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                                                                    EXHIBIT 10.4


                             MASTER LEASE AGREEMENT


Lessor:        TRANSAMERICA BUSINESS CREDIT CORPORATION
               RIVERWAY II
               WEST OFFICE TOWER
               WEST HIGGINS
               ROSEMONT, ILLINOIS  60018


Lessee:        VIXEL CORPORATION
               325 INTERLOCKEN PARKWAY, BUILDING A
               BROOMFIELD, COLORADO  80021


The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of May
20, 1997, is Transamerica Business Credit Corporation ("Lessor"). All equipment,
together with all present and future additions, parts, accessories, attachments,
substitutions, repairs, improvements, and replacements thereof or thereto, which
are the subject of a Lease (as defined in the next sentence) shall be referred
to as "Equipment." Simultaneous with the execution and delivery of this
Agreement, the parties are entering into one or more Lease Schedules (each, a
"Schedule") which refer to and incorporate by reference this Agreement, each of
which constitutes a lease (each, a "Lease") for the Equipment specified therein.
Additional details pertaining to each Lease are specified in the applicable
Schedule. Each Schedule that the parties hereafter enter into shall constitute a
Lease. Except as provided in Paragraph 1 below, Lessor has no obligation to
enter into any additional leases with, or extend any future financing to,
Lessee.


        1. LEASE. Subject to and upon all of the terms and conditions of this
Agreement and each Schedule, Lessor hereby agrees to lease to Lessee up to
$7,000,000 in Equipment and Lessee hereby agrees to lease from Lessor the
Equipment for the Term (as defined in Paragraph 2 below) thereof. The timing and
financial scope of Lessor's obligation to enter into Leases hereunder are
further limited as set forth in the Commitment Letter executed by Lessor and
Lessee, dated as of May 2, 1997 and attached hereto as Exhibit A (the
"Commitment Letter") and incorporated herein by this reference.

        2. TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule (which date shall not be prior to delivery, acceptance and funding in
each case) and, unless sooner terminated (as hereinafter provided), shall expire
at the end of the term specified in such Schedule; provided, however, that
obligations due to be performed by Lessee during the Term shall continue until
they have been performed in full. Schedules will only be executed after the
delivery of the Equipment to Lessee or upon completion of deliveries of items of
such Equipment with aggregate cost of not less than $75,000.00.

        3. RENT. Lessee shall pay as rent to Lessor, for use of the Equipment
during the Term, rental payments equal to the sum of all rental payments
including, without limitation, security deposits, advance rents, and interim
rents payable in the amounts and on the dates specified in the applicable
Schedule ("Rent"). If any Rent or other amount payable by Lessee is not paid
within five days after the day on which it becomes payable, Lessee will pay on
demand, as a late charge, an amount equal to 2% of such unpaid Rent or other
amount but only to the extent permitted by applicable law. All payments provided
for herein shall be payable to Lessor at its address specified above, or at any
other place designated by Lessor. Notwithstanding the Lease Repayment Terms set
forth in the Commitment Letter, the Monthly Rent Payments (fixed as of each
Lease Term Commencement) shall be adjusted for each Lease commensurate to the
change in the weekly average of the interest rates of four-year U.S. Treasury
Securities (as published in the Wall Street Journal) from the week ending March
7, 1997 to the week preceding the date of such Lease Term Commencement.



<PAGE>   2

One half of Lessee's Application Fee of $70,000 paid pursuant to the Commitment
Letter, less amounts (not to exceed $5,000) applied pursuant to Paragraph 22
below, shall be applied on a pro-rata basis (based upon the amount of each Lease
compared to the total Commitment) toward the last month's rent payment paid in
advance on the Lease Term Commencement for each Lease.

        4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease may be
canceled or terminated except as expressly provided herein. So long as Lessor
has not wrongfully or unlawfully interfered with Lessee's quiet enjoyment of the
Equipment, Lessee's obligation to pay all Rent due or to become due hereunder
shall be absolute and unconditional and shall not be subject to any delay,
reduction, set-off, defense, counterclaim, or recoupment for any reason
whatsoever, including any failure of the Equipment or any representations by the
manufacturer or the vendor thereof. If the Equipment is unsatisfactory for any
reason, Lessee shall make any claim solely against the manufacturer or the
vendor thereof and shall, nevertheless, pay Lessor all Rent payable hereunder.

        5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.

        6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN
OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY, QUALITY, OR
FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR FOR BREACH OF ANY
WARRANTY WHATSOEVER. ONCE ACCEPTED BY LESSEE, LESSEE LEASES THE EQUIPMENT "AS
IS." IN NO EVENT SHALL LESSOR HAVE ANY LIABILITY, NOR SHALL LESSEE HAVE ANY
REMEDY AGAINST LESSOR, FOR ANY LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED
DIRECTLY OR INDIRECTLY BY THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR
THE OPERATION, MAINTENANCE, OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS
THAT TERM IS USED IN SECTION 2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS
AMENDED FROM TIME TO TIME ("UCC"). Lessor grants to Lessee, for the sole purpose
of prosecuting a claim or receiving any other benefits under the warranty, the
benefits of any and all warranties made available by the manufacturer or the
vendor of the Equipment to the extent assignable.

        7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for the
sole and limited purpose of accepting delivery of the Equipment from each vendor
thereof. Lessee shall pay any and all delivery and installation charges. Lessor
shall not be liable to Lessee for any delay in, or failure of, delivery of the
Equipment.

        8. PURCHASE OBLIGATION. Subject to Paragraphs 14 and 20, Lessee shall
purchase all, but not less than all, the Equipment covered by the applicable
Lease on the date specified therefor in the applicable Schedule ("Purchase
Date"). The purchase price for such Equipment shall be 10% of the Equipment Cost
as set forth in the applicable Schedule. On the Purchase Date, Lessee shall pay
to Lessor the purchase price, together with all sales and other taxes applicable
to the transfer of the Equipment and any other amount payable and arising
hereunder, in immediately available funds, whereupon Lessor shall transfer to
Lessee, without recourse or warranty of any kind, express or implied, all of
Lessor's right, title, and interest in and to such Equipment on an "As Is, Where
Is" basis and prepare and file with all applicable authorities any UCC
termination statements that Lessee may reasonably request.

        9. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee shall
affix to the Equipment any labels supplied by Lessor indicating ownership of
such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee under a
Lease. The Equipment is and shall at all times be and remain personal property
and shall not become a fixture. Lessee shall obtain and record such instruments
and take such steps as may be necessary to prevent any person from acquiring any
rights in the Equipment by reason of the Equipment being claimed or deemed to be
real property. Upon request by Lessor, Lessee shall use reasonable commercial
efforts to obtain and deliver to Lessor



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valid and effective waivers, in recordable form, by the owners, landlords, and
mortgagees of the real property upon which the Equipment is located or
certificates of Lessee that it is the owner of such real property or that such
real property is neither leased nor mortgaged. Lessee shall make the Equipment
and its maintenance records available for inspection by Lessor at reasonable
times and upon reasonable notice. Lessee shall execute and deliver to Lessor for
filing any UCC financing statements or similar documents Lessor may reasonably
request with respect to the Equipment.

        10. EQUIPMENT USE. Lessee agrees that the Equipment will be operated by
competent, qualified personnel in connection with Lessee's business for the
purpose for which the Equipment was designed and in accordance with applicable
operating instructions, laws, and government regulations, and that Lessee shall
use all reasonable precautions to prevent loss or damage to the Equipment from
fire and other hazards. Lessee shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the Equipment.

        11. MAINTENANCE. Lessee, at its sole cost and expense, shall keep the
Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all recertification requirements, and
shall maintain the Equipment in its original condition and working order,
ordinary wear and tear excepted. At the reasonable request of Lessor, Lessee
shall furnish all proof of maintenance.

        12. ALTERATION; MODIFICATIONS; PARTS. Lessee may materially alter or
modify the Equipment only with the prior written consent of Lessor. Any
alteration shall be removed and the Equipment restored to its normal, unaltered
condition at Lessee's expense (without damaging the Equipment's originally
intended function or its value) prior to its return to Lessor pursuant to
Paragraph 13 below. Any part installed in connection with warranty or
maintenance service or which cannot be removed in accordance with the preceding
sentence shall be the property of Lessor.

        13. RETURN OF EQUIPMENT. Except for Equipment that has suffered a
Casualty Loss (as defined in Paragraph 14 below) and is not required to be
repaired pursuant to Paragraph 14 below or Equipment purchased by Lessee
pursuant to Paragraph 8 above, upon demand by Lessor pursuant to Paragraph 21
below, Lessee shall contact Lessor for shipping instructions and, at Lessee's
own risk, immediately return the Equipment, freight prepaid, to a location in
the continental United States specified by Lessor. At the time of such return to
Lessor, the Equipment shall (i) be in the operating order, repair, and condition
as required by or specified in the original specifications and warranties of
each manufacturer and vendor thereof, ordinary wear and tear excepted, (ii) meet
all recertification requirements, and (iii) be capable of being promptly
assembled and operated by a third party purchaser or third party lessee without
further repair, replacement, alterations, or improvements, and in accordance and
compliance with any and all statutes, laws, ordinances, rules, and regulations
of any governmental authority or any political subdivision thereof applicable to
the use and operation of the Equipment. The provisions of this Paragraph 13 are
of the essence of the Lease, and upon application to any court of equity having
jurisdiction in the premises, Lessor shall be entitled to a decree against
Lessee requiring specific performance of the covenants of Lessee set forth in
this Paragraph 13. If Lessee fails to return the Equipment when required, the
terms and conditions of the Lease shall continue to be applicable and Lessee
shall continue to pay Rent until the Equipment is received by Lessor or
otherwise purchased by Lessee in accordance with this Agreement.

        14. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at its own
expense, liability and property damage insurance relating to the Equipment,
insuring against such risks as are customarily insured against on the type of
equipment leased hereunder by businesses in which Lessee is engaged in such
amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each liability insurance policy shall provide
coverage (including, without limitation, personal injury coverage) of not less
than $1,000,000 for each occurrence, and shall name Lessor as an additional
insured; and each property damage policy shall name Lessor and Lessee as loss
payees as their interests may appear and all policies shall contain a clause
requiring the insurer to give Lessor at least thirty days' prior written notice
of any alteration in the terms or



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cancellation of the policy. Lessee shall furnish to Lessor a certificate of
insurance, and upon reasonable request, a copy of each insurance policy (with
endorsements) or other evidence satisfactory to Lessor that the required
insurance coverage is in effect; provided, however, Lessor shall have no duty to
ascertain the existence of or to examine the insurance policies to advise Lessee
if the insurance coverage does not comply with the requirements of this
Paragraph. If Lessee fails to insure the Equipment as required, Lessor shall
have the right but not the obligation to obtain such insurance, and the cost of
the insurance shall be for the account of Lessee due as part of the next due
Rent. Lessee consents to Lessor's release, upon its failure to obtain
appropriate insurance coverage, of any and all information necessary to obtain
insurance with respect to the Equipment or Lessor's interest therein.

        Until the Equipment is purchased by Lessee as provided in Paragraph 8
above or returned to Lessor pursuant to Paragraph 13 above, Lessee shall bear
the entire risk of theft or destruction of, or damage to, the Equipment
including, without limitation, any condemnation, seizure, or requisition of
title or use ("Casualty Loss"). No Casualty Loss shall relieve Lessee from its
obligations to pay Rent except as provided in clause (b) below. When any
Casualty Loss occurs, Lessee shall immediately notify Lessor and, at the option
of Lessor, shall promptly (a) place such Equipment in good repair and working
order; or (b) pay Lessor an amount equal to the Stipulated Loss Value of such
Equipment and all other amounts (excluding Rent) payable by Lessee hereunder,
together with a late charge on such amounts at a rate per annum equal to the
rate imputed in the Rent payments hereunder (as reasonably determined by Lessor)
from the date of the Casualty Loss through the date of payment of such amounts,
whereupon Lessor shall transfer to Lessee, without recourse or warranty (express
or implied), all of Lessor's interest, if any, in and to such Equipment on an
"AS IS, WHERE IS" basis. The proceeds of any insurance payable with respect to
the Equipment shall be applied, at the option of Lessee, if no Event of Default
has occurred and is continuing, and otherwise at the option of Lessor, either
towards (i) repair of the Equipment or (ii) payment of any of Lessee's
obligations hereunder. Lessee hereby appoints Lessor as Lessee's limited
attorney-in-fact to make claim for, receive payment of, and execute and endorse
all documents, checks or drafts issued with respect to any Casualty Loss under
any insurance policy relating to the Equipment. Lessor may only use such power
upon and during the continuance of an Event of Default.

        15. TAXES. Lessee shall pay when due, and indemnify and hold Lessor
harmless from, all sales, use, excise, and other taxes, charges, and fees
(including with respect to the Equipment, without limitation, licensing,
registration, titling, personal property, stamp, levies, imposts, duties,
charges, or withholdings of any nature), and if resulting from an act or
omission of Lessee, any fines, penalties, or interest thereon, imposed or levied
by any governmental body, agency, or tax authority upon or in connection with
the Equipment, its purchase, ownership, delivery, leasing, possession, use, or
relocation of the Equipment or otherwise in connection with the transactions
contemplated by each Lease or the Rent thereunder, excluding (a) any income,
franchise, payroll, withholding, business and occupation or any other tax, duty
or fee on the net or gross income, capital gains or gross receipts (other than
gross income or receipts taxes in the nature or a sales, use or property tax) of
Lessor or (b) any of the above relating to a payment by Lessor to its employees,
agents or assigns. Upon request, Lessee will provide proof of payment. Unless
Lessor elects otherwise, Lessor will pay all property taxes on the Equipment for
which Lessee shall reimburse Lessor promptly upon request. Lessee shall timely
prepare and file all reports and returns which are required to be made with
respect to any obligation of Lessee under this Paragraph 15. Lessee shall, to
the extent permitted by law, cause all billings of such fees, taxes, levies,
imposts, duties, withholdings, and governmental charges to be made to Lessor in
care of Lessee. Upon request, Lessee will provide Lessor with copies of all such
billings. Lessee shall have the option to contest any of such taxes diligently
and in good faith so long as Lessee maintains adequate reserves for such taxes
measured in accordance with GAAP.

        16. LESSOR'S PAYMENT. If Lessee fails to perform its obligations under
Paragraph 14 or 15 above, or Paragraph 22 below, Lessor shall have the right to
substitute performance, in which case Lessee shall immediately reimburse Lessor
therefor.

        17. GENERAL INDEMNITY. Each Lease is a net lease. Therefore, Lessee
shall indemnify Lessor and its successors and assigns against, and hold Lessor
and its successors and assigns harmless from, any and all claims, actions,
damages, obligations, liabilities, and all costs and expenses, including,
without limitation, reasonable legal fees of outside counsel, incurred by Lessor
or its successors and assigns arising out of each Lease including, without
limitation, the purchase, ownership, delivery, lease, possession, maintenance,



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condition, use, or return of the Equipment, or arising by operation of law,
except that Lessee shall not be liable for any claims, actions, damages,
obligations, and costs and expenses determined by a non-appealable, final order
of a court of competent jurisdiction to have occurred as a result of the gross
negligence or willful misconduct of Lessor or its successors and assigns. Lessee
agrees that upon written notice by Lessor of the assertion of any claim, action,
damage, obligation, liability, or lien, Lessee shall assume full responsibility
for the defense thereof, provided that Lessor's failure to give such notice
shall not limit or otherwise affect its rights hereunder except to the extent
Lessee incurs a loss as a direct result of such failure. Any payment pursuant to
this Paragraph (except for any payment of Rent) shall be of such amount as shall
be necessary so that, after payment of any taxes required to be paid thereon by
Lessor, including taxes on or measured by the net income of Lessor, the balance
will equal the amount due hereunder. The provisions of this Paragraph with
regard to matters arising during a Lease shall survive the expiration or
termination of such Lease.

        18. ASSIGNMENT BY LESSEE. Except in connection with a merger allowed
under Paragraph 20(j) below, Lessee shall not, without the prior written consent
of Lessor, (a) assign, transfer, pledge, or otherwise dispose of any Lease or
Equipment, or any interest therein; (b) sublease or lend any Equipment or permit
it to be used by anyone other than Lessee and its employees, agents,
representatives, contractors and other authorized persons; or (c) move any
Equipment from the location specified for it in the applicable Schedule, except
that Lessee may move Equipment to another location within the United States
provided that Lessee has delivered to Lessor (A) prior written notice thereof
and (B) duly executed financing statements and other agreements and instruments
(all in form and substance satisfactory to Lessor) necessary or, in the opinion
of the Lessor, desirable to protect Lessor's interest in such Equipment.
Notwithstanding anything to the contrary in the immediately preceding sentence,
Lessee may keep any Equipment consisting of motor vehicles or rolling stock at
any location in the United States.

        19. ASSIGNMENT BY LESSOR. Lessor may assign its interest or grant a
security interest in any Lease and the Equipment individually or together, in
whole or in part. If Lessee is given written notice of any such assignment, it
shall immediately make all payments of Rent and other amounts hereunder directly
to such assignee. Each such assignee shall have all of the rights of Lessor
under each Lease assigned to it. Lessee shall not assert against any such
assignee any set-off, defense, or counterclaim that Lessee may have against
Lessor or any other person. Notwithstanding any such assignment by Lessor,
Lessor shall not be relieved of its obligations under any Lease.

        20. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of the
obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within five days
of when due any amount required to be paid by Lessee under or in connection with
any Lease; (b) any of the Lease Parties fails in any material respect to perform
any other provision under or in connection with a Lease or violates any of the
covenants or agreements of such Lease Party under or in connection with a Lease;
(c) any representation made or financial information delivered or furnished by
any of the Lease Parties under or in connection with a Lease shall prove to have
been inaccurate in any material respect when made; (d) any of the Lease Parties
makes an assignment for the benefit of creditors, whether voluntary or
involuntary, or consents to the appointment of a trustee or receiver, or if
either shall be appointed for any of the Lease Parties or for a substantial part
of its property without its consent and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for sixty days
following the commencement thereof; (e) any petition or proceeding is filed by
or against any of the Lease Parties under any Federal or State bankruptcy or
insolvency code or similar law and, in the case of any such involuntary petition
or proceeding, such petition or proceeding remains undismissed or unstayed for
sixty days following the filing or commencement thereof, or any of the Lease
Parties takes any action authorizing any such petition or proceeding; (f) any of
the Lease Parties fails to pay when due any indebtedness for borrowed money or
under conditional sales or installment sales contracts or similar agreements,
leases, or obligations evidenced by bonds, debentures, notes, or other similar
agreements or instruments to any creditor (including Lessor under any other
agreement) after any and all applicable cure periods therefor shall have elapsed
and only if the amount involved exceeds $500,000; (g) any judgment shall be
rendered against any of the Lease Parties which shall remain unpaid or unstayed
for a period of sixty days; (h) any of the Lease Parties shall dissolve,
liquidate, wind up or cease its business; (i) any of the Lease Parties shall
amend or modify its name, unless such Lease Party promptly delivers



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to Lessor written notice of such amendment or modification and executed
financing statements (in form and substance satisfactory to the Lessor); (j) any
of the Lease Parties shall merge or consolidate with or sell substantially all
of its assets to any other entity in which the shareholders of such Lease Party
(including spouses, children or trusts of or for such shareholders) immediately
prior to such transaction own less than 50% of the voting securities of the
surviving entity or purchaser or make any material change in its capital
structure, in each case without Lessor's prior written consent, which shall not
be unreasonably withheld; (k) any of the Lease Parties shall suffer any loss or
suspension of any material license, permit, or other right or asset, which loss
is reasnably likely to have a material adverse effect on Lessee's ability to
perform under this Agreement, fail generally to pay its debts as they mature, or
call a meeting for purposes of compromising its debts; (l) any of the Lease
Parties shall deny or disaffirm its obligations hereunder or under any of the
documents delivered in connection herewith; or (m) there is a change, which
change does not result from the sale of newly issued equity securities to
investors or from a transaction described in clause (j) above, in more than 50%
of the ownership of any equity interests of any of the Lease Parties on the date
hereof or more than 50% of such interests become subject to any contractual,
judicial or statutory lien, charge, security interest, or encumbrance.

        21. REMEDIES. Upon the occurrence and continuation of an Event of
Default for ten days after notice for a payment Event of Default and for thirty
days after notice for all other Events of Default, Lessor shall have the right,
in its sole discretion, to exercise any one or more of the following remedies:
(a) terminate each Lease; (b) declare any and all Rent and other amounts then
due and any and all Rent and other amounts to become due under each Lease
(collectively, the "Lease Obligations") immediately due and payable; (c) take
possession of any or all items of Equipment, wherever located, without demand,
notice, court order, or other process of law, and without liability for entry to
Lessee's premises, for damage to Lessee's property, or otherwise; (d) demand
that Lessee immediately return any or all Equipment to Lessor in accordance with
Paragraph 13 above, and, for each day that Lessee shall fail to return any item
of Equipment, Lessor may demand an amount equal to the Rent payable for such
Equipment in accordance with Paragraph 13 above; (e) lease, sell, or otherwise
dispose of the Equipment in a commercially reasonable manner, with or without
notice and on public or private bid; (f) recover the following amounts from the
Lessee (as damages, including reimbursement of costs and expenses, liquidated
for all purposes and not as a penalty): (i) all costs and expenses of Lessor
reimbursable to it hereunder, including, without limitation, expenses of
disposition of the Equipment, reasonable legal fees, and all other amounts
specified in Paragraph 22 below; (ii) an amount equal to the sum of (A) any
accrued and unpaid Rent through the later of (1) the date of the applicable
default, (2) the date that Lessor has obtained possession of the Equipment, or
(3) such other date as Lessee has made an effective tender of possession of the
Equipment to Lessor (the "Default Date") and (B) if Lessor resells or re-lets
the Equipment, Rent at the periodic rate provided for in each Lease for the
additional period that it takes Lessor to resell or re-let all of the Equipment;
(iii) the present value of all future Rent reserved in the Leases and contracted
to be paid over the unexpired Term of the Leases and the purchase price of the
equipment as set forth in Paragraph 8 above, discounted at six percent compound
interest; and (iv) any indebtedness for Lessee's indemnity under Paragraph 17
above, plus a late charge at the rate specified in Paragraph 3 above, less the
amount received by Lessor, if any, upon sale or re-let of the Equipment; and (g)
exercise any other right or remedy to recover damages or enforce the terms of
the Leases. Lessor may pursue any other rights or remedies available at law or
in equity, including, without limitation, rights or remedies seeking damages,
specific performance, and injunctive relief. Any failure of Lessor to require
strict performance by Lessee, or any waiver by Lessor of any provision hereunder
or under any Schedule, shall not be construed as a consent or waiver of any
other breach of the same or of any other provision. Any amendment or waiver of
any provision hereof or under any Schedule or consent to any departure by Lessee
herefrom or therefrom shall be in writing and signed by Lessor.

        No right or remedy is exclusive of any other provided herein or
permitted by law or equity. All such rights and remedies shall be cumulative and
may be enforced concurrently or individually from time to time.

        22. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs and
expenses (including reasonable legal fees and expenses) incurred in connection
with the preparation, execution and delivery of this Agreement and other
agreement and transaction contemplated hereby, which expenses shall not exceed
$5,000.00 without the written consent of Lessee, and all costs and expenses in
protecting and enforcing Lessor's rights and interests in each Lease and the
Equipment, including, without limitation, reasonable legal fees of outside
counsel, collection, and remarketing fees and expenses incurred by Lessor in
enforcing the terms, conditions, or



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provisions of each Lease or upon the occurrence and continuation of an Event of
Default.

        23. LESSEE'S WAIVERS. To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a lessee by
Sections 2A-508 through 2A-522 of the UCC, provided, however, that Lessee shall
have the right to recover damages from Lessor for any breach of its obligations
under this Agreement. To the extent permitted by applicable law, Lessee also
hereby waives any rights now or hereafter conferred by statute or otherwise
which may require Lessor to sell, lease, or otherwise use any Equipment in
mitigation of Lessor's damages as set forth in Paragraph 21 above or which may
otherwise limit or modify any of Lessor's rights or remedies under Paragraph 21,
except that Lessee shall have the right to require Lessor to convey to Lessee,
without representation, warranty or recourse, all of Lessor's rights, title and
interest in and to the Equipment upon Lessor's receipt, following an event of
default and the exercise of the Lessor's remedies, of the amounts specified in
Paragraph 21(f). Any action by Lessee against Lessor for any default by Lessor
under any Lease shall be commenced within one year after any such cause of
action accrues.

        24. NOTICES; ADMINISTRATION. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica Technology Finance Division,
76 Batterson Park Road, Farmington, Connecticut 06032, Attention: Assistant Vice
President, Lease Administration, with a copy to Lessor at Riverway II, West
Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, Attention: Legal
Department, if to Lessee, then to Vixel Corporation, 325 Interlocken Parkway,
Building A, Broomfield, CO 80021, Attention: Mr. Mark Harrington, Chief
Financial Officer or such other address as shall be designated by Lessee or
Lessor to the other party. All such notices and correspondence shall be
effective when received.

        25. REPRESENTATIONS. Lessee represents and warrants to Lessor that (a)
Lessee is duly organized, validly existing, and in good standing under the laws
of the State of its incorporation; (b) the execution, delivery, and performance
by Lessee of this Agreement are within Lessee's powers, have been duly
authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery, and
performance by Lessee of this Agreement; (d) each Lease constitutes the legal,
valid, and binding obligations of Lessee enforceable against Lessee in
accordance with its terms, except as may be limited by applicable bankruptcy,
reorganization, receivership, insolvency or other laws affecting the enforcement
of creditors' or lessors' rights generally; (e) the cost of each item of
Equipment does not exceed the fair and usual price for such type of equipment
purchased in like quantity and reflects all discounts, rebates, and allowances
for the Equipment (including, without limitation, discounts for advertising,
prompt payment, testing, or other services) given to the Lessee by the
manufacturer, supplier, or any other person; and (f) all information supplied by
Lessee to Lessor in connection herewith is correct and does not omit any
material statement necessary to insure that the information supplied is not
misleading.

        26. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will
execute, acknowledge, record, or file, as the case may be, such further
documents and do such further acts as may be reasonably necessary, desirable, or
proper to carry out more effectively the purposes of this Agreement. Lessee
hereby appoints Lessor as its attorney-in-fact to execute on behalf of Lessee
and authorizes Lessor to file without Lessee's signature any UCC financing
statements and amendments Lessor deems necessary and advisable with regard to
the Equipment.

        27. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon as
available, but not later than 120 days after the end of each fiscal year of
Lessee and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for Lessee and
its consolidated subsidiaries (the "Financial Statements") for such year,
reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that



                                       7
<PAGE>   8

such Financial Statements have been prepared in accordance with generally
accepted accounting principles and are fairly stated in all material respects
(subject to normal year-end audit adjustments). Lessee shall also deliver to
Lessor as soon as available copies of all press releases and other similar
communications issued by Lessee.

        28. CONSENT TO JURISDICTION. Lessee irrevocably submits to the
jurisdiction of any Illinois state or federal court sitting in Illinois for any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and Lessee irrevocably agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Illinois state or federal court.

        29. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

        30. FINANCE LEASE. Lessee and Lessor agree that each Lease is a "Finance
Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges that
Lessee has reviewed and approved each written Supply Contract (as defined by UCC
2A-103(y)) covering Equipment purchased from each "Supplier" (as defined by UCC
2A-103(x)) thereof.

        31. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer or supplier, nor any salesman, representative, or other agent of
the manufacturer or supplier, is an agent of Lessor. No salesman,
representative, or agent of the manufacturer or supplier is authorized to waive
or alter any term or condition of this Agreement or any Schedule and no
representation as to the Equipment or any other matter by the manufacturer or
supplier shall in any way affect Lessee's duty to pay Rent and perform its other
obligations as set forth in this Agreement or any Schedule.

        32. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR
UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL
NOT IN ANY WAY BE AFFECTED OR IMPAIRED.



                                       8
<PAGE>   9

LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE HERETO,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED AND SIGNED
BY LESSOR AND LESSEE IN CONNECTION HEREWITH FROM TIME TO TIME, AND THE
COMMITMENT LETTER ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR
WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF. SHOULD THERE EXIST ANY INCONSISTENCY BETWEEN THE TERMS OF
THE COMMITMENT LETTER AND THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL
PREVAIL.

        IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed by their duly authorized officers as of the date
first written above.


                                            VIXEL CORPORATION


                                            By:  /s/ Mark Harrington
                                               ---------------------------------
                                               Name: Mark Harrington
                                               Title: Chief Financial Officer


                                            TRANSAMERICA BUSINESS CREDIT
                                            CORPORATION

                                            By: /s/ Gary P. Moro
                                               ---------------------------------
                                               Name:  Gary P. Moro
                                               Title: Vice President



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