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                                                                  EXHIBIT 10.27



                            BASIC LEASE INFORMATION
                                   OFFICE NET


<TABLE>
<S>                                           <C>
LEASE DATE:                                   July 26, 2000

TENANT:                                       Brocade Communications Systems, Inc., a Delaware corporation

TENANT'S NOTICE ADDRESS:                      1901 Guadalupe Parkway
                                              San Jose, California 95131

TENANT'S BILLING ADDRESS:                     1901 Guadalupe Parkway
                                              San Jose, California 95131

TENANT CONTACT:                               Wendy Richardson   PHONE NUMBER:  408/487-8100
                                              Facility Manager   FAX NUMBER:    408/487-8101

LANDLORD:                                     Spieker Properties, L.P., a California limited partnership

LANDLORD'S NOTICE ADDRESS:                    151 Metro Drive
                                              San Jose, CA 95110

LANDLORD'S REMITTANCE ADDRESS:                P.O. Box 45587 Dept. # 11531
                                              San Francisco, CA 94145-0587

PROJECT DESCRIPTION:                          That certain six-story, Class A, multi-tenant office building located at the
                                              southeast corner of Technology Drive and Metro Drive, situated in the County of
                                              Santa Clara, City of San Jose, State of California.

BUILDING DESCRIPTION:                         That certain real property commonly known as 1740 Technology Drive, located at 1740
                                              Technology Drive, San Jose, California, and as depicted on EXHIBIT B attached
                                              hereto.

PREMISES:                                     Approximately thirty-one thousand one hundred sixty-eight (31,168) rentable square
                                              feet, which consists of 15.95% of the Project and as depicted on EXHIBIT B attached
                                              hereto.


PERMITTED USE:                                General office and administrative, and up to twenty percent (20%) of the rentable
                                              area of the Premises may be used for communications laboratory purposes.

OCCUPANCY DENSITY:                            4.5 per 1,000 rentable square feet of the Premises.

PARKING DENSITY:                              4 spaces per 1,000 usable square feet of the Premises.

PARKING CHARGE:                               Initially at $0 per space per month for nonreserved parking spaces during the
                                              initial Term of this Lease, thereafter subject to adjustment pursuant to Paragraph
                                              37 hereof.

SCHEDULED TERM COMMENCEMENT DATE:             December 1, 2000, subject to adjustment pursuant to the terms of this Lease.

SCHEDULED LENGTH OF TERM:                     One hundred seventeen (117) months following the Term Commencement Date.

SCHEDULED TERM EXPIRATION DATE:               August 31, 2010, subject to adjustment pursuant to the terms of this Lease.

BASE RENT:                                    With respect to the Premises, see Paragraph 39.A hereof.

SECURITY DEPOSIT:                             Eight Hundred Thirteen Thousand Four Hundred Eighty-six and No/100 Dollars
                                              ($813,486.00) Letter of Credit delivered in accordance with the terms of Paragraph
                                              39.D (subject to adjustment as provided in Paragraphs 39.D and 19 hereof).

TENANT'S NAICS CODE:                          51121

TENANT'S PROPORTIONATE SHARE OF PROJECT:      15.95%
</TABLE>


The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms


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provided under the particular Lease paragraph pertaining to such information. In
the event of any conflict between the Basic Lease Information and the Lease, the
latter shall control.


LANDLORD                                   TENANT

Spieker Properties, L.P.,                  Brocade Communications Systems, Inc.,
a California limited partnership           a Delaware corporation

By: Spieker Properties, Inc.,              By:
    a Maryland corporation,                   --------------------------------
    its general partner                        Michael J. Byrd
                                               Its:  Vice President, Finance,
                                                     Chief Financial Officer

By:                                        By:
    --------------------------------           --------------------------------
         John W. Petersen                           Victor Rinkle
    Its: Senior Vice President                 Its: Vice President, Operations



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                                TABLE OF CONTENTS


<TABLE>
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                                                                                                                          PAGE
                                                                                                                          ----
<S>                                                                                                                        <C>
         Basic Lease Information............................................................................................1
         Table of Contents..................................................................................................2
1.       Premises...........................................................................................................4
2.       Possession and Lease Commencement..................................................................................4
3.       Term...............................................................................................................4
4.       Use................................................................................................................4
5.       Rules and Regulations..............................................................................................6
6.       Rent...............................................................................................................6
7.       Operating Expenses.................................................................................................6
8.       Insurance and Indemnification......................................................................................8
9.       Waiver of Subrogation..............................................................................................9
10.      Landlord's Repairs and Maintenance.................................................................................9
11.      Tenant's Repairs and Maintenance...................................................................................9
12.      Alterations.......................................................................................................10
13.      Signs.............................................................................................................10
14.      Inspection/Posting Notices........................................................................................11
15.      Services and Utilities............................................................................................11
16.      Subordination.....................................................................................................12
17.      Financial Statements..............................................................................................12
18.      Estoppel Certificate..............................................................................................13
19.      Security Deposit..................................................................................................13
20.      Limitation of Tenant's Remedies...................................................................................13
21.      Assignment and Subletting.........................................................................................13
22.      Authority of Tenant...............................................................................................14
23.      Condemnation......................................................................................................14
24.      Casualty Damage...................................................................................................15
25.      Holding Over......................................................................................................16
26.      Default...........................................................................................................16
27.      Liens.............................................................................................................17
28.      Substitution......................................................................................................17
29.      Transfers by Landlord.............................................................................................17
30.      Right of Landlord to Perform Tenant's Covenants...................................................................18
31.      Waiver............................................................................................................18
32.      Notices...........................................................................................................18
33.      Attorney's Fees...................................................................................................18
34.      Successors and Assigns............................................................................................18
35.      Force Majeure.....................................................................................................18
36.      Surrender of Premises.............................................................................................18
37.      Parking...........................................................................................................19
38.      Miscellaneous.....................................................................................................19
39.      Additional Provisions.............................................................................................20
40.      Jury Trial Waiver.................................................................................................23
         Signatures........................................................................................................23

Exhibits:
         Exhibit A......................................................................................Rules and Regulations
         Exhibit B............................................................................Site Plan, Property Description
         Exhibit C................................................................................Lease Improvement Agreement
</TABLE>

         Additional Exhibits as Required



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                                      LEASE


THIS LEASE is made as of the 26th day of July, 2000, by and between Spieker
Properties, L.P., a California limited partnership (hereinafter called
"LANDLORD"), and Brocade Communications Systems, Inc., a Delaware corporation
(hereinafter called "TENANT").


                                  1. PREMISES

        Landlord leases to Tenant and Tenant leases from Landlord, upon the
terms and conditions hereinafter set forth, those premises (the "PREMISES")
outlined in red on EXHIBIT B and described in the Basic Lease Information. The
Premises shall be all or part of a building (the "BUILDING") and of a project
(the "PROJECT"), which may consist of more than one building and additional
facilities, as described in the Basic Lease Information. The Building and
Project are outlined in blue and green respectively on EXHIBIT B. Landlord and
Tenant acknowledge that physical changes may occur from time to time in the
Premises, Building or Project, and that the number of buildings and additional
facilities which constitute the Project may change from time to time, which may
result in an adjustment in Tenant's Proportionate Share, as defined in the Basic
Lease Information, as provided in Paragraph 7.A.

                      2. POSSESSION AND LEASE COMMENCEMENT

        EXISTING IMPROVEMENTS. If this Lease pertains to a Premises in which the
interior improvements have already been constructed ("EXISTING IMPROVEMENTS"),
the provisions of this Paragraph 2. shall apply and the term commencement date
("TERM COMMENCEMENT DATE") shall be the earlier of the date on which: (1) Tenant
takes possession of some or all of the Premises; or (2) December 1, 2000. If for
any reason Landlord cannot deliver possession of the Premises to Tenant on the
scheduled Term Commencement Date, Landlord shall not be subject to any liability
therefore, nor shall Landlord be in default hereunder nor shall such failure
affect the validity of this Lease, and Tenant agrees to accept possession of the
Premises at such time as Landlord is able to deliver the same, which date shall
then be deemed the Term Commencement Date. Tenant shall not be liable for any
Rent (defined below) for any period prior to the Term Commencement Date. Tenant
acknowledges that Tenant has inspected and accepts the Premises in their present
condition, "as is" AND IN GOOD REPAIR, and as suitable for the Permitted Use (as
defined below), and for Tenant's intended operations in the Premises. Tenant
agrees that the Premises and other improvements are in good and satisfactory
condition as of when possession was taken. Tenant further acknowledges that no
representations as to the condition or repair of the Premises nor promises to
alter, remodel or improve the Premises have been made by Landlord or any agents
of Landlord unless such are expressly set forth in this Lease. Upon Landlord's
request, Tenant shall promptly execute and return to Landlord a "Start-Up
Letter" in which Tenant shall agree, among other things, to acceptance of the
Premises and to the determination of the Term Commencement Date, in accordance
with the terms of this Lease, but Tenant's failure or refusal to do so shall not
negate Tenant's acceptance of the Premises or affect determination of the Term
Commencement Date. To the best of Landlord's knowledge, all elevators, HVAC and
other building systems are in good working order.


A.

B.

                                     3. TERM

        The term of this Lease (the "TERM") shall commence on the Term
Commencement Date and continue in full force and effect for the number of months
specified as the Scheduled Length of Term in the Basic Lease Information or
until this Lease is terminated as otherwise provided herein. If the Term
Commencement Date is a date other than the first day of the calendar month, the
Term shall be the number of months of the Length of Term in addition to the
remainder of the calendar month following the Term Commencement Date.

                                     4. USE

A. GENERAL. Tenant shall use the Premises for the permitted use specified in the
Basic Lease Information ("PERMITTED USE") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, assignees and subtenants (collectively, "TENANT'S
PARTIES") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the occupant density (the "OCCUPANCY DENSITY") or the parking density
(the "PARKING DENSITY") specified in the Basic Lease Information at any time.
Tenant shall pay the Parking Charge specified in the Basic Lease Information as
Additional Rent (as hereinafter defined) hereunder. So long as Tenant is
occupying the Premises, Tenant and Tenant's Parties shall have the nonexclusive
right to use, in common with other parties occupying the Building or Project,
the parking areas, driveways and other common areas of the Building and Project,
including at no cost to Tenant during the initial Term of this Lease, Landlord's
fitness facility, subject to the terms of this Lease and such rules and
regulations as Landlord may from time to time prescribe. Landlord reserves the
right, without notice or liability to Tenant, and without the same constituting
an actual or constructive eviction, to alter or modify the common areas from
time to time, including the location and configuration thereof, and the
amenities and facilities which Landlord may determine to provide from time to
time, provided that any such alteration or modification shall not materially
adversely affect Tenant's use of the Premises or the parking area as provided
hereunder, and provided further that any such alteration or modification shall
not detract from the first-class quality of the Building. In the event that any
alteration or modification of the common area materially and adversely affects
Tenant's use of the parking areas of the Project, Landlord may provide to Tenant
a reasonable alternate parking area for Tenant's and Tenant's Parties' use.
During the Term hereof, provided that Tenant comply with the reasonable
requirements of Landlord's security system, Tenant shall have the right to
access the Premises via Landlord's security system, twenty-four (24) hours per
day, three hundred sixty-five (365) days per calendar year, in accordance with
the terms and conditions of this Lease, subject to Landlord's repair and
maintenance obligations pursuant to this Lease which obligations may require the
performance of after-hours repair or maintenance work by Landlord which work may
temporarily prevent after-hours access to the Building. As of the date of this
Lease, Landlord employs a roving security service covering the Project.
Notwithstanding the foregoing, nothing in this Lease shall be deemed to require
that Landlord provide security services to Tenant or any tenant of the Project
at any time.

B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas, substances,
noise or vibrations to emanate from the Premises or from any portion of the
common areas as a result of Tenant's or any Tenant's Party's use thereof, nor
take any action which would constitute a nuisance or would disturb, obstruct or
endanger any other tenants or occupants of the Building or Project or elsewhere,
or interfere with their use of their respective premises or common areas.
Storage outside the Premises of materials, vehicles or any other items



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is prohibited. Tenant shall not use or allow the Premises to be used for any
immoral, improper or unlawful purpose, nor shall Tenant cause or maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer the commission of any waste in, on or about the Premises. Tenant shall
not allow any sale by auction upon the Premises, or place any loads upon the
floors, walls or ceilings which could endanger the structure, or place any
harmful substances in the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Premises. Landlord shall not be responsible to Tenant for the non-compliance by
any other tenant or occupant of the Building or Project with any of the
above-referenced rules or any other terms or provisions of such tenant's or
occupant's lease or other contract.

C. COMPLIANCE WITH REGULATIONS. Subject to punchlist items, if any, provided by
Tenant to Landlord in accordance with Paragraph 2.B above, when entering the
Premises, Tenant accepts the Premises in the condition existing as of the date
of such entry. Tenant shall at its sole cost and expense strictly comply with
all existing or future applicable municipal, state and federal and other
governmental statutes, rules, requirements, regulations, laws and ordinances,
including zoning ordinances and regulations, and covenants, easements and
restrictions of record (to the extent Tenant has actual or constructive
knowledge of such restrictions of record) governing and relating to Tenant's
Permitted Use or other specific use by Tenant or Tenant's Parties, occupancy or
possession of the Premises, to Tenant's use of the common areas, or to the use,
storage, generation or disposal of Hazardous Materials (hereinafter defined) by
Tenant or Tenant's Parties (collectively "REGULATIONS"). Tenant shall at its
sole cost and expense obtain any and all licenses or permits necessary for
Tenant's use of the Premises. Tenant shall at its sole cost and expense promptly
comply with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted. Tenant shall not do or permit anything to be
done in, on, under or about the Project or bring or keep anything which will in
any way increase the rate of any insurance upon the Premises, Building or
Project or upon any contents therein or cause a cancellation of said insurance
or otherwise affect said insurance in any manner. Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any loss, cost, expense, damage, attorneys' fees or
liability arising out of the failure of Tenant to comply with any Regulation to
the extent that such compliance is required of Tenant under this Lease. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease. Landlord represents that, on the date
Landlord delivers possession of the Premises to Tenant, the Premises shall
comply in all material respects with those Regulations applicable to real
property located in Santa Clara County and pertaining to the Premises. Landlord
shall be responsible for complying with Regulations (including ADA and Title 24
to the extent any such compliance requirement of Landlord is expressly stated
herein) pertaining to the common areas of the Project prior to and except to the
extent arising out of Tenant's occupancy or use of the Premises or common areas
or construction of any Tenant Improvements or Alterations made by or on behalf
of Tenant, whether by Landlord or otherwise and whether performed before or
after the Term Commencement Date, or installation of any equipment, fixtures,
furniture or other personal property in or about the Premises. Tenant shall have
the sole responsibility for complying, at Tenant's cost, with any and all
provisions of the Americans with Disabilities Act of 1990, as it has been and
may later be amended ("ADA"), (i) with respect to the Premises; and (ii) with
respect to the common areas of the Project where in the case of this clause (ii)
such compliance has been brought about by: (A) any Tenant Improvements or
Alterations to the Premises or to the common areas made by or on behalf of
Tenant, whether by Landlord or otherwise, and performed after the Term
Commencement Date; (B) requirements of Tenant's employees, or any changes to
Tenant's use of the Premises; or (C) any architectural barriers caused by
Tenant's installation of any equipment, fixtures, furniture, or other personal
property in or about the Premises (items (i) and (ii) collectively, "TENANT'S
ADA RESPONSIBILITIES"). Tenant shall indemnify, defend and hold Landlord, its
agents and employees harmless from and against any and all claims, damages, or
liabilities (including, without limitation, reasonable attorneys' fees and
costs) arising directly or indirectly from Tenant's failure to satisfy any of
Tenant's ADA Responsibilities. Landlord shall indemnify, defend and hold Tenant,
its agents and employees harmless from and against any and all claims, damages
or liabilities arising directly or indirectly from Landlord's failure to comply
with any obligations of a landlord under the ADA, other than such claims,
damages or liabilities arising from Tenant's failure to satisfy any of Tenant's
ADA Responsibilities; provided, however, that Landlord may treat costs of ADA
compliance with respect to the common areas of the Project to the extent
incurred after the date Landlord delivers possession of the Premises to Tenant
as an Operating Expense. Notwithstanding anything to the contrary contained in
Paragraph 7.A of this Lease, costs of ADA and Title 24 compliance brought about
by alterations to the common areas performed before the date Landlord delivers
possession of the Premises to Tenant for Tenant's construction of the Tenant
Improvements, or which are expressly made Landlord's responsibility under this
Lease, will be borne solely by Landlord and shall neither be treated as an
Operating Expense nor be the responsibility of Tenant, except to the extent
provided herein. Landlord represents that, as of the date Landlord delivers
possession of the Premises to Tenant, to the best of Landlord's actual
knowledge, the Premises and the Building shall comply in all material respects
with the ADA and Title 24 as the ADA and Title 24 have, as of the date Landlord
delivers possession of the Premises to Tenant, been interpreted in Santa Clara
County and pertain to the Premises and the Building. Notwithstanding anything to
the contrary contained in this Lease, regardless of whether the cost of
compliance with Regulations shall be borne by Tenant, or Tenant and other
tenants of the Project as an Operating Expense (as defined herein), Landlord
shall perform or cause to be performed any compliance with Regulations items as
described in this Lease which items are located in the common area or are
structural in nature; provided, however, that the costs of such compliance items
shall be allocated in accordance herewith.

D. HAZARDOUS MATERIALS. As used in this Lease, "HAZARDOUS MATERIALS" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be handled, used, generated, stored, released or
disposed of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials onto the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises; provided
that Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times and if Landlord determines in good faith that Tenant may
not be in compliance with this Paragraph 4.D to inspect the Premises and to
conduct tests and investigations to determine whether Tenant is in compliance
with the foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold Landlord harmless from and
against any and all claims, liabilities, losses, costs, loss of rents, liens,
damages, injuries or expenses (including reasonable attorneys' and consultants'
fees, and court costs), demands, causes of action, or judgments directly or
indirectly arising out of or related to the use, generation, storage, release,
or disposal of Hazardous Materials by Tenant or any of Tenant's Parties in, on,
under or about the Premises, the Building or the Project or surrounding land or
environment, which indemnity shall include, without limitation, damages for
personal or bodily injury, property damage, damage to the environment or natural
resources occurring on or off the Premises, losses attributable to diminution in
value or adverse effects on marketability, the cost of any investigation,
monitoring, government oversight, repair, removal, remediation, restoration,
abatement, and disposal, and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following the
expiration or earlier termination of this Lease. Neither the consent by Landlord
to the use, generation, storage, release or disposal of Hazardous Materials nor
the strict compliance by Tenant with all laws pertaining to Hazardous Materials
shall excuse Tenant from Tenant's obligation of indemnification pursuant to this
Paragraph 4.D. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or earlier termination of this Lease.



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<PAGE>   6

                            5. RULES AND REGULATIONS

        Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as EXHIBIT A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations.

                                     6. RENT

A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever, at the Remittance Address specified in the Basic
Lease Information or to such other place as Landlord may from time to time
designate in writing. Base Rent for the first full month of the Term for the
Premises shall be paid by Tenant upon Tenant's execution of this Lease. Such
payment of Base Rent for the first full month of the Term shall be applied to
the first full month of the Term by Landlord upon its receipt thereof so that,
upon such application by Landlord of such payment, no additional payment of Base
Rent allocable to the first full month of the Term shall be due from Tenant. If
the obligation for payment of Base Rent commences on a day other than the first
day of a month, then Base Rent shall be prorated and the prorated installment
shall be paid on the first day of the calendar month next succeeding the Term
Commencement Date. The Base Rent payable by Tenant hereunder is subject to
adjustment as provided elsewhere in this Lease, as applicable. As used herein,
the term "Base Rent" shall mean the Base Rent specified in the Basic Lease
Information as it may be so adjusted from time to time.

B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.D. and E., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("ADDITIONAL RENT"). "RENT" shall mean
Base Rent and Additional Rent.

                              7. OPERATING EXPENSES

A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Tenant shall pay the applicable Tenant's Proportionate Share of each such
Operating Expenses. Landlord and Tenant acknowledge that if the number of
buildings which constitute the Project increases or decreases, or if physical
changes are made to the Premises, Building or Project or the configuration of
any thereof, Landlord may reasonably adjust Tenant's Proportionate Share of the
Building or Project to equitably and fairly reflect the change. Landlord's
determination of Tenant's Proportionate Share of the Building and of the Project
shall be conclusive so long as it is reasonably and consistently applied.
"OPERATING EXPENSES" shall mean all expenses and costs of every kind and nature
which Landlord shall pay or become obligated to pay, because of or in connection
with the ownership, management, maintenance, repair, preservation, replacement
and operation of the Building or Project and its supporting facilities and such
additional facilities now and in subsequent years as may be determined by
Landlord to be necessary or desirable to the Building and/or Project (as
determined in a reasonable manner) other than those expenses and costs which are
specifically attributable to Tenant or which are expressly made the financial
responsibility of Landlord or specific tenants of the Building or Project
pursuant to this Lease. Operating Expenses shall include, but are not limited
to, the following:

        (1) TAXES. All real property taxes and assessments, possessory interest
        taxes, sales taxes, personal property taxes, business or license taxes
        or fees, gross receipts taxes, service payments in lieu of such taxes or
        fees, annual or periodic license or use fees, excises, transit charges,
        and other impositions, general and special, ordinary and extraordinary,
        unforeseen as well as foreseen, of any kind (including fees "in-lieu" of
        any such tax or assessment) which are now or hereafter assessed, levied,
        charged, confirmed, or imposed by any public authority upon the Building
        or Project, its operations or the Rent (or any portion or component
        thereof), or any tax, assessment or fee imposed in substitution,
        partially or totally, of any of the above. Operating Expenses shall also
        include any taxes, assessments, reassessments, or other fees or
        impositions with respect to the development, leasing, management,
        maintenance, alteration, repair, use or occupancy of the Premises,
        Building or Project or any portion thereof, including, without
        limitation, by or for Tenant, and all increases therein or reassessments
        thereof whether the increases or reassessments result from increased
        rate and/or valuation (whether upon a transfer of the Building or
        Project or any portion thereof or any interest therein or for any other
        reason). Operating Expenses shall not include inheritance or estate
        taxes imposed upon or assessed against the interest of any person in the
        Building or the Project, or taxes computed upon the basis of the net
        income of any owners of any interest in the Building or the Project. If
        it shall not be lawful for Tenant to reimburse Landlord for all or any
        part of such taxes, the monthly rental payable to Landlord under this
        Lease shall be revised to net Landlord the same net rental after
        imposition of any such taxes by Landlord as would have been payable to
        Landlord prior to the payment of any such taxes.

        (2) INSURANCE. All insurance premiums and costs, including, but not
        limited to, any deductible amounts, premiums and other costs of
        insurance incurred by Landlord, including for the insurance coverage set
        forth in Paragraph 8.A. herein.

        (3) COMMON AREA MAINTENANCE.

                (a) Repairs, replacements, and general maintenance of and for
                the Building and Project and public and common areas and
                facilities of and comprising the Building and Project,
                including, but not limited to, the roof and roof membrane,
                windows, elevators, restrooms, conference rooms, health club
                facilities, lobbies, mezzanines, balconies, mechanical rooms,
                building exteriors, alarm systems, pest extermination,
                landscaped areas, parking and service areas, driveways,
                sidewalks, loading areas, fire sprinkler systems, sanitary and
                storm sewer lines, utility services, heating/ventilation/air
                conditioning systems, electrical, mechanical or other systems,
                telephone equipment and wiring servicing, plumbing, lighting,
                and any other items or areas which affect the operation or
                appearance of the Building or Project, which determination shall
                be at Landlord's discretion, except for: those items to the
                extent paid for by the proceeds of insurance or paid by Tenant
                or other third parties; and those items attributable solely or
                jointly to specific tenants of the Building or Project.

                (b) Repairs, replacements, and general maintenance shall include
                the cost of any improvements made to or assets acquired for the
                Project or Building that in Landlord's discretion may reduce any
                other Operating Expenses, including present or future repair
                work, are reasonably necessary for the health and safety of the
                occupants of the Building or Project, or for the operation of
                the Building systems, services and equipment, or are required to
                comply with any Regulation, such costs or allocable portions
                thereof to be amortized over such reasonable period as Landlord
                shall determine which period is substantially in accordance with
                generally accepted accounting principles, together with interest
                on the unamortized balance at the publicly announced "prime
                rate" charged by Wells Fargo Bank, N.A. (San Francisco) or its
                successor at the time such improvements or capital assets are
                constructed or acquired, plus two (2)



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<PAGE>   7

                percentage points, or in the absence of such prime rate, then at
                the U.S. Treasury six-month market note (or bond, if so
                designated) rate as published by any national financial
                publication selected by Landlord, plus four (4) percentage
                points, but in no event more than the lesser of (i) ten percent
                (10%) or (ii) the maximum rate permitted by law, plus reasonable
                financing charges.

                (c) Payment under or for any easement, license, permit,
                operating agreement, declaration, restrictive covenant or
                instrument relating to the Building or Project.

                (d) All expenses and rental related to services and costs of
                supplies, materials and equipment used in operating, managing
                and maintaining the Premises, Building and Project, the
                equipment therein and the adjacent sidewalks, driveways, parking
                and service areas, including, without limitation, expenses
                related to service agreements regarding security, fire and other
                alarm systems, janitorial services, window cleaning, elevator
                maintenance, Building exterior maintenance, landscaping and
                expenses related to the administration, management and operation
                of the Project, including without limitation salaries, wages and
                benefits and management office rent.

                (e) The cost of supplying any services and utilities which
                benefit all or a portion of the Premises, Building or Project,
                including without limitation services and utilities provided
                pursuant to Paragraph 15 hereof.

                (f) Legal expenses and the cost of audits by certified public
                accountants; provided, however, that legal expenses chargeable
                as Operating Expenses shall not include the cost of negotiating
                leases, collecting rents, evicting tenants nor shall it include
                costs incurred in legal proceedings with or against any tenant
                or to enforce the provisions of any lease.

                (g) A management and accounting cost recovery fee not to exceed
                four percent (4%) of the sum of the Project's revenues.

If the rentable area of the Building and/or Project is not fully occupied during
any fiscal year of the Term as determined by Landlord, an adjustment shall be
made in Landlord's discretion in computing the Operating Expenses for such year
so that Tenant pays an equitable portion of all variable items (e.g., utilities,
janitorial services and other component expenses that are affected by variations
in occupancy levels) of Operating Expenses, as reasonably determined by
Landlord; provided, however, that in no event shall Landlord be entitled to
collect in excess of one hundred percent (100%) of the total Operating Expenses
actually incurred by Landlord from all of the tenants in the Building or
Project, as the case may be.

Operating Expenses shall not include the cost of providing tenant improvements
or other specific costs incurred for the account of specific tenants of the
Building or Project other than Tenant, the initial construction cost of the
Building, or debt service on any mortgage or deed of trust recorded with respect
to the Project other than pursuant to Paragraph 7.A(3)(b) above. Moreover, if
Landlord does not provide janitorial service to the Premises, Operating Expenses
with respect to the Premises shall not include the cost of janitorial service.
In addition, notwithstanding anything in the definition of Operating Expenses in
this Lease to the contrary, Operating Expenses shall not include the following,
except to the extent specifically provided: costs of capital improvements,
replacements or equipment and any depreciation or amortization expenses thereon,
except to the extent included in Operating Expenses in Paragraph 7.A of this
Lease; marketing costs, including leasing commissions, attorneys' fees in
connection with the negotiation and preparation or enforcement of letters, deal
memos, letters of intent, leases, subleases and/or assignments, space planning
costs, and other costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present or prospective
tenants or other occupants of the Building or the Project; except to the extent
included in Operating Expenses in Paragraph 7.A(3) above, interest, principal,
points and fees on debt or amortization payments on any mortgage or deed of
trust or any other debt instrument encumbering the Building or Project or the
land on which the Building or Project is situated; and advertising and
promotional expenditures; Landlord's general corporate overhead and general
administrative expenses not related to the operation of the Building or the
Project (including executive salaries), except as specifically set forth in
Paragraph 7.A of this Lease.

Notwithstanding anything herein to the contrary, in any instance wherein
Landlord, in Landlord's reasonable discretion, deems Tenant to be responsible
for any amounts greater than Tenant's Proportionate Share, Landlord shall have
the right to allocate costs in any manner Landlord reasonably deems appropriate.
Landlord shall not collect from the tenants of the Project an amount greater
than 100% of the Operating Expenses incurred in the Project.

The above enumeration of services and facilities shall not be deemed to impose
an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that it
shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.

B. PAYMENT OF ESTIMATED OPERATING EXPENSES. "ESTIMATED OPERATING EXPENSES" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. If at any time
during the course of the fiscal year, Landlord reasonably determines that
Operating Expenses are projected to vary from the then Estimated Operating
Expenses by more than five percent (5%), Landlord may, by written notice to
Tenant, revise the Estimated Operating Expenses for the balance of such fiscal
year, and Tenant's monthly installments for the remainder of such year shall be
adjusted so that by the end of such fiscal year Tenant has paid to Landlord
Tenant's Proportionate Share of the revised Estimated Operating Expenses for
such year, such revised installment amounts to be Additional Rent for all
purposes hereunder.

C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "OPERATING EXPENSE ADJUSTMENT"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, or as
soon thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within thirty (30) days after receipt of such statement, such payment
to constitute Additional Rent for all purposes hereunder. If such statement
shows that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference within
thirty (30) days after delivery of such statement to Tenant. If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within thirty (30) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first



                                       7
<PAGE>   8

day of the fiscal year, Tenant's Proportionate Share of the Operating Expense
Adjustment shall be prorated based on a month of 30 days and the number of
calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.

D. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and its supporting facilities and such additional facilities now
and in subsequent years as may be determined by Landlord to be necessary or
desirable to the Building and/or Project.

E. TENANT AUDIT. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than thirty (30) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to notify Landlord of such dispute and to request an audit in
writing, and within sixty (60) days after Landlord's receipt of such written
notice, to cause Landlord's books and records with respect to Operating Expenses
for such fiscal year to be audited by certified public accountants selected by
Tenant and subject to Landlord's reasonable right of approval. The Operating
Expense Adjustment shall be appropriately adjusted on the basis of such audit.
If such audit discloses a liability for a refund in excess of six percent (6%)
of Tenant's Proportionate Share of the Operating Expenses previously reported,
the cost of such audit shall be borne by Landlord; otherwise the cost of such
audit shall be paid by Tenant. If Tenant shall not request an audit in
accordance with the provisions of this Paragraph 7.E. within thirty (30) days
after receipt of Landlord's statement provided pursuant to Paragraph 7.B. or
7.C., such statement shall be final and binding for all purposes hereof. Tenant
acknowledges and agrees that any information revealed in the above described
audit may contain proprietary and sensitive information and that significant
damage could result to Landlord if such information were disclosed to any party
other than Tenant's auditors, Tenant's executives and financial managers and
Tenant's legal counsel, all of whom Tenant shall require to keep confidential
any information discovered through such audit, which requirement of
confidentiality shall survive the termination of this Lease. Except to the
extent required by an order of a court with proper jurisdiction, Tenant shall
not in any manner disclose, provide or make available any information revealed
by the audit to any person or entity without Landlord's prior written consent,
which consent may be withheld by Landlord in its sole and absolute discretion.
The information disclosed by the audit will be used by Tenant solely for the
purpose of evaluating Landlord's books and records in connection with this
Paragraph 7.E.

                        8. INSURANCE AND INDEMNIFICATION

A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.

        (1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
        insuring the Building against damage or destruction due to risk
        including fire, vandalism, and malicious mischief in an amount not less
        than the replacement cost thereof, in the form and with deductibles and
        endorsements as selected by Landlord. At its election, Landlord may
        instead (but shall have no obligation to) obtain "All Risk" coverage,
        and may also obtain earthquake, pollution, and/or flood insurance in
        amounts selected by Landlord.

        (2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also (but
        shall have no obligation to) carry (i) insurance against loss of rent,
        in an amount equal to the amount of Base Rent and Additional Rent that
        Landlord could be required to abate to all Building tenants in the event
        of condemnation or casualty damage for a period of twelve (12) months;
        and (ii) liability insurance and such other insurance as Landlord may
        deem prudent or advisable, in such amounts and on such terms as Landlord
        shall determine. Landlord shall not be obligated to insure, and shall
        have no responsibility whatsoever for any damage to, any furniture,
        machinery, goods, inventory or supplies, or other personal property or
        fixtures which Tenant may keep or maintain in the Premises, or any
        leasehold improvements, additions or alterations within the Premises.

B. TENANT'S INSURANCE. Tenant shall procure at Tenant's sole cost and expense
and keep in effect from the date of this Lease and at all times until the end of
the Term the following:

        (1) PROPERTY INSURANCE. Insurance on all personal property and fixtures
        of Tenant and all improvements, additions or alterations made by or for
        Tenant to the Premises on an "All Risk" basis, insuring such property
        for the full replacement value of such property.

        (2) LIABILITY INSURANCE. Commercial General Liability insurance covering
        bodily injury and property damage liability occurring in or about the
        Premises or arising out of the use and occupancy of the Premises and the
        Project, and any part of either, and any areas adjacent thereto, and the
        business operated by Tenant or by any other occupant of the Premises.
        Such insurance shall include contractual liability insurance coverage
        insuring all of Tenant's indemnity obligations under this Lease. Such
        coverage shall have a minimum combined single limit of liability of at
        least Two Million Dollars ($2,000,000.00), and a minimum general
        aggregate limit of Three Million Dollars ($3,000,000.00), with an
        "Additional Insured - Managers or Lessors of Premises Endorsement." All
        such policies shall be written to apply to all bodily injury (including
        death), property damage or loss, personal and advertising injury and
        other covered loss, however occasioned, occurring during the policy
        term, shall be endorsed to add Landlord and any party holding an
        interest to which this Lease may be subordinated as an additional
        insured, and shall provide that such coverage shall be "PRIMARY" and
        non-contributing with any insurance maintained by Landlord, which shall
        be excess insurance only. Such coverage shall also contain endorsements
        including employees as additional insureds if not covered by Tenant's
        Commercial General Liability Insurance. All such insurance shall provide
        for the severability of interests of insureds; and shall be written on
        an "OCCURRENCE" basis, which shall afford coverage for all claims based
        on acts, omissions, injury and damage, which occurred or arose (or the
        onset of which occurred or arose) in whole or in part during the policy
        period.

        (3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Workers'
        Compensation Insurance as required by any Regulation, and Employers'
        Liability Insurance in amounts not less than One Million Dollars
        ($1,000,000) each accident for bodily injury by accident; One Million
        Dollars ($1,000,000) policy limit for bodily injury by disease; and One
        Million Dollars ($1,000,000) each employee for bodily injury by disease.

        (4) COMMERCIAL AUTO LIABILITY INSURANCE. Commercial auto liability
        insurance with a combined limit of not less than One Million Dollars
        ($1,000,000) for bodily injury and property damage for each accident.
        Such insurance shall cover liability relating to any auto of Tenant
        (including owned, hired and non-owned autos, and automobiles used within
        the scope of employment under Tenant).

        (5) ALTERATIONS REQUIREMENTS. In the event Tenant shall desire to
        perform any Alterations, Tenant shall deliver to Landlord, prior to
        commencing such Alterations (i) evidence reasonably satisfactory to
        Landlord that Tenant carries "Builder's



                                       8
<PAGE>   9


        Risk" insurance covering construction of such Alterations in an amount
        and form approved by Landlord, (ii) such other insurance as Landlord
        shall nondiscriminatorily and reasonably require, and (iii) a lien and
        completion bond or other security in form and amount satisfactory to
        Landlord in Landlord's reasonable discretion (which amount of such bond
        or other security shall be approximately one hundred fifty percent
        (150%) of the total cost of completion of the portion of the Tenant
        Improvements for which Landlord requires such additional security).
        Landlord shall in no event be required to accept an instrument of
        security for purposes of the foregoing sentence which instrument of
        security is not customarily accepted by Landlord for such purposes in
        the ordinary course of Landlord's business operations.

        (6) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
        Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty
        (30) days' notice of cancellation or change in terms; and (ii) waive all
        rights of subrogation by the insurance carrier against Landlord. If at
        any time during the Term the amount or coverage of insurance which
        Tenant is required to carry under this Paragraph 8.B. is, in Landlord's
        reasonable judgment, materially less than the amount or type of
        insurance coverage typically carried by owners or tenants of properties
        located in the general area in which the Premises are located which are
        similar to and operated for similar purposes as the Premises or if
        Tenant's use of the Premises should change with or without Landlord's
        consent, Landlord shall have the right to require Tenant to increase the
        amount or change the types of insurance coverage required under this
        Paragraph 8.B. All insurance policies required to be carried by Tenant
        under this Lease shall be written by companies rated A X or better in
        "Best's Insurance Guide" and authorized to do business in the State of
        California. With respect to the Tenant named hereunder (Brocade
        Communications Systems, Inc."), in any event deductible amounts under
        all insurance policies required to be carried by Tenant under this Lease
        shall not exceed One Hundred Thousand Dollars ($100,000.00) per
        occurrence, provided that Tenant maintains a tangible net worth of at
        least Fifty Million and No/100 Dollars ($50,000,000.00) as reasonably
        determined by Landlord, or, if Tenant's net worth is less than Fifty
        Million and No/100 Dollars ($50,000,000.00), such deductible amounts
        shall not exceed Twenty-Five Thousand and No/100 Dollars ($25,000.00)
        per occurrence. With respect to any other party which becomes "Tenant"
        under this Lease, by assignment or operation of law, or otherwise, in
        any event deductible amounts under all insurance policies required to be
        carried by Tenant under this Lease shall not exceed Five Thousand
        Dollars ($5,000.00) per occurrence. Tenant shall deliver to Landlord on
        or before the Term Commencement Date, and thereafter at least fifteen
        (15) days before the expiration dates of the expired policies, certified
        copies of Tenant's insurance policies, or a certificate evidencing the
        same issued by the insurer thereunder; and, if Tenant shall fail to
        procure such insurance, or to deliver such policies or certificates,
        Landlord may, at Landlord's option and in addition to Landlord's other
        remedies in the event of a default by Tenant hereunder, procure the same
        for the account of Tenant, and the cost thereof shall be paid to
        Landlord as Additional Rent.

C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord, Spieker Properties, Inc., and
each of their respective directors, shareholders, partners, lenders, members,
managers, contractors, affiliates and employees (collectively, "LANDLORD
INDEMNITEES") harmless from and against any and all claims, liabilities, losses,
costs, loss of rents, liens, damages, injuries or expenses, including reasonable
attorneys' and consultants' fees and court costs, demands, causes of action, or
judgments, directly or indirectly arising out of or related to: (1) claims of
injury to or death of persons or damage to property or business loss occurring
or resulting directly or indirectly from the use or occupancy of the Premises,
Building or Project by Tenant or Tenant's Parties, or from activities or
failures to act of Tenant or Tenant's Parties; (2) claims arising from work or
labor performed, or for materials or supplies furnished to or at the request or
for the account of Tenant in connection with performance of any work done for
the account of Tenant within the Premises or Project; (3) claims arising from
any breach or default on the part of Tenant in the performance of any covenant
contained in this Lease; and (4) claims arising from the negligence or
intentional acts or omissions of Tenant or Tenant's Parties. The foregoing
indemnity by Tenant shall not be applicable to claims to the extent arising from
the gross negligence or willful misconduct of Landlord or Landlord's agents,
employees, or contractors or Landlord's breach of a material term of this Lease
beyond any applicable cure periods. Landlord shall not be liable to Tenant and
Tenant hereby waives all claims against Landlord for any injury to or death of,
or damage to any person or property or business loss in or about the Premises,
Building or Project by or from any cause whatsoever (other than Landlord's gross
negligence or willful misconduct or Landlord's breach of a material term of this
Lease beyond any applicable cure periods) and, without limiting the generality
of the foregoing, whether caused by water leakage of any character from the
roof, walls, basement or other portion of the Premises, Building or Project, or
caused by gas, fire, oil or electricity in, on or about the Premises, Building
or Project, acts of God or of third parties, or any matter outside of the
reasonable control of Landlord. The provisions of this Paragraph shall survive
the expiration or earlier termination of this Lease.

                            9. WAIVER OF SUBROGATION

        Landlord and Tenant each waives any claim, loss or cost it might have
against the other for any injury to or death of any person or persons, or damage
to or theft, destruction, loss, or loss of use of any property (a "LOSS"), to
the extent the same is insured against (or is required to be insured against
under the terms hereof) under any property damage insurance policy covering the
Building, the Premises, Landlord's or Tenant's fixtures, personal property,
leasehold improvements, or business, regardless of whether the negligence of the
other party caused such Loss.

                     10. LANDLORD'S REPAIRS AND MAINTENANCE

        Landlord shall maintain in good repair, reasonable wear and tear
excepted, the structural soundness of the roof, foundations, and exterior walls
of the Building. The term "exterior walls" as used herein shall not include
windows, glass or plate glass, doors, special store fronts or office entries.
Any damage caused by or repairs necessitated by any negligence or act of Tenant
or Tenant's Parties may be repaired by Landlord at Landlord's option and
Tenant's expense. Tenant shall promptly give Landlord written notice of any
defect or need of repairs in such components of the Building for which Landlord
is responsible upon Tenant's knowledge of the same, after which Landlord shall
have a reasonable opportunity and the right to enter the Premises at all
reasonable times to repair same. Landlord shall make commercially reasonable
efforts to cause its agents, employees and contractors who enter the Premises to
use commercially reasonable efforts not to unreasonably interfere with Tenant's
Permitted Use of the Premises. Landlord's liability with respect to any defects,
repairs, or maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises, the Building or the Project or to fixtures,
appurtenances or equipment in the Building, except as provided in Paragraph 24.
Subject to punchlist items described in Paragraph 2.B hereof, by taking
possession of the Premises, Tenant accepts them "as is," as being in good order,
condition and repair and the condition in which Landlord is obligated to deliver
them and suitable for the Permitted Use and Tenant's intended operations in the
Premises, whether or not any notice of acceptance is given. Landlord shall
promptly commence the correction of the punchlist items described in Paragraph
2.B hereof, if any, following Landlord's receipt of any such punchlist items
list in accordance with this Lease.

                      11. TENANT'S REPAIRS AND MAINTENANCE

        Tenant shall at all times during the Term at Tenant's expense maintain
all parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant in a first-class, good, clean and secure condition
and promptly make all necessary repairs and replacements, as reasonably
determined by Landlord, with materials and workmanship of the same character,
kind and quality as the original. Notwithstanding anything to the contrary
contained herein, Tenant shall, at its expense, promptly repair any damage to
the Premises or the Building or Project resulting from or caused by any
negligence or act of Tenant or Tenant's Parties.



                                       9
<PAGE>   10

                                 12. ALTERATIONS

A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord's reasonable opinion, compatible with the Building or the Project and
its mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems, and will not cause the Building or Project or such systems to be
required to be modified to comply with any Regulations (including, without
limitation, the Americans With Disabilities Act), unless Tenant in its sole
discretion agrees in writing to pay for all costs and expenses associated with
such compliance requirement (which agreement shall survive termination of this
Lease); and (c) will not interfere with the use and occupancy of any other
portion of the Building or Project by any other tenant or its invitees.
Specifically, but without limiting the generality of the foregoing, Landlord
shall have the right of written consent for all plans and specifications for the
proposed Alterations, construction means and methods, all appropriate permits
and licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose
reasonable rules and regulations for contractors and subcontractors performing
such work. Tenant shall also supply to Landlord any documents and information
reasonably requested by Landlord in connection with Landlord's consideration of
a request for approval hereunder. Notwithstanding the foregoing, Tenant shall
have the right, without consent of, but upon at least ten (10) business days'
prior written notice (as provided under Paragraph 12.B below) to, Landlord, to
make non-structural, cosmetic Alterations within the interior of the Premises
(and which are not visible from the outside of the Premises), which do not
impair the value of the Building, and which cost, in the aggregate, less than
Twenty-Five Thousand Dollars ($25,000.00) in any twelve (12) month period during
the Term of this Lease, provided that such Alterations shall nevertheless be
subject to all of the remaining requirements of this Paragraph 12, including
without limitation, subparagraphs (a) through (c) above, other than the
requirement of Landlord's prior consent. In addition, all Alterations shall be
performed by duly licensed contractors or subcontractors reasonably acceptable
to Landlord, proof of insurance shall be submitted to Landlord as required under
Paragraph 8.B above, and Landlord reserves the right to impose reasonable rules
and regulations for contractors and subcontractors. Tenant shall, if requested
by Landlord, promptly furnish Landlord with complete as-built plans and
specifications for any Alterations performed by Tenant to the Premises, at
Tenant's sole cost and expense. Tenant shall cause all Alterations to be
accomplished in a first-class, good and workmanlike manner, and to comply with
all applicable Regulations and Paragraph 27 hereof. Tenant shall at Tenant's
sole expense, perform any additional work required under applicable Regulations
due to the Alterations hereunder. No review or consent by Landlord of or to any
proposed Alteration or additional work shall constitute a waiver of Tenant's
obligations under this Paragraph 12, nor constitute any warranty or
representation that the same complies with all applicable Regulations, for which
Tenant shall at all times be solely responsible. Tenant shall reimburse Landlord
for all costs which Landlord may incur in connection with granting approval to
Tenant for any such Alterations, including any costs or expenses which Landlord
may incur in electing to have outside architects and engineers review said plans
and specifications, and shall pay Landlord an administration fee of five percent
(5%) of the cost of the Alterations as Additional Rent hereunder. All such
Alterations shall remain the property of Tenant until the expiration or earlier
termination of this Lease, at which time they shall be and become the property
of Landlord; provided, however, that Landlord may, at Landlord's option, require
that Tenant, at Tenant's expense, remove any or all Alterations (excluding the
initial Tenant Improvements) made by or on behalf of Tenant and restore the
Premises by the expiration or earlier termination of this Lease, to their
condition existing prior to the construction of any such Alterations, reasonable
wear and tear excepted. All such removals and restoration shall be accomplished
in a first-class and good and workmanlike manner so as not to cause any damage
to the Premises or Project whatsoever. If Tenant fails to remove such
Alterations or Tenant's trade fixtures or furniture or other personal property,
Landlord may keep and use them or remove any of them and cause them to be stored
or sold in accordance with applicable law, at Tenant's sole expense. In addition
to and wholly apart from Tenant's obligation to pay Tenant's Proportionate Share
of Operating Expenses, Tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees, possessory interest taxes,
fees or charges in lieu of any such taxes, capital levies, or other charges
imposed upon, levied with respect to or assessed against its fixtures or
personal property, on the value of Alterations within the Premises, and on
Tenant's interest pursuant to this Lease, or any increase in any of the
foregoing based on such Alterations. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord.

At Landlord's election and notwithstanding the foregoing, however, Tenant shall
pay to Landlord the cost of removing any such Alterations and restoring the
Premises to their original condition, such cost to include a reasonable charge
for Landlord's overhead and profit as provided above at the time Landlord grants
written consent to a requested Alteration; provided, however, that Landlord
shall not require that Tenant pay to Landlord the cost of removing any such
Alterations and restoring the Premises to their original condition as described
in the foregoing sentence if the following conditions precedent are satisfied by
Tenant: (i) Tenant (and not a sublessee or assignee of Tenant) shall be the
party for which the Alterations are requested and Tenant is in possession of the
portion of the Premises upon which the Alterations shall be made, and (ii) the
removal costs of such Alterations described above are determined by Landlord in
its reasonable discretion to be less than a cumulative total of one hundred
thousand and no/100 dollars ($100,000.00) with respect to all existing
Alterations which Landlord may require to be removed pursuant to the terms of
this Lease. Nothing in the foregoing sentence shall be interpreted to relieve
Tenant of its obligations described in this Lease to remove Alterations and
restore the Premises at Tenant's cost in accordance with this Paragraph 12,
Paragraph 36 and with other applicable terms and conditions of this Lease. In
the event that Tenant does remove any such Alterations and restores the Premises
in accordance with the terms of this Lease, Landlord shall return any monies
delivered by Tenant to Landlord in accordance with the preceding sentence. In
the event Tenant fails to remove Alterations and restore the Premises in
accordance with the terms of this Lease, Landlord may perform the same on
Tenant's behalf apply monies collected by Landlord for such purpose to the
removal and restoration or, in the event Landlord does not require any such
payment by Tenant, the amount due from Tenant may be deducted from the Security
Deposit or any other sums or amounts held by Landlord under this Lease.

B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.

C. Notwithstanding anything to the contrary contained in Paragraph 12.A, at the
time Landlord gives its consent for any Alterations, Tenant shall also be
notified whether or not Landlord will require that such Alterations be removed
upon the expiration or earlier termination of this Lease. Landlord shall respond
to Tenant's written request within fifteen (15) business days. In the event
Landlord fails to respond to Tenant's written request within such fifteen (15)
business day time period, Landlord shall not be in default hereof nor shall
Tenant be deemed to have received consent to the requested Alterations; however
Tenant is entitled to provide a second written request for consent to Landlord.
Landlord shall respond to Tenant's second written request for consent described
in this Paragraph 12.C within ten (10) business days after Landlord's receipt
thereof. In the event Landlord fails to so respond to Tenant's second written
request, Landlord shall be deemed to have consented to Tenant's request to make
Alterations; provided, however, that if the total cost of any proposed
Alterations by Tenant during the previous six (6) month period is equal to or
more than One Hundred Thousand Dollars ($100,000.00), Landlord shall be deemed
to have rejected Tenant's second request to make such Alterations.

                                    13. SIGNS

Tenant shall not place, install, affix, paint or maintain any signs, notices,
graphics or banners whatsoever or any window decor which is visible in or from
public view or corridors, the common areas or the exterior of the Premises or
the Building, in or on any exterior window or window fronting upon any common
areas or service area without Landlord's prior written approval which Landlord
shall have the right



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<PAGE>   11


to withhold in its absolute and sole discretion; provided that Tenant's name
shall be included in any Building-standard door and directory signage, if any,
in accordance with Landlord's Building signage program, including without
limitation, payment by Tenant of any fee charged by Landlord for maintaining
such signage, which fee shall constitute Additional Rent hereunder. Any
installation of signs, notices, graphics or banners on or about the Premises or
Project approved by Landlord shall be subject to any Regulations and to any
other requirements imposed by Landlord. Tenant shall remove all such signs or
graphics by the expiration or any earlier termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury to or
defacement of the Premises, Building or Project and any other improvements
contained therein, and Tenant shall repair any injury or defacement including
without limitation discoloration caused by such installation or removal. Any
signage rights granted by Landlord to Tenant shall be exclusive to Tenant and
such rights shall not be assigned, subleased or otherwise conveyed without the
prior written approval of Landlord of which Landlord shall have the right to
withhold in its absolute and sole discretion. Tenant's signage rights under this
Paragraph are personal to the original Tenant named in this Lease and shall not
inure to the benefit of any assignees or subtenants. Notwithstanding anything
contained in this Paragraph 13 to the contrary, Tenant shall be entitled to two
(2) signs to be located as follows (a) one (1) sign on the monument facing
Technology Drive, and (b) one (1) sign on the monument facing Metro Drive each
in a location reasonably determined by Landlord. Such signage right is personal
to Tenant and subject to the following terms and conditions:

        1.      Tenant shall submit plans and drawings for such signage to the
                City of San Jose and to any other public authorities having
                jurisdiction and shall obtain written approval from each such
                jurisdiction prior to installation, and shall fully comply with
                all applicable Regulations;

        2.      Tenant shall, at Tenant's sole cost and expense, design,
                construct and install such signage;

        3.      All signs shall be subject to Landlord's prior written approval,
                which Landlord shall have the right to withhold in its absolute
                and sole discretion;

        4.      Tenant shall maintain its signage in good condition and repair,
                and all costs of maintenance and repair shall be borne by
                Tenant. Maintenance shall include, without limitation, cleaning
                and, if such signage is illuminated, relamping at reasonable
                intervals. Tenant shall be responsible for any electrical energy
                used in connection with its signs;

        5.      At Landlord's option, Tenant's signage rights granted hereby may
                be revoked and terminated upon occurrence of any of the
                following events:

                (a)     Tenant shall be in material default, as defined in
                        Paragraph 26 as determined by Landlord in its sole
                        discretion, and shall not have cured said default for a
                        period of ninety (90) days;

                (b)     Except with respect to Permitted Transfers described in
                        Paragraph 21.A(3) hereof, Tenant shall assign this Lease
                        or sublet any portion of the Premises without Landlord's
                        prior written consent in accordance with Paragraph 21,
                        or Tenant occupies less than fifty percent (50%) of the
                        Premises;

                (c)     This Lease shall terminate or otherwise no longer be in
                        effect.

        6.      Upon the expiration or earlier termination of this Lease if
                Tenant fails to remove its signage in accordance with this
                Paragraph 13, or at such other time that Tenant's signage rights
                are terminated pursuant to the terms hereof, Landlord shall
                cause Tenant's signage to be removed from the Building and the
                Building to be repaired and restored to the condition which
                existed prior to the installation of Tenant's signage
                (including, if necessary, the replacement of any precast
                concrete panels), all at the sole cost and expense of Tenant and
                otherwise in accordance with Paragraph 36 of this Lease, without
                further notice from Landlord notwithstanding anything to the
                contrary contained in this Lease. Tenant shall pay all costs and
                expenses for such removal and restoration within thirty (30)
                days following delivery of an invoice therefore.

                         14. INSPECTION/POSTING NOTICES

After reasonable notice, except in emergencies where no such notice shall be
required, Landlord and Landlord's agents and representatives, shall have the
right to enter the Premises to inspect the same, to clean, to perform such work
as may be permitted or required hereunder, to make repairs, improvements or
alterations to the Premises, Building or Project or to other tenant spaces
therein, to deal with emergencies, to post such notices as may be permitted or
required by law to prevent the perfection of liens against Landlord's interest
in the Project or to exhibit the Premises to prospective tenants, purchasers,
encumbrancers or to others, or for any other purpose as Landlord may deem
necessary or desirable; provided, however, that Landlord shall use reasonable
efforts not to unreasonably interfere with Tenant's business operations. Tenant
shall not be entitled to any abatement of Rent by reason of the exercise of any
such right of entry. Tenant waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby.
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about the Premises, excluding Tenant's vaults and safes
or special security areas (designated in advance), and Landlord shall have the
right to use any and all means which Landlord may deem necessary or proper to
open said doors in an emergency, in order to obtain entry to any portion of the
Premises, and any entry to the Premises or portions thereof obtained by Landlord
by any of said means, or otherwise, shall not be construed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual or
constructive, of Tenant from the Premises or any portions thereof. At any time
within six (6) months prior to the expiration of the Term or following any
earlier termination of this Lease or agreement to terminate this Lease, Landlord
shall have the right to erect on the Premises, Building and/or Project a
suitable sign indicating that the Premises are available for lease.

                           15. SERVICES AND UTILITIES

A. Provided Tenant shall not be in default hereunder, and subject to the
provisions elsewhere herein contained and to the rules and regulations of the
Building, Landlord shall furnish to the Premises during ordinary business hours
of generally recognized business days, to be reasonably determined by Landlord
(but exclusive, in any event, of Saturdays, Sundays and legal holidays), water
for lavatory and drinking purposes and electricity, heat and air conditioning as
usually furnished or supplied for use of the Premises for reasonable and normal
office use as of the date Tenant takes possession of the Premises as determined
by Landlord (but not including above-standard or continuous cooling for
excessive heat-generating machines, excess lighting or equipment), janitorial
services during the times and in the manner that such services are, in
Landlord's judgment, customarily furnished in comparable office buildings in the
immediate market area, and elevator service, which shall mean service either by
nonattended automatic elevators or elevators with attendants, or both, at the
option of Landlord. Tenant acknowledges that Tenant has inspected and accepts
the water, electricity, heat and air conditioning and other utilities and
services being supplied or furnished to the Premises as of the date Tenant takes
possession of the Premises, as being sufficient for use of the Premises for
reasonable and normal office use in their present condition, "as is," and
suitable for the Permitted Use, and for Tenant's intended operations in the
Premises. Landlord shall have no obligation to provide additional or after-hours
electricity, heating or air conditioning, but if Landlord elects to provide such
services at Tenant's request, Tenant shall pay to Landlord, upon demand, a
reasonable charge for such services as reasonably determined by Landlord. Tenant
agrees to keep and cause to be kept closed all window covering


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<PAGE>   12

when necessary because of the sun's position, and Tenant also agrees at all
times to cooperate fully with Landlord and to abide by all of the regulations
and requirements which Landlord may reasonably prescribe for the proper
functioning and protection of electrical, heating, ventilating and air
conditioning systems. Wherever heat-generating machines, excess lighting or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, Landlord reserves the right to
install supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord.

B. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises, including without limitation, computers,
electronic data processing machines, copying machines, and other machines, using
excess lighting or using electric current, water, or any other resource in
excess of or which will in any way increase the amount of electricity, water, or
any other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, and the Permitted Use, in each case as of the
date Tenant takes possession of the Premises and as determined by Landlord, or
which will require additions or alterations to or interfere with the Building
power distribution systems; nor connect with electric current, except through
existing electrical outlets in the Premises or water pipes, any apparatus,
equipment or device for the purpose of using electrical current, water, or any
other resource. If Tenant shall require water or electric current or any other
resource in excess of that being furnished or supplied for the use of the
Premises as of the date Tenant takes possession of the Premises as determined by
Landlord, Tenant shall first procure the written consent of Landlord which
Landlord may refuse, to the use thereof, and Landlord may cause a special meter
to be installed in the Premises so as to measure the amount of water, electric
current or other resource consumed for any such other use. Tenant shall pay
directly to Landlord upon demand as an addition to and separate from payment of
Operating Expenses the cost of all such additional resources, energy, utility
service and meters (and of installation, maintenance and repair thereof and of
any additional circuits or other equipment necessary to furnish such additional
resources, energy, utility or service). Landlord may add to the separate or
metered charge a recovery of additional expense incurred in keeping account of
the excess water, electric current or other resource so consumed. Following
receipt of Tenant's request to do so, Landlord shall use good faith efforts to
restore any service specifically to be provided under Paragraph 15 that becomes
unavailable and which is in Landlord's reasonable control to restore; provided,
however, that Landlord shall in no case be liable for any damages directly or
indirectly resulting from nor shall the Rent or any monies owed Landlord under
this Lease herein reserved be abated by reason of: (a) the installation, use or
interruption of use of any equipment used in connection with the furnishing of
any such utilities or services, or any change in the character or means of
supplying or providing any such utilities or services or any supplier thereof;
(b) the failure to furnish or delay in furnishing any such utilities or services
when such failure or delay is caused by acts of God or the elements, labor
disturbances of any character, or otherwise or because of any interruption of
service due to Tenant's use of water, electric current or other resource in
excess of that being supplied or furnished for the use of the Premises as of the
date Tenant takes possession of the Premises; (c) the inadequacy, limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy or any other service or utility whatsoever serving the
Premises or Project, whether by Regulation or otherwise; or (d) the partial or
total unavailability of any such utilities or services to the Premises or the
Building or the diminution in the quality or quantity thereof, whether by
Regulation or otherwise; or (e) any interruption in Tenant's business operations
as a result of any such occurrence; nor shall any such occurrence constitute an
actual or constructive eviction of Tenant or a breach of an implied warranty by
Landlord. Landlord shall further have no obligation to protect or preserve any
apparatus, equipment or device installed by Tenant in the Premises, including
without limitation by providing additional or after-hours heating or air
conditioning. Landlord shall be entitled to cooperate voluntarily and in a
reasonable manner with the efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or other resource consumption.
The obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program. In addition, Landlord
reserves the right to change the supplier or provider of any such utility or
service from time to time. Tenant shall have the right to directly contract with
or otherwise obtain any electrical or janitorial service for or with respect to
the Premises or Tenant's operations therein from any supplier or provider of any
such service. Tenant shall cooperate with Landlord and any supplier or provider
of such services designated by Landlord from time to time to facilitate the
delivery of such services to Tenant at the Premises and to the Building and
Project, including without limitation allowing Landlord and Landlord's suppliers
or providers, and their respective agents and contractors, reasonable access to
the Premises for the purpose of installing, maintaining, repairing, replacing or
upgrading such service or any equipment or machinery associated therewith.

C. Tenant shall pay, upon demand, for all utilities furnished to the Premises,
or if not separately billed to or metered to Tenant, Tenant's Proportionate
Share of all charges jointly serving the Project in accordance with Paragraph 7.
All sums payable under this Paragraph 15 shall constitute Additional Rent
hereunder.

D. Tenant may contract separately with providers of telecommunications or
cellular products, systems or services for the Premises. Even though such
products, systems or services may be installed or provided by such providers in
the Building, in consideration for Landlord's permitting such providers to
provide such services to Tenant, Tenant agrees that Landlord and the Landlord
Indemnitees shall in no event be liable to Tenant or any Tenant Party for any
damages of any nature whatsoever arising out of or relating to the products,
systems or services provided by such providers (or any failure, interruption,
defect in or loss of the same) or any acts or omissions of such providers in
connection with the same or any interference in Tenant's business caused
thereby. Tenant waives and releases all rights and remedies against Landlord and
the Landlord Indemnitees that are inconsistent with the foregoing.

                                16. SUBORDINATION

Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, this Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant's attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, in the form requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed of
trust, subject to such nondisturbance requirement. If requested in writing by
Tenant, Landlord shall use commercially reasonable efforts to obtain a
subordination, nondisturbance and attornment agreement for the benefit of Tenant
reflecting the foregoing from any ground landlord, mortgagee or beneficiary, at
Tenant's expense, subject to such other terms and conditions as the ground
landlord, mortgagee or beneficiary may require.

                            17. FINANCIAL STATEMENTS

At the request of Landlord from time to time, Tenant shall provide to Landlord
Tenant's and any guarantor's current financial statements or other information
discussing financial worth of Tenant and any guarantor, which Landlord shall use
solely for purposes of this Lease and in connection with the ownership,
management, financing and disposition of the Project. Landlord shall not
disclose, provide or make available any confidential information revealed by
Tenant's private financial information to any person or entity without Tenant's
prior written consent.



                                       12
<PAGE>   13


                            18. ESTOPPEL CERTIFICATE

Tenant agrees from time to time, within ten (10) days after request of Landlord,
to deliver to Landlord, or Landlord's designee, an estoppel certificate stating
that this Lease is in full force and effect, that this Lease has not been
modified (or stating all modifications, written or oral, to this Lease), the
date to which Rent has been paid, the unexpired portion of this Lease, that
there are no current defaults by Landlord or Tenant under this Lease (or
specifying any such defaults), that the leasehold estate granted by this Lease
is the sole interest of Tenant in the Premises and/or the land at which the
Premises are situated, and such other matters pertaining to this Lease as may be
reasonably requested by Landlord or any mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or Project or any interest therein.
Failure by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day period,
Landlord may execute and deliver such certificate on Tenant's behalf and that
such certificate shall be binding on Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
Project or any interest therein. The parties agree that Tenant's obligation to
furnish such estoppel certificates in a timely fashion is a material inducement
for Landlord's execution of this Lease, and shall be an event of default
(without any cure period that might be provided under Paragraph 26.A(3) of this
Lease) if Tenant fails to fully comply or makes any material misstatement in any
such certificate.

                              19. SECURITY DEPOSIT

Tenant agrees to deposit with Landlord upon execution of this Lease, a security
deposit as stated in the Basic Lease Information (the "SECURITY DEPOSIT"), which
sum shall be held and owned by Landlord, without obligation to pay interest, as
security for the performance of Tenant's covenants and obligations under this
Lease. The Security Deposit is not an advance rental deposit or a measure of
damages incurred by Landlord in case of Tenant's default. Upon the occurrence of
any event of default by Tenant, Landlord may from time to time, without
prejudice to any other remedy provided herein or by law, use such fund as a
credit to the extent necessary to credit against any arrears of Rent or other
payments due to Landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default, and Tenant shall pay to Landlord, on
demand, the amount so applied in order to restore the Security Deposit to its
original amount. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be promptly returned by
Landlord to Tenant at such time after termination of this Lease that all of
Tenant's obligations under this Lease have been fulfilled to Landlord's
reasonable satisfaction, reduced by such amounts as may be required by Landlord
(i) to remedy defaults on the part of Tenant in the payment of Rent or other
obligations of Tenant under this Lease, (ii) to repair damage to the Premises,
Building or Project caused by Tenant or any Tenant's Parties, and (iii) to clean
the Premises to the extent Tenant fails to comply with Paragraph 36 hereof.
Landlord may use and commingle the Security Deposit with other funds of
Landlord. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, and all other provisions of any Regulations, now or
hereinafter in force, which restricts the amount or types of claim that a
landlord may make upon a security deposit or imposes upon a landlord (or its
successors) any obligation with respect to the handling or return of security
deposits.

                       20. LIMITATION OF TENANT'S REMEDIES

The obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of Landlord or of the
individual or other partners of Landlord or its or their partners, directors,
officers, or shareholders, and Tenant agrees to look solely to Landlord's
interest in the Project for the recovery of any amount from Landlord, and shall
not look to other assets of Landlord nor seek recourse against the assets of the
individual or other partners of Landlord or its or their partners, directors,
officers or shareholders. Any lien obtained to enforce any such judgment and any
levy of execution thereon shall be subject and subordinate to any lien, mortgage
or deed of trust on the Project. Under no circumstances shall Tenant have the
right to offset against or recoup Rent or other payments due and to become due
to Landlord hereunder except as expressly provided in this Lease, which Rent and
other payments shall be absolutely due and payable hereunder in accordance with
the terms hereof. In no case shall Landlord be liable to Tenant for any lost
profits, damage to business, or any form of special, indirect or consequential
damage on account of any breach of this Lease or otherwise, notwithstanding
anything to the contrary contained in this Lease.

                          21. ASSIGNMENT AND SUBLETTING

A.      (1) GENERAL. This Lease has been negotiated to be and is granted as an
        accommodation to Tenant. Accordingly, this Lease is personal to Tenant,
        and Tenant's rights granted hereunder do not include the right to assign
        this Lease or sublease the Premises, or to receive any excess, either in
        installments or lump sum, over the Rent which is expressly reserved by
        Landlord as hereinafter provided, except as otherwise expressly
        hereinafter provided. Tenant shall not assign or pledge this Lease or
        sublet the Premises or any part thereof, whether voluntarily or by
        operation of law, or permit the use or occupancy of the Premises or any
        part thereof by anyone other than Tenant, or suffer or permit any such
        assignment, pledge, subleasing or occupancy, without Landlord's prior
        written consent except as provided herein. If Tenant desires to assign
        this Lease or sublet any or all of the Premises in the case where
        Landlord's consent is required, Tenant shall give Landlord written
        notice (the "TRANSFER NOTICE") at least thirty (30) days prior to the
        anticipated effective date of the proposed assignment or sublease, which
        shall contain all of the information reasonably requested by Landlord to
        address Landlord's decision criteria specified hereinafter. Landlord
        shall then have a period of ten (10) business days following receipt of
        the Transfer Notice to notify Tenant in writing that Landlord elects
        either: (i) to terminate this Lease as to the space so affected as of
        the date so requested by Tenant; or (ii) to consent to the proposed
        assignment or sublease, subject, however, to Landlord's prior written
        consent of the proposed assignee or subtenant and of any related
        documents or agreements associated with the assignment or sublease. If
        Landlord should fail to notify Tenant in writing of such election within
        said period, Landlord shall be deemed to have waived option (i) above,
        but written consent by Landlord of the proposed assignee or subtenant
        shall still be required. If Landlord does not exercise option (i) above,
        Landlord's consent to a proposed assignment or sublease shall not be
        unreasonably withheld. Consent to any assignment or subletting shall not
        constitute consent to any subsequent transaction to which this Paragraph
        21 applies. Notwithstanding the foregoing, Landlord hereby waives its
        right to recapture a portion of the Premises, as such right is described
        in clause (i) above, in the following circumstance only: (X) The term of
        such proposed sublease shall be no more than forty-eight (48) months and
        no extension options shall be granted in such sublease. With respect to
        any sublease that occurs, the standard of "sound financial condition"
        described as a condition to Landlord's consent shall be based upon a
        determination by Landlord, in its reasonable discretion, that such
        proposed transferee shall have a tangible net worth, evidenced by
        audited financial statements delivered to Landlord pursuant to the terms
        of this Lease, that is reasonably sufficient, taking into account all
        expected obligations of the transferee with respect to the proposed
        transfer and all of its other contingent and noncontingent obligations,
        to service when due the obligations of the transferee with respect to
        the proposed transfer.

(2)     CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other instances
        in which it may be reasonable for Landlord to withhold Landlord's
        consent to an assignment or subletting, Landlord and Tenant acknowledge
        that it shall be reasonable for Landlord to withhold Landlord's consent
        in the following instances: if the proposed assignee does not agree to
        be bound by and assume the obligations of Tenant under this Lease in
        form and substance reasonably satisfactory to Landlord; the use of the
        Premises by such proposed assignee or subtenant would not be a Permitted
        Use or would violate any exclusivity or other arrangement which Landlord
        has with any other tenant or occupant or any Regulation or would
        increase the Occupancy Density or Parking Density of the Building or
        Project, or would otherwise result in an undesirable tenant mix for the
        Project as



                                       13
<PAGE>   14


        determined by Landlord; the proposed assignee or subtenant is not of
        sound financial condition as determined by Landlord in Landlord's sole
        discretion; the proposed assignee or subtenant is a governmental agency;
        the proposed assignee or subtenant does not have a good reputation as a
        tenant of property or a good business reputation; the proposed assignee
        or subtenant is a person with whom Landlord is negotiating to lease
        space in the Project or is a present tenant of the Project if Tenant's
        proposed sublease space competes with space Landlord has available for
        lease in the Project ; the assignment or subletting would entail any
        Alterations which would lessen the value of the leasehold improvements
        in the Premises or use of any Hazardous Materials (except as expressly
        approved in this Lease) or other noxious use or use which may
        unreasonably disturb other tenants of the Project; or Tenant is in
        default of any obligation of Tenant under this Lease, or Tenant has
        defaulted under this Lease on three (3) or more occasions during any
        twelve (12) months preceding the date that Tenant shall request consent.
        Failure by or refusal of Landlord to consent to a proposed assignee or
        subtenant shall not cause a termination of this Lease. Upon a
        termination under Paragraph 21.A(1)(i), Landlord may lease the Premises
        to any party, including parties with whom Tenant has negotiated an
        assignment or sublease, without incurring any liability to Tenant. At
        the option of Landlord, a surrender and termination of this Lease shall
        operate as an assignment to Landlord of some or all subleases or
        subtenancies. Landlord shall exercise this option by giving notice of
        that assignment to such subtenants on or before the effective date of
        the surrender and termination. In connection with each request for
        assignment or subletting, Tenant shall pay to Landlord Landlord's
        standard fee (which amount shall not exceed $1,500.00) for approving
        such requests, as well as all costs reasonably incurred by Landlord and
        all costs incurred by any mortgagee or ground lessor in approving each
        such request and effecting any such transfer, including, without
        limitation, reasonable attorneys' fees.

(3)     PERMITTED TRANSFERS. An "Affiliate" means any entity that (i) controls,
        is controlled by, or is under common control with Tenant (ii) results
        from the transfer of all or substantially all of Tenant's assets or
        stock, or (iii) results from the merger or consolidation of Tenant with
        another entity. "Control," as used in the previous sentence, means the
        direct or indirect ownership of more than fifty percent (50%) of the
        voting securities of an entity or possession of the right to vote more
        than fifty percent (50%) of the voting interest in the ordinary
        direction of the entity's affairs. Notwithstanding anything to the
        contrary contained in this Lease, Landlord's consent is not required for
        any assignment of this Lease or sublease of all or a portion of the
        Premises to an Affiliate so long as the following conditions are met:
        (a) at least five (5) days after any such assignment or sublease,
        Landlord receives written notice of such assignment or sublease (as well
        as any documents or information reasonably requested by Landlord
        regarding the transfer and the transferee in support of the requirements
        of this Paragraph 21.A(3)); (b) Tenant is not then in default under this
        Lease; (c) if the transfer is an assignment or any other transfer to an
        Affiliate other than a sublease, the intended assignee assumes in
        writing all of Tenant's obligations under this Lease relating to the
        Premises in form satisfactory to Landlord or, if the transfer is a
        sublease, the intended sublessee accepts the sublease in form
        satisfactory to Landlord; (d) the intended transferee has a tangible net
        worth, as evidenced by financial statements delivered to Landlord and
        certified by an independent certified public accountant in accordance
        with generally accepted accounting principles that are consistently
        applied, at least equal to Tenant as of the date of this Lease; (e) the
        Premises shall continue to be operated solely for the use specified in
        the Basic Lease Information; and (f) Tenant shall pay to Landlord
        Landlord's standard fee (which amount shall not exceed $1,500.00) for
        approving assignments and subleases and all costs reasonably incurred by
        Landlord and all costs incurred by any mortgagee or ground lessor for
        such assignment or subletting, including, without limitation, reasonable
        attorneys' fees. No transfer to an Affiliate in accordance with this
        subparagraph shall relieve Tenant named herein of any obligation under
        this Lease or alter the liability of Tenant named herein for the payment
        of Rent or for the performance of any other obligation to be performed
        by Tenant, including the obligations contained in Paragraph 25 with
        respect to any Affiliate.

B. BONUS RENT. Any Rent or other consideration realized by Tenant under any such
sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission and reasonable attorneys' fees
incurred by Tenant solely in connection with the sublease or assignment,
reasonable, actual out of pocket costs of tenant improvements made solely in
connection with the sublease or assignment and paid for by Tenant, and
reasonable, out-of-pocket marketing costs, shall be divided and paid, forty
percent (40%) to Tenant, sixty percent (60%) to Landlord. In any subletting or
assignment undertaken by Tenant, Tenant shall diligently seek to obtain the
then-fair market rental amount (as reasonably determined by Landlord and Tenant)
available in the marketplace for comparable space available for leasing (using
as a basis for such determination other Landlord-owned Buildings and Projects of
the same stature and located in the same geographic area in which the Premises
are located).

C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease. Notwithstanding anything to the
contrary in this Lease, the transfer of outstanding capital stock or other
listed equity interests, or the purchase of outstanding capital stock or other
listed equity interests, or the purchase of equity interests issued in an
initial public offering of stock, by persons or parties other than "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, through
the "over-the-counter" market or any recognized national or international
securities exchange shall not be included in determining whether control has
been transferred.

D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or of the underlying beneficial interests of
said entity and/or a change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute an assignment for all
purposes of this Lease.

E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or any guarantor of this
Lease of any liability under its guaranty or alter the primary liability of the
Tenant named herein for the payment of Rent or for the performance of any other
obligations to be performed by Tenant, including obligations contained in
Paragraph 25 with respect to any assignee or subtenant. Landlord may collect
rent or other amounts or any portion thereof from any assignee, subtenant, or
other occupant of the Premises, permitted or otherwise, and apply the net rent
collected to the Rent payable hereunder, but no such collection shall be deemed
to be a waiver of this Paragraph 21, or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the further
performance by Tenant of the obligations of Tenant under this Lease or of any
guarantor. Any assignment or subletting which conflicts with the provisions
hereof shall be void.

                                  22. AUTHORITY

Landlord represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Landlord's obligations hereunder and that
all persons signing this Lease on its behalf are authorized to do. Tenant and
the person or persons, if any, signing on behalf of Tenant, jointly and
severally represent and warrant that Tenant has full right and authority to
enter into this Lease, and to perform all of Tenant's obligations hereunder, and
that all persons signing this Lease on its behalf are authorized to do so.

                                23. CONDEMNATION

A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would



                                       14
<PAGE>   15


prevent or materially interfere with the Permitted Use of the Premises, either
party shall have the right to terminate this Lease at its option. If any
material portion of the Building or Project is taken or condemned for any public
use under any Regulation, or by right of eminent domain, or by private purchase
in lieu thereof, Landlord may terminate this Lease at its option. In either of
such events, the Rent shall be abated during the unexpired portion of this
Lease, effective when the physical taking of said Premises shall have occurred.

B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of this Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances, but only after giving Landlord credit for all sums received
or to be received by Tenant by the condemning authority, subject to the last
sentence of Paragraph 23.C of this Lease. Notwithstanding anything to the
contrary contained in this Paragraph, if the temporary use or occupancy of any
part of the Premises shall be taken or appropriated under power of eminent
domain during the Term, this Lease shall be and remain unaffected by such taking
or appropriation and Tenant shall continue to pay in full all Rent payable
hereunder by Tenant during the Term; in the event of any such temporary
appropriation or taking, Tenant shall be entitled to receive that portion of any
award which represents compensation for the use of or occupancy of the Premises
during the unexpired Term. In the event a portion or the whole of Tenant's
Premises shall be taken or appropriated under the power of eminent domain or
conveyed in lieu thereof and such restoration cannot be made, in Landlord's sole
opinion, within one hundred eight (180) days from the time of taking, Landlord
shall notify Tenant within sixty (60) days of such taking and Tenant shall have
the right to cancel this Lease by giving Landlord written notice of its
intention to cancel within thirty (30) days of the date of Landlord's notice.
If, however, within sixty (60) days after the date that the nature and extent of
the taking are finally determined, Landlord notifies Tenant that Landlord at its
cost will add on to the remaining Premises so that the area and the approximate
layout of the Premises will be substantially the same after the date of taking
as they were before the date of taking, and Landlord commences the restoration
immediately and completes the restoration within one hundred eighty (180) days
after Landlord so notifies Tenant, this Lease shall continue in full force and
effect without any reduction in Rent, except the abatement made pursuant to this
paragraph.

C. AWARD. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any and all payment, income, rent, award or any interest therein whatsoever
which may be paid or made in connection with such taking or conveyance and
Tenant shall have no claim against Landlord or otherwise for any sums paid by
virtue of such proceedings, whether or not attributable to the value of any
unexpired portion of this Lease, except as expressly provided in this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property and moving costs, shall be and
remain the property of Tenant.

D. WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.

                               24. CASUALTY DAMAGE

A. GENERAL. If the Premises or Building should be damaged or destroyed by fire,
tornado, or other casualty (collectively, "CASUALTY"), Tenant shall give
immediate written notice thereof to Landlord upon learning of the same. Within
thirty (30) days after Landlord's receipt of such notice, Landlord shall notify
Tenant whether in Landlord's good faith estimation material restoration of the
Premises can reasonably be made within one hundred eighty (180) days from the
date of such notice and receipt of required permits for such restoration.
Landlord's determination shall be binding on Tenant.

B. WITHIN 180 DAYS. If the Premises or Building should be damaged by Casualty to
such extent that material restoration can in Landlord's estimation be reasonably
completed within one hundred eighty (180) days after the date of such notice and
receipt of required permits for such restoration, this Lease shall not
terminate. Provided that insurance proceeds are received by Landlord to fully
repair the damage, Landlord shall proceed to rebuild and repair the Premises
diligently and in the manner determined by Landlord, except that Landlord shall
not be required to rebuild, repair or replace any part of any Alterations which
may have been placed on or about the Premises or paid for by Tenant. If the
Premises are untenantable in whole or in part following such damage, the Rent
payable hereunder during the period in which they are untenantable shall be
abated proportionately.

C. GREATER THAN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that material restoration cannot in Landlord's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such rebuilding or
repair, and such damage materially and adversely interferes with the conduct of
Tenant's business in the Premises, then either Party shall have the right to
cancel this Lease by giving the other party written notice within ten (10) days
from the date of Landlord's notice that material restoration cannot in
Landlord's estimation be reasonably completed within such one hundred eighty
(180) day period. Said cancellation shall be effective thirty (30) days from the
first day that either party gives its notice to cancel. If neither party elects
to so cancel this Lease, Landlord shall proceed to rebuild and repair the
Premises diligently and in the manner determined by Landlord, except that
Landlord shall not be required to rebuild, repair or replace any part of any
Alterations which may have been placed on or about the Premises by Tenant. If
the Premises are untenantable in whole or in part following such damage, the
Rent payable hereunder during the period in which they are untenantable shall be
abated proportionately. Notwithstanding the above, Landlord shall not be
required to rebuild, repair or replace any part of any Alterations which may
have been placed, on or about the Premises or paid for by Tenant. If the
Premises are untenantable in whole or in part following such damage, the Rent
payable hereunder during the period in which they are untenantable shall be
abated proportionately, but only to the extent of rental abatement insurance
proceeds received by Landlord during the time and to the extent the Premises are
unfit for occupancy.

D. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds; provided that Tenant
shall not be liable for that portion of the repair costs for which Landlord was
obligated under the terms of this Lease to carry insurance but failed to carry
such insurance.

E. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if the
Premises or Building are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then, Landlord shall
promptly notify Tenant of the same and, in either case, Landlord shall have the
right to terminate this Lease by delivering written notice of termination to
Tenant within thirty (30) days after the date of notice to Landlord that said
damage or destruction is not fully covered by insurance or such requirement is
made by any such holder, as the case may be, whereupon this Lease shall
terminate thirty (30) days after Landlord delivers such notice. In the event
that the Premises are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, and Landlord consequently
determines not to repair or restore the Premises, Tenant may terminate this
Lease by providing written notice of such termination to Landlord and such
termination shall be effective fifteen (15) days following Landlord's receipt of
such written notice from Tenant.



                                       15
<PAGE>   16



F. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in the
event of damage or destruction to the Premises or the Building. As a material
inducement to Landlord entering into this Lease, Tenant hereby waives any rights
it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil Code of
California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.

G. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of the
Premises or the Building, under no circumstances shall Landlord be required to
repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property.

                                25. HOLDING OVER

Unless Landlord expressly consents in writing to Tenant's holding over, Tenant
shall be unlawfully and illegally in possession of the Premises, whether or not
Landlord accepts any rent from Tenant or any other person while Tenant remains
in possession of the Premises without Landlord's written consent. If Tenant
shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such retention
the greater of the following: (i) one hundred seventy-five percent (175%) of the
amount of daily rental as of the last month prior to the date of expiration or
earlier termination, or (ii) the amount of the fair market rental as such amount
is reasonably determined by Landlord (Landlord shall use as a basis for its
determination other buildings and projects owned by Landlord, located in the
same geographic area as the Premises, and of the same class and stature as the
Building and Project). Tenant shall also indemnify, defend, protect and hold
Landlord harmless from any loss, liability or cost, including consequential and
incidental damages and reasonable attorneys' fees, incurred by Landlord
resulting from delay by Tenant in surrendering the Premises, including, without
limitation, any claims made by the succeeding tenant founded on such delay.
Acceptance of Rent by Landlord following expiration or earlier termination of
this Lease, or following demand by Landlord for possession of the Premises,
shall not constitute a renewal of this Lease, and nothing contained in this
Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, if upon expiration or earlier termination of this Lease, or
following demand by Landlord for possession of the Premises, Tenant has not
fulfilled its obligation with respect to repairs and cleanup of the Premises or
any other Tenant obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems necessary at Tenant's
sole cost and expense, and any time required by Landlord to complete such
obligations shall be considered a period of holding over and the terms of this
Paragraph 25 shall apply. The provisions of this Paragraph 25 shall survive any
expiration or earlier termination of this Lease.

                                   26. DEFAULT

A. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an
event of default on the part of Tenant:

        (1) ABANDONMENT. Abandonment or vacation of the Premises for a
        continuous period in excess of five (5) days. Tenant waives any right to
        notice Tenant may have under Section 1951.3 of the Civil Code of the
        State of California, the terms of this Paragraph 26.A. being deemed such
        notice to Tenant as required by said Section 1951.3.

        (2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
        other amount due and payable hereunder date when said payment is due,
        such failure continuing for three (3) days after written notice of such
        failure, as to which time is of the essence, provided that Landlord
        shall not be required to provide such notice more than once during the
        twelve (12) month period commencing with the date of such notice. The
        second failure to pay any such amount within three (3) days after said
        payment is due during such 12-month period shall be an event of default
        hereunder without notice. Such notice shall replace rather than
        supplement any statutory notice required under Code of Civil Procedure
        Section 1161 or any similar or successor statute.

        (3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
        covenant under this Lease other than those matters specified in
        subparagraphs (1) and (2) of this Paragraph 26.A., and in Paragraphs 8,
        16, 18 and 25, such failure continuing for thirty (30) days after
        written notice of such failure, as to which time is of the essence;
        provided, however, that in the event that any such cure cannot
        reasonably be completed within such thirty (30) day period and provided
        further that Tenant has commenced and is diligently pursuing such cure,
        Tenant shall have an additional period of fifteen (15) days to complete
        such cure. Notwithstanding anything to the contrary contained in this
        Lease, the following shall constitute an event of default under this
        Paragraph 26.A(3) without any such notice or lapse of time: (i) failure
        to provide an estoppel certificate when and as required under Paragraph
        18 hereof; (ii) failure to maintain insurance required under Paragraph 8
        hereof; (iii) failure to vacate the Premises upon the expiration or
        earlier termination of this Lease; (iv) failure to comply with any
        obligation under this Lease pertaining to Hazardous Materials; (v) any
        other matter provided for in another subparagraph of this Paragraph 26.A
        or for which another time limit is provided elsewhere in this Lease,
        including without limitation, under Exhibit C to this Lease.

        (4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit
        of creditors.

        (5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
        Tenant, or the filing of an involuntary petition by Tenant's creditors,
        which involuntary petition remains undischarged for a period of thirty
        (30) days. If under applicable law, the trustee in bankruptcy or Tenant
        has the right to affirm this Lease and continue to perform the
        obligations of Tenant hereunder, such trustee or Tenant shall, in such
        time period as may be permitted by the bankruptcy court having
        jurisdiction, cure all defaults of Tenant hereunder outstanding as of
        the date of the affirmance of this Lease and provide to Landlord such
        adequate assurances as may be necessary to ensure Landlord of the
        continued performance of Tenant's obligations under this Lease.

        (6) RECEIVERSHIP. The employment of a receiver to take possession of
        substantially all of Tenant's assets or Tenant's leasehold of the
        Premises, if such appointment remains undismissed or undischarged for a
        period of fifteen (15) days after the order therefor.

        (7) ATTACHMENT. The attachment, execution or other judicial seizure of
        all or substantially all of Tenant's assets or Tenant's leasehold of the
        Premises, if such attachment or other seizure remains undismissed or
        undischarged for a period of fifteen (15) days after the levy thereof.

        (8) INSOLVENCY. The admission by Tenant in writing of its inability to
        pay its debts as they become due.

B.      REMEDIES UPON DEFAULT.

        (1) TERMINATION. In the event of the occurrence of any event of default,
        Landlord shall have the right to give a written termination notice to
        Tenant, and on the date specified in such notice, Tenant's right to
        possession shall terminate, and this Lease shall terminate unless on or
        before such date all Rent in arrears and all costs and expenses incurred
        by or on behalf of Landlord hereunder shall have been paid by Tenant and
        all other events of default of this Lease by Tenant at the time existing
        shall have been fully remedied to the satisfaction of Landlord. At any
        time after such termination, Landlord may recover possession of the
        Premises or any part thereof and expel and remove therefrom Tenant and
        any other person occupying the same, including any


                                       16
<PAGE>   17

        subtenant or subtenants notwithstanding Landlord's consent to any
        sublease, by any lawful means, and again repossess and enjoy the
        Premises without prejudice to any of the remedies that Landlord may have
        under this Lease, or at law or equity by any reason of Tenant's default
        or of such termination. Landlord hereby reserves the right, but shall
        not have the obligation, to recognize the continued possession of any
        subtenant. The delivery or surrender to Landlord by or on behalf of
        Tenant of keys, entry codes, or other means to bypass security at the
        Premises shall not terminate this Lease.

        (2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
        occurred, this Lease shall continue in effect for so long as Landlord
        does not terminate Tenant's right to possession under Paragraph 26.B(1)
        hereof. Landlord shall have the remedy described in California Civil
        Code Section 1951.4 ("Landlord may continue this Lease in effect after
        Tenant's breach and abandonment and recover Rent as it becomes due, if
        Tenant has the right to sublet or assign, subject only to reasonable
        limitations"), or any successor code section. Accordingly, if Landlord
        does not elect to terminate this Lease on account of any event of
        default by Tenant, Landlord may enforce all of Landlord's rights and
        remedies under this Lease, including the right to recover Rent as it
        becomes due. Acts of maintenance, preservation or efforts to lease the
        Premises or the appointment of a receiver under application of Landlord
        to protect Landlord's interest under this Lease or other entry by
        Landlord upon the Premises shall not constitute an election to terminate
        Tenant's right to possession.

        (3) INCREASED SECURITY DEPOSIT. If Tenant is in default under Paragraph
        26.A(2) hereof and such default remains uncured for ten (10) days after
        such occurrence or such default occurs more than three times in any
        twelve (12) month period, Landlord may require that Tenant increase the
        Security Deposit to the amount of three times the current month's Rent
        at the time of the most recent default if the Security Deposit is less
        than the amount of three times the current month's Rent.

C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent and other amounts that would have
been earned after the date of termination until the time of award exceeds the
amount of such Rent loss that Tenant proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid Rent and
other amounts for the balance of the Term after the time of award exceeds the
amount of such Rent loss that the Tenant proves could be reasonably avoided; and
(4) any other amount and court costs necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom. The "worth at the time of award" as used in (1) and (2) above
shall be computed at the Applicable Interest Rate (defined below). The "worth at
the time of award" as used in (3) above shall be computed by discounting such
amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%). If this Lease provides for any
periods during the Term during which Tenant is not required to pay Base Rent or
if Tenant otherwise receives a Rent concession, then upon the occurrence of an
event of default, Tenant shall owe to Landlord the full amount of such Base Rent
or value of such Rent concession, plus interest at the Applicable Interest Rate,
calculated from the date that such Base Rent or Rent concession would have been
payable.

D. LATE CHARGE. In addition to its other remedies, Landlord shall have the right
without notice or demand to add to the amount of any payment required to be made
by Tenant hereunder, and which is not paid and received by Landlord on or before
the first day of each calendar month, an amount equal to an amount equal to six
percent (6%) of the delinquent amount, or $150.00, whichever amount is greater,
for each month or portion thereof that the delinquency remains outstanding to
compensate Landlord for the loss of the use of the amount not paid and the
administrative costs caused by the delinquency, the parties agreeing that
Landlord's damage by virtue of such delinquencies would be extremely difficult
and impracticable to compute and the amount stated herein represents a
reasonable estimate thereof. Any waiver by Landlord of any late charges or
failure to claim the same shall not constitute a waiver of other late charges or
any other remedies available to Landlord.

E. INTEREST. Interest shall accrue on all sums not paid when due hereunder at
the lesser of ten percent (10%) per annum or the maximum interest rate allowed
by law ("APPLICABLE INTEREST RATE") from the due date until paid.

F. REMEDIES CUMULATIVE. All of Landlord's rights, privileges and elections or
remedies are cumulative and not alternative, to the extent permitted by law and
except as otherwise provided herein.

G. REPLACEMENT OF STATUTORY NOTICE REQUIREMENTS. When this Lease requires
service of a notice, that notice shall replace rather than supplement any
equivalent or similar statutory notice, including any notice required by
California Code of Civil Procedure Section 1161 or any similar or successor
statute. When a statute requires service of a notice in a particular manner,
service of that notice (or a similar notice required by this Lease) in the
manner required by this Paragraph 26 shall replace and satisfy the statutory
service-of-notice procedures, including those required by California Code of
Civil Procedure Section 1162 or any similar or successor statute.

                                    27. LIENS

Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the Premises
or Project. If Tenant shall not, within ten (10) days following the imposition
of any such lien, cause the same to be released of record by payment or posting
of a proper bond, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation, to cause the same
to be released by such means as Landlord shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord on behalf of
Tenant and all expenses incurred by Landlord in connection therefor shall be
payable to Landlord by Tenant on demand with interest at the Applicable Interest
Rate as Additional Rent. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord, the Premises, the
Project and any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give Landlord not less than ten (10)
business days prior written notice of the commencement of any work in the
Premises or Project which could lawfully give rise to a claim for mechanics' or
materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from time
to time provide, for which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by Landlord
without Landlord's consent, and in any event not before completion of the work
which could lawfully give rise to a claim for mechanics' or materialmen's liens.

                            28. INTENTIONALLY OMITTED


                            29. TRANSFERS BY LANDLORD

In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of



                                       17
<PAGE>   18


"Landlord" to be performed after the passing of title to Landlord's
successor-in-interest. This Lease shall not be affected by any such sale and
Tenant agrees to attorn to the purchaser or assignee. Landlord's
successor(s)-in-interest shall not have liability to Tenant with respect to the
failure to perform any of the obligations of "Landlord," to the extent required
to be performed prior to the date such successor(s)-in-interest became the owner
of the Building.

               30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS

All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of Rent. If Tenant shall fail to pay any sum of money,
other than Base Rent, required to be paid by Tenant hereunder or shall fail to
perform any other act on Tenant's part to be performed hereunder, including
Tenant's obligations under Paragraph 11 hereof, and such failure shall continue
for fifteen (15) days after notice thereof by Landlord, in addition to the other
rights and remedies of Landlord, Landlord may make any such payment and perform
any such act on Tenant's part. In the case of an emergency, no prior
notification by Landlord shall be required. Landlord may take such actions
without any obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.

                                   31. WAIVER

If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord (including,
without limitation, through any "lockbox") shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time Landlord
accepted such Rent. Failure by Landlord to enforce any of the terms, covenants
or conditions of this Lease for any length of time shall not be deemed to waive
or decrease the right of Landlord to insist thereafter upon strict performance
by Tenant. Waiver by Landlord of any term, covenant or condition contained in
this Lease may only be made by a written document signed by Landlord, based upon
full knowledge of the circumstances.

                                   32. NOTICES

Each provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to the
other shall be deemed to be complied with when and if the following steps are
taken:

A. RENT. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.

B. OTHER. All notices, demands, consents and approvals which may or are required
to be given by either party to the other hereunder shall be in writing and
either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt or
refusal to accept delivery. Tenant appoints as its agent to receive the service
of all default notices and notice of commencement of unlawful detainer
proceedings the person in charge of or apparently in charge of occupying the
Premises at the time, and, if there is no such person, then such service may be
made by attaching the same on the main entrance of the Premises.

C. REQUIRED NOTICES. Upon learning of the following circumstances, Tenant shall
promptly notify Landlord in writing of any notice of a violation or a potential
or alleged violation of any Regulation that relates to the Premises or the
Project, or of any inquiry, investigation, enforcement or other action that is
instituted or threatened by any governmental or regulatory agency against Tenant
or any other occupant of the Premises, or any claim that is instituted or
threatened by any third party that relates to the Premises or the Project.

                               33. ATTORNEYS' FEES

If Landlord places the enforcement of this Lease, or any part thereof, or the
collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Tenant brings to enforce its respective rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said costs
and attorneys' fees shall be a part of the judgment in said action.

                           34. SUCCESSORS AND ASSIGNS

This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.

                                35. FORCE MAJEURE

If performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions, fire or other
casualty, or other causes beyond the reasonable control of the party obligated
to perform, performance by that party for a period equal to the period of that
prevention, delay, or stoppage is excused. Tenant's obligation to pay Rent,
however, is not excused by this Paragraph 35.

                            36. SURRENDER OF PREMISES

Tenant shall, upon expiration or sooner termination of this Lease, surrender the
Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, reasonable wear and tear excepted,
including, but not limited to, all interior walls cleaned, all holes in walls
repaired and all floors cleaned, waxed, and free of any Tenant-introduced
marking or painting, all to the reasonable satisfaction of Landlord. Tenant
shall remove all of its debris from the Project. At or before the time of
surrender, Tenant shall comply with the terms of Paragraph 12.A. hereof with
respect to Alterations to the Premises and all other matters addressed in such
Paragraph. If the Premises are not so surrendered at the expiration or sooner
termination of this Lease, the provisions of Paragraph 25 hereof shall apply.
All keys to the Premises or any part thereof shall be surrendered to Landlord
upon expiration or sooner termination of the Term. Tenant shall give written
notice to Landlord at least thirty (30) days prior to vacating the Premises and
shall meet with Landlord for a joint inspection of the Premises at the time of
vacating at a mutually agreeable time, but nothing contained herein shall be
construed as an extension of the Term or as a consent by Landlord to any holding
over by Tenant. In the event of Tenant's failure to participate in such joint
inspection, Landlord's inspection at or after Tenant's vacating the Premises
shall conclusively be deemed correct for purposes of



                                       18
<PAGE>   19

determining Tenant's responsibility for repairs and restoration. Any delay
caused by Tenant's failure to carry out its obligations under this Paragraph 36
beyond the term hereof, shall constitute unlawful and illegal possession of
Premises under Paragraph 25 hereof.

                                   37. PARKING

        So long as Tenant is occupying the Premises, Tenant and Tenant's Parties
shall have the right to use up to the number of parking spaces specified in the
Basic Lease Information on an unreserved, nonexclusive, first come, first served
basis, for passenger-size automobiles, in the parking areas in the Project
designated from time to time by Landlord for use in common by tenants of the
Building. The parking rights granted under this Paragraph 37 are personal to
Tenant and are not transferable except: (i) pursuant to the terms of a sublease
or assignment which expressly transfers such parking rights and which has been
approved in writing by Landlord in accordance with the terms of this Lease, (ii)
a Permitted Transfer, provided that Tenant notify Landlord in writing of such
transfer of parking privileges, or (iii) with the express written consent of
Landlord which consent shall be granted in Landlord's sole discretion.

        Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
subject to such parking charges as Landlord shall determine, and shall otherwise
be subject to such terms and conditions as Landlord may require.

        Tenant shall at all times comply and shall cause all Tenant's Parties
and visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.

        Landlord shall have no liability for any damage to property or other
items located in the parking areas of the Project, nor for any personal injuries
or death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.

        Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant's Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking. Landlord also reserves the right to
alter, modify, relocate or close all or any portion of the parking areas in
order to make repairs or perform maintenance service, or to restripe or renovate
the parking areas, or if required by casualty, condemnation (subject to Tenant's
right of termination provided in Paragraph 23 hereof), act of God, Regulations
or for any other reason deemed reasonable by Landlord.

        After the initial Term hereof, Tenant shall pay to Landlord (or
Landlord's parking contractor, if so directed in writing by Landlord), as
Additional Rent hereunder, the monthly charges established from time to time by
Landlord for parking in such parking areas (which shall initially be the charge
specified in the Basic Lease Information, as applicable). Tenant shall pay to
Landlord as Additional Rent hereunder, the monthly charge established by
Landlord then in effect for any reserved parking spaces requested by Tenant and
granted by Landlord, if any. Landlord shall have no obligation to provide such
reserved parking to Tenant during the Term hereof or any extension hereto. Such
parking charges shall be payable in advance with Tenant's payment of Basic Rent.
No deductions from the monthly parking charge shall be made for days on which
the Tenant does not use any of the parking spaces entitled to be used by Tenant.

                                38. MISCELLANEOUS

A.      GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.

B.      TIME. Time is of the essence regarding this Lease and all of its
provisions.

C.      CHOICE OF LAW. This Lease shall in all respects be governed by the laws
of the State of California.

D.      ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.

E.      MODIFICATION. This Lease may not be modified except by a written
instrument signed by the parties hereto. Tenant accepts the area of the Premises
as specified in the Basic Lease Information as the approximate area of the
Premises for all purposes under this Lease, and acknowledges and agrees that no
other definition of the area (rentable, usable or otherwise) of the Premises
shall apply. Tenant shall in no event be entitled to a recalculation of the
square footage of the Premises, rentable, usable or otherwise, and no
recalculation, if made, irrespective of its purpose, shall reduce Tenant's
obligations under this Lease in any manner, including without limitation the
amount of Base Rent payable by Tenant or Tenant's Proportionate Share of the
Building and of the Project.

F.      SEVERABILITY. If, for any reason whatsoever, any of the provisions
hereof shall be unenforceable or ineffective, all of the other provisions shall
be and remain in full force and effect.

G.      RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof.

H.      EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective otherwise
until execution and delivery by both Landlord and Tenant.

I.      ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than
the total Rent due nor any endorsement on any check or letter accompanying any
check or payment of Rent shall be deemed an accord and satisfaction of full
payment of Rent, and Landlord may accept such payment without prejudice to
Landlord's right to recover the balance of such Rent or to pursue other
remedies. All offers by or on behalf of Tenant of accord and satisfaction are
hereby rejected in advance.

J.      EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.

K.      DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that
this Lease has been agreed to by both the parties, that both Landlord and Tenant
have consulted with attorneys with respect to the terms of this Lease and that
no presumption shall be created


                                       19
<PAGE>   20

against Landlord because Landlord drafted this Lease. Except as otherwise
specifically set forth in this Lease, with respect to any consent, determination
or estimation of Landlord required or allowed in this Lease or requested of
Landlord, Landlord's consent, determination or estimation shall be given or made
solely by Landlord in Landlord's good faith opinion, whether or not objectively
reasonable. If Landlord fails to respond to any request for its consent within
the time period, if any, specified in this Lease, Landlord shall be deemed to
have disapproved such request, except as otherwise expressly provided in this
Lease.

L.      EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.

M.      NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.

N.      NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and
Tenant and nothing herein is intended to create any third party benefit.

O.      QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the
observance and performance of all of the other covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall peaceably and
quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by Landlord or any other person or persons lawfully or
equitably claiming by, through or under Landlord, subject, nevertheless, to all
of the other terms and conditions of this Lease. Landlord shall not be liable
for any hindrance, interruption, interference or disturbance by other tenants or
third persons, nor shall Tenant be released from any obligations under this
Lease because of such hindrance, interruption, interference or disturbance.

P.      COUNTERPARTS. This Lease may be executed in any number of counterparts,
each of which shall be deemed an original.

Q.      MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.

R.      PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant
hereunder for any fractional month shall be prorated based on a month of 30
days. As used herein, the term "fiscal year" shall mean the calendar year or
such other fiscal year as Landlord may deem appropriate.

                           39. ADDITIONAL PROVISIONS

A.      RENT.

Subject to the provisions of Paragraphs 2.B, Base Rent, net of Operating
Expenses per Paragraph 7 of this Lease, for the Premises shall be as follows:


<TABLE>
<S>                                                  <C>
From the Term Commencement Date through the
end of the twelfth (12th) month following
the Term Commencement Date:                          $135,581.00 per month plus operating expenses per Paragraph 7 of this Lease.
                                                     Operating Expenses for calendar year 2000 are estimated to be $23,999.00 per
                                                     month.

Month 13 following the Term Commencement
Date through Month 24:                               $139,648.00 per month plus operating expenses per Paragraph 7 of this Lease

Month 25 following the Term Commencement
Date through Month 36:                               $143,838.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 37 following the Term Commencement
Date through Month 48:                               $148,153.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 49 following the Term Commencement
Date through Month 60:                               $152,597.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 61 following the Term Commencement
Date through Month 72:                               $157,175.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 73 following the Term Commencement
Date through Month 84:                               $161,891.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 85 following the Term Commencement
Date through Month 96:                               $166,747.00 per month plus operating expenses per Paragraph 7 of this Lease.

Month 97 following the Term Commencement
Date through Month 108:                              $171,750.00 per month plus operating expenses per Paragraph 7 of this Lease

Month 109 following the Term Commencement
Date through Month 117:                              $176,902.00 per month plus operating expenses per Paragraph 7 of this Lease.
</TABLE>

B.      EARLY ACCESS. Provided Landlord has terminated the lease with the
existing tenant and is in possession of the Premises, Landlord shall provide
access to Tenant to the Premises on October 1, 2000, during normal business
hours after reasonable prior notice to Landlord for purposes of installing
furniture, fixtures and equipment (including network cabling and
telecommunications equipment to the extent such installation is approved by
Landlord in writing) and to commence construction of the Tenant Improvements
therein in the Premises, with all terms and conditions of this Lease in full
force and effect, excluding payment of Rent and Operating Expenses. Landlord and
Tenant shall each reasonably cooperate with the other to attempt to reasonably
coordinate their respective schedules to accommodate the early access by Tenant
contemplated by this Paragraph 39.B. In the event Landlord does not provide
access to Tenant to the Premises by October 1, 2000 for the purposes defined
above, the Term Commencement Date shall be six-one (61) days from the date
Landlord does provide access to Tenant to the Premises. Tenant may terminate
this Lease by delivering written notice to Landlord on June 1, 2001 only if
Landlord has not terminated the existing lease for the Premises and is not in
possession of the Premises by May 31, 2001. In the event of such termination,
Landlord shall return any Security Deposit to Tenant as well as any other sums
paid hereunder by Tenant to Landlord. All obligations of Tenant and Landlord
under this Lease shall thereafter terminate and no party shall have any further
obligations under this Lease.

C.      OPTION TO RENEW. Tenant shall, provided this Lease is in full force and
effect and Tenant is not and has not been in default under any of the terms and
conditions of this Lease, have two (2) successive options to renew this Lease
for a term of five (5) years each, for the Premises in "as is" condition and on
the same terms and conditions set forth in this Lease, except as modified by the
terms, covenants and conditions set forth below:


                                       20

<PAGE>   21

        (1)     If Tenant elects to exercise such option, then Tenant shall
                provide Landlord with written notice no earlier than the date
                which is Two Hundred Seventy (270) days prior to the expiration
                of the then current term of this Lease, but no later than 5:00
                p.m. (Pacific Standard Time) on the date which is one hundred
                eighty (180) days prior to the expiration of the then current
                term of this Lease. If Tenant fails to provide such notice,
                Tenant shall have no further or additional right to extend or
                renew the term of this Lease.

        (2)     The Base Rent in effect at the expiration of the then current
                term of this Lease shall be increased to reflect the current
                fair market rental for comparable space in the Building or
                Project and in other similar buildings in the same rental market
                as of the date the renewal term is to commence, taking into
                account the specific provisions of this Lease which will remain
                constant, and the Building amenities, location, identity,
                quality, age, conditions, term of lease, tenant improvements,
                services provided, and other pertinent items.

        (3)     Landlord shall advise Tenant of the new Base Rent for the
                Premises for the applicable renewal term which will be based on
                Landlord's determination of fair market rental value no later
                than fifteen (15) days after receipt of notice of Tenant's
                exercise of its option to renew. Tenant shall have forty-five
                (45) days after receipt of such notification from Landlord to
                accept the new Base Rent. If Tenant does not accept Landlord's
                determination of the new Base Rent within such forty-five (45)
                day period, this option shall be null and void, and Landlord
                shall have no further obligation to Tenant and may enter into a
                lease for the Premises with a third party on such terms and
                conditions as Landlord may determine in its sole discretion.

        (4)     Notwithstanding anything to the contrary contained in this
                Paragraph, in no event shall the Base Rent for any renewal term
                be less than the Base Rent in effect at the expiration of the
                previous term. In addition, Landlord shall have no obligation to
                provide or pay for any tenant improvements or brokerage
                commissions during any renewal term.

        (5)     Tenant's right to exercise any options to renew under this
                Paragraph shall be conditioned upon Tenant occupying the entire
                Premises and the same not being occupied by any assignee,
                subtenant or licensee other than Tenant or its affiliate at the
                time of exercise of any option and commencement of the renewal
                term. Tenant's exercise of any option to renew shall constitute
                a representation by Tenant to Landlord that as of the date of
                exercise of the option and the commencement of the applicable
                renewal term, Tenant does not intend to seek to assign this
                Lease in whole or in part, or sublet all or any portion of the
                Premises.

        (6)     Any exercise by Tenant of any option to renew under this
                Paragraph shall be irrevocable. If requested by Landlord, Tenant
                agrees to execute a lease amendment or, at Landlord's option, a
                new lease agreement on Landlord's then standard lease form for
                the Building reflecting the foregoing terms and conditions
                (which new lease form shall be reasonably acceptable to Tenant
                and shall provide to Tenant the benefit of its bargain contained
                herein), prior to the commencement of the renewal term. The
                options to renew granted under this Paragraph are not
                transferable; the parties hereto acknowledge and agree that they
                intend that each option to renew this Lease under this Paragraph
                shall be "personal" to the specific Tenant named in this Lease
                and that in no event will any assignee or sublessee have any
                rights to exercise such options to renew.

        (7)     If more than one renewal option is provided above, the exercise
                of each renewal option shall be contingent upon Tenant
                exercising the prior renewal option. Only one renewal option may
                be exercised at a time. As each renewal option provided for
                above is exercised, the number of renewal options remaining to
                be exercised is reduced by one and upon exercise of the last
                remaining renewal option Tenant shall have no further right to
                extend the term of this Lease.

D.      LETTER OF CREDIT.

        (1)     DELIVERY OF LETTER OF CREDIT. In lieu of depositing a security
                deposit with Landlord, Tenant shall, on execution of this Lease,
                deliver to Landlord and cause to be in effect during the Lease
                Term an unconditional, irrevocable letter of credit ("LOC") in
                the amount specified for the Security Deposit in the Basic Lease
                Information, as it may be increased as provided in this Lease
                (the "LOC AMOUNT") for an initial term of the LOC of three (3)
                years and thereafter shall renew automatically from year to year
                through 30 days beyond the expiration date of this Lease or any
                extension thereto. The LOC shall be in a form acceptable to
                Landlord and shall be issued by an LOC bank selected by Tenant
                and acceptable to Landlord. The text of the LOC shall expressly
                state that the LOC shall survive the termination of this Lease.
                An LOC bank is a bank that accepts deposits, maintains accounts,
                has a local office that will negotiate a letter of credit, and
                the deposits of which are insured by the Federal Deposit
                Insurance Corporation. Tenant shall pay all expenses, points, or
                fees incurred by Tenant in obtaining the LOC. The LOC shall not
                be mortgaged, assigned or encumbered in any manner whatsoever by
                Tenant without the prior written consent of Landlord. Tenant
                acknowledges that Landlord has the right to transfer or mortgage
                its interest in the Project, the Building and in this Lease and
                Tenant agrees that in the event of any such transfer or
                mortgage, Landlord shall have the right to transfer or assign
                the LOC and/or the LOC Security Deposit (as defined below) to
                the transferee or mortgagee, and in the event of such transfer,
                Tenant shall look solely to such transferee or mortgagee for the
                return of the LOC and/or the LOC Security Deposit. The maximum
                amount of any transfer fee associated with such transfer shall
                not be in excess of reasonable transfer fees customarily
                required by issuing banks, which about shall be expressly stated
                in the terms of the LOC, and shall be payable by Landlord.

        (2)     REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time,
                replace any existing LOC with a new LOC if the new LOC (a)
                becomes effective at least thirty (30) days before expiration of
                the LOC that it replaces; (b) is in the required LOC amount; (c)
                is issued by an LOC bank acceptable to Landlord; and (d)
                otherwise complies with the requirements of this Paragraph 39.D.

        (3)     LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall
                hold the LOC as security for the performance of Tenant's
                obligations under this Lease. If, after notice and failure to
                cure within any applicable period provided in this Lease, Tenant
                is in default pursuant to this Lease, Landlord may, without
                prejudice to any other remedy it has, draw on that portion of
                the LOC necessary to (a) pay Rent or other sum in default; (b)
                pay or reimburse Landlord for any amount that Landlord may spend
                or become obligated to spend in exercising Landlord's rights
                under Paragraph 30 (Right of Landlord to Perform Tenant's
                Covenant); and/or (c) compensate Landlord for any expense, loss,
                or damage that Landlord may suffer because of Tenant's default.
                If Tenant fails to renew or replace the LOC at least thirty (30)
                days before its expiration, Landlord may, without prejudice to
                any other remedy it has, draw on the entire amount of the LOC.

        (4)     LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
                Landlord but not applied by Landlord shall be held by Landlord
                as a security deposit (the "LOC SECURITY DEPOSIT") in accordance
                with Paragraph 19 of this Lease.



                                       21
<PAGE>   22

        (5)     RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If
                Landlord draws on any portion of the LOC and/or applies all or
                any portion of such draw, Tenant shall, within five (5) business
                days after demand by Landlord, either (a) deposit cash with
                Landlord in an amount that, when added to the amount remaining
                under the LOC and the amount of any LOC Security Deposit, shall
                equal the LOC Amount then required under this Paragraph 39.D; or
                (b) reinstate the LOC to the full LOC Amount.

        (6)     REDUCTION OF LETTER OF CREDIT. At least fifteen (15) business
                days prior to the dates specified in each of clauses a. through
                d. below, Tenant shall deliver to Landlord for review Tenant's
                financial statements prepared in accordance with generally
                accepted accounting principles and audited by a nationally
                recognized public accounting firm acceptable to Landlord, and
                any other financial information requested by Landlord ("TENANT'S
                FINANCIAL INFORMATION") If: (i) Tenant has a tangible net worth,
                which "tangible net worth" shall be determined by Landlord in
                its sole discretion and shall mean assets less intangible assets
                and total liabilities, with intangible asserts including
                nonmaterial benefits such as goodwill, patents, copyrights, and
                trademarks, in excess of One Hundred Seventy five Million and
                No/100 Dollars ($175,000,000.00) as reflected in Tenant's
                Financial Information, which amount shall be determined by
                Landlord to its satisfaction prior to any reduction in the LOC
                Amount; and (ii) Tenant's Financial Information reflects four
                (4) consecutive calendar quarters of profitability, as
                determined by Landlord, during the time period immediately
                preceding Tenant's request for reduction in the LOC Amount
                described in this subparagraph during the time period
                immediately preceding Tenant's request for reduction in the LOC
                Amount, as such profitability is determined by Landlord, then
                the following reductions in the LOC Amount may be made in
                accordance with the terms of this Paragraph 39.D(6):

                a.      At any time after the end of the thirty-sixth (36th)
                        month following the Term Commencement Date, the LOC
                        Amount may be reduced to an amount equal to Seven
                        Hundred Eleven Thousand Seven Hundred Fifty Six and
                        No/100 Dollars ($711,756.00);

                b.      At any time after the end of the forty-eighth (48th)
                        month following the Term Commencement Date, the LOC
                        Amount may be reduced to an amount equal to Six Hundred
                        Ten Thousand Seventy Seven and No/100 Dollars
                        ($610,077.00);

                c.      At any time after the end of the sixtieth (60th) month
                        following the Term Commencement Date, the LOC Amount may
                        be reduced to an amount equal to Five Hundred Eight
                        Thousand Three Hundred Ninety Seven and No/100 Dollars
                        ($508,397.00);

                d.      At any time after the end of the seventy-second (72nd)
                        month following the Term Commencement Date, the LOC may
                        be returned by Landlord to the issuing bank for
                        cancellation provided that Tenant has, prior to such
                        delivery by Landlord, delivered a cash security Deposit
                        (to be held by Landlord in accordance with the terms of
                        Paragraph 19 of this Lease) an amount equal to Four
                        Hundred Six Thousand Seven Hundred Eighteen and No/100
                        Dollars ($406,718.00).

        In the event that any of the above described reductions to the LOC
        Amount is made and, subsequently, Tenant fails to meet the corresponding
        profitability and tangible net worth condition precedent for a period of
        thirty (30) days following delivery by Landlord of written notice of any
        such failure, Tenant shall within two (2) business days, increase the
        face amount of the LOC to an amount equal to the LOC Amount existing
        prior to such reduction (including the reduction described in clause d.
        above). If Tenant fails to increase the LOC Amount as provided above,
        such failure shall constitute a default hereunder (which default shall
        not be subject to any cure rights afforded anywhere in this Lease and
        Landlord shall be entitled to draw on the LOC for the full LOC Amount
        and hold such LOC Amount as a Security Deposit in accordance with the
        terms of this Lease, and enforce all other rights available to Landlord
        pursuant to the terms of this Lease or under applicable law.

E.      CONTINGENCY. Tenant acknowledges that there is an existing lease on the
Premises. This Lease Agreement is contingent upon Landlord's termination of the
existing lease for the Premises and possession of the Premises. Upon termination
of the existing lease for the Premises, Landlord shall provide to Tenant written
notice of such termination.

F.      BROKER. Landlord and Tenant each represent and warrant to the other that
they have had no other dealings with any real estate broker or agent in
connection with the negotiation of this Lease, excepting only Bailes &
Associates, Inc. ("Broker") who represented Tenant, and that Landlord shall not
pay any commissions or fees to Broker in connection with this Lease. Each party
agrees to indemnify and defend the other party against and hold the other party
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, costs and expenses with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, including Broker, occurring by, through , or under
the indemnifying party.



                                       22
<PAGE>   23

                              40. JURY TRIAL WAIVER


EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF THE
COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED ON THIS
LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE
PROVISIONS OF THIS PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.



IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and the year first above written.


                                     LANDLORD


                                     Spieker Properties, L.P.,
                                     a California limited partnership


                                     By: Spieker Properties, Inc.,
                                         a Maryland corporation,
                                         its general partner

                                     By:
                                         --------------------------------------
                                         John W. Petersen
                                         Its:  Senior Vice President

                                     Date: July 26, 2000


                                     TENANT


                                     Brocade Communications Systems, Inc.,
                                     a Delaware corporation


                                     By:
                                         --------------------------------------
                                         Michael J. Byrd
                                         Its: Vice President, Finance,
                                              and Chief Financial Officer


                                     Date:  July 26, 2000



                                     By:
                                         --------------------------------------
                                         Mr. Victor Rinkle
                                         Its:   Vice President, Operations


                                     Date:  July 26, 2000



                                       23
<PAGE>   24

                                    EXHIBIT A
                              RULES AND REGULATIONS


1.      Driveways, sidewalks, halls, passages, exits, entrances, elevators,
        escalators and stairways shall not be obstructed by tenants or used by
        tenants for any purpose other than for ingress to and egress from their
        respective premises. The driveways, sidewalks, halls, passages, exits,
        entrances, elevators and stairways are not for the use of the general
        public and Landlord shall in all cases retain the right to control and
        prevent access thereto by all persons whose presence, in the judgment of
        Landlord, shall be prejudicial to the safety, character, reputation and
        interests of the Building, the Project and its tenants, provided that
        nothing herein contained shall be construed to prevent such access to
        persons with whom any tenant normally deals in the ordinary course of
        such tenant's business unless such persons are engaged in illegal
        activities. No tenant, and no employees or invitees of any tenant, shall
        go upon the roof of any Building, except as authorized by Landlord. No
        tenant, and no employees or invitees of any tenant shall move any common
        area furniture without Landlord's consent.

2.      No sign, placard, banner, picture, name, advertisement or notice,
        visible from the exterior of the Premises or the Building or the common
        areas of the Building shall be inscribed, painted, affixed, installed or
        otherwise displayed by Tenant either on its Premises or any part of the
        Building or Project without the prior written consent of Landlord in
        Landlord's sole and absolute discretion. Landlord shall have the right
        to remove any such sign, placard, banner, picture, name, advertisement,
        or notice without notice to and at the expense of Tenant, which were
        installed or displayed in violation of this rule. If Landlord shall have
        given such consent to Tenant at any time, whether before or after the
        execution of Tenant's Lease, such consent shall in no way operate as a
        waiver or release of any of the provisions hereof or of the Lease, and
        shall be deemed to relate only to the particular sign, placard, banner,
        picture, name, advertisement or notice so consented to by Landlord and
        shall not be construed as dispensing with the necessity of obtaining the
        specific written consent of Landlord with respect to any other such
        sign, placard, banner, picture, name, advertisement or notice.

        All approved signs or lettering on doors and walls shall be printed,
        painted, affixed or inscribed at the expense of Tenant by a person or
        vendor approved by Landlord and shall be removed by Tenant at the time
        of vacancy at Tenant's expense.

3.      The directory of the Building or Project will be provided exclusively
        for the display of the name and location of tenants only and Landlord
        reserves the right to charge for the use thereof and to exclude any
        other names therefrom.

4.      No curtains, draperies, blinds, shutters, shades, screens or other
        coverings, awnings, hangings or decorations shall be attached to, hung
        or placed in, or used in connection with, any window or door on the
        Premises without the prior written consent of Landlord. In any event
        with the prior written consent of Landlord, all such items shall be
        installed inboard of Landlord's standard window covering and shall in no
        way be visible from the exterior of the Building. All electrical ceiling
        fixtures hung in offices or spaces along the perimeter of the Building
        must be fluorescent or of a quality, type, design, and bulb color
        approved by Landlord. No articles shall be placed or kept on the window
        sills so as to be visible from the exterior of the Building. No articles
        shall be placed against glass partitions or doors which Landlord
        considers unsightly from outside Tenant's Premises.

5.      Landlord reserves the right to exclude from the Building and the
        Project, between the hours of 6 p.m. and 8 a.m. and at all hours on
        Saturdays, Sundays and legal holidays, all persons who are not tenants
        or their accompanied guests in the Building. Each tenant shall be
        responsible for all persons for whom it allows to enter the Building or
        the Project and shall be liable to Landlord for all acts of such
        persons.

        Landlord and its agents shall not be liable for damages for any error
        concerning the admission to, or exclusion from, the Building or the
        Project of any person.

        During the continuance of any invasion, mob, riot, public excitement or
        other circumstance rendering such action advisable in Landlord's
        opinion, Landlord reserves the right (but shall not be obligated) to
        prevent access to the Building and the Project during the continuance of
        that event by any means it considers appropriate for the safety of
        tenants and protection of the Building, property in the Building and the
        Project.

6.      All cleaning and janitorial services for the Building and the Premises
        shall be provided exclusively through Landlord. Except with the written
        consent of Landlord, no person or persons other than those approved by
        Landlord shall be permitted to enter the Building for the purpose of
        cleaning the same. Tenant shall not cause any unnecessary labor by
        reason of Tenant's carelessness or indifference in the preservation of
        good order and cleanliness of its Premises. Landlord shall in no way be
        responsible to Tenant for any loss of property on the Premises, however
        occurring, or for any damage done to Tenant's property by the janitor or
        any other employee or any other person.

7.      Tenant shall see that all doors of its Premises are closed and securely
        locked and must observe strict care and caution that all water faucets
        or water apparatus, coffee pots or other heat-generating devices are
        entirely shut off before Tenant or its employees leave the Premises, and
        that all utilities shall likewise be carefully shut off, so as to
        prevent waste or damage. Tenant shall be responsible for any damage or
        injuries sustained by other tenants or occupants of the Building or
        Project or by Landlord for noncompliance with this rule. On
        multiple-tenancy floors, all tenants shall keep the door or doors to the
        Building corridors closed at all times except for ingress and egress.

8.      Tenant shall not use any method of heating or air-conditioning other
        than that supplied by Landlord. As more specifically provided in
        Tenant's lease of the Premises, Tenant shall not waste electricity,
        water or air-conditioning and agrees to cooperate fully with Landlord to
        assure the most effective operation of the Building's heating and
        air-conditioning, and shall refrain from attempting to adjust any
        controls other than room thermostats installed for Tenant's use.

9.      Landlord will furnish Tenant free of charge with two keys to each door
        in the Premises. Landlord may make a reasonable charge for any
        additional keys, and Tenant shall not make or have made additional keys.
        Tenant shall not alter any lock or access device or install a new or
        additional lock or access device or bolt on any door of its Premises,
        without the prior written consent of Landlord. If Landlord shall give
        its consent, Tenant shall in each case furnish Landlord with a key for
        any such lock. Tenant, upon the termination of its tenancy, shall
        deliver to Landlord the keys for all doors which have been furnished to
        Tenant, and in the event of loss of any keys so furnished, shall pay
        Landlord therefor.

10.     The restrooms, toilets, urinals, wash bowls and other apparatus shall
        not be used for any purpose other than that for which they were
        constructed and no foreign substance of any kind whatsoever shall be
        thrown into them. The expense of any breakage, stoppage, or damage
        resulting from violation of this rule shall be borne by the tenant who,
        or whose employees or invitees, shall have caused the breakage,
        stoppage, or damage.

11.     Tenant shall not use or keep in or on the Premises, the Building or the
        Project any kerosene, gasoline, or inflammable or combustible fluid or
        material.

12.     Tenant shall not use, keep or permit to be used or kept in its Premises
        any foul or noxious gas or substance. Tenant shall not allow the
        Premises to be occupied or used in a manner offensive or objectionable
        to Landlord or other occupants of the Building by reason of noise,



                                       24
<PAGE>   25

        odors and/or vibrations or interfere in any way with other tenants or
        those having business therein, nor shall any animals or birds be brought
        or kept in or about the Premises, the Building, or the Project.

13.     No cooking shall be done or permitted by any tenant on the Premises,
        except that use by the tenant of Underwriters' Laboratory (UL) approved
        equipment, refrigerators and microwave ovens may be used in the Premises
        for the preparation of coffee, tea, hot chocolate and similar beverages,
        storing and heating food for tenants and their employees shall be
        permitted. All uses must be in accordance with all applicable federal,
        state and city laws, codes, ordinances, rules and regulations and the
        Lease.

14.     Except with the prior written consent of Landlord, Tenant shall not
        sell, or permit the sale, at retail, of newspapers, magazines,
        periodicals, theater tickets or any other goods or merchandise in or on
        the Premises, nor shall Tenant carry on, or permit or allow any employee
        or other person to carry on, the business of stenography, typewriting or
        any similar business in or from the Premises for the service or
        accommodation of occupants of any other portion of the Building, nor
        shall the Premises be used for the storage of merchandise or for
        manufacturing of any kind, or the business of a public barber shop,
        beauty parlor, nor shall the Premises be used for any illegal, improper,
        immoral or objectionable purpose, or any business or activity other than
        that specifically provided for in such Tenant's Lease. Tenant shall not
        accept hairstyling, barbering, shoeshine, nail, massage or similar
        services in the Premises or common areas except as authorized by
        Landlord.

15.     If Tenant requires telegraphic, telephonic, telecommunications, data
        processing, burglar alarm or similar services, it shall first obtain,
        and comply with, Landlord's instructions in their installation. The cost
        of purchasing, installation and maintenance of such services shall be
        borne solely by Tenant.

16.     Landlord will direct electricians as to where and how telephone,
        telegraph and electrical wires are to be introduced or installed. No
        boring or cutting for wires will be allowed without the prior written
        consent of Landlord. The location of burglar alarms, telephones, call
        boxes and other office equipment affixed to the Premises shall be
        subject to the prior written approval of Landlord.

17.     Tenant shall not install any radio or television antenna, satellite
        dish, loudspeaker or any other device on the exterior walls or the roof
        of the Building, without Landlord's consent. Tenant shall not interfere
        with radio or television broadcasting or reception from or in the
        Building, the Project or elsewhere.

18.     Tenant shall not mark, or drive nails, screws or drill into the
        partitions, woodwork or drywall or in any way deface the Premises or any
        part thereof without Landlord's consent. Tenant may install nails and
        screws in areas of the Premises that have been identified for those
        purposes to Landlord by Tenant at the time those walls or partitions
        were installed in the Premises. Tenant shall not lay linoleum, tile,
        carpet or any other floor covering so that the same shall be affixed to
        the floor of its Premises in any manner except as approved in writing by
        Landlord. The expense of repairing any damage resulting from a violation
        of this rule or the removal of any floor covering shall be borne by the
        tenant by whom, or by whose contractors, employees or invitees, the
        damage shall have been caused.

19.     No furniture, freight, equipment, materials, supplies, packages,
        merchandise or other property will be received in the Building or
        carried up or down the elevators except between such hours and in such
        elevators as shall be designated by Landlord.

        Tenant shall not place a load upon any floor of its Premises which
        exceeds the load per square foot which such floor was designed to carry
        or which is allowed by law. Landlord shall have the right to prescribe
        the weight, size and position of all safes, furniture or other heavy
        equipment brought into the Building. Safes or other heavy objects shall,
        if considered necessary by Landlord, stand on wood strips of such
        thickness as determined by Landlord to be necessary to properly
        distribute the weight thereof. Landlord will not be responsible for loss
        of or damage to any such safe, equipment or property from any cause, and
        all damage done to the Building by moving or maintaining any such safe,
        equipment or other property shall be repaired at the expense of Tenant.

        Business machines and mechanical equipment belonging to Tenant which
        cause noise or vibration that may be transmitted to the structure of the
        Building or to any space therein to such a degree as to be objectionable
        to Landlord or to any tenants in the Building shall be placed and
        maintained by Tenant, at Tenant's expense, on vibration eliminators or
        other devices sufficient to eliminate noise or vibration. The persons
        employed to move such equipment in or out of the Building must be
        acceptable to Landlord.

20.     Tenant shall not install, maintain or operate upon its Premises any
        vending machine without the written consent of Landlord.

21.     There shall not be used in any space, or in the public areas of the
        Project either by Tenant or others, any hand trucks except those
        equipped with rubber tires and side guards or such other material
        handling equipment as Landlord may approve. Tenants using hand trucks
        shall be required to use the freight elevator, or such elevator as
        Landlord shall designate. No other vehicles of any kind shall be brought
        by Tenant into or kept in or about its Premises.

22.     Each tenant shall store all its trash and garbage within the interior of
        the Premises. Tenant shall not place in the trash boxes or receptacles
        any personal trash or any material that may not or cannot be disposed of
        in the ordinary and customary manner of removing and disposing of trash
        and garbage in the city, without violation of any law or ordinance
        governing such disposal. All trash, garbage and refuse disposal shall be
        made only through entry-ways and elevators provided for such purposes
        and at such times as Landlord shall designate. If the Building has
        implemented a building-wide recycling program for tenants, Tenant shall
        use good faith efforts to participate in said program.

23.     Canvassing, soliciting, distribution of handbills or any other written
        material and peddling in the Building and the Project are prohibited and
        each tenant shall cooperate to prevent the same. No tenant shall make
        room-to-room solicitation of business from other tenants in the Building
        or the Project, without the written consent of Landlord.

24.     Landlord shall have the right, exercisable without notice and without
        liability to any tenant, to change the name and address of the Building
        and the Project.

25.     Landlord reserves the right to exclude or expel from the Project any
        person who, in Landlord's judgment, is under the influence of alcohol or
        drugs or who commits any act in violation of any of these Rules and
        Regulations.

26.     Without the prior written consent of Landlord, Tenant shall not use the
        name of the Building or the Project or any photograph or other likeness
        of the Building or the Project in connection with, or in promoting or
        advertising, Tenant's business except that Tenant may include the
        Building's or Project's name in Tenant's address.

27.     Tenant shall comply with all safety, fire protection and evacuation
        procedures and regulations established by Landlord or any governmental
        agency.

28.     Tenant assumes any and all responsibility for protecting its Premises
        from theft, robbery and pilferage, which includes keeping doors locked
        and other means of entry to the Premises closed.

29.     The requirements of Tenant will be attended to only upon appropriate
        application at the office of the Building by an authorized individual.
        Employees of Landlord shall not perform any work or do anything outside
        of their regular duties unless under special instructions from



                                       25
<PAGE>   26

        Landlord, and no employees of Landlord will admit any person (tenant or
        otherwise) to any office without specific instructions from Landlord.

30.     Landlord reserves the right to designate the use of the parking spaces
        on the Project. Tenant or Tenant's guests shall park between designated
        parking lines only, and shall not occupy two parking spaces with one
        car. Parking spaces shall be for passenger vehicles only; no boats,
        trucks, trailers, recreational vehicles or other types of vehicles may
        be parked in the parking areas (except that trucks may be loaded and
        unloaded in designated loading areas). Vehicles in violation of the
        above shall be subject to tow-away, at vehicle owner's expense. Vehicles
        parked on the Project overnight without prior written consent of the
        Landlord shall be deemed abandoned and shall be subject to tow-away at
        vehicle owner's expense. No tenant of the Building shall park in visitor
        or reserved parking areas. Any tenant found parking in such designated
        visitor or reserved parking areas or unauthorized areas shall be subject
        to tow-away at vehicle owner's expense. The parking areas shall not be
        used to provide car wash, oil changes, detailing, automotive repair or
        other services unless otherwise approved or furnished by Landlord.
        Tenant will from time to time, upon the request of Landlord, supply
        Landlord with a list of license plate numbers of vehicles owned or
        operated by its employees or agents.

31.     No smoking of any kind shall be permitted anywhere within the Building,
        including, without limitation, the Premises and those areas immediately
        adjacent to the entrances and exits to the Building, or any other area
        as Landlord elects. Smoking in the Project is only permitted in smoking
        areas identified by Landlord, which may be relocated from time to time.

32.     If the Building furnishes common area conferences rooms for tenant
        usage, Landlord shall have the right to control each tenant's usage of
        the conference rooms, including limiting tenant usage so that the rooms
        are equally available to all tenants in the Building. Any common area
        amenities or facilities shall be provided from time to time at
        Landlord's discretion.

33.     Tenant shall not swap or exchange building keys or cardkeys with other
        employees or tenants in the Building or the Project.

34.     Tenant shall be responsible for the observance of all of the foregoing
        Rules and Regulations by Tenant's employees, agents, clients, customers,
        invitees and guests.

35.     These Rules and Regulations are in addition to, and shall not be
        construed to in any way modify, alter or amend, in whole or in part, the
        terms, covenants, agreements and conditions of any lease of any premises
        in the Project.

36.     Landlord may waive any one or more of these Rules and Regulations for
        the benefit of any particular tenant or tenants, but no such waiver by
        Landlord shall be construed as a waiver of such Rules and Regulations in
        favor of any other tenant or tenants, nor prevent Landlord from
        thereafter enforcing any such Rules and Regulations against any or all
        tenants of the Building.

37.     Landlord reserves the right to make such other and reasonable rules and
        regulations as in its judgment may from time to time be needed for
        safety and security, for care and cleanliness of the Building and the
        Project and for the preservation of good order therein. Tenant agrees to
        abide by all such Rules and Regulations herein stated and any additional
        rules and regulations which are adopted.



                                       26
<PAGE>   27

                                    EXHIBIT B

                         SITE PLAN, PROPERTY DESCRIPTION

LEGAL DESCRIPTION - All that certain real property situated in the City of San
Jose, County of Santa Clara, State of California described as follows:

PARCEL A - Parcel No. 2 as shown on that certain Parcel Map filed in Book 443 of
Maps at Pages 8 and 9, on June 7, 1979, Official Records of Santa Clara County.

PARCEL B - Portion of Parcel 5, as shown on that certain Parcel Map recorded
June 7, 1979 in Book 443 of Maps, Pages 8 and 9, Records of Santa Clara County,
California, and being more particularly described as follows:

Beginning at the most westerly corner of Parcel 5 as shown upon that certain
Parcel Map recorded in Book 443 of Maps at Pages 8 and 9, Santa Clara County
Records.

Thence, from said POINT OF BEGINNING North 59 16' 50" East along the northwest
line of said Parcel 407.01 feet to the most northerly corner thereof; thence
South 301 29' 35" East along the northeast line of said Parcel 75.00 feet,
thence South 59 16' 35" West 407.01 feet to the southwest line of said Parcel;
thence North 30 29' 35" West along said line 75.00 feet to the POINT OF
BEGINNING.





                                       27
<PAGE>   28

                                    EXHIBIT C

                           LEASE IMPROVEMENT AGREEMENT


           This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT") sets forth
the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease (the
"LEASE") to which this Improvement Agreement is attached and forms a part.

1.      Base Building Work. The "Base Building Work" described on SCHEDULE 1 to
this EXHIBIT C, IF ANY, has been or will be performed by Landlord at Landlord's
sole cost and expense.

2.      Plans and Specifications.

           2.1 Tenant shall retain the services of DEVCON OR REEL GROBMAN AND
ASSOCIATES or such other architectural firm as shall be approved by Landlord in
writing (the "SPACE PLANNER") to prepare a detailed space plan (the "SPACE
PLAN") mutually satisfactory to Landlord and Tenant for the construction of the
Tenant Improvements in the Premises. Tenant shall submit the Space Plan and any
proposed revisions thereto to Landlord for Landlord's approval.

           2.2 Based on the approved Space Plan, Tenant shall cause the Space
Planner to prepare detailed plans, specifications and working drawings mutually
satisfactory to Landlord and Tenant for the construction of the Tenant
Improvements (the "PLANS"). Landlord and Tenant shall diligently pursue the
preparation of the Plans. Tenant shall submit the Plans and any proposed
revisions thereto, including the estimated cost of the Tenant Improvements. All
necessary revisions to the Space Plan and the Plans shall be made within two (2)
business days after Landlord's response thereto. This procedure shall be
repeated until Landlord ultimately approves the Space Plan and Plans.

           2.3 Tenant shall be responsible for ensuring that the Plans are
compatible with the design, construction and equipment of the Building, comply
with applicable Regulations and the Standards (defined below), and contain all
such information as may be required to show locations, types and requirements
for all heat loads, people loads, floor loads, power and plumbing, regular and
special HVAC needs, telephone communications, telephone and electrical outlets,
lighting, light fixtures and related power, and electrical and telephone
switches, B.T.U. calculations, electrical requirements and special receptacle
requirements. The Plans shall also include mechanical, electrical, plumbing,
structural and engineering drawings mutually satisfactory to Landlord and Tenant
which shall be prepared by DEVCON OR MCCLARNEY CONSTRUCTION or such other
contractor or contractors as shall be approved by Landlord in writing.
Notwithstanding Landlord's preparation, review and approval of the Space Plan
and the Plans and any revisions thereto, Landlord shall have no responsibility
or liability whatsoever for any errors or omissions contained in the Space Plan
or Plans or any revisions thereto, or to verify dimensions or conditions, or for
the quality, design or compliance with applicable Regulations of any
improvements described therein or constructed in accordance therewith. Tenant
hereby waives all claims against Landlord relating to, or arising out of the
design or construction of, the Tenant Improvements.

           2.4 Landlord may approve or disapprove the Space Plan or Plans or any
proposed revision thereto submitted to Landlord in Landlord's sole reasonable
discretion. Landlord's criteria for approvals shall be based on reasonable
criteria established from time to time by Landlord, but Landlord will be deemed
to have acted reasonably if Landlord's disapproval is predicated upon (i) effect
on the structural integrity of the Building, (ii) possible damage to the
Building's mechanical, electrical, plumbing and HVAC systems, (iii)
non-compliance with applicable laws, codes and regulations, (iv) incompatibility
with the base building plans, (v) failure to use materials required by Schedule
2 pertaining to Standards, and (vi) effect on the exterior of the Building or
any of the Building's common areas. Landlord shall not be deemed to have
approved the Space Plan, the Plans, or any proposed revisions thereto, unless
approved by Landlord in writing. Landlord shall approve or disapprove any Space
Plan, Plans or proposed revisions thereto submitted to Landlord for Landlord's
approval within three (3) business days after Landlord's receipt thereof. If
Landlord has not approved in writing any Space Plan, Plans, or proposed
revisions thereto submitted to Landlord within five (5) business days after
Landlord's receipt thereof, Landlord shall be deemed to have disapproved the
same.

3.      Specifications for Standard Tenant Improvements.

           3.1 Specifications and quantities of standard building components
which will comprise and be used in the construction of the Tenant Improvements
("STANDARDS") are set forth in SCHEDULE 2 to this EXHIBIT C. As used herein,
"STANDARDS" or "BUILDING STANDARDS" shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on SCHEDULE 2 of this EXHIBIT C, or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in writing.

           3.2 No deviations from the Standards are permitted.

4.      Tenant Improvement Cost.

           4.1 The cost of the Tenant Improvements shall be paid for by Tenant,
including, without limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site improvements;
remediation and preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance and
bonds; attorneys' fees; financing costs; and all other costs expended or to be
expended in the construction of the Tenant Improvements, including those costs
incurred for construction of elements of the Tenant Improvements in the
Premises, which construction was performed by Landlord prior to the execution of
the Lease or for materials comprising the Tenant Improvements which were
purchased by Landlord prior to the execution of the Lease; and an administration
fee of three percent (3%) of the total cost of the Tenant Improvements.

           4.2 Provided Tenant is not in default under the Lease, including this
Improvement Agreement, Landlord shall contribute a one-time tenant improvement
allowance not to exceed $218,000.00 ("TENANT IMPROVEMENT ALLOWANCE") toward the
cost of the initial Tenant Improvements. Provided Tenant is not then in default
under the Lease, including this Improvement Agreement, during the construction
of the Tenant Improvements, Landlord shall make monthly disbursements of the
Tenant Improvement Allowance for the benefit of Tenant and shall authorize the
release of monies for the benefit of Tenant as follows:

           (a)        Monthly Disbursements. On or before the twenty-first
                      (21st) day of the calendar month, during the construction
                      of the Tenant Improvements (or such other date as Landlord
                      may designate in writing), Tenant shall deliver to
                      Landlord: (i) a request for payment of Tenant's
                      contractor, which request shall be approved by Tenant,
                      showing the schedule, by trade, of percentage of
                      completion of the Tenant Improvements, detailing the
                      portion of the work completed and the portion not
                      completed; (ii) invoices from any subcontractor, laborer,
                      materialmen, supplier and any other party which performed
                      work on Tenant's behalf pursuant to this Improvement
                      Agreement,




                                       28
<PAGE>   29

                      including, but not limited to, labor rendered and
                      materials delivered to the Premises; (iii) executed
                      conditional mechanic's lien releases from all of the
                      parties submitting invoices with respect to the work
                      performed and for which payment is requested to be made,
                      which releases shall comply with the appropriate
                      provisions of California Civil Code 3262(d); (iv) executed
                      unconditional mechanic's lien releases from all of the
                      parties with respect to work performed and included on
                      prior pay requests, which releases shall comply with the
                      appropriate provisions of California Civil Code; and (v)
                      all other information reasonably requested by Landlord.
                      Tenant's request for payment shall be deemed Tenant's
                      acceptance and approval of the specific work furnished and
                      or the materials actually supplied as set forth in
                      Tenant's payment request. Within ten (10) business days
                      thereafter, Landlord shall deliver a check (or transfer
                      funds electronically) to Tenant made jointly payable to
                      Tenant's contractor and Tenant in payment of the lesser of
                      (A) Landlord's proportionate share of the amount of such
                      request for payment by Tenant's contractor, as set forth
                      in this paragraph, less a ten percent (10%) retention (the
                      aggregate amount of such retentions to be known as the
                      "FINAL RETENTION"), and (B) the balance of any remaining
                      available portion of the Tenant Improvement Allowance (not
                      including the Final Retention), provided Landlord does not
                      dispute any request for payment based upon noncompliance
                      with the Plans and or Standards, or due to any substandard
                      work, or for any other reasonable cause. For purposes of
                      this Improvement Agreement, Landlord's proportionate share
                      shall be the product of the following: (X) the amount of
                      the Tenant Improvement Allowance over total cost of the
                      Tenant Improvements, as such total cost may from time to
                      time increase as provided herein, multiplied by (Y) the
                      total amount approved by Landlord in Tenant's written
                      request for payment as described above. Landlord's payment
                      of such amounts shall not be deemed Landlord's approval or
                      acceptance of the work furnished or materials supplied as
                      set forth in Tenant's payment request.

           (b)        Final Retention. Subject to the provisions of this
                      Improvement Agreement, a check for the Final Retention
                      payable jointly to Tenant's contractor and Tenant shall be
                      delivered by Landlord to Tenant following the completion
                      of the construction of the Tenant Improvements and
                      expiration of the time for filing of any mechanics' liens
                      claimed or which might be filed on account of any work
                      ordered by Tenant or its contractor or any subcontractor;
                      provided that (A) Tenant delivers to Landlord properly
                      executed and unconditional mechanics lien releases in
                      compliance with both California Civil Code Section
                      3262(d)(2) and with Section 3262(d)(3) or Section
                      3262(d)(4) (which mechanics' lien releases shall be
                      executed by the subcontractors, labor suppliers and
                      materialmen in addition to Tenant's contractor), and all
                      appropriate bills and supporting documentation for the
                      work ordered by Tenant or its contractor or any
                      subcontractor, (B) Landlord has determined that no
                      substantial work exists which adversely affects the
                      mechanical, electrical, plumbing, heating, ventilating and
                      air conditioning, life-safety or other systems of the
                      Building or Project, the structure or exterior appearance
                      of the Building or Project, and (C) Space Planner and
                      Tenant's contractor deliver to Landlord a certificate of
                      completion, in a form reasonably acceptable to Landlord
                      certifying that the construction of the Tenant
                      Improvements has been substantially completed.

           (c)        Other Terms. Landlord shall only be obligated to make
                      disbursements from the Tenant Improvement Allowance in
                      accordance with the terms of this Agreement.

           4.3 In the event the estimated cost of the design and construction of
the Tenant Improvements exceeds the Tenant Improvement Allowance, Landlord's
proportionate share pursuant to Paragraph 4.2.(a) above shall be adjusted
accordingly. No credit shall be given to Tenant if the cost of the Tenant
Improvements is less than the Tenant Improvement Allowance.

           4.4 If the cost of the Tenant Improvements increases after the
Tenant's approval of the Plans due to the requirements of any governmental
agency or applicable Regulation, Landlord's proportionate share pursuant to
Paragraph 4.2.(a) above shall be adjusted accordingly.

           4.5 If Tenant requests any change(s) in the Plans after approval of
the estimate of the cost of the Tenant Improvements and any such requested
changes are approved by Landlord in writing in Landlord's sole discretion, and
the cost of the Tenant Improvements increases as a result of such approved
change(s). Landlord's proportionate share pursuant to Paragraph 4.2.(a) above
shall be adjusted accordingly.

5.      Construction of Tenant Improvements.

           5.1 Within ten (10) days after Tenant's and Landlord's approval of
the Plans including the estimate of the cost of the Tenant Improvements and
Landlord's receipt of payment of any such estimated cost exceeding the amount of
the Tenant Improvement Allowance, Tenant shall cause the contractor to proceed
to secure a building permit and commence construction of the Tenant Improvements
provided that the Building has in Landlord's discretion reached the stage of
construction where it is appropriate to commence construction of the Tenant
Improvements in the Premises.

           5.2 Tenant shall be responsible for obtaining all governmental
approvals to the full extent necessary for the construction and installation of
the Tenant Improvements and for Tenant's occupancy of the Premises, in
compliance with all applicable Regulations. Tenant shall employ DEVCON OR
MCCLARNEY CONSTRUCTION as the contractor or such other contractor or contractors
as shall be approved by Landlord in writing to construct the Tenant Improvements
in conformance with the approved Space Plan and Plans. The construction
contracts between Tenant and the approved contractor shall be subject to
Landlord's prior reasonable approval and shall provide for progress payments.
The contractor(s) shall be duly licensed and Landlord's approval of the
contractor(s) shall be conditioned, among other things, upon the contractor's
reputation for quality of work, timeliness of performance, integrity and
Landlord's prior experience with such contractor.

           5.3 Without limiting the provisions of Paragraph 35 of the Lease,
Landlord shall not be liable for any direct or indirect damages suffered by
Tenant as a result of delays in construction beyond Landlord's reasonable
control, including, but not limited to, delays due to strikes or unavailability
of materials or labor, or delays caused by Tenant (including delays by the Space
Planner, the contractor or anyone else performing services on behalf of Landlord
or Tenant).

           5.4 All work to be performed on the Premises by Tenant or Tenant's
contractor or agents shall be subject to the following conditions:

               (a) Such work shall proceed upon Landlord's written approval of
Tenant's contractor, and public liability and property damage insurance carried
by Tenant's contractor, and shall further be subject to the provisions of
Paragraphs 12 and 27 of the Lease.

               (b) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before such
work is commenced, and in any case, all such work shall be performed in a good
and workmanlike and first-class manner, and in accordance with all applicable
Regulations and the requirements and standards of any insurance underwriting
board, inspection bureau or insurance carrier insuring the Premises pursuant to
the Lease. Notwithstanding




                                       29
<PAGE>   30

any failure by Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to comply with all applicable Regulations.
Tenant shall be responsible for ensuring that construction and installation of
the Tenant Improvements will not affect the structural integrity of the
Building.

               (c) If required by Landlord or any lender of Landlord, all work
by Tenant or Tenant's contractor shall be done with union labor in accordance
with all union labor agreements applicable to the trades being employed.

               (d) Landlord or Landlord's agents shall have the right to inspect
the construction of the Tenant Improvements by Tenant during the progress
thereof. If Landlord shall give notice of faulty construction or any other
deviation from the approved Space Plan or Plans, Tenant shall cause its
contractor to make corrections promptly. However, neither the privilege herein
granted to Landlord to make such inspections, nor the making of such inspections
by Landlord, shall operate as a waiver of any right of Landlord to require good
and workmanlike construction and improvements erected in accordance with the
approved Space Plan or Plans.

               (e) Tenant shall cause its contractor to complete the Tenant
Improvements as soon as reasonably possible but in any event on or before the
Scheduled Term Commencement Date.

               (f) Tenant's construction of the Tenant Improvements shall comply
with the following: (i) the Tenant Improvements shall be constructed in strict
accordance with the approved Space Plan or Plans; (ii) Tenant's and its
contractor shall submit schedules of all work relating to the Tenant
Improvements to Landlord for Landlord's approval within two (2) business days
following the selection of the contractor and the approval of the Plans.
Landlord shall within five (5) business days after receipt thereof inform Tenant
of any changes which are necessary and Tenant's contractor shall adhere to such
corrected schedule; and (iii) Tenant shall abide by all rules made by Landlord
with respect to the use of freight, loading dock, and service elevators, storage
of materials, coordination of work with the contractors of other tenants, and
any other matter in connection with this Improvement Agreement, including,
without limitation, the construction of the Tenant Improvements.

               (g) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor and
shall pay such reasonable charges for such services as may be charged by
Tenant's or Landlord's contractor.

               (h) Tenant's entry to the Premises for any purpose, including,
without limitation, inspection or performance of Tenant construction by Tenant's
agents, prior to the date Tenant's obligation to pay rent commences shall be
subject to all the terms and conditions of the Lease except the payment of Rent.
Tenant's entry shall mean entry by Tenant, its officers, contractors, licensees,
agents, servants, employees, guests, invitees, or visitors.

               (i) Tenant shall promptly reimburse Landlord upon demand for any
reasonable expense actually incurred by the Landlord by reason of faulty work
done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.

               (j) Tenant hereby indemnifies and holds Landlord harmless with
respect to any and all costs, losses, damages, injuries and liabilities relating
in any way to any act or omission of Tenant or Tenant's contractor or agents, or
anyone directly or indirectly employed by any of them, in connection with the
Tenant Improvements and any breach of Tenant's obligations under this
Improvement Agreement, or in connection with Tenant's non-payment of any amount
arising out of the Tenant Improvements. Such indemnity by Tenant, as set forth
above, shall also apply with respect to any and all costs, losses, damages,
injuries, and liabilities related in any way to Landlord's performance or any
ministerial acts reasonably necessary (i) to permit Tenant to complete the
Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or
certificate of occupancy for the Premises.

               (k) Tenant's contractor and the subcontractors utilized by
Tenant's contractor shall guarantee to Tenant and for the benefit of Landlord
that the portion of the Tenant Improvements for which it is responsible shall be
free from any defects in workmanship and materials for a period of not less than
one (1) year from the date of completion thereof. Each of Tenant's contractor
and the subcontractors utilized by Tenant's contractor shall be responsible for
the replacement or repair, without additional charge, of all work done or
furnished in accordance with its contract that shall become defective within one
(1) year after the later to occur of (i) completion of the work performed by
such contractor of subcontractors and (ii) the Term Commencement Date. The
correction of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or replacement of
all or any part of the Tenant Improvements, and/or the Building and/or common
areas that may be damaged or disturbed thereby. All such warranties or
guarantees as to materials or workmanship of or with respect to the Tenant
Improvements shall be contained in the construction contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such rights of
direct enforcement.

6.      Insurance Requirements.

           6.1 All of Tenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in form
and with companies as are required to be carried by Tenant as set forth in
Paragraph 8 of the Lease.

           6.2 Tenant shall carry "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of the Tenant Improvements, and
such other insurance as Landlord may require, it being understood and agreed
that the Tenant Improvements shall be insured by Tenant pursuant to Paragraph 8
of the Lease immediately upon completion thereof. Such insurance shall be in
amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the requirement
that all of Tenant's contractors shall carry excess liability and Products and
Completed Operation coverage insurance, each in amounts not less than $500,000
per incident, $1,000,000 in aggregate, and in form and with companies as are
required to be carried by Tenant as set forth in Paragraph 8 of the Lease.

           6.3 Certificates for all insurance carried pursuant to this
Improvement Agreement must comply with the requirements of Paragraph 8 of the
Lease and shall be delivered to Landlord before the commencement of construction
of the Tenant Improvements and before the contractor's equipment is moved onto
the site. In the event the Tenant Improvements are damaged by any cause during
the course of the construction thereof, Tenant shall immediately repair the same
at Tenant's sole cost and expense. Tenant's contractors shall maintain all of
the foregoing insurance coverage in force until the Tenant Improvements are
fully completed and accepted by Landlord, except for any Product and Completed
Operation Coverage insurance required by Landlord, which is to be maintained for
ten (10) years following completion of the work and acceptance by Landlord and
Tenant. All policies carried under this Paragraph 6 shall insure Landlord and
Tenant, as their interests may appear, as well as the contractors. All insurance
maintained by Tenant's contractors shall preclude subrogation claims by the
insurer against anyone insured thereunder. Such insurance shall



                                       30
<PAGE>   31

provide that it is primary insurance as respects the owner and that any other
insurance maintained by owner is excess and noncontributing with the insurance
required hereunder.

7.      Completion and Rental Commencement Date.

           7.1 Tenant's obligation to pay Rent under the Lease shall commence on
the Scheduled Term Commencement Date and the Scheduled Term Commencement Date
shall be the Term Commencement Date notwithstanding anything to the contrary
contained in Paragraph 2 of the Lease. However, Landlord Delays (as defined
below) shall extend the Term Commencement Date, but only in the event that
substantial completion of the Tenant Improvements is delayed despite Tenant's
reasonable efforts to adapt and compensate for such delays. In addition, no
Landlord Delays shall be deemed to have occurred unless Tenant has provided
notice, in compliance with the Lease, to Landlord specifying that a delay shall
be deemed to have occurred because of actions, inactions or circumstances
specified in the notice in reasonable detail. If such actions, inactions or
circumstances are not cured by Landlord within one (1) business day after
receipt of such notice ("COUNT DATE"), and if such actions, inaction or
circumstances otherwise qualify as a Landlord Delay, then a Landlord Delay shall
be deemed to have occurred commencing as of the Count Date. The Term
Commencement Date shall be extended by one day for each day from the Count Date
that a Landlord Delay has occurred, as calculated as provided above. The term
"Landlord Delays," as such term may be used in this Improvement Agreement, shall
mean any delays in the completion of the Tenant Improvements which are due to
any act or omission of Landlord, its agents or contractors. Landlord Delays
shall include, but shall not be limited to: (i) delays in the giving of
authorizations or approvals by Landlord, (ii) delays due to the acts or failures
to act, of Landlord, its agents or contractors, where such acts or failures to
act delay the completion of the Tenant Improvements, provided that Tenant acts
in a commercially reasonable manner to mitigate any such delay, (iii) delays due
to the interference of Landlord, its agents or contractors with the completion
of the Tenant Improvements or the failure or refusal of any party to permit
Tenant, its agents and contractors, access to and use of the Building or any
Building facilities or services, including elevators and loading docks, which
access and use are necessary to complete the Tenant Improvements, and (iv)
delays due to Landlord's failure to allow Tenant sufficient access to the
Building and/or the Premises during Tenant's move into the Premises.

           7.2 Within ten (10) days after completion of construction of the
Tenant Improvements, Tenant shall cause a Notice of Completion to be recorded in
the office of the Recorder of the county in which the Building is located in
accordance with Section 3093 of the Civil Code of the State of California or any
successor statute, and shall furnish a copy thereof to Landlord upon such
recordation. If Tenant fails to do so, Landlord may execute and file the same on
behalf of Tenant as Tenant's agent for such purpose, at Tenant's sole cost and
expense. At the conclusion of construction, (i) Tenant shall cause the Space
Planner and the contractor (i) to update the approved working drawings as
necessary to reflect all changes made to the approved working drawings during
the course of construction, (ii) to certify to the best of their knowledge that
the "record-set" of as-built drawings are true and correct, which certification
shall survive the expiration or termination of the Lease, and (c) to deliver to
Landlord two (2) sets of copies of such record set of drawings within ninety
(90) days following issuance of a certificate of occupancy for the Premises, and
(iii) Tenant shall deliver to Landlord a copy of all warranties, guarantees, and
operating manuals and information relating to the improvements, equipment, and
systems in the Premises.

           7.3 A default under this Improvement Agreement shall constitute a
default under the Lease, and the parties shall be entitled to all rights and
remedies under the Lease in the event of a default hereunder by the other party
(notwithstanding that the Term thereof has not commenced).

           7.4 Without limiting the "as-is" provisions of the Lease, except for
the Tenant Improvements, if any, to be constructed by Landlord pursuant to this
Improvement Agreement, Tenant accepts the Premises in its "as-is" condition and
acknowledges that it has had an opportunity to inspect the Premises prior to
signing the Lease. To the best of Landlord's knowledge, all elevators, HVAC and
other building systems are in good working order.

                             SCHEDULE 1 TO EXHIBIT C

         BASE BUILDING WORK - 1740 TECHNOLOGY DRIVE, SAN JOSE, CA 95110



                                      NONE.


        Not applicable. 1740 TECHNOLOGY DRIVE, SAN JOSE, CA 95110. The following
constitutes the Building Standard tenant improvements ("STANDARDS") in the
quantities specified:


PARTITIONS

Interior:                2 1/2" Metal studs with 5/8" gypsum board on each side.
                         Taped smooth and ready for finish.

Demising:                3 5/8" Metal studs with 5/8" gypsum board to building
                         structure on one side and 6" above ceiling on other
                         side, with sound batt insulation Provide minimum of two
                         (2) 4'-0" x 4'-0" openings protected by security wire
                         mesh fabric in each wall. Taped smooth and ready for
                         finish.

Perimeter Wainscot:      5/8" layer of gypsum board, taped smooth ready for
                         finish. Extruded aluminum sill to match exterior
                         mullions.

Interior Columns         5/8" layer of gypsum board, taped smooth ready for
                         finish.

Paint:                   One coat primer, two coats of interior latex paint in
                         eggshell finish, on each side of partitions.


DOOR ASSEMBLIES

Doors:                   Doors will be 3'-0" x 9'-0" x 1 3/4" solid core
                         construction Sapeli mahogany. Tenant entry doors to be
                         20-minute rated.

Door Frames:             Door frames will be Sapeli mahogany. Frames to be
                         20-minute rated.

Door Hardware:           Tenant entry doors shall receive a lockset, surface
                         mounted closer, butt hinges, and door stop. Tenant
                         interior doors shall receive a latchset, butt hinges
                         and door stop. Door hardware to be Schlage, L-series
                         #15 stainless steel with ASSA cylinder. Schlage tail
                         piece required. Finish to be equal to ASSA bright
                         chrome.


CEILING SYSTEM

Acoustic ceilings        Acoustical suspended ceilings will be Armstrong,
and suspended            Cortega, Fire-rated Tegular tile #816A, with Donn DX
                         15/16" suspension system in #040 white.




                                       31
<PAGE>   32


systems:

Light Fixtures:          2' x 4' Light fixtures will have custom Optibrite
                         optical reflector (2)-lamp, Motorola Rapid Start
                         Electronic Ballast, part #M2RNT8ILL, 277-volt lamp
                         model #GEF32T8SP35.

                         2' x 2' Light fixtures will have custom Optibrite
                         reflector (3)-lamp, Motorola Rapid Start Electronic
                         Ballast, part #M3RNT8ILL, 277-volt lamp model
                         #GEF32T8SP35.

Light Switch Assembly:   Switches will be paired in double gang box to meet
                         Title 24 requirements. Bryant #4901, Ivory finish.


ELECTRICAL AND TELEPHONE


Receptacles:             Receptacles will be duplex 20 ampere, 125 volt a.c.
                         with Bryant wall plate, smooth line, Ivory finish

Telephone outlets:       Outlets will be a standard telephone plate in
                         manufacturer's standard colors, mounted vertically
                         level with electrical receptacles, Color: ivory.

Exit signage:            Exit signs to be Lithonia Emergency Systems, Titan
                         XS-series, housing color: white, panels: green, style:
                         stencil, catalog #ELA XCKFSWR/G J6, 120-volt


HEATING AND AIR CONDITIONING SYSTEM

HVAC System:             Interior and exterior zone cooling provided by Carrier
                         Moduline Plus Air Terminals. Perimeter heating provided
                         by five heating fan coil units located in ceiling
                         plenum on each floor.


FIRE PROTECTION

Fire Sprinkler Heads:    Sprinkler heads to be Central Model "A" recessed
                         pendant automatic and quick response sprinklers.
                         Escutcheons to be metal. Color to be white.


FLOOR COVERING:

Carpet:                  38 oz. weight cut pile, Designweave, Sabre Classic,
                         installed direct glue-down. All standard colors
                         available.

Tile:                    Armstrong, Standard Excelon vinyl composition tile. All
                         standard colors available.

Base:                    Burke, 4" rubber base, topset over VCT and straight cut
                         over carpet. All standard colors available.


WINDOW COVERING

Blinds:                  1" aluminum Hunter Douglas, Contract Celebrity mini
                         blinds Color: #002-Alabaster. Sized to fit within
                         aluminum mullion module.




                                       32
<PAGE>   33

                                   SCHEDULE 3
                                  TO EXHIBIT C

                        CONTRACTOR RULES AND REGULATIONS


GENERAL REQUIREMENTS FOR BUILDING CONSTRUCTION WORK

================================================================================


INTENT

The intent of these General Requirements is to communicate Spieker Properties
general performance expectations and requirements of contractors performing work
in our projects. While these requirements may not cover all specific project
requirements, or may not apply to all projects, they are intended to communicate
a basic overall methodology for doing construction work in Spieker Properties
projects.


                                   Preliminary

1.      All work performed shall be performed by union signatory general
        contractor utilizing all union labor and must comply with all applicable
        rules, regulations, and codes of the building, city, state, and federal
        governmental agencies having jurisdiction. The General Contractor will
        file drawings and secure all required permits prior to beginning work,
        unless circumstances require earlier construction commencement, as
        directed by the Owner's architect. All construction within the leased
        premises shall conform to applicable sections of California Title 24
        Standards and the American with Disabilities Act (ADA).

2.      All work shall be performed during regular business hours (7:00 A.M. -
        6:00 P.M.), Monday through Friday, with the exception of work types
        listed below. All building system operations will be maintained in
        normal operation, and will not be adversely impacted by construction
        work, unless specifically authorized by a Project Management
        representative. The contractor shall communicate requests to the
        Management Office 24 hours in advance of any required interruption of
        any building services.

                EXCEPTIONS - The following work is required to be performed on
                an overtime or off-hours basis: core drilling, nailing of
                tackless carpet stripping, spray painting of any lacquer or
                other volatile or odor creating substances, and any type of
                concrete chipping. Any scheduling requests for these types of
                off-hours work must be approved and authorized by the Management
                Office prior to performance any of work.

3.      All contractors must supply Certificate(s) of Insurance naming Spieker
        Properties, L.P. as additionally insured prior to the start of any
        construction. Insurance certificates and copies of permits, as required,
        must be provided to Project Management prior to the commencement of any
        work.

4.      Contractors representative will meet with Project Management
        representative prior to beginning contracted work, to review the scope
        of construction work, construction methods, these general requirements,
        any additional project specific requirements, and any potential impact
        to the satisfactory on-going operation of building services.

5.      The contractor will coordinate proper parking locations for construction
        personnel with Project Management prior to starting construction, to
        avoid impacting our tenants parking availability.


PROJECT AREA ACCESS

1.      Access to project buildings, parking structures, suites, etc. will be
        coordinated in advance with Project Office. No installed access control
        or security system will be over ridden or bypassed for any reason, or at
        any time. All construction personnel will be limited to those areas for
        which they have been given specific access.

2.      Access to all electrical closets, telephone closets, mechanical rooms,
        and suites must be coordinated in advance through the Project Office.
        Electrical, telephone, and other equipment rooms will be kept closed and
        locked when they are not physically occupied.


DURING WORK PERFORMANCE

1.      Upon the start of construction, the contractor will provide walk-off
        mats at all entrances to the construction area(s) from stairwells (if
        used) and entrances to all elevators.

2.      Contractors shall maintain cleanliness throughout; do not clutter or
        block hallways, exits, elevator lobby, electrical or telephone rooms.
        Building fire rated doors will not be propped open, removed, or their
        door closures disconnected. Nor will elevator doors be propped or jammed
        open to prevent the automatic function of it's timed door actuators.
        CONTRACTORS ARE REQUIRED TO UTILIZE THE FREIGHT ELEVATOR ONLY! Where a
        freight elevator is not available, Project Management will designate the
        appropriate elevator for contractor use. Where available, elevator
        protective pads will be used whenever moving materials or equipment in
        the elevator. Contractors are responsible for all damage they cause and
        clean-up.

3.      Building electrical closets will not, at any time, or for any reason, be
        utilized for the storage of any construction project materials or trash,
        as such storage constitutes a violation of prevailing fire codes.

4.      All material deliveries, and debris removal, must be made as
        expeditiously as possible so as to not have these vehicles blocking
        accesses to/from the building. The contractor, at contractor expense
        must remove all construction debris from the building. Building trash
        dumpsters are not to be utilized for the disposal of construction
        project debris, as these are provided for tenant use. As may be
        required, Contractor will make arrangements for delivery of a debris box
        for his use. The Project Office will approve an appropriate location for
        the debris box while it is on the project. Delivery or removal of large
        amounts of material is to be done after normal business hours with
        24-hr. prior approval of the Project Manager.

5.      The contractor is responsible for taking the following precautions/
        steps to protect the satisfactory on-going operation of all building
        systems and tenant operations:

        -       Covering HVAC supply and return duct openings to protect from
                construction dirt/dust being spread to other areas of the
                building or into the HVAC equipment/system. This can be
                accomplished by sealing off, covering with filtering media, or
                other Project Management approved method.



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        -       Coordinate with Project Manager prior to construction to have
                fire sprinkler systems isolated, smoke detectors disabled, or
                alarm systems de-activated for periods as may be necessary.
                Contractor will protect those smoke detectors or fire sprinkler
                heads left installed in the area, after disabling, by covering
                them with plastic bags during construction.

        -       Where electrical components or circuits are removed, contractor
                will ensure full compliance with OSHA required lockout/tagout
                procedures to prevent personal injuries or system outages.

        -       Develop the best isolation possible of the construction area to
                contain any dirt, dust, noise or other potential tenant impact
                which may be generated by demo, construction work and clean-up.

6.      Any damage to any project area including but not limited to, parking
        areas, doors, freight elevators, and carpets will be reported to the
        Project Office and repaired by the contractor immediately. Spieker
        Properties reserves the right to remedy any damage at the Contractors
        expense if the damage is not repaired in a timely manner.

7.      No powder-actuated guns are to be used without the specific prior
        authorization of the Project Management Office.

8.      No foreign substances are to be poured down any restroom floor drains,
        or into other restroom fixtures.

9.      All firewall and floor penetrations shall be sleeved and sealed in
        accordance with applicable fire code, using only approved, UL listed,
        fire stop materials. All firestop installations must be reviewed and
        approved by the Project Manager prior to closing the associated area of
        work.

10.     All electrical panel and circuit breaker labeling will be performed in
        accordance with acceptable industry methods, or as may be directed by
        Project Management.

11.     Contractor will notify the Management Office at least 48 hours in
        advance of construction completion. A walk-through and punch list will
        be developed for each job.

12.     Smoking is prohibited in all buildings, and parking garages, at all
        times.

13.     The Contractor is responsible for ensuring, on an on-going basis, that
        common areas, work space, and construction use restrooms are thoroughly
        cleaned upon completion of work, including trash and material disposal,
        removal of all noise and dust shielding materials installed at beginning
        of project, windows cleaned, etc.

14.     THE PROJECT OFFICE IS TO BE NOTIFIED IMMEDIATELY SHOULD ANY EMERGENCY
        DEVELOP, ANY BUILDING SYSTEM OR OPERATION BE IMPACTED, OR ANY ASPECT OF
        THE CONSTRUCTION EFFORT IMPACT ANY TENANT.


SAFETY/COMPLIANCE


1.      General Contractor is responsible for ensuring jobsite safety
        compliance. This includes the work force as well as anyone entering the
        construction area. Protective barricades will be placed as required to
        ensure general area safety. Material Safety Data Sheets (MSDS) for all
        materials to be used on the jobsite must be provided to the Project
        Manager for review prior to bringing the materials into the project. The
        contractor will further ensure that a copy of each MSDS is available at
        the jobsite whenever a specific material is in use.

2.      No welding, burning, or cutting with an open flame will be performed
        without prior notification to the Project Office so that appropriate
        actions may be taken with fire alarm systems and fire sprinkler systems.
        Appropriate fire extinguishers will be immediately available at all
        times.

3.      The contractor is responsible for ensuring that all of their
        sub-contractors are aware, and in compliance, with these general
        requirements.


                                    MATERIALS


1.      The contractor shall contact the Management Office at the start of
        construction for instructions on building keying, specific hardware and
        other standards, as may be applicable, unless this coordination is
        accomplished through hardware submittals. All permanent keying will be
        provided through the Management Office.

2.      All HVAC, electrical, plumbing, fire alarm system, fire sprinkler,
        building control and lighting components installed will be of Building
        Standard manufacture, unless noted as otherwise on the approved plans
        and specifications. This includes but is not limited to thermostats,
        controls, diffusers, lighting fixtures, switches, lamps, relays, smoke
        detectors, fire sprinkler heads, sprinkler flow switches, manual pull
        stations, indicator horns/strobes, etc.


Project Completion

1.      Upon completion of project, contractor will perform a full air balance
        of any installed or modified HVAC systems, providing one copy of each
        air balance report to the Management Office.

2.      Upon completion of project, a completed test report (witnessed by a Fire
        Department representative as required) will be provided to the Project
        Management Office for all fire sprinkler or fire alarm systems having
        been impacted by any aspect of the construction work.

3.      Upon completion of construction, one (1) set of as-built prints, and one
        (1) set of as-built sepias, are to be provided to the Management Office.

4.      Contractor will ensure that specific submittals, manufacturers operation
        and maintenance manuals, and applicable manufacturers cut sheets are
        delivered to the Project Office for all equipment or components
        installed in the course of their work. This includes, but is not limited
        to, mechanical equipment, fire alarm system components, fire sprinkler
        system components, HVAC system equipment or components, lighting system
        components, electrical distribution or control components, and any
        sensing or monitoring components.




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5.      Upon completion of construction clean inside of all perimeter windows
        and the interior of all lighting fixtures and louvers. Thoroughly clean
        all work areas, common areas where impacted, construction use restrooms,
        and freight elevators. Coordinate construction clean-up schedule with
        Management Office.


                              Building Contact List


Any questions or concerns should be directed to:

        PROJECT DIRECTOR            -           JENNIFER FERRARI
        BUILDING MANAGERS           -           SUSAN MCCAULEY
        CUSTOMER SERV. REP.         -           _____ N/A_______
        BUILDING ENGINEER           -                    SHAWN DALY
        MANAGEMENT OFFICE           -                   (408) 453-3434
        MANAGEMENT OFFICE FAX       -                   (408) 452-0931






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