OPTION AGREEMENT

THIS OPTION AGREEMENT ("Agreement") is entered into as of June 11,1998, by and between Network Appliance, Inc., a Delaware Corporation ("Optionee"), and 475 Java Drive Associates, L. P., a California Limited Partnership ("Owner") and upon exercise by Optionee as provided herein shall constitute (i) a contract of purchase and sale between the parties and (ii) escrow instructions to Escrow Agent (as hereinafter defined).

THE PARTIES ENTER INTO THIS AGREEMENT on the basis of the following facts, understandings and intentions:

A. Owner owns and desires to grant to Optionee an option to purchase and Optionee wishes to acquire an option to purchase real property comprised of approximately 6.217 acres, located at 475 Java Drive, Sunnyvale, California, as more particularly described on EXHIBIT A attached hereto ("Land") together with Owner's interest in (i) all rights, privileges, easements and right-of-ways appurtenant thereto, (ii) to the extent assignable, all entitlements, permits and other intangible property used in connection therewith, and (iii) to the extent assignable, all contract rights, related to the ownership, use and operation thereof (collectively, including such Land and Improvements, the "Property"), and Optionee desires to purchase the Property from Owner, on all of the terms, covenants and conditions provided herein.

B. For purposes of this Agreement, the following terms shall have the meanings given below:

1. "Execution Date" shall mean the date set forth at the beginning hereof.

2. "Business Day" shall mean any day other than a Saturday, Sunday or day on which banks in the state of California are authorized to be closed for business.

3. "Close of Escrow" shall mean the consummation of the purchase of the Property by Optionee or Optionee's assignee from Owner and the record at ion of Owner's Grant Deed in accordance with the terms and provisions of this Agreement.

4. "Closing Date" shall mean a date which is the later of (i) thirty (30) days following the exercise of the Option by Optionee or (ii) January 10, 2000, but in no event later than March 30, 2000 (extended by the number of days beyond October 1, 1999 that it takes Owner to complete the demolition required pursuant to Section 4.1 of the Ground Lease).

5. "Escrow Agent" shall mean First American Title Insurance Company, 1636 North First Street, San Jose, California 95112.

6. "Title Company" shall mean First American Title Insurance Company, 1636 North First Street, San Jose, California 95112.

7. "Exercise Window" shall mean the period commencing at 12:01 a. m. December 1, 1999 (extended by the number of days beyond October 1,1999 that it takes Owner to complete the demolition required pursuant to Section 4.1 of the Ground Lease) and ending 11:59 p. m. ninety (90) days thereafter.

8. "Ground Lease" shall mean that certain lease between Owner as Lessor and Optionee as Lessee.

9. "Lot Line Adjustment" shall mean adjustment of the property line between the Property and the adjoining property at 495 Java Drive in order to accommodate a common driveway as shown on Owner's Plans (as defined in the Work Letter).

10. "CC&R's" shall mean covenants, conditions and restrictions for the purpose for operating the Property and the adjoining property at 495 Java Drive in a manner that allows a common driveway substantially in conformance with the Declaration Of Covenants, Conditions And Restrictions And Cross-Access Parking Agreement For 500 East Middle field Road and 401 Ellis Street, Mountain View, California dated December 12, 1997 and recorded as Document No. 13979683 of the Santa Clara County, California records, with appropriate revisions to adapt such document to the Property.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements of the parties as herein set forth, the parties hereto agree as follows:

1. Option; Option Payment.

(a) Option. Owner hereby grants to Optionee an option ("Option") to purchase the Property from Owner, on all of the terms, covenants and conditions provided herein.

(b) Option Payment. Upon execution of this Agreement Optionee shall pay, as option consideration, the sum of$4,500,000 to Owner ("Option Payment"); provided, however, if Optionee does not pay the Option Payment upon execution, Optionee must pay the Option Payment within seven (7) Business Days and failure to pay by said date shall entitle Owner to either (i) terminate this Agreement and the Ground Lease or (ii) file suit for payment of the Option Payment. The Option Payment shall be deposited with the Escrow Agent upon execution of this Agreement pursuant to escrow instructions approved by Owner and Optionee. The escrow instructions shall provide that the Escrow Agents hall deposit the Option Payment in an interest bearing account, pursuant to investment instructions from Optionee and approved by Owner. All interest earned on the Option Payment shall be for the account of Optionee. The escrow instructions shall also provide that the Option Payment shall be released to Owner upon the earlier of (i) exercise of Optionee's option hereunder, in which case such Option Payment shall be applied toward the Purchase Price, or (ii) the expiration of the Option without exercise by Optionee.

2. Exercise of Option. Optionee shall be entitled to exercise the Option at any time during the Exercise Window by delivering written notice of its unconditional election to exercise the Option to Owner ("Exercise Notice"), which Exercise Notice, in order to be effective, must be delivered to Owner during, and prior to the expiration of, the Exercise Window. Upon the effective exercise of the Option in accordance with the foregoing this Agreement shall be a bilateral agreement requiring Owner to sell the Property to Optionee and Optionee to purchase the Property from Owner through the Close of Escrow on the Closing Date on the terms and conditions of this Agreement.

3. Purchase Price. Optionee shall pay Owner a purchase price ("Purchase Price") for the Property of Twenty-Three Million Seven Hundred Forty-Five Thousand Dollars ($23,745,000.00), payable at the Close of Escrow in cash ("Cash Payment")

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