the event that the Close of Escrow occurs\nprior to completion of the Improvements, Seller shall be obligated to complete\nthe Improvements following Close of Escrow. In such event the Purchase Price\nshall be reduced by the Interest Savings. The \"Interest Savings\" shall mean the\namount of interest that Seller would have paid to Comerica Bank between the\nClosing Date and the date estimated (as of the closing date) for \n\n\n\n   7\n\nsubstantial completion of the Improvements based upon the loan balance as of the\nClosing Date and Seller's best available interest rate pursuant to its loan from\nComerica Bank. Buyer and Seller shall execute such additional documents and\ninstruments as may be necessary to accomplish the purposes of this\nsub-paragraph, including but limited to, an agreement allowing Seller access to\nthe Property for the purposes of completion of the Improvements, appropriate\nrequirements for insurance to be carried by Buyer as owner of the Property, etc.\n\n                      (e) Right to Terminate. If any Milestone set forth in\nSection 6(b) is not achieved by Seller, Buyer shall have the right to terminate\nthis Agreement by written notice to Seller at any time within ten (10) business\ndays after Seller's failure to achieve the particular Milestone; provided,\nhowever, if the conditions described in Section 6(f) are met Buyer shall have\nthe right to elect the remedies described in Section 6(f). If Buyer exercises\nits termination right, Buyer shall be entitled to the remedies provided in this\nSection 6(e), which shall be Buyer's sole and exclusive remedies with respect to\nSeller's failure to achieve any Milestone. If Buyer exercises a termination\nright pursuant to this Section 6(e) and Seller believes that the Milestone was\nachieved by the appropriate date (as extended by the Milestone Extension\nPeriod), the parties agree to submit the dispute concerning Seller's failure to\nachieve that particular Milestone, and Buyer's resulting right to terminate the\nLease, to binding arbitration pursuant to the provisions of Section 16.\nNotwithstanding any other provision of this Agreement or the Work Letter, if\nSeller fails to achieve any Milestone Buyer's sole and exclusive remedies shall\nbe to either (i) elect to proceed under Section 6(f) if the conditions set forth\ntherein have occurred, or (ii) terminate this Agreement and receive the Deposit\nand damages from Seller (which shall be paid within thirty (30) days of the date\nof Buyer's notice of termination, or, if the parties resort to arbitration\npursuant to the provision set forth above, then within thirty (30) days of\nBuyer's prevailing on said termination in arbitration) in the following amounts\n(all clauses referenced are in Paragraph 6(b)): $250,000, as liquidated damages\nfor failure of Seller to achieve the Milestone described in clause (1); and\n$500,000, as liquidated damages for failure of Seller to achieve the Milestone\ndescribed in clause (2). Seller and Buyer acknowledge and agree that if Seller\nfails to achieve the Milestone described in clause (1) or (2) and Buyer elects\nto terminate this Agreement pursuant to this paragraph as a result thereof, the\ndamages which Buyer will suffer are difficult, if not impossible to calculate,\nand that the above-described liquidated damages are a fair and reasonable\nestimate of the damages that Buyer would suffer with respect to a failure to\nachieve the Milestone described in clause (1) or (2).\n\n                      (f) Buyer's Self Help Remedy. Notwithstanding the above,\nin the event that all of the following are true: (i) Seller has failed to\nachieve a Milestone set forth in Section 6(b), and (ii) Buyer is not in a\ncontinuing default under this Agreement, then Buyer shall have the right to\nsubstantially complete the Improvements and offset its actual out of pocket\ncosts and expenses incurred in connection therewith against the Purchase Price.\n\n         7. No Incumbrance or Transfer. Except as provided herein, Seller shall\nnot incumber, lease, transfer, assign or sell all or any portion, or interest\nin, the Property, or enter into any agreement or contract effecting or relating\nto the Property without Buyer's prior written consent, which consent may be\nwithheld in Buyer's sole discretion. Seller shall be entitled to encumber the\nProperty for the purpose of securing one or more construction loans. Seller may\nalso implement the Lot Line Adjustment, record the CC&R's and execute such other\ncontracts (but not contracts or encumbrances that will be binding upon Buyer or\nthe Property after the \n\n\n\n   8\n\nClose of Escrow) as may be necessary or advisable in connection with performing\nits obligations hereunder including completion of the Improvements.\n\n                  8. Escrow.\n\n         (a) Escrow. Within two (2) Business Days of the Execution Date, Seller\nshall establish an escrow (\"Escrow\") with the Escrow Agent for the close of this\ntransaction. An executed copy of this Agreement shall be deposited with the\nEscrow Agent by Buyer and this Agreement, together with Seller's Additional\nEscrow Instructions (as hereinafter defined), if any, and Buyer's Additional\nEscrow Instructions (as hereinafter defined), if any, shall constitute Escrow\nAgent's escrow instructions for closing Escrow. Escrow shall close (\"Close of\nEscrow\") on or before the Closing Date.\n\n         (b) Seller. On or prior to the Closing Date Seller shall deposit the\nfollowing into Escrow:\n\n                      (i) Grant Deed. A duly executed and acknowledged Grant\nDeed in usual form setting forth all exceptions to title created or suffered by\nSeller which are not to be removed at or prior to Closing;\n\n                      (ii) Non-Foreign Person Certificates. Duly executed\nnon-foreign person certificates (\"Non-Foreign Person Certificates\") in usual\nform sufficient to relieve Buyer of any withholding requirements pursuant to the\nprovisions of Section 1445 of the Internal Revenue Code of 1986 as amended (the\n\"Code\") and Section 18805 of the California Revenue and Taxation Code and a\nCalifornia Form 590-RE certifying that Seller has a permanent place of business\nor is qualified to do business in the State of California;\n\n                      (iii) Assignment of Intangible Property. An assignment, in\na form reasonably approved by Buyer and Seller, of all Seller's rights, title,\nand interest to any and all plans, permits, approvals, entitlements and other\nintangible property relating to the Property (the \"Assignment of Intangibles\");\n\n                      (iv) Assignment of Warranties. An assignment by Seller, in\na form reasonably approved by Buyer and Seller, of all Seller's rights, title\nand interest under the Warranties (the \"Assignment of Warranties\");\n\n                      (v) Closing Certificate. Seller's Closing Certificate, in\na form reasonably approved by Buyer and Seller; and\n\n                      (vi) Additional Escrow Instructions and Documents. Such\nadditional escrow instructions (\"Seller's Additional Escrow Instructions\") and\ndocuments as Escrow Agent may reasonably require of Seller to close the sale of\nthe Property in accordance with this Agreement, which instructions shall not be\ninconsistent with the terms of this Agreement.\n\n         (c) Buyer. On or prior to the Closing Date Buyer shall deposit the\nfollowing into Escrow:\n\n\n\n   9\n\n                      (i) Cash Payment. The Cash Payment;\n\n                      (ii) Additional Cash. Additional cash in the amount\nnecessary to pay Buyer's share of closing costs and prorations, as hereinafter\nset forth;\n\n                      (iii) Release and Assumption. The Release and Assumption\nprovided for in Section 11(g); and\n\n                      (iv) Additional Escrow Instructions and Documents. Such\nadditional escrow instructions (\"Buyer's Additional Escrow Instructions\") and\ndocuments as Escrow Agent may reasonably require of Buyer to close the sale of\nthe Property in accordance with this Agreement.\n\n                  9. Close of Escrow.\n\n         (a) Time. When the Escrow Holder has confirmed that Title Company is in\na position to issue an ALTA Extended Policy (Form B-1970) insuring title to the\nProperty as being vested in Buyer in accordance with Section 5(a) and all\ndocuments and funds required hereby have been deposited with Escrow Agent,\nEscrow Agent shall cause Close of Escrow to occur as provided below.\n\n         (b) Procedure. Escrow Agent shall close Escrow as follows:\n\n                      (i) Record the following documents in the order set forth\nbelow:\n\n                                    (1) The Grant Deed.\n\n                      (ii) Deliver to Seller the following:\n\n                                    (1) The Cash Payment and the Deposit;\n\n                                    (2) The Release and Assumption; and\n\n                                    (3) A conformed copy of the Grant Deed.\n\n                      (iii) Deliver to Buyer the following:\n\n                                    (1) An ALTA Policy in accordance with\nSection 5(a);\n\n                                    (2) The Non-Foreign Person Certificates; and\n\n                                    (3) Conformed copies of the Grant Deed,\nAssignment of Warranties, Seller's Closing Certificates and Assignment of\nIntangibles, and the originals of such documents following their recordation.\n\n         (c) Closing Costs and Prorations.\n\n\n\n   10\n\n                      (i) Closing Costs. Seller shall pay the cost for a basic\nCLTA owner's policy; Buyer shall pay all additional costs for the Title Policy\nand all Endorsements. Seller shall pay county transfer taxes and one-half of the\nescrow fees applicable to the sale. Buyer shall pay one-half of the escrow fees\nand all recording fees attributable to the conveyance documents, and Seller\nshall pay recording fees attributable to the release of any liens on the\nProperty. All other costs and charges of the escrow for the sale shall be paid\nin accordance with custom.\n\n                      (ii) Prorations. Real estate taxes and all other expenses\nnormal to the operation and maintenance of the Property, shall be prorated as of\n12:01 a.m. on the Closing Date.\n\n                      (iii) Escrow Cancellation Costs. Notwithstanding the\nprovisions of subsection (i) above, if Escrow fails to close due to Seller's\ndefault, Seller shall pay all Escrow cancellation charges. If Escrow fails to\nclose due to Buyer's default, Buyer shall pay all Escrow cancellation charges.\nIf Escrow fails to close for any reason other than the foregoing, Buyer and\nSeller shall each pay one-half (1\/2) of any Escrow cancellation charges. \"Escrow\ncancellation charges\" means all fees, charges, and expenses incurred by Escrow\nAgent, including all expenses incurred in connection with issuance of the\nPreliminary Report and other title matters.\n\n         10. Brokers. Each of Buyer and Seller represents to the other party\nthat, other than Cornish & Carey representing Buyer and CPS, representing Seller\n(\"Brokers\"), such party has not engaged any broker or finder in connection with\nany of the transactions contemplated by this Agreement. Buyer shall indemnify,\ndefend and hold Seller harmless from and against any loss, cost or expense,\nincluding, but not limited to, attorneys' fees and court costs, resulting from\nany claim against Seller for any fee or commission by any broker or finder\nclaiming by or through Buyer, other than the Brokers. Seller shall indemnify,\ndefend and hold Buyer harmless from and against any loss, cost or expense,\nincluding, but not limited to, attorneys' fees and court costs, resulting from\nany claim for a fee or commission by any broker or finder claiming by or through\nSeller. Seller shall be responsible for the payment of any fees or commissions\npayable to the Brokers in connection with the transaction contemplated by this\nAgreement in accordance with Seller's written agreements with such brokers. The\ncovenants contained herein shall survive the Close of Escrow.\n\n         11. Seller's Representations, Warranties and Covenants.\n\n         (a) Seller's Representations and Warranties. Seller hereby makes the\nfollowing representations and warranties to Buyer which representations and\nwarranties shall survive the Close of Escrow for a period of twelve (12) months\n(at which time these representations and warranties shall expire):\n\n                      (i) Litigation; Government Action. Except as disclosed to\nBuyer in writing, there is no claim, litigation, notice that the Property is in\nviolation of law, or governmental investigation presently pending with respect\nto which Seller has been served with process or other notice thereof or, to the\nbest of Seller's knowledge, otherwise pending or threatened, against or relating\nto the Property.\n\n\n\n   11\n\n                      (ii) Condemnation. There is presently no pending\ncondemnation of the Property or any part thereof with respect to which Seller\nhas been served with process or other notice thereof nor, to the best of\nSeller's knowledge, is any such condemnation otherwise pending or contemplated.\n\n                      (iii) Leases. There are no leases or other occupancy\nagreements relating to the Property.\n\n                      (iv) Hazardous Materials.\n\n                                    (1) For purposes hereof, \"Hazardous\nMaterials\" shall mean any and all asbestos, radioactive material, hazardous\nwaste, toxic substance or related material, including but not limited to those\nmaterials and substances defined as \"hazardous substances\", \"hazardous\nmaterials\", \"hazardous wastes\" or \"toxic substances\" in any California or\nfederal law or regulation.\n\n                                    (2) Seller has not released or discharged,\nor caused to be released or discharged, upon the Property any Hazardous\nMaterials, and to the best of Seller's knowledge, except as disclosed in the\nProperty Documents, there are no Hazardous Materials present on, in, or under\nthe Property.\n\n                                    (3) To the best of Seller's knowledge, the\nProperty Documents are all of the documents and reports in Seller's possession\npertaining to Hazardous Materials on or at the Property.\n\n                      (v) Property Documents. There are no other documents or\nreports in Seller's possession or under Seller's control other than the Property\nDocuments, describing the condition of the Property concerning the presence of\nHazardous Materials, the geotechnical condition of the soils or other like\nphysical condition of the Property as of the Execution Date; provided, however,\nthe improvements demolished and removed by Seller contained asbestos. Seller\nacknowledges and agrees that the demolition and removal of the existing\nimprovements including the asbestos containing materials therein and all costs\nin connection therewith is the sole responsibility of Seller.\n\n         (b) Organization and Authority. Seller is a California limited\npartnership validly existing and in good standing under the laws of California.\nSeller and has full power to enter into this Agreement and is duly qualified to\ntransact business in California. The execution, delivery, and performance of\nthis Agreement have been duly authorized and approved by all requisite action\nand the consummation of the transactions contemplated hereby will be duly\nauthorized and approved by all requisite action of Seller and no other\nauthorizations or approvals, whether of governmental bodies or otherwise, will\nbe necessary in order to enable Seller enter into or to comply with the terms of\nthis Agreement.\n\n         (c) Binding Effect of Documents. This Agreement and the other documents\nto be executed by Seller hereunder, upon execution and delivery thereof by\nSeller, will have been duly entered into by Seller, and will constitute legal,\nvalid and binding obligations of Seller. Neither this Agreement nor anything\nprovided to be done under this Agreement \n\n\n\n   12\n\nviolates or shall violate any contract, document, understanding, agreement, or\ninstrument to which Seller is a party or by which it is bound.\n\n         (d) \"Best Knowledge\" Definition. For purposes of this Section 11, the\nterm \"to the best of Seller's knowledge\" shall mean the current actual knowledge\nof John Mozart and Steve Dostart after usual inquiry in connection with the\noperation of the Property. Seller represents that John Mozart and Steve Dostart\nare the representatives of Seller with supervisory responsibilities concerning\nthe Property who would, in the ordinary course of their responsibilities,\nreceive notice from persons or entities of any of the matters described in the\nrepresentations and warranties in this Section 11.\n\n         (e) \"As-Is\" Condition; Release and Assumption. If Seller breaches any\nrepresentation, warranty, or covenant hereunder prior to Closing and Buyer\ncloses escrow with knowledge thereof, Buyer shall be deemed to waive such\nbreach. Except as expressly provided in this Agreement and in Seller's Closing\nCertificate, Seller makes no representations or warranties of any kind, express\nor implied, written or oral, as to the physical condition of the Property; the\nuses of the Property or any limitations thereon, including, without limitation,\nzoning, environmental or other laws, regulations or governmental requirements;\nthe utilities or other physical equipment and fixtures on the Property, the\ncosts of operating the Property or any other aspect of the economic operations\non the Property; the possibility of future assessments of charges being levied\nagainst the Property or imposed as a condition to development or construction;\nor the condition of the soils or groundwater of the Property. Except as provided\nherein, Buyer specifically acknowledges that it is acquiring the Property in an\n\"as-is\" condition (as such term is most broadly construed), in reliance upon its\nown inspection and investigation of the Property. Except as expressly provided\nherein, Seller makes no representation or warranties with respect to the\ncondition of title to the Property, and Buyer agrees that it will rely solely on\nits policy of title insurance. At closing, and as a condition to Seller's\nobligations hereunder, Buyer shall, pursuant to a form of Release and Assumption\n(\"Release and Assumption\") prepared by Seller and delivered to Buyer for\napproval by Buyer within ten (10) days after the Execution Date, (1) release\nSeller from any and all claims, liability or causes of action (except for the\nexpress representations and warranties herein and in Seller's Closing\nCertificate to the extent the same survive closing) in connection with the\nProperty and (2) assume all of Seller's obligations under any and all laws and\nregulations pertaining to the Property (except (i) those occurring prior to the\nClose of Escrow, or (ii) for Seller's obligations in connection with completion\nof the Improvements, if the Improvements are not completed as of the Closing\nDate).\n\n         12. Loss by Fire or Other Casualty; Condemnation.\n\n                      (a) Condemnation and General Casualty. Buyer shall be\nbound to purchase the Property for the full Purchase Price as required by the\nterms hereof, without regard to the occurrence or effect of any damage to or\ndestruction of any improvements or condemnation of any portion of the Property.\nIn the event of a casualty Buyer may elect to purchase the Property pursuant to\nthe terms of this sub-paragraph (a) or to require Seller to repair and complete\nthe Improvements pursuant to sub-paragraph (c). Such election shall be made by\nwritten notice given within thirty (30) days following the casualty. If Buyer\nelects to proceed pursuant to this sub-paragraph (a), the Purchase Price shall\nbe credited by the amount of any insurance proceeds or condemnation awards\n(excluding proceeds or awards payable in respect of\n\n\n\n   13\n\ncarrying costs or other costs born by Seller and not subject to adjustment of\nthe Purchase Price as provided herein) collected by Seller as a result of any\nsuch damage or destruction or condemnation less any monies actually expended by\nSeller to repair any damage, plus any deductible amounts attributable to such\ndamage or destruction, or such proceeds shall be assigned to Buyer if not then\ncollected.\n\n                      (b) Seller Cooperation. If Seller assigns the proceeds of\nany insurance policy to Buyer pursuant to Section 12(a), Seller shall cooperate\nwith Buyer in presenting and prosecuting the claim with Seller's insurance\ncarriers, shall follow Buyer's instructions with respect thereto (except to the\nextent Seller is advised by counsel that following a particular instruction\nwould expose Seller to liability, or to the extent Seller would incur additional\ncost to follow such instruction which is not paid by Buyer), and will not settle\nany such claim without Buyer's written approval.\n\n                      (c) Insurance. Seller shall purchase and keep in force a\npolicy or policies of fire and property damage insurance (including coverage for\nflood and earthquake, if available) covering loss or damage to the Property\n(including the improvements) in the amount of the full replacement value thereof\nincluding comprehensive builder's risk\/course of construction insurance. In the\nevent of a casualty and election by Buyer (pursuant to sub-paragraph (a) above)\nto require Seller to repair and complete the Improvements, Seller shall be\nobligated to repair and complete the Improvements pursuant to the terms and\nconditions hereof subject to extension of all of the dates for performance and\nthe closing date for the delay caused by the casualty. In such event there shall\nbe no adjustment to the Purchase Price for increase costs sustained by Seller\n(whether or not such costs are covered by insurance) in connection with or\ncaused by the casualty. Notwithstanding anything to the contrary herein, in the\nevent of a casualty under circumstances where the cost of completion of the\nImprovements exceeds the Available Funds by an amount in excess of $1,000,000,\nSeller may terminate this agreement unless Buyer elects to pay such excess. The\nterm \"Available Funds\" shall mean the sum of (i) insurance proceeds, (ii)\ndeductibles in respect of the casualty loss and (iii) the amount of the cost of\nthe Improvements which Buyer had not yet disbursed (and for which Buyer had not\nincurred liability) as of the date of the casualty.\n\n         13. Successors and Assigns. The terms, covenants, and conditions herein\ncontained shall be binding upon and inure to the benefit of the successors and\nassigns of the parties hereto. Buyer may assign it's rights under this Agreement\nto a financing entity in connection with a synthetic lease transaction without\nthe need for Seller's prior written consent but no such assignment shall relieve\nthe assignor from primary liability for its obligations hereunder. Prior to the\nacquisition of the Property, Buyer intends to assign Buyer's interest under this\nAgreement to an entity (the \"Lessor\"), who will then lease all of the acquired\nportions of the property to Buyer, as tenant (\"Tenant\"), pursuant to a synthetic\nlease (\"Lease\") to be executed by Lessor and Tenant, pursuant to which Tenant\nshall have the right to construct certain improvements thereon, pursuant to\nplans and specifications approved by Lessor and Tenant. The parties acknowledge\nthat (a) Tenant is intended to be the ultimate occupant and user of the Real\nProperty, and (b) the improvements to be constructed thereon are being designed\nfor Tenant's benefit and to Tenant's specifications. Therefore, the parties\nacknowledge that Tenant is an intended third party beneficiary of all of\nSeller's covenant, representations, warranties and obligations under this\nAgreement.\n\n\n\n   14\n\n         14. Entire Agreement. This Agreement contains all of the covenants,\nconditions and agreements between the parties and shall supersede all prior\ncorrespondence, agreements, and understandings, both oral and written. No\nprovisions of this Agreement may be amended or modified in any manner except by\nan agreement in writing duly executed by the parties hereto.\n\n         15. Governing Law. This Agreement shall be governed by and construed in\naccordance with the laws of the State of California as applied to agreements\namong California residents which are entered into and performed entirely within\nCalifornia.\n\n         16. Attorneys' Fees; Arbitration.\n\n                      (a) Attorneys' Fees. In the event of any litigation or\narbitration regarding the rights and obligations under this Agreement, the\nprevailing party shall be entitled to recover, in addition to damages,\ninjunctive or other relief, reasonable attorneys' fees expert witness fees, and\ncourt costs.\n\n                      (b) Arbitration of Disputes. ANY CONTROVERSY OR CLAIM\nARISING OUT OF THIS AGREEMENT SHALL BE SETTLED BY ARBITRATION IN ACCORDANCE WITH\nTHE RULES OF THE AMERICAN ARBITRATION ASSOCIATION FOR THE ARBITRATION OF\nCOMMERCIAL DISPUTES, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY\nBE ENTERED IN ANY COURT HAVING JURISDICTION. THE PREVAILING PARTY IN SUCH\nARBITRATION SHALL BE ENTITLED TO ATTORNEYS' FEES AND COSTS.\n\n                  NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO\nHAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE \"ARBITRATION OF\nDISPUTES\" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW\nAND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED\nIN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP\nYOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE\nSPECIFICALLY INCLUDED IN THE \"ARBITRATION OF DISPUTES\" PROVISION. IF YOU REFUSE\nTO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED\nTO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR\nAGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.\n\n                  WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT\nDISPUTES ARISING OUT OF THIS AGREEMENT TO NEUTRAL ARBITRATION.\n\n         CONSENT TO NEUTRAL ARBITRATION BY:\n______________ (SELLER): __________________(BUYER).\n\n         17. Notices. All notices required or permitted to be given pursuant to\nthe terms hereof shall be in writing and either delivered by hand delivery,\nprofessional courier service\n\n\n\n   15\n\nwhich provides written evidence of delivery or deposited in the United States\nmail, registered or certified, postage prepaid and addressed as follows:\n\n To Seller:                   495 Java Drive Associates, L.P.\n                              c\/o Mozart Development Company\n                              1068 East Meadow Circle\n                              Palo Alto, California 94303\n                              Attn: John Mozart and Steve Dostart\n                              Tel. (415) 493-9000\n                              FAX  (415) 493-9050\n\nWith a copy to:               Ellman, Burke, Hoffman & Johnson\n                              One Ecker Building, Suite 200\n                              San Francisco, California 94105\n                              Attn:  Jeffrey W. Johnson, Esq.\n                              Tel. (415) 777-2727\n                              FAX (415) 495-7587\n\nTo  Buyer:                    Network Appliance Inc.\n                              2770 San Tomas Expressway\n                              Santa Clara, California 95051\n                              Attn:  Chris Carlton\n                              Tel. (408) 367-3200\n                              FAX  (408) 367-3151\n\n  With a copy to:             Network Appliance Inc.\n                              2770 San tomas Expressway\n                              Santa Clara, California 95051\n                              Attn:  Fran Bellet, Esq.\n                              Tel. (408) 367-3200\n                              FAX (408) 367-3151\n\nThe foregoing addresses may be changed by written notice to the other party as\nprovided herein. Notices shall be deemed delivered and received, in the case of\npersonal delivery or delivery by courier as aforesaid, on the day physically\ndelivered to the indicated addressee, and in the case of delivery by United\nStates mail, three (3) Business Days after deposit in the United States mail as\naforesaid.\n\n         18. Exhibits. All exhibits are attached hereto and incorporated herein\nby this reference.\n\n         19. Authority. Each person executing this Agreement on behalf of a\nparty to this Agreement hereby represents and warrants that he or she has\nauthority to execute this Agreement on behalf of such party.\n\n\n\n   16\n\n         20. Headings. Headings at the beginning of any paragraph or Section of\nthis Agreement are solely for the convenience of the parties and are not a part\nof this Agreement or to be used in the interpretation hereof.\n\n         21. Survival. The representations, warranties and covenants of the\nparties hereto shall survive the Close of Escrow, or the termination of the\nAgreement if the Close of Escrow does not occur, subject to the express\nlimitations on survivability contained in this Agreement.\n\n         22. Waiver. No waiver by Buyer or Seller of a breach of any of the\nterms, covenants, or conditions of this Agreement by the other party shall be\nconstrued or held to be a waiver of any succeeding or preceding breach of the\nsame or any other term, covenant or condition herein contained. No waiver of any\ndefault by Buyer or Seller hereunder shall be implied from any omission by the\nother party to take any action on account of such default if such default\npersists or is repeated, and no express waiver shall affect a default other than\nas specified in such waiver. The consent or approval by Buyer or Seller to or of\nany act by the other party requiring the consent or approval of the first party\nshall not be deemed to waive or render unnecessary such party's consent or\napproval to or of any subsequent similar acts by the other party.\n\n                  23. Confidentiality. Buyer and Seller shall both maintain this\nAgreement in the terms and conditions of confidence except as required by law\nand except as required in connection with the performance of each of the\nobligations of Buyer and Seller hereunder. Notwithstanding anything to the\ncontrary herein, the provisions of this Section 23 shall be separate and\nseverable from all of the other provisions of this Agreement. A breach or\nalleged breach of the provisions of this Section 23 shall not be grounds for\ntermination of this Agreement or otherwise excuse the performance of any other\nobligations hereunder. The maximum damages recoverable for a breach of the terms\nof this Section 23 shall be Twenty-Five Thousand Dollars ($25,000.00).\n\n         24. Withdrawal from Market. During the period that this Agreement is in\neffect Seller shall withdraw the Property from the market and shall not except\nany back-up offers for the sell or lease of all or any portion of the Property.\n\n         25. Severability. If any phrase, clause, sentence, paragraph, section,\narticle, or other portion of this Agreement shall become illegal, null or void\nor against public policy, for any reason, or shall be held by any court of\ncompetent jurisdiction to be illegal, null or void or against public policy, the\nremaining portions of this Agreement shall not be affected thereby and shall\nremain in force and effect to the fullest extent permissible by law. Buyer and\nSeller acknowledge and agree that Buyer and Seller have simultaneously executed\na Lease and an Option Agreement for the property adjoining the Property at 475\nJava Drive (\"Separate Transaction\"). The parties agree that for all purposes\nhereunder the Separate Transaction is separate and independent of any and all\nrights and obligations of the parties hereunder.\n\n\n\n   17\n\n         26. Counterparts. This Agreement may be executed in any number of\ncounterparts, each of which shall be deemed an original, and all of which\ntogether shall constitute one and the same instrument.\n\n\n\n         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the dates set forth next to their respective signatures below.\n\nBUYER:            Network Appliance, Inc.,\n                  a Delaware corporation\n\n\n                  By: \/s\/ CHRIS CARLTON\n                     ------------------------------\n\n                  Its: Vice President\n                      -----------------------------\n\nSELLER:\n\n                  495 Java Drive Associates, L.P.\n                  a California Limited Partnership\n\n                  By       M-D Venture, Inc.,\n                           a California Corporation,\n                           its general partner\n\n                  By: \/s\/ STEVE DOSTART\n                     ------------------------------\n                      Steve Dostart, Vice President\n\n\n\n\n   18\n\n\n\n                                    EXHIBIT A\n\n                            [Description of Property]\n\n\n\n   19\n\n                                   EXHIBIT \"A\"\n\n                       MAP OF PROJECT (INCLUDING BUILDING)\n\n\n               [SITE PLAN WITH BUILDING OUTLINED AND CROSSHATCHED]\n\n\n\n   20\n\n                                  EXHIBIT \"A-1\"\n\n                               DESCRIPTION OF LAND\n\n\n            [PARCEL MAP AND LEGAL DESCRIPTION HERE FROM TITLE REPORT]\n\n\n   21\n\n                                   EXHIBIT \"B\"\n\n                         [FORM OF CC&Rs TO BE ATTACHED]\n\n\n\n\n   22\n\n                                   EXHIBIT \"C\"\n\n                             [INTENTIONALLY DELETED]\n\n\n\n   23\n\n                                   WORK LETTER\n\n                  1. Obligations of Seller and Buyer. Seller shall furnish and\ninstall the Improvements provided for in Paragraph 2 below at Seller's expense.\nThe quantities, character and manner of installation of all of the foregoing\nwork shall be subject to the limitations imposed by any applicable regulations,\nlaws, ordinances, codes and rules.\n\n\n                  2. Improvements. Seller shall furnish an industrial shell\nbuilding which exterior and site shall substantially comply with the, \"Base\nBuilding Improvement Plans\" described on Schedule 1 hereto, excepting that the\nsitework shall be revised to be in substantial conformance with the site plan\ndefined in Schedule 2 hereto and excepting those items included on the Base\nBuilding Improvement Plans for informational purposes only (eg. restroom\nlocations, shaft locations, elevators, extra stairwells, etc.) noted on the\nplans as N.I.C. and as further specified below\n\n(\"Improvements\"). However, in the event of a conflict between the (a) Base\nBuilding Improvement Plans and (b) the items listed in (i) through (viii) below\nand the Exclusions listed in Paragraph 3, then the latter shall control.\n\n                  (i) floor - hard trowel, smooth concrete, level (at a\nspecification not to exceed a slope of 1\/8\" in 10 feet) and ready for\ninstallation of floor covering (excluding standard floor preparation and\nwaterproofing); underslab waterproofing shall include 2\" sand layer over gravel\nwith visqueen vapor barrier ;\n\n                  (ii) ceiling\/roof - (a) structural steel members, (b) exposed\ncorrugated metal deck, (c) building sprinkler system to include main floor shut\noff valves, primary loop;\n\n                  (iii) exterior walls - (a) exposed metal studs and\/or aluminum\nwindow system members, empty framing cavity, and the backside of exterior\nsheeting and fireproofed columns (if required by code), (b) completed window\nassembly with painted metal window frames;\n\n                  (iv) electrical\/utilities - small electrical transformer for\nsite lighting, all other utilities (including telephone lines and sanitary\nsewer) stubbed into shell, and conduit (excluding cabling) installed to the 475\nJava Drive property line 495 Java Drive;\n\n                  (v) elevator - two (2) elevator pits;\n\n                  (vi) stairs - one (1) building staircase (minimal level\nrequired to obtain shell building permit);\n\n                  (vii) live load - slab and upper floor decks shall be designed\nto support a live load of eighty (80) pounds per square foot and a partition\nload of twenty (20) pounds per square foot for a total of one hundred (100)\npounds per square foot;\n\n                  (viii) site work - parking, parking lot lighting (in\ncompliance with applicable code requirements) striping, curb cuts, ramps,\nsidewalks (if required by the City of Sunnyvale), \n\n\n   24\n\nunderground storm drains, and main entries to the Building to be in compliance\nwith the applicable ADA requirements;\n\n                  (ix) roof screens - roof screens as noted on the Base Building\nImprovement Plans.\n\n\n                  3. Exclusions from Base Building Improvements. Specific\nexclusions from Improvements include, but are not limited to, (a) sprinklers\nbeyond those required for shell permit, (b) window coverings, (c) fire alarms or\nsecurity systems, (d) interior walls, (e) HVAC systems, (f) electrical service\nin the Building, (g) restrooms, (h) elevator, (i) lobby, (j) electrical,\ntelephone, janitorial and similar closets, (k) building cabling, (l) building\nsignage, (m) insulation.\n\n                  4. Seller's Plans. Seller shall provide Buyer with necessary\nbase \"design build\" drawings, specifications, and CAD diskettes (to the extent\navailable) for the Buildings no later than July 1, 1998 (\"Seller's Plans\").\nSeller's Plans shall be substantially in accordance with the plans described on\n\nSchedule 1 (which have been approved by Buyer), together with and including the\nspecifications described for the Improvements in Paragraph 2 of this Work\nLetter, but shall specifically exclude any improvements to the interior of the\nBuilding, or items noted in Paragraph 3 as specific exclusions from the\nImprovements. Seller shall have the right to change Seller's Plans after\nsubmission to Buyer as needed to satisfy any requirements of the City of\nSunnyvale; provided, however, Seller shall provide Buyer prior written notice of\nany such changes and notice of meetings with the City of Sunnyvale to be\nattended by Buyer, which Seller shall be entitled to attend. Any additional time\nrequired to accommodate Buyer's involvement in such meetings shall constitute a\nBuyer Delay pursuant to Section 7 below to the extent it actually delays\nconstruction.\n\n                  Excepting changes required by the City of Sunnyvale, any\nchanges in Seller's Plans initiated by Seller shall be subject to Buyer's review\nand approval, which shall not be unreasonably withheld, conditioned or delayed.\nBuyer must notify Seller in writing of any disapproval with respect to any\nsubmitted plans and specification within three (3) business days, unless the\nrevisions include new detailed mechanical, electrical and plumbing drawings or\nsubstantial revisions thereto, in which case, Buyer shall have five (5) business\ndays to notify Seller in writing of any disapproval or unless the plans and\nspecifications are the final complete set of plans and specifications which\nSeller intends to submit to the applicable authorities to obtain its building\npermit and other applicable governmental licenses, in which case Buyer shall\nhave seven (7) business days to notify Seller in writing of any disapproval. Any\nwritten notice containing Buyer's disapproval, shall also include the specific\nreasons for disapproval. If Buyer fails to notify Seller of any disapproval\nwithin the applicable time periods provided above, Buyer shall be deemed to have\napproved the submitted revised plans and specifications.\n\n                  5. Change Orders. Any changes requested by Buyer that\nnecessitate revisions or changes in Seller's Plans or the design or construction\nof the Improvements or delay the commencement or completion of Improvements,\nshall be subject to the prior written approval of \n\n\n   25\n\nSeller subject to the standard for approval and Purchase Price adjustment\nprovided for in Section 6(c) and 6(d), respectively, in the Purchase Agreement;\nany such changes approved by Seller shall be a \"Change Order\" hereunder. Before\nany such design and\/or construction changes are made, Buyer shall pay to Seller\nthe full costs to be incurred by Seller in connection with such Change Order if,\nand to the extent, the aggregate cost of all Change Orders exceeds $3,000,000.\nAny such Change Order funded by Seller shall be a basis for adjustment of the\nPurchase Price pursuant to Section 6(d) of the Agreement to which this Work\nLetter is attached as an exhibit. Seller and Buyer shall hold weekly\nconstruction meetings during the development of the Project and shall cooperate\nin good faith during the weekly meetings to review and agree upon Change Orders.\nIn those instances in which proposed revisions to Seller's Plans result from a\nChange Order, Seller shall cause the Seller's contractor, if applicable, to\ndetermine the additional cost or savings from such Change Order, and Seller\nshall promptly so notify Buyer. The additional costs or savings resulting from\nsuch Change Orders (and the time impact of said Change Order, if any) shall be\nsupported by detailed trade cost breakdowns prepared by Seller's Contractor.\nBuyer shall, within five (5) business days after such notification by Seller,\ninform Seller in writing whether or not Buyer desires to proceed with such\nChange Order. In the event that Buyer fails to inform Seller within such five\n(5) day period that Buyer desires to proceed with such Change Order, Seller\nshall not make any changes(s) to the Improvements included in such Change Order.\nIf Buyer informs Seller within such five (5) day period that Buyer does wish to\nproceed with the proposed Change Order, the proposed Change Order shall be\nincorporated in the Improvements if applicable thereto and Seller's contractor\nshall proceed with the work covered by the Change Order and Buyer shall be\nresponsible for all costs and expenses incurred in connection therewith as\naforesaid. The Seller shall pass through to Buyer the Seller's contractor's\npercentage mark-up (which shall not be greater than the mark-up charged to\nSeller) for overhead and profit (which shall include all charges for general\nconditions) for Change Orders to the Improvements without additional mark-up\nfrom Seller. All Change Orders shall be in writing and shall be on such AIA form\nas required by Seller and\/or Seller's contractor. Buyer shall evidence in\nwriting it's approval of such Change Order prior to Seller's approval of same.\n\n                  6. Substantial Completion. For purposes of this Work Letter\nand the Purchase Agreement, the Improvements shall be deemed \"substantially\ncomplete\" at such time as (i) Seller has completed work in accordance with\nSeller's Plans and in compliance with all legal requirements applicable to the\nImprovements at the time the permits where obtained for the construction thereof\nsubject to completion and correction of items on Seller's architect's punch\nlist, and landscaping, (ii) Seller has assured Buyer access to the Building\n(e.g. all concrete\/asphalt paving and hard scape work is complete), and (iii)\nSeller is diligently prosecuting the completion of landscaping. Upon Buyer's\nrequest, if a certificate of shell completion or similar certification is\navailable from the City of Sunnyvale in connection with the Improvements,\nwithout incurring any additional cost or causing delays to the Improvements or\nBuyer Improvements, Seller shall use commercially reasonable efforts to obtain\nsuch certification after completion of the Improvements and deliver a copy to\nBuyer.\n\n                  7. Buyer Delays. If substantial completion of the Improvements\nis delayed due to any of the following (collectively, \"Buyer Delays\"), then the\ndelay shall be included in the Milestone Delay Extension and the Purchase Price\nshall be subject to adjustment pursuant to \n\n\n   26\n\nSection 6(d) of the Purchase Agreement: (i) Buyer's failure to timely submit any\nitems required by this Work Letter, including, without limitation, the space\nplan, supporting drawings and specifications and pallet of interior colors and\nfinishes; (b) Buyer's requested changes to the Improvements pursuant to any\nChange Order(s); or (c) Buyer's failure to comply with Seller's contractor's\nschedule. No Buyer Delay shall be deemed to have occurred unless and until\nSeller has given written notice to Buyer specifying the action or inaction which\nSeller contends constitutes a Buyer Delay. If such action or inaction is not\ncured within one (1) business day after Buyer's receipt of such notice, then a\nBuyer Delay, as set forth in such notice, shall be deemed to have occurred\ncommencing as of the date Buyer received such notice and continuing for the\nnumber of days the substantial completion of the Improvements was in fact\ndelayed as a direct result of such action or inaction.\n\n                  8. Seller Delay. The term \"Seller Delay\" as used in this Lease\nor this Work Letter shall mean the extent of any delay in the design or\nconstruction of the Buyer Improvements which is due to the following: (1) delay\nin the giving of authorizations or approvals by Seller beyond the time periods\nprovided for herein or in the Lease; (2) delay attributable to the refusal of\nSeller, its agents or contractors to permit Buyer, its agents or contractors,\naccess to and use of the Building and any Building facilities or services after\nthe Initial Buyer Work Date; (3) delay attributable to Seller giving Buyer\nincorrect or incomplete Building requirements or Seller Plans, or revisions made\nto such Seller Plans subsequent to the delivery of such items to Buyer; and (4)\nfailure of Seller to deliver Seller's Plans to Buyer on or before July 1, 1998.\nNo Seller Delay shall be deemed to have occurred unless and until Buyer has\ngiven written notice to Seller specifying the action or inaction which Buyer\ncontends constitutes a Seller Delay. If such action or inaction is not cured\nwithin one (1) business day after Seller's receipt of such notice, then a Seller\nDelay, as set forth in such notice, shall be deemed to have occurred commencing\nas of the date Seller received such notice and continuing for the number of days\nthe substantial completion of the Buyer Improvements was in fact delayed as a\ndirect result of such action or inaction.\n\n                  9. Force Majeure Events. The term \"Force Majeure Events,\" as\nused in the Lease or this Work Letter shall mean any delay in the completion of\nthe Improvements which is attributable to any: (1) actual delay or failure to\nperform by the applicable party attributable to any strike, lockout or other\nlabor or industrial disturbance (whether or not on the part of employees of\neither party hereto), civil disturbance, future order claiming jurisdiction, act\nof the public enemy, war, riot, sabotage, blockade, embargo, inability to secure\ncustomary materials, supplies, or labor through ordinary sources by reason or\nregulation or order of any governmental or regulatory body; (2) delay\nattributable to lightning, earthquake, fire, storm, hurricane, tornado, flood,\nwashout, rain, severe weather, explosion, or any other similar industry-wide or\narea-wide cause beyond the reasonable control of the party from whom performance\nis required, or any of its contractors or other representatives. Except as\nspecifically limited in this Work Letter, any prevention, delay or stoppage due\nto any Force Majeure Event shall excuse the performance of the party affected\nfor a period of time equal to any such prevention, delay or stoppages (except\nthe obligations of either party to pay money, other than rent, pursuant to this\nLease). No Force Majeure Event shall be deemed to have occurred unless and until\nthe party claiming such Force Majeure Event has provided written notice to the\nother party specifying the action or inaction \n\n\n\n   27\n\nthat such notifying party contends constitutes a Force Majeure Event within five\n(5) business days of the occurrence of such event.\n\n                  10. Billing. Buyer shall pay to Seller all amounts payable by\nBuyer within thirty (30) days after billing by Seller. Bills may be rendered\nduring the progress of the work so as to enable Seller to pay its general\ncontractor, architect or engineers without advancing Seller's funds for changes\nto the Base Building Improvements, though such progress billings shall only be\nbased on the extent to which the work is completed.\n\n                  11. Insurance. During the course of construction, Seller shall\nrequire its contractors and architects to obtain and maintain in force Broad\nForm Comprehensive General Liability insurance (including, without limitation,\ninsurance against completed operations liability for losses occurring within\nthree (3) years after the completion of the Work) with coverage for explosion,\ncollapse, and underground damage, against claims arising out of bodily injury,\npersonal injury, or death and from damage to or destruction of property of\nothers, including, without limitation, loss of use thereof, and including,\nwithout limitation, the liability of Seller or the applicable contractor or\narchitect arising out of the activities of all subcontractors, and each of them,\nwith a combined single limit of not less than One Million Dollars ($1,000,000)\nfor any one accident and\/or occurrence and\/or series of accidents or occurrences\narising out of any one event. Such insurance shall include Broad Form Property\nDamage and Independent Contractors Coverage. Such insurance shall be primary and\nnot subject to any contribution from any insurance carried by Seller.\n\n                  12. Buyer's Improvements. In the event that Buyer wishes to\ncommence constructing additional improvements within the Improvements to be\nconstructed by Seller (\"Buyer's Improvements\") prior to substantial completion\nof the Improvements by Seller, the terms and conditions of this paragraph 12\nshall apply. Buyer shall use Devcon Construction as its general contractor for\nthe Buyer Improvements or some other contractor with an equivalent reputation\nand bonding capability reasonably approved by Seller (\"Buyer's Contractor\").\nBuyer shall direct and authorize Buyer's Contractor to keep Seller fully\ninformed of the construction process for the Buyer Improvements and to provide\nSeller with access to all documentation and other information in Buyer's\nContractor's possession or control regarding construction of the Buyer\nImprovements, provided that Seller shall not be obligated to monitor or inspect\nconstruction of the Buyer Improvements or any information in connection\ntherewith.\n\n                  All Buyer Improvements shall be constructed by Buyer's\nContractor. Installation of all Buyer Improvements shall be coordinated with\nSeller's contractor's schedule for the Base Building Improvements, and shall be\nhandled in such a manner as to maintain harmonious labor relations and not\ninterfere with or delay the work of Seller's contractors. In addition, at\nSeller's request all Buyer Improvements shall be constructed using union labor.\nAll Buyer Improvements furnished and installed by Buyer shall not cause Seller's\ncontractor to be dependent upon Buyer's work in order for Seller's contractor to\ncomplete his work. Buyer's contractors, subcontractors and labor shall be\nsubject to approval by Seller which approval shall not be unreasonably withheld\nor delayed and shall be subject to the reasonable administrative supervision of\nBuyer's general contractor and reasonable rules of the site. Buyer shall give\n\n\n\n   28\n\nSeller full access and entry to the Premises in order to complete the Base\nBuilding Improvements. Buyer shall not be charged any fee for Seller's review of\nthe plans, drawings and specifications or any oversight of the construction of\nthe Buyer Improvements.\n\n                  Buyer shall keep the Property free and clear of all lien\nclaims arising in connection with Buyer's Improvements. Any delay experienced by\nSeller as the result of Buyer's construction of Buyer's Improvements shall\nconstitute a Buyer's Delay (subject to the notice and cure provisions of section\n7 above) for the purposes of this work letter. In the event the Purchase\nAgreement is terminated by Buyer pursuant to the terms and conditions thereof,\nexcept due to Seller's intentional breach at the election of Seller, Buyer shall\nimmediately remove any and all of Buyer's Improvements that Seller reasonably\ndetermines to be of no value or of negative value in connection with the use of\nthe Property by Seller; provided, however, at any time prior to commencement of\nconstruction of Buyer's Improvements, Buyer may submit to Seller its plans and\nspecifications for Buyer's Improvements and request that Seller designate in\nwriting within fifteen (15) days from receipt of such written request, which\nportion of the proposed Buyer's Improvements meet the foregoing standard\nrequiring removal. Seller shall have no obligation to pay Buyer for any of\nBuyer's Improvements in the event of termination of the Agreement for any reason\nwhatsoever.\n\n\n\n\n   29\n\n                                 EXHIBIT D-1(A)\n\n                         BASE BUILDING IMPROVEMENT PLANS\n\n\n\n                 [Plan index to be attached from submittal set]\n\n\n\n   30\n\n\n                                 EXHIBIT D-1(b)\n\n\n                                REVISED SITE PLAN\n\n\n\n                 [Plan index to be attached from submittal set]\n\n\n\n   31\n\n                                   EXHIBIT D-2\n\n                         APPROVED BUYER PLAN GUIDELINES\n\n\n\n[To be forthcoming pursuant to the terms outlined below. Typically, the easiest\nmanner to do this is for Buyer to attach a conceptual, softline plan that would\n                                be pre-approved]\n\n\nSeller and Buyer shall endeavor to agree upon parameters concerning the contents\nof this Exhibit. However, the parties have no obligation to so agree. In the\nevent that Buyer believes that the parties are unable to agree upon such\nparameters, Buyer shall have the option to terminate the Lease by providing\nSeller written notice of its election to do so within two (2) weeks of the\nexecution date of the Lease.\n\n\n\n\n   32\n\n                                    EXHIBIT E\n\nESTOPPEL CERTIFICATE\n\n[Date]\n\nNetwork Appliance, Inc.\n[Address]\n\nAttn: [corporate officer]\n\n         Re: Acknowledgment of Initial Buyer Work Date under the Lease Agreement\n         by and between 495 Java Drive Associates, L.P., and Network Appliance,\n         Inc., dated as of ______________, 1998 (the \"Lease\")\n\nDear [name]:\n\n                  This letter will confirm that for all purposes of the Lease,\nthe Initial Buyer Work Date (as defined in Paragraph 3(a) of the Lease) is\n_______________, 199_.\n\n                  Please acknowledge your acceptance of this letter by signing\nand returning a copy to the undersigned.\n\n                                   Very truly yours,\n\n                                   495 Java Drive Associates, L.P.,\n                                   a California limited partnership\n\n                                   By:  M-D Ventures, Inc.,\n                                   a California corporation\n                                   Its General Partner\n\n\n                                   By: ___________________\n                                   Its: __________________\n\n\nAccepted and Agreed:\n\nNetwork Appliance, Inc.,\na Delaware corporation\n\nBy: ___________________________\nIts: __________________________\n\nDated: ________________________\n\n\n\n   33\n\n                                   EXHIBIT \"F\"\n                             [INTENTIONALLY DELETED]\n\n\n\n   34\n\n\n\n                                   EXHIBIT \"G\"\n\n                             [INTENTIONALLY DELETED]\n\n\n\n\n   35\n\n\n\n                                   EXHIBIT \"H\"\n\n                              ESTOPPEL CERTIFICATE\n                              (CONSTRUCTION LENDER)\n\n\n       [TO FOLLOW FROM LENDER, SUBJECT TO BUYER'S REASONABLE REQUIREMENTS]\n\n\n\n   36\n\n                                   EXHIBIT \"H\"\n\n                       FORM OF BUYER ESTOPPEL CERTIFICATE\n                                    (ONGOING)\n\nTO: __________________________ , OR ASSIGNEE (\"LENDER\"), AND\/OR WHOM ELSE IT MAY\nCONCERN:\n\nTHIS IS TO CERTIFY THAT:\n\n1.       The undersigned is the lessee (\"Buyer\") under that certain lease dated\n         ______________, 19____ , (\"Lease\"), by and between ___________________\n         ________________ as lessor (\"Seller\") and ____________________________\n         as Buyer, covering those certain premises commonly known and designated\n         as __________________ (\"Premises\").\n\n2.       The Lease has not been modified, changed, altered, assigned,\n         supplemented or amended in any respect (except as indicated below; if\n         none, state \"none\"). The Lease is not in default and is valid and in\n         full force and effect on the date hereof. The Lease is the only Lease\n         or agreement between the Buyer and the Seller affecting or relating to\n         the Premises. The Lease represents the entire agreement between the\n         Seller and the Buyer with respect to the Premises ________________.\n\n3.       The Buyer is not entitled to, and has made no agreement(s) with the\n         Seller or its agents or employees concerning free rent, partial rent,\n         rebate of rent payments, credit or offset or deduction in rent, or any\n         other type of rental concession, including, without limitation, lease\n         support payments or lease buy-outs (except as expressly provided in the\n         Lease or as indicated below; if none, state \"none\").\n\n         _______________________________________________________________.\n\n4.       The Buyer has accepted the Premises, and opened for business in the\n         Premises on _____________________, 19__. The Lease term began\n         _____________________, 19__. The termination date of the present term\n         of the Lease, excluding unexercised renewals, is ___________________,\n         19__.\n\n5.       The Buyer has paid rent for the Premises for the period up to and\n         including ______ , 19__ . The fixed minimum rent and any additional\n         rent (including the Buyer's share of tax increases and cost of living\n         increases) payable by the Buyer presently is $__ per month. No such\n         rent has been paid more than one (1) month in advance of its due date,\n         except as indicated below (if none, state \"none\"). The Buyer's security\n         deposit is\n\n                  $___________________.\n\n6.       To the best of Buyer's knowledge (which means the current, actual\n         knowledge of the signatory for Buyer, who is the person responsible at\n         Buyer for applicable matters): (i) no \n\n\n\n   37\n\n         event has occurred and no condition exists which, with the giving\n         notice or the lapse of time or both, will constitute a default under\n         the Lease; and (ii) the Buyer has no existing defenses or offsets\n         against the enforcement of this Lease by the Seller.\n\n7.       The Buyer has received or will receive payment or credit for Buyer\n         improvement work in the total amount of $_______________ (or if other\n         than cash, describe below; if none, state \"none\"). Except as noted\n         below, all conditions under this Lease to be performed by the Seller\n         have been satisfied. ___________________________________.\n\n8.       Except as provided in the Lease, the Buyer has no outstanding options\n         or rights of first refusal to purchase the Premises or any part thereof\n         or all or any part of the real property of which the Premises are a\n         part.\n\n9.       No actions, whether voluntary or otherwise, are pending against the\n         Buyer or any general partner of the Buyer under the bankruptcy laws of\n         the United States or any state thereof.\n\n10.      The Buyer has not sublet the Premises to any sublessee and has not\n         assigned any of its rights under the Lease, except as indicated below\n         (if none, state \"none\"). No one except the Buyer and its employees\n         occupies the Premises. ________________________________ .\n\n11.      The address for notices to be sent to the Buyer is as set forth in the\n         Lease.\n\n12.      To the best of Buyer's knowledge, Buyer's and Buyer's sublessee's and\n         assignee's use, maintenance or operation of the Premises complies with,\n         and will at all times comply with, all applicable federal, state,\n         county or local statutes, laws, rules and regulations of any\n         governmental authorities relating to environmental, health or safety\n         matters (being hereinafter collectively referred to as the\n         Environmental Laws).\n\n13.      The Premises have not been used and the Buyer does not plan to use the\n         Premises for any activities which, directly or indirectly, involve the\n         use, generation, treatment, storage, transportation or disposal of any\n         petroleum product or any toxic or hazardous chemical, material,\n         substance, pollutant or waste except as permitted by the lease.\n\n14.      Buyer has not received any notices, written or oral, of violation of\n         any Environmental Law or of any allegation which, if true, would\n         contradict anything contained herein and there are no writs,\n         injunctions, decrees, orders or judgements outstanding, no lawsuits,\n         claims, proceedings or investigations pending or threatened, relating\n         to Buyer's or Buyer's sublessee's or assignee's use, maintenance or\n         operation of the Premises, nor is Buyer aware of a basis for any such\n         proceeding.\n\n15.      (INCLUDE THIS PARAGRAPH FOR LOAN TRANSACTIONS.) The Buyer acknowledges\n         that all the interest of the Seller in and to the Lease is being duly\n         assigned to Lender, and that pursuant to the terms thereof, all rent\n         payments under the Lease shall \n\n\n\n   38\n\n         continue to be paid to the Seller in accordance with the terms of the\n         Lease unless and until the Buyer is notified otherwise in writing by\n         Lender or its successors or assigns. Buyer is hereby authorized and\n         directed by Seller to comply with any written direction of Lender\n         concerning payment of Rent and no such compliance will give rise to any\n         default by Buyer under the Lease.\n\n         It is particularly noted that:\n\n                  (a) Under the provisions of this assignment, the Lease cannot\n                  be terminated (except as expressly provided in the Lease) or\n                  modified in any of its terms, or consent be given to the\n                  release of any party having liability thereon, without the\n                  prior written consent of Lender or it successors or assigns,\n                  and without such consent, no rent may be collected or accepted\n                  more than one (1) month in advance.\n\n                  (b) The interest of the Seller in the Lease has been assigned\n                  to Lender for the purposes specified in the assignment.\n                  Lender, or its successors or assigns, assumes no duty,\n                  liability or obligation whatsoever under the Lease or any\n                  extension or renewal thereof.\n\n                  (c) Any notices sent to Lender or its affiliates should be\n                  sent by registered mail and addressed as follows:\n                  _____________________________ .\n\n16.      Buyer agrees to give any Mortgagee and\/or Trust Deed Holders\n         (\"Mortgagee\"), by registered mail, a copy of any notice of default\n         served upon the Seller, and Lender shall have the cure rights expressly\n         provided in Paragraph 21 of the Lease.\n\n17.      This certification is made to induce Lender to make certain fundings,\n         knowing that Lender relies upon the truth of this certification in\n         disbursing said funds.\n\n18.      The undersigned is authorized to execute this Buyer Estoppel\n         Certificate on behalf of the Buyer.\n\n\n\nDATED THIS                              DAY OF _______, 19_________.\n\n\n\n                                        (BUYER)\n\n                                        BY:_________________________\n\n                                             ITS:\n\n                                             DATE:\n\n   39\n\nTHE UNDERSIGNED HEREBY CERTIFIES THAT THE CERTIFICATIONS SET FORTH ABOVE ARE\nTRUE AS OF THE DATE HEREOF.\n\n\n\n                                        (OWNER\/SELLER)\n\n                                        BY:__________________________\n\n                                             ITS:\n\n                                             DATE:\n\n\n\n   40\n\n\n                                   EXHIBIT \"I\"\n\n               [PREAPPROVED FORM OF SNDA AGREEMENT TO BE ATTACHED]\n\n\n\n   41\n\n\n                                   EXHIBIT \"J\"\n\n                              RULES AND REGULATIONS\n\n                  1. Sidewalks, exits, entrances, elevators, escalators and\nstairways shall not be obstructed by Buyer or used by Buyer for any purpose\nother than for ingress to and egress from the Premises. Buyer, and Buyer's\nemployees or invitees, shall not go upon the roof of the Building, except as\nauthorized by Seller or pursuant to Paragraph 46 of the Lease.\n\n\n                  2. All curtains, draperies, blinds, shutters, shades, screens\nor other coverings, awnings, hangings or decorations shall be attached to, hung\nor placed in, or used in connection with, any exterior window, door or patio on\nthe Premises, if any, shall be subject to Seller's approval, which shall not be\nunreasonably withheld.\n\n\n                  3. If Buyer shall alter any lock or access device or install a\nnew or additional lock or access device, Buyer shall in each case furnish Seller\nwith a key for any such lock to the extent Seller would be entitled to such key\nunder the Lease.\n\n\n                  4. Upon the termination of the tenancy, Buyer shall deliver to\nSeller all the keys or access devices for the Building, offices, rooms and\ntoilet rooms which Buyer shall have had made.\n\n                  5. The toilet rooms, toilets, urinals, wash bowls and other\napparatus shall not be used for any purpose other than that for which they were\nconstructed and no foreign substance of any kind whatsoever shall be thrown\ntherein, and the expense of any breakage, stoppage or damage resulting from the\nviolation of this rule by Buyer or Buyer's employees or invitees shall be borne\nby Buyer.\n\n\n                  6. Animals or birds shall not be brought or kept in or about\nthe Premises or the Building, other than seeing-eye dogs or other such animals\nthat assist handicapped individuals.\n\n\n                  7. Buyer shall not install any radio or television antenna,\nloudspeaker or any other device on the exterior walls or the roof of the\nBuilding except as expressly permitted by the Lease.\n\n                  8. Buyer shall not lay linoleum, tile, carpet or any other\nfloor covering so that the same shall be affixed to the floor of the Premises in\nany manner except as approved in writing by Seller. The expense of repairing any\ndamage resulting from a violation of this rule by Buyer or Buyer's contractors,\nemployees or invitees or the removal of any floor covering shall be borne by\nBuyer.\n\n\n\n   42\n\n                  9. Buyer shall not place a load upon any floor of the Premises\nwhich exceeds the load per square foot which such floor was designed to carry\nand which is allowed by law. Buyer may hang pictures on walls in the Premises.\nAny damage to the walls caused by molley bolts, double sided tape, or like\nhanging materials, will be repaired by Buyer.\n\n\n                  10. Buyer shall store all trash and garbage within the\ninterior of the Premises or in the appropriate trash collection areas outside of\nthe Premises. No material shall be placed in the trash boxes or receptacles if\nsuch material is of such nature that it may not be disposed of in the ordinary\nand customary manner of removing and disposing of trash and garbage in the\njurisdiction in which the Premises is located, without violation of any law or\nordinance governing such disposal.\n\n                  11. Buyer shall comply with all safety, fire protection and\nevacuation procedures and regulations established by any governmental agency.\n\n\n                  12. Buyer assumes any and all responsibility for protecting\nthe Premises from theft, robbery and pilferage, which includes keeping doors\nlocked and other means of entry to the Premises closed, unless caused by the\ngross negligence or willful misconduct of Seller, its agents, servants, or\nemployees (\"Seller Parties\").\n\n                  13. Buyer shall be responsible for the observance of all of\nthe foregoing Rules and Regulations by Buyer's employees, agents, clients,\ncustomers, invitees and guests.\n\n\n                  14. Unless otherwise defined, terms used in these Rules and\nRegulations shall have the same meaning as in the Lease.\n\n\n\n   43\n\n                                    EXHIBIT K\n\n                  REQUIRED CONDITION OF PREMISES UPON SURRENDER\n\n\n                  Upon termination of the Lease, the Premises shall be returned\nto Seller with all Building Systems and elevator, fire and gas systems in good\nworking order and maintained with any necessary repairs completed in the\nreasonable opinion of Seller's subcontractor, and all operating manuals and\nmaintenance records with respect to such systems shall be delivered to Seller.\nAll space in the Premises shall be clean and well-maintained with walls freshly\npainted as necessary (or touched-up, if acceptable to Seller in its reasonable\ndiscretion), and carpet shampooed and presentable for re-leasing. Any damaged or\nunpresentable carpet shall be replaced. All window coverings shall be cleaned\nand any damaged coverings repaired or replaced. Any damaged ceiling tiles shall\nbe replaced and all light fixtures shall be fully operational and clean. All\ndoors shall be presentable and damaged doors repaired or replaced. Bathrooms\nshall be freshly mopped and all tile surfaces cleaned. Any damaged bathroom\npartitions or fixtures shall be repaired or replaced. The exterior and interior\nof all windows shall be washed and all interior partition glass shall be\ncleaned. If Buyer is obligated to remove or restore any Buyer Improvements or\nAlterations upon termination or expiration of the Lease pursuant to Paragraph\n8(d) or (e) of the Lease or Paragraph 6 of the Work Letter, the affected area\nwill be returned to Seller in the form of open office space in the condition\ndescribed above.\n\n\n\n   44\n\n                                   EXHIBIT \"L\"\n\n                             [INTENTIONALLY DELETED]\n\n\n\n   45\n\n                                   EXHIBIT \"M\"\n\n                            FORM OF LETTER OF CREDIT\n\n\n     [TO BE PROVIDED BY BUYER FOR REVIEW BY SELLER PRIOR TO LEASE EXECUTION]\n\n\n\n   46\n\n\n\n                                   EXHIBIT \"N\"\n\n                    BUYER'S HAZARDOUS SUBSTANCES DISCLOSURES\n\n\n     [TO BE PROVIDED BY BUYER FOR SELLER'S REVIEW PRIOR TO LEASE EXECUTION]\n\n\n\n   47\n\n\n                   ADDENDUM TO AGREEMENT OF PURCHASE AND SALE\n\n\n                  Notwithstanding anything to the contrary in the Agreement of\nPurchase and Sale between Network Appliance, Inc. (\"Buyer\") and 495 Java Drive\nAssociates, L.P. (\"Seller\"), (i) Buyer warrants that it has authority to\nexecute, deliver and perform the Agreement of Purchase and Sale and (ii) Seller\nshall be entitled to terminate the Agreement of Purchase and Sale at any time\nafter July 10, 1998 if, prior to such termination Buyer has failed to deliver to\nSeller its Board of Directors Resolution certified by the Secretary or Assistant\nSecretary of Buyer authorizing the transactions contemplated by the Agreement of\nPurchase and Sale. Upon such termination Seller shall return Buyer's Deposit.\n\n                                     BUYER:\n\n                                     NETWORK APPLIANCE, INC.\n\n\n\n                                     By: \/s\/ CHRIS CARLTON\n                                        ---------------------------\n\n                                          Its: Vice President\n                                              ---------------------\n\n\n                                     SELLER:\n\n                                     495 JAVA DRIVE ASSOCIATES, L.P.\n\n                                     By M-D Ventures, Inc.\n\n\n\n                                     By: \/s\/ JEFFREY JOHNSON\n                                        ---------------------------\n\n                                          Its: Attorney-in-fact\n                                              ---------------------\n\n\n   48\n\n                            INDEMNIFICATION AGREEMENT\n\n\n                  This Indemnification Agreement is executed as of June 15, 1998\nby and between Network Appliance, Inc., a Delaware Corporation (\"Network\") and\n495 Java Drive Associates, L.P., a California limited partnership (\"Java\").\n\n                  1.  Recitals.\n\n                      a. Java owns the property located at 495 Java Drive,\nSunnyvale, California (\"Property\").\n\n                      b. Java is in the process of constructing a four story\nbuilding consisting of approximately One Hundred Twenty-Six Thousand Seven\nHundred Sixty (126,760) square feet (\"Improvements\"). The Improvements are being\nconstructed by Devcon Construction Company (\"Devcon\").\n\n                      c. Network and Java have executed that certain Agreement\nOf Purchase And Sale dated as of June 11, 1998 for the purchase by Network of\nthe Property (\"Purchase Agreement\").\n\n                      d. The capitalized terms not otherwise defined herein\nshall have the meanings given in the Purchase Agreement.\n\n                      e. Network wishes to review the plans and specifications\nfor the Improvements to consider changes therein. Under the terms and conditions\nof the Purchase Agreement the additional costs of changes are to be borne by\nNetwork. In order to minimize the additional costs associated with such changes\nNetwork has determined that it would be to its advantage to cause Devcon to stop\nconstruction as of the date hereof and to do only such construction as Network\nshall authorize.\n\n                      f. Java is willing to allow Network to stop the Devcon\nconstruction and limit its construction to only those portions of the work\nauthorized by Network in accordance herewith if, and only if, Network\nindemnifies Java on the terms and conditions of this Indemnity Agreement for the\ncosts associated therewith.\n\n                  2. Devcon Construction. Java shall instruct Devcon to stop\nconstruction as of June 16, 1998 and to limit its construction to only the\nportions of work authorized by Network (collectively \"Stop Work Notice\") until\nthe earlier of (i) written notice delivered by Network to Java notifying Java\nthat it wishes to withdraw the Stop Work Notice or (ii) written notice by Java\ndelivered to Network that it has withdrawn the Stop Work Notice following\ntermination of the Purchase Agreement or after September 14, 1998.\n\n                  3. Indemnification. Network shall be obligated to pay Java the\nfollowing costs and expenses associated with the Stop Work Notice:\n\n                  (a) All increased costs of construction of the Improvements\n\n\n\n   49\n\n                  charged by Devcon in connection with the Stop Work Notice as\n                  evidenced by appropriate invoices and supporting information\n                  supplied by Devcon. Java agrees to cooperate with Network in\n                  reviewing and approving such charges.\n\n                  (b) The sum of $2,323 per day for the period that substantial\n                  completion of the Improvements is delayed by the effect of the\n                  Stop Work Notice as determined by Devcon and reasonably\n                  approved by Java. Unless and until substantial completion of\n                  the Improvements occurs it shall be presumed that the number\n                  of days of delay caused by the Stop Work Notice shall be the\n                  number of days from June 16, 1998 until the day proceeding the\n                  date Devcon commences pouring foundations (ie the same stage\n                  of construction that existed on June 16, 1998) (\"Presumed\n                  Delay Period\"). If the purchase and sale contemplated by the\n                  Purchase Agreement fails to occur for any reason whatsoever,\n                  the number of days of delay shall be the Presumed Delay\n                  Period. If the purchase and sale contemplated by the Purchase\n                  Agreement is completed the number of days of delay for the\n                  computation required by this sub-paragraph (b) shall be the\n                  lesser of (i) the Presumed Delay Period or (ii) the number of\n                  days beyond March 17, 1999 that substantial completion of the\n                  Improvements (as defined in the Purchase Agreement) occurs.\n\n                  4. Payment. Unless and until the Purchase Agreement is\nterminated or the Closing Date arrives and Close of Escrow is not completed on\nthe Closing Date the amounts that Network is obligated to pay pursuant to this\nIndemnification Agreement shall be treated as a Change Order under the Purchase\nAgreement and credited to the first $3,000,000 of Change Orders to be financed\nby Java and which are to result in an adjustment to the Purchase Price at Close\nof Escrow. In the event the Purchase Agreement is terminated for any reason\nwhatsoever and\/or the Closing Date arrives and Network fails to purchase the\nProperty for any reason whatsoever, the amounts payable by Network to Java\nhereunder shall be due and payable within ten (10) days written notice given\npursuant to the notice procedure set forth in the Purchase Agreement.\n\n                  5. Attorneys fees; Arbitration. In the event of any litigation\nor arbitration regarding the rights and obligations under this Agreement the\nprevailing party shall be entitled to recover, in addition to damages,\nreasonably attorney's fees, expert witness fees and court costs. Any controversy\nor claim arising out of this Agreement shall be settled by arbitration in\naccordance with the rules of the American Arbitration Association for the\narbitration of commercial disputes, and judgement on the award rendered by the\nArbitrator(s) may be entered in any court having jurisdiction. the prevailing\nparty in such arbitration shall be entitled to attorney's fees and costs.\n\n                  6. Separate and Independent Obligations. The obligations of\nNetwork are entirely separate and independent of any and all of the rights and\nobligations of the parties under the Purchase Agreement or any other agreement\nbetween the parties hereto.\n\n\n   50\n\n\n                  IN WITNESS WHEREOF the parties hereto have executed this\nIndemnity Agreement as of the date and year set forth above.\n\n\n\n                                        Network Appliance, Inc.,\n                                        a Delaware Corporation\n\n\n                                        \/s\/ CHRIS CARLTON\n                                        -----------------------------\n\n                                        by: Chris Carlton\n                                           --------------------------\n\n                                        its: Vice President\n                                            ------------------------- \n\n\n                                        495 Java Drive Associates, L.P.,\n\n                                        M-D Venture, Inc., a California\n                                        Corporation, its General Partner\n\n\n                                        \/s\/ JEFFREY JOHNSON\n                                        -----------------------------\n\n                                        by: Jeffrey Johnson\n                                           -------------------------\n\n                                        its: Attorney-in-fact\n  \n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8330],"corporate_contracts_industries":[9508],"corporate_contracts_types":[9583,9579],"class_list":["post-41738","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-network-appliance-inc","corporate_contracts_industries-technology__hardware","corporate_contracts_types-land__ca","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41738"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41738"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41738"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}