Construction Management Agreement

TABLE OF CONTENTS

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ENGAGEMENT AND AUTHORIZATION											1
GENERAL TERMS AND CONDITIONS											2
1		Additional definitions									2
		“97-10/Event”									2
		“97-10/Maximum Permitted Prepayment”									2
		“97-10/Prepayment”									3
		“97-10/Project Costs”									3
		“97-10/Pronouncement”									4
		“NAI’s Estimate of Force Majeure Delays”									4
		“NAI’s Estimate of Force Majeure Excess Costs”									4
		“Accrued Construction Period Interest Expense”									4
		“Affiliate’s Contract”									5
		“Arrangement Fee”									5
		“Administrative Fee”									5
		“Capital Adequacy Charges”									5
		“Carrying Costs”									5
		“Commitment Fees”									5
		“Complete Taking”									5
		“Completion Date”									5
		“Completion Notice”									5
		“Construction Advances”									5
		“Construction Advance Request”									6
		“Construction Allowance”									6
		“Construction Budget”									6
		“Construction Project”									6
		“Covered Construction Period Losses”									6
		“Defective Work”									6
		“FOCB Notice”									6
		“Force Majeure Event”									7
		“Funded Construction Allowance”									7
		“Future Work”									7
		“Ground Lease Rents”									7
		“Increased Cost Charges”									7
		“Increased Commitment”									7
		“Increased Funding Commitment”									7
		“Increased Time Commitment”									7
		“Initial Advance”									7
		“Maximum Construction Allowance”									7

TABLE OF CONTENTS
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		“Notice of NAI’s Intent to Terminate”									7
		“Notice of NAI’s Intent to Terminate Because of a Force Majeure Event”									8
		“Notice of Termination By NAI”									8
		“Outstanding Construction Allowance”									8
		“Owner’s Election to Continue Construction”									8
		“Pre-lease Casualty”									8
		“Pre-lease Force Majeure Delays”									8
		“Pre-lease Force Majeure Event”									8
		“Pre-lease Force Majeure Event Notice”									8
		“Pre-lease Force Majeure Excess Costs”									8
		“Pre-lease Force Majeure Losses”									9
		“Prior Work”									10
		“Projected Cost Overruns”									10
		“Reimbursable Construction Period Costs”									10
		“Remaining Proceeds”									10
		“Scope Change”									10
		“Target Completion Date”									10
		“Termination of NAI’s Work”									10
		“Third Party Contract”									11
		“Third Party Contract/Termination Fees”									11
		“Timing or Budget Shortfall”									11
		“Work”									11
		“Work/Suspension Event”									11
		“Work/Suspension Notice”									12
		“Work/Suspension Period”									12
2		Construction and Management of the Property by NAI									12
		(A)		The Construction Project							12
				(1)		Construction Approvals by BNPPLC					12
						(a)		Preconstruction Approvals by BNPPLC			12
						(b)		Approval of Scope Changes			12
				(2)		NAI’s Right to Possession and to Control Construction					13
						(c)		Adequacy of Drawings, Specifications and Budgets			14
						(d)		Existing Condition of the Land and Improvements			14
						(e)		Correction of Defective Work			14
						(f)		Clean Up			15
						(g)		No Damage for Delays			15
						(h)		No Fee For Construction Management			15
				(3)		Quality of Work					15

TABLE OF CONTENTS
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		(B)		Completion Notice							15
		(C)		Status of Property Acquired With BNPPLC’s Funds							16
		(D)		Insurance							16
				(1)		Liability Insurance					16
				(2)		Property Insurance					17
				(3)		Failure of NAI to Obtain Insurance					17
				(4)		Waiver of Subrogation					17
		(E)		Condemnation							18
		(F)		Additional Representations, Warranties and Covenants of NAI Concerning the Property							18
				(1)		Payment of Local Impositions					18
				(2)		Operation and Maintenance					19
				(3)		Debts for Construction, Maintenance, Operation or Development					20
				(4)		Permitted Encumbrances and the Ground Lease					20
				(5)		Books and Records Concerning the Property					20
		(G)		BNPPLC’s Right of Access							21
				(1)		Access Generally					21
				(2)		Failure of NAI to Perform					21
3		Amounts to be Added to the Lease Balance (in Addition to Construction Advances)									22
		(A)		Initial Advance							22
		(B)		Carrying Costs							23
		(C)		Commitment Fees							23
		(D)		Future Administrative Fees and Out-of-Pocket Costs							24
		(E)		Increased Cost Charges and Capital Adequacy Charges							24
		(F)		Ground Lease Payments							25
4		Construction Advances									25
		(A)		Costs Subject to Reimbursement Through Construction Advances							25
		(B)		Exclusions From Reimbursable Construction Period Costs							27
		(C)		Conditions to NAI’s Right to Receive Construction Advances							27
				(1)		Construction Advance Requests					27
				(2)		Amount of the Advances					28
						(a)		The Maximum Construction Allowance			28
						(b)		Costs Previously Incurred by NAI			28
						(c)		Limits During any Work/Suspension Period			29
						(d)		Restrictions Imposed for Administrative Convenience			29
				(3)		No Advances After Certain Dates					29
		(D)		Breakage Costs for Construction Advances Requested But Not Taken							29

TABLE OF CONTENTS
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		(E)		No Third Party Beneficiaries							30
		(F)		No Waiver							30
5		Application of Insurance and Condemnation Proceeds									30
		(A)		Collection and Application Generally							30
		(B)		Advances of Escrowed Proceeds to NAI							31
		(C)		Status of Escrowed Proceeds After Commencement of the Term of the Lease							31
		(D)		Special Provisions Applicable After a 97-10/Event or Event of Default							31
		(E)		NAI’s Obligation to Restore							31
		(F)		Special Provisions Concerning a Complete Taking							32
6		Notice of Cost Overruns and Pre-lease Force Majeure Events									32
		(A)		Notice of Projected Cost Overruns							32
		(B)		Pre-lease Force Majeure Event Events and Notices							32
7		Suspension and Termination of NAI’s Work									32
		(A)		Rights and Obligations During a Work/Suspension Period							32
		(B)		NAI’s Election to Terminate NAI’s Work							32
		(C)		BNPPLC’s Election to Terminate NAI’s Work							36
		(D)		Surviving Rights and Obligations							36
		(E)		Cooperation After a Termination of NAI’s Work							37
8		Continuation of Construction by BNPPLC									38
		(A)		Owner’s Election to Continue Construction							38
				(1)		Take Control of the Property					39
				(2)		Continuation of Construction					39
				(3)		Arrange for Turnkey Construction					40
				(4)		Suspension or Termination of Construction by BNPPLC					40
		(B)		Powers Coupled With an Interest							40
9		NAI’s Obligation for 97-10/Prepayments									40
10		Indemnity for Covered Construction Period Losses									41
		(A)		Covenant to Indemnify Against Covered Construction Period Losses							41
		(B)		Certain Losses Included or Excluded							42
				(1)		Environmental					42
				(2)		Failure to Maintain a Safe Work Site					43
				(3)		Failure to Complete Construction					43
				(4)		Fraud					43

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				(5)		Excluded Taxes and Established Misconduct					43
		(C)		Express Negligence Protection							44
		(D)		Survival of Indemnity							44
		(E)		Due Date for Indemnity Payments							44
		(F)		Order of Application of Payments							44
		(G)		Defense of BNPPLC							44
				(1)		Assumption of Defense					44
				(2)		Indemnity Not Contingent					45
		(H)		When Payments Are Due							45
		(I)		Survival							45
		(J)		Notice of Claims							45
		(K)		Withholding of Consent to Settlements Proposed by NAI							46
		(L)		Settlements Without the Prior Consent of NAI							46
				(1)		Election to Pay Reasonable Settlement Costs in Lieu of Actual					46
				(2)		Conditions to Election					46
				(3)		Indemnity Survives Settlement					47
		(M)		No Authority to Admit Wrongdoing on the Part of NAI							47
		(N)		Refunds of Covered Construction Period Losses Paid by NAI							47
				(2)		Meaning of Refund					48
				(3)		Conditions to Payment					48

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Exhibits and Schedules

Exhibit A		Legal Description
Exhibit B		Description of the Construction Project and Budget
Exhibit C		Construction Advance Request Form
Exhibit D		Pre-lease Force Majeure Event Notice
Exhibit E		Notice of Termination by NAI’s Work
Exhibit F		Notice of NAI’s Intent to Terminate
Exhibit G		Notice of Increased Funding Commitment by BNPPLC
Exhibit H		Notice of Increased Time Commitment by BNPPLC
Exhibit I		Notice of Rescission of NAI’s Intent to Terminate

CONSTRUCTION MANAGEMENT AGREEMENT

     This CONSTRUCTION MANAGEMENT AGREEMENT (this “Agreement”), dated as of December 14, 2006 (the “Effective Date”), is made by and between BNP PARIBAS LEASING CORPORATION (“BNPPLC”), a Delaware corporation, and NETWORK APPLIANCE, INC. (“NAI”), a Delaware corporation.

RECITALS

     Contemporaneously with the execution of this Agreement, BNPPLC and NAI are executing a Common Definitions and Provisions Agreement dated as of the Effective Date (the “Common Definitions and Provisions Agreement”), which by this reference is incorporated into and made a part of this Agreement for all purposes. As used in this Agreement, capitalized terms defined in the Common Definitions and Provisions Agreement and not otherwise defined in this Agreement are intended to have the respective meanings assigned to them in the Common Definitions and Provisions Agreement.

     At the request of NAI and to facilitate the transaction contemplated in the other Operative Documents, contemporaneously with this Agreement BNPPLC is executing and accepting a Ground Lease from NAI (the “Ground Lease”), pursuant to which BNPPLC is acquiring a leasehold estate in the Land described in Exhibit A and any existing Improvements on such Land.

     Also contemporaneously with this Agreement, BNPPLC and NAI are executing a Lease Agreement (the “Lease”), pursuant to which the parties expect that NAI will lease the Improvements on the Land described in Exhibit A from BNPPLC for a lease term that will commence on the Completion Date (as defined below).

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

ENGAGEMENT AND AUTHORIZATION

     Subject to the terms and conditions set forth in this Agreement, BNPPLC does hereby engage and authorize NAI — and NAI does hereby accept such engagement and authorization, as an independent contractor for BNPPLC — to construct the Construction Project on the Land and to manage such construction for BNPPLC. As more particularly provided in subparagraph 2(A)(2) below, NAI will take possession and control of the Land and all Improvements on the Land to accomplish such construction. However, the rights and authority granted to NAI by this Agreement are expressly made subject and subordinate to the terms and condition hereinafter set

forth and to the Ground Lease, to the Permitted Encumbrances and to any other claims or encumbrances affecting the Land or the Property that may be asserted by third parties other than Liens Removable by BNPPLC.

GENERAL TERMS AND CONDITIONS

     1      Additional definitions. As used in this Agreement, capitalized terms defined above will have the respective meanings assigned to them above; as indicated above, capitalized terms that are defined in the Common Definitions and Provisions Agreement and that are used but not defined herein will have the respective meanings assigned to them in the Common Definitions and Provisions Agreement; and, the following terms will have the following respective meanings: