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                                  EXHIBIT 10.17




                                    Page 94
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                 THIS INDENTURE made this 29th day of May, 1997.

BETWEEN:

                       KANATA RESEARCH PARK CORPORATION

                      (Hereinafter called the "Landlord")

                                                               OF THE FIRST PART

AND:

                        NEWBRIDGE NETWORKS CORPORATION

                       (Hereinafter called the "Tenant")

                                                              OF THE SECOND PART



        WITNESSETH that in consideration of the rents, covenants, conditions and
agreements herein contained, the Landlord and the Tenant covenant and agree as
follows:

1.00    LEASED PREMISES

        The Landlord hereby leases to the Tenant all those premises consisting
        of the building known municipally as 359 Terry Fox Drive and comprising
        approximately Seventy-Six Thousand Two Hundred and Thirty point Six Five
        (76,230.65) rentable square feet of space on the ground floor ("Leased
        Premises") in the City of Kanata which said building is erected on the
        lands (herein called the "Lands") described in Schedule "A" annexed
        hereto. The Leased Premises are more particularly outlined on the floor
        plan annexed hereto and marked Schedule "B".

1.01    ADDITIONAL DEFINITIONS

        For the purposes of this Lease and any additions or amendments thereto:

        (a)    "Improvements" means all improvements located on the Lands,
               including the Building, the parking lot or structure servicing
               the Building and other facilities and physical structures which
               are for the exclusive use of occupants of the Building;

        (b)    "Common Areas" means at any time those portions of the Lands and
               Building not leased or designated for lease to tenants but
               provided to be used in common by (or by the sublesses, agents,
               employees, customers or licensees of) Landlord, Tenant and other
               tenants of the Building, whether or not they are open to general
               public and shall include any fixtures, chattels, systems, decor,
               signs, facilities or landscaping contained in those areas or
               maintained or used in connection with them, and shall be deemed
               to include the city sidewalks adjacent to the Lands and any
               pedestrian walkway system (either above or below ground), park,
               or other public facility in respect of which Landlord is from
               time to time subject to obligations arising from the Lands and
               Building.

                                    Page 95
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        (c)    "Tenant's Proportionate Share" means seventy-nine percent (79%)
               provided the said percentage may be varied based on the actual
               area of the Leased Premises as certified by the Landlord.

2.00    TERM

        To have and to hold the Leased Premises for and during a period of
        years, (hereinafter called the "Term") commencing on the 1st day of
        June, l997 for approximately Fifty-Eight Thousand Two Hundred and Thirty
        point Six Five rentable square feet and for approximately Eighteen
        Thousand rentable square feet from the 1st day of August, 1997 or the
        date the area is substantially complete in accordance with Schedule "G"
        whichever is the later and from thenceforth next ensuing and fully to be
        completed and ended on the 31st day of May 2002.

2.01    INABILITY TO GIVE OCCUPANCY

        It is hereby agreed that if the Landlord is unable to deliver vacant
        possession of the Leased Premises on the date of commencement of the
        Term by reason of the Leased Premises or the Building being uncompleted
        or by reason of any previous tenant or occupant overholding (but not by
        reason of circumstances beyond the Landlord's control or by reason of
        the failure of the Tenant to complete Tenant's Work herein or by reason
        of the Tenant failing on or before the date occurring six (6) weeks
        prior to the commencement of the Term herein to supply all necessary
        approvals and specifications which the Landlord requires in order to
        complete the Leasehold Improvements herein,) the Landlord shall
        diligently exercise all of its rights to obtain completion and vacant
        possession of the Leased Premises and the rent payable hereunder shall
        abate at a rental per day equal to 1/365th of the Annual Rent payable
        until such completion or vacant possession is obtained but the Landlord
        shall not be liable to the Tenant for damages of any nature whatsoever
        and this Lease shall continue in full force and effect subject only to
        the abatement of rent as aforesaid.

2.02    EARLY OCCUPANCY

        If the Tenant occupies the Leased Premises prior to the commencement of
        the Term, then during the period up to the date of commencement the
        Tenant shall be a tenant of the Landlord subject to all the covenants,
        conditions and agreements set out in this Lease and at a rental per day
        equal to 1/365th of the Annual Rent and Additional Rent and such rental
        shall be paid on or before the commencement of the Term.

2.03    OVERHOLDING

        If the Tenant shall continue to occupy the Leased Premises after the
        expiration of this Lease with or without the consent of the Landlord and
        without any further written agreement, the Tenant shall be a monthly
        tenant at a rent equivalent to 150% of the Monthly Rent and Additional
        Rent hereby reserved and subject to all the terms and conditions herein
        set out except as to length of tenancy.


3.00    RENT - Basic Rent

        In each year during the Term of this Lease the Tenant covenants and
        agrees to pay without any set-off or deduction whatsoever, to the
        Landlord, as rent for the Leased Premises the following:

                                    Page 96
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<TABLE> 
<CAPTION> 
                        Years      Rate/sq foot      Leased Premises
                        -----      ------------      ---------------
                        <S>        <C>               <C> 
                        1-5         $9.25            $705,133.51
</TABLE> 

        herein called "Annual Rent". The Annual Rent will be adjusted
        proportionately for any lease year which is other than twelve months.

3.01    MONTHLY RENTAL

        The Annual Rent shall be payable in equal monthly installments of Fifty-
        Eight Thousand Seven Hundred and Sixty-One Dollars and Thirteen Cents
        ($58,761.13) (hereinafter called the "Monthly Rent") in advance on the
        first day of each calendar month during the Term. If the Term commences
        on any day other than the first (1st) or ends on any day other than the
        last of a calendar month, rent for the fraction of a month at the
        commencement and at the end of the Term shall be prorated at a rate per
        day equal to 1/365th of the Annual Rent payable.

3.02    ADDITIONAL RENT

        The Tenant covenants to pay as additional rent all sums to be paid to
        the Landlord hereunder including, without limiting the generality of the
        foregoing, all tax on the Tenant's leasehold improvements, Goods and
        Services Tax and the Tenant's Proportionate Share of the Tax, Capital
        Tax, Landlord's Business Tax and Operating Costs (herein called
        "Additional Rent").

3.03    ESTIMATED ADDITIONAL RENTALS

        During the Term, the Tenant shall pay to the Landlord monthly in advance
        on the 1st day of each and every month during the Term, one-twelfth
        (1/12) of the amount of such annual Additional Rent as reasonably
        estimated by the Landlord to be due from the Tenant. Such estimates may
        be adjusted from time to time and re-adjusted by the Landlord and the
        Tenant shall pay to the Landlord monthly installments of Additional Rent
        according to such estimates, as so adjusted.

3.04    DEFICIENCY OF ADDITIONAL RENT

        If the aggregate amount of such estimated Additional Rent payments made
        by the Tenant in any year should be less than the Additional Rent due
        for such year, then the Tenant shall pay to the Landlord as Additional
        Rent within thirty (30) days of receipt of notice thereof from the
        Landlord the amount of such deficiency.

3.05    EXCESS OF ADDITIONAL RENTAL INSTALLMENTS

        If the aggregate amount of such Additional Rent payments made by the
        Tenant in any year of the Term should be greater than the Additional
        Rent due for such year, then should the Tenant not be otherwise in
        default hereunder, the amount of such excess will be applied by the
        Landlord to the next succeeding installments of such Additional Rent due
        hereunder; and if there be any such excess for the last year of the
        Term, the amount thereof will be refunded by the Landlord to the Tenant
        within thirty (30) days after the completion of the Landlord's year-end
        audit provided the Tenant is not otherwise in default under the terms of
        the Lease.

                                    Page 97
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3.06    PRO-RATING OF ADDITIONAL RENT

        If only part of any calendar year is included within the Term the amount
        of the Additional Rent payable by the Tenant for such partial year shall
        be prorated and shall be based upon the estimates made by the Landlord
        and upon a final determination of such Additional Rent, the amount
        remaining unpaid at the termination of this Lease shall, notwithstanding
        such termination, be adjusted and paid within a reasonable time
        thereafter.

3.07    PREPAYMENT OF ADDITIONAL RENT

        Notwithstanding the foregoing, if the Landlord is required to pay any
        amount, which it is entitled to collect from the tenants of the
        Building, more frequently than provided for in this Lease or if the
        Landlord is required to prepay any such amount, the Tenant shall pay to
        the Landlord its portion of such amount calculated in accordance with
        this Lease, forthwith upon demand.

3.08    DISPUTE AS TO AMOUNT OF ADDITIONAL RENT

        In the event of any dispute by the Tenant as to the amount of any
        Additional Rent claimed by the Landlord or the amount of the Tenant's
        Proportionate Share thereof, the opinion of the Landlord's auditors
        shall be conclusive and binding as to the amount thereof for any period
        to which the opinion relates.

3.09    MANNER AND PLACE OF PAYMENT OF RENT

        All rent shall, until further written notice is received from the
        Landlord, be paid by the Tenant without any prior demand therefor to
        Kanata Research Park Corporation, at par in the City of Ottawa at the
        principal office of, Kanata Research Park Corporation, 600 March Road,
        P.O. Box l3600, Kanata, Ontario, Canada K2K 2E6, or at such other place
        in Canada as Kanata Research Park Corporation may designate in writing
        from time to time and shall be payable in lawful money of Canada. The
        Landlord agrees that payments made to Kanata Research Park Corporation
        pursuant to this Lease shall be deemed to be payments made to the
        Landlord and the Tenant shall not be required to see to the application
        thereof.

3.10    DEFAULT

        Any sums received by the Landlord from or for the account of the Tenant
        when the Tenant is in default hereunder may be applied at the Landlord's
        option to the satisfaction, in whole or part, of any of the obligations
        of the Tenant then due hereunder in such manner as the Landlord sees
        fit, and regardless of any designation or instructions of the Tenant to
        the contrary.

3.11    ACCRUAL OF RENT

        Rent shall be considered as annual and accruing from day to day, and
        where it becomes necessary for any reason to calculate such rent for an
        irregular period of less than one (1) year an appropriate apportionment
        and adjustment shall be made. Where the calculation of any Additional
        Rent is not made until after the termination of this Lease, the
        obligation of the Tenant to pay such Additional Rent shall survive the
        termination of this Lease and such amounts shall be payable by the
        Tenant upon demand by the Landlord.

                                    Page 98
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3.12    NET LEASE

        The Tenant acknowledges and agrees that it is intended that this Lease
        shall be a completely carefree net lease for the Landlord and that the
        Landlord shall not be responsible during the Term for any costs,
        charges, expenses or outlays of any nature whatsoever arising from or
        relating to the Leased Premises, whether foreseen or unforeseen and
        whether or not within the contemplation of the parties at the
        commencement of the Term except as shall be otherwise expressly provided
        for in this Lease and other than Income Tax due by the Landlord, the
        Tenant shall be responsible for any business transfer tax, value added
        tax, multi-stage sales tax, goods and services tax or any other tax or
        levy on rental income that may be charged, levied or assessed by any
        government or other applicable taxing authority against the Landlord
        whether known as a goods and services tax or any other name ("Goods and
        Services Tax").

4.00    TENANT'S BUSINESS TAX

        In each and every year during the Term the Tenant covenants to pay and
        discharge prior to the same becoming due and payable all taxes, rates,
        duties and assessments and other charges that may be levied, rated,
        charged or assessed against or in respect of the Tenant's or other
        occupant's use and occupancy of the Leased Premises or in respect of the
        Tenant's or other occupant's leasehold improvements, equipment,
        machinery, trade fixtures and facilities situate or installed on or in
        the Leased Premises and every tax and licence fee in respect of any and
        every business carried on in the Leased Premises or in respect of the
        use or occupancy thereof by the Tenant (and any and every subtenant,
        licensee or occupant thereof) whether such taxes, rates, duties,
        assessments and licence fees are charged by any municipal,
        parliamentary, school or other body during the term hereby demised. The
        Tenant will indemnify and keep indemnified the Landlord from and against
        payment of all loss, costs, charges and expenses occasioned by, or
        arising from any and all such taxes, rates, duties, assessments, licence
        fees, and any and all taxes which may in future be levied or charged in
        lieu of such taxes; and any such loss, costs, charges and expenses
        suffered by the Landlord may be collected by the Landlord as rent with
        all rights of distress and otherwise as reserved to the Landlord in
        respect of rent in arrears. The Tenant further covenants and agrees that
        upon written request of the Landlord, the Tenant will promptly deliver
        to the Landlord for inspection receipts for payment of all such taxes,
        rates, duties, assessments, licence fees and other charges in respect of
        all improvements, equipment and facilities of the Tenant on or in the
        Leased Premises or in respect of any business carried on in the Leased
        Premises which were due and payable up to one (1) month prior to such
        request.

4.01    LANDLORD'S BUSINESS TAX

        In the event that there are any taxes, rates, duties, assessments or
        charges levied, rated, charged or assessed against the Landlord by any
        municipal or other governmental authority with respect to the Landlord's
        use or occupancy of any part of the Building or the Land which the
        Tenant is entitled to use in common with other persons or with respect
        to any other part of the Building which the Landlord uses or occupies
        for the purpose of supplying services to the Leased Premises (such
        taxes, rates, duties, assessments or charges hereinafter called the
        "Landlord's Business Tax"), then it is agreed that in addition to all
        other sums, the Tenant is required to pay pursuant to this Lease, the
        Tenant shall pay to the Landlord as Additional Rent, the Tenant's
        Proportionate Share of such Landlord's Business Tax.

                                    Page 99
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4.02    TAX ON TENANT'S LEASEHOLD IMPROVEMENTS

        The Tenant shall pay to the Landlord as Additional Rent, in respect of
        each applicable tax year, an amount equal to that portion of the Tax for
        such tax year, as determined by the Landlord, which may reasonably be
        regarded as being attributable to the fixtures, improvements,
        installations, alterations, additions and equipment from time to time
        made, erected or installed by or on behalf of the Tenant in the Leased
        Premises.

4.03    PROPERTY TAX

        "Tax" in this Lease means an amount equivalent to all taxes, rates,
        duties, levies and assessments whatsoever levied, rated, charged or
        assessed by any municipal, parliamentary, educational, school or other
        governmental authority charged upon the Building, the Lands, the
        property and all improvements now or hereafter appurtenant thereto or
        upon the Landlord on account thereof including all taxes, rates, duties,
        levies and assessments for local improvements and including any tax
        which has been attracted by the Tenant's leasehold improvements and
        equipment and for which the Tenant is responsible hereunder and
        excluding any portion of Tax payable solely by any other tenant and
        excluding any Tax charged against or applicable to the other office
        buildings constructed on the Lands and the parking spaces (excluding
        visitor parking) applicable to such buildings and excluding such taxes
        as corporate income, capital gains, profits or excess profits, taxes
        assessed upon the income of the Landlord, and shall also include any and
        all taxes which may in future be levied in lieu of Tax as hereinbefore
        defined.

4.04    ALLOCATION OF TAX

        If the Tax or any portion thereof that may be payable by the Tenant by
        reason of this Lease, depends upon an assessment or an approximation of
        an assessment which has not been made by the taxing authority or
        authorities having jurisdiction, the Landlord shall determine the same;
        any such determination made by the Landlord shall be binding upon the
        Tenant unless shown to be unreasonable or erroneous in some substantial
        respect. The Landlord shall have the right from time to time to
        reasonably allocate and re-allocate Taxes not charged separately to the
        various buildings (including the Building) and the parking garages
        located on the Lands.

4.05    SEPARATE SCHOOL TAXES

        If the Tenant or any subtenant or licensee of the Tenant or any occupant
        of the Leased Premises shall elect to have the Leased Premises or any
        part thereof assessed for separate school taxes, the Tenant shall pay to
        the Landlord, as additional rent, as soon as the amount of the separate
        school taxes is ascertained, any amount by which the amount of separate
        school taxes exceeds the amount which would have been payable for Tax
        had such election not been made and if the Tenant or any subtenant or
        licensee of the Tenant shall elect to have the Leased Premises or any
        part thereof assessed for separate school taxes as aforesaid and if such
        separate school taxes are less than the taxes which would have been
        payable for school taxes had such election not been made, then and in
        that event, the Tenant shall be entitled to deduct from the rent for the
        first month of the year following which such taxes were payable, the
        amount by which the separate school taxes were less than the amount
        which would have been payable for school taxes in the year prior to such
        month.

                                   Page 100
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4.06    TAX APPEAL

        Any expense incurred by the Landlord in obtaining or attempting to
        obtain a reduction in the amount of the Tax or the assessment upon which
        the Tax may be based, shall be added to and included in the amount of
        the Tax and if the Tenant shall have paid its Proportionate Share of the
        Tax and the Landlord shall thereafter receive a refund of any portion of
        the Tax, the Landlord shall make an appropriate refund to the Tenant.

4.07    CAPITAL TAX

        "Capital Tax" means the tax or excise imposed or capable of being
        imposed upon the Landlord by any government authority having
        jurisdiction which is measured or based in whole or in part upon the
        taxable capital employed by the Landlord, which said taxable capital
        shall be deemed to be the cost to the Landlord of said Building and
        Lands computed as if the amount of such tax were that amount due if the
        Building and the Lands were the only property of the Landlord, the
        Landlord was entitled to no capital deduction, investment allowance or
        any other deduction whatsoever. For the purpose of this paragraph the
        Term "investment allowance" and "capital deduction" shall be defined by
        reference to the applicable taxing statute.

5.00    OPERATING COSTS

        "Operating Costs" in this Lease means the total charges, expenses,
        costs, fees, rentals, disbursements or outlays incurred, accrued, paid,
        payable or attributable whether by the Landlord or others on behalf of
        the Landlord for complete repair, maintenance, operation, cleaning and
        management of the Building, Lands and all the improvements thereon and
        the components of each of them (herein collectively called the
        "Property") such as are in keeping with maintaining the standard of a
        first class commercial Property so as to give it high character and
        distinction; and including, without limiting the generality of the
        foregoing, the cost of all repairs and replacements required for such
        operation and maintenance, the cost of maintaining and repairing the
        heating, air-conditioning, ventilating and mechanical systems and
        equipment in the Building, the cost of operating and maintaining any
        elevators, (including the cost of service contracts); the costs of
        providing hot and cold water; the costs of providing electricity not
        otherwise chargeable to tenants; the costs of all fuel, gas and steam
        used in heating, ventilating and air-conditioning; the cost of energy
        conservation devices or equipment; the cost of snow removal; landscape
        maintenance including the cost of replacing any landscaping on the
        Lands; the cost of window cleaning; the cost of insurance premiums for
        fire, casualty, liability, rental and any other insurance coverage
        maintained by the Landlord in connection with the Property; telephone
        and other utility costs; the amount paid or payable for all salaries,
        wages and benefits and other payments paid to or on behalf of persons
        engaged in the cleaning, supervision, maintenance and repair of the
        Property (including wages of the on site Property Manager); the cost of
        accounting services necessary to prepare the statements and opinions for
        the tenants and to compute the rents and other charges payable by the
        tenants of the Building and the reasonable cost of collecting and
        enforcing payment of all amounts payable by the tenants; the cost of
        porters, guards and other protection services; the cost of providing
        security services; the cost of garbage or refuse removal from the
        Building not otherwise chargeable to tenants; the cost of repair and
        maintenance of the roadways, curbs, paving, walkways, pools,
        landscaping, lighting and other common facilities and outside areas;
        cost of services provided for the common use of the tenants; building
        management (not exceeding the going rate charged by trust companies for
        building management in the Regional Municipality of Ottawa-Carleton for
        similar buildings); the cost of service contracts with independent

                                   Page 101
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        contractors and all other expenses, paid or payable by the Landlord in
        connection with the operation of the Property together with an
        administration fee equal to fifteen percent of Operating Costs, but such
        Operating Costs shall not include any interest on any debt or capital;
        retirement of any debt; any amounts directly chargeable by the Landlord
        to any tenant or tenants of the Building and the cost of any repairs
        paid for by insurance proceeds or for which the Landlord was reimbursed
        by insurance proceeds.

5.01    ALLOCATION OF OPERATING COSTS

        In determining the Operating Costs attributable to the Building, the
        Landlord shall have the right from time to time to reasonably allocate
        and re-allocate such Operating Costs which represent operating costs
        incurred for facilities or services shared by the Building and such
        other buildings as are owned or operated by the Landlord and which are
        not charged or allocated separately against the Building and any such
        other building or buildings. Any such determination made by the Landlord
        shall be binding upon the Tenant unless shown to be unreasonable or
        erroneous in some substantive respect. The Tenant shall have the right
        to reasonable access to the books and records of the Landlord to conduct
        an examination and to ascertain whether allocations of Operating Costs
        made by the Landlord have been made reasonably.

5.02    FULL OCCUPANCY

        If in any year the Building has not been fully occupied for the whole
        year, the amount of the Operating Costs for such year may be adjusted by
        the Landlord, acting reasonably, to an amount which reflects what the
        amount of the Operating Costs would be if the Building had been fully
        occupied for the whole year.

5.03    USE OF ELECTRICITY

        The Tenant shall not, without the Landlord's prior written consent in
        each instance, connect any additional fixtures, appliances or equipment
        to the Building's electric distribution system or make any alteration or
        addition to the electrical system of the Leased Premises existing at the
        commencement of the Term. If the Landlord grants such consent, the cost
        of all additional risers and other equipment required therefor shall be
        paid as Additional Rent by the Tenant to the Landlord upon demand. As a
        condition to granting such consent, the Landlord may require the Tenant
        to agree to pay an increase in the Additional Rent for Operating Costs
        by an amount which will reasonably reflect the increased cost of the
        Landlord of the additional electrical services to be furnished to the
        Leased Premises by the Landlord.

5.04    METERS

        The Tenant covenants to pay for the cost of any additional metering
        which may be required by the Landlord to be installed in the Building
        for the purpose of determining the amount of electricity consumed by the
        Tenant in the Leased Premises.

6.00    ASSIGNING OR SUBLETTING

        The Tenant covenants that it will not assign or sublet the Leased
        Premises or any part thereof without the prior written consent of the
        Landlord, which consent shall not be unreasonably withheld save and
        except in the event of any of the following, in which case the Landlord
        may arbitrarily withhold its consent:

                                   Page 102
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        (a)    an assignment or sublet of the whole of the Leased Premises, the
               terms of which have a net present value that are less or more
               than the net present value of the terms of the Lease (not
               including the value of initial leasehold improvements, leasing
               commissions or inducements of any kind under the Lease) and in
               the latter event if the Landlord consents to such assigned or
               sublet the Tenant shall pay the increased value to the Landlord
               as Additional Rent.;

        (b)    a sublet of a part of the Leased Premises;

        (c)    where the assignee or subtenant is then a tenant of the Landlord
               at the Building and the Landlord has or will have during the next
               following six (6) months, vacant space for rent in the Building.

6.01    REQUEST TO ASSIGN OR SUBLET

        If the Tenant requests the Landlord's consent to an assignment of this
        Lease or to a subletting of the whole or any part of the Leased
        Premises, the Tenant shall submit to the Landlord the name and address
        of the proposed assignee or subtenant together with a copy of an offer
        or agreement to assign or sublet or the sublease or assignment and such
        additional information as to the nature of its business and its
        financial responsibility and standing (including financial statements)
        as the Landlord may reasonably require ("required information").

6.02    ASSIGNMENT

        The Landlord's consent to any assignment may be conditional upon the
        assignee entering into an assignment in form and content satisfactory to
        the Landlord, to perform, observe and keep each and every covenant,
        condition and agreement in this Lease on the part of the Tenant to be
        performed, observed and kept including the payment of rent and all other
        sums and payments agreed to be paid or payable under this Lease on the
        days and times and in the manner specified.

6.03    CONSENT NOT TO RELEASE TENANT

        In no event shall any assignment or subletting to which the Landlord may
        have consented release or relieve the Tenant from his obligations fully
        to perform all the terms, covenants and conditions of this Lease to be
        performed.

6.04    NOTICE OF CHANGE OF CONTROL

        Where there is a change in corporate control of the Tenant, the Tenant
        shall forthwith so advise the Landlord in writing.

6.05    COST OF CONSENT

        The Tenant further agrees that prior to any consent for assignment,
        subletting or change in control being effective and binding upon the
        Landlord, the Tenant shall pay on demand the Landlord's reasonable costs
        (including the Landlord's own administrative costs) incurred in
        connection with the Tenant's request for such consent.

7.00    TENANT'S COVENANTS

        The Tenant further covenants with the Landlord as follows:

                                   Page 103
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7.01    TENANT REPAIRS

        To repair, maintain and keep the Leased Premises and all trade fixtures
        and improvements therein in good and substantial repair subject only to
        defects in construction of the structural members of the Building,
        reasonable wear and tear and damage by fire, lightning and tempest or
        other casualty against which the Landlord is insured (herein
        collectively referred to as "Tenant Repair Exceptions"); and that the
        Landlord may enter and view state of repair and that the Tenant will
        repair according to notice in writing, except for Tenant Repair
        Exceptions and that the Tenant will leave the Leased Premises in good
        repair, except for Tenant Repair Exceptions. Notwithstanding anything
        hereinbefore contained, the Landlord may in any event make repairs to
        the Leased Premises without notice if such repairs are, in the
        Landlord's opinion, necessary for the protection of the Building and the
        Tenant covenants and agrees with the Landlord that if the Landlord
        exercises any such option to repair, the Tenant will pay to the Landlord
        together with the next instalment of Monthly Rent which shall become due
        after the exercise of such option all sums which the Landlord shall have
        expended in making such repairs and that such sums, if not so paid
        within such time, shall be recoverable from the Tenant as rent in
        arrears. Provided further that in the event that the Landlord from time
        to time makes any repairs as hereinbefore provided, the Tenant shall not
        be deemed to have been relieved from the obligation to repair and leave
        the Leased Premises in a good state of repair.

7.02    RULES AND REGULATIONS

        That the Tenant and his employees and all persons visiting or doing
        business with him on the Leased Premises shall be bound by and shall
        observe rules and regulations annexed hereto or as may hereafter be
        reasonably set by the Landlord of which notice in writing shall be given
        to the Tenant and upon such notice being delivered all such rules and
        regulations shall be deemed to be incorporated into and form part of
        this Lease. Such rules and regulations shall not be inconsistent with
        nor derogate from the terms of this Lease and in any event shall apply
        equally to all tenants of the Building and be non-discriminatory in
        their application.

7.03    USE OF PREMISES

        The Leased Premises shall be used only for office and hi-technology
        manufacturing purposes.

7.04    INCREASE IN INSURANCE PREMIUMS

        That it will not keep, use, sell or offer for sale in or upon the Leased
        Premises any article which may be prohibited by any insurance policy in
        force from time to time covering the Building including any regulations
        made by any fire insurance underwriters applicable to such policies. In
        the event the Tenant's occupancy or conduct or business in, or on the
        Leased Premises, whether or not the Landlord has consented to the same,
        results in any increase in premiums for the insurance carried from time
        to time by the Landlord with respect to the Building, the Tenant shall
        pay any such increase in premiums as Additional Rent within ten (10)
        days after bills for such additional premiums shall be rendered by the
        Landlord. In determining whether increased premiums are a result of the
        Tenant's use or occupancy of the Leased Premises, a schedule issued by
        the organization computing the insurance rate on the Building showing
        the various components of such rate, shall be conclusive evidence of the
        several items and charges which make up such rate. The Tenant shall
        promptly 

                                   Page 104
<PAGE>
 
        comply with all reasonable requirements of the insurance
        authority or of any insurer now or hereafter in effect relating to the
        Leased Premises.

7.05    CANCELLATION OF INSURANCE

        If any policy of insurance upon the Building or any part thereof or upon
        the Lands or any part thereof shall be cancelled or rendered voidable by
        the insurer by reason of any act, omission or occupation of the Leased
        Premises or any part thereof by the Tenant, any assignee or subtenant of
        the Tenant or by anyone permitted by the Tenant to be upon the Leased
        Premises, and the Tenant, after receipt of notice from the Landlord,
        shall have failed to immediately reinstate such insurance policies or
        avoid cancellation of such insurance policies, the Landlord may at its
        option determine this Lease forthwith by leaving upon the Leased
        Premises notice in writing of its intention so to do and thereupon rent
        and any other payments for which the Tenant is liable under this Lease
        shall be apportioned and paid in full to the date of such determination
        and the Tenant shall immediately deliver up possession of the Leased
        Premises to the Landlord and the Landlord may re-enter and take
        possession of the same or the Landlord shall pay any increased cost of
        such insurance and the Tenant shall pay as Additional Rent, on demand,
        the amount by which the premiums for such insurance are so increased.

7.06    OBSERVANCE OF LAW

        To comply promptly at its own expense with all provisions of law
        including without limitation, federal and provincial legislative
        enactments, building by-laws, and any other governmental or municipal
        regulations which relate to the partitioning, equipment, operation and
        use of the Leased Premises, and to the making of any repairs,
        replacements, alterations, additions, changes, substitutions or
        improvements of or to the Leased Premises. And to comply with all
        police, fire and sanitary regulations imposed by any federal, provincial
        or municipal authorities or made by fire insurance underwriters, and to
        observe and obey all governmental and municipal regulations and other
        requirements governing the conduct of any business conducted in the
        Leased Premises. Provided that in default of the Tenant so complying the
        Landlord may at its option where possible comply with any such
        requirement and the cost of such compliance shall be payable on demand
        by the Tenant to the Landlord as Additional Rent.

7.07    WASTE AND OVERLOADING OF FLOORS

        Not to do or suffer any waste or damage, disfiguration or injury to the
        Leased Premises or the fixtures and equipment thereof or permit or
        suffer any overloading of the floors thereof; and not to place therein
        any safe, heavy business machine or other heavy thing without first
        obtaining the consent in writing of the Landlord; and not to use or
        permit to be used any part of the Leased Premises for any dangerous,
        noxious or offensive trade or business and not to cause or permit any
        nuisance in, at or on the Leased Premises; and without the prior consent
        in writing of the Landlord, the Tenant will not bring onto or use in the
        Leased Premises or permit any person subject to the Tenant to bring onto
        or use on the Leased Premises any fuel or combustible material for
        heating, lighting or cooking nor will it allow onto the Leased Premises
        any stove, burner, kettle, apparatus or appliance for utilizing the same
        and the Tenant will not purchase, acquire or use electrical current or
        gas for consumption on the Leased Premises except from such supplier
        thereof as shall have been approved in writing by the Landlord.

                                   Page 105
<PAGE>
 
7.08    INSPECTION

        To permit the Landlord, its servants or agents to enter upon the Leased
        Premises at any time and from time to time for the purpose of inspection
        and of making repairs, alterations or improvements to the Leased
        Premises or to the Building and the Tenant shall not be entitled to
        compensation for any inconvenience, nuisance or discomfort occasioned
        thereby. The Landlord, its servants or agents may at any time and from
        time to time enter upon the Leased Premises to remove any article or
        remedy any condition which, in the opinion of the Landlord, reasonably
        arrived at, would be likely to lead to cancellation of any policy of
        insurance and such entry by the Landlord shall not be deemed to be a re-
        entry. The Tenant shall, upon written request of the Landlord, produce
        audited Financial Statements of the Tenant, which statements shall
        include a Balance Sheet, Income Statement, Statement of Retained
        Earnings, Statement of Source and Application of Funds.

7.09    INDEMNITY TO LANDLORD

        To promptly indemnify and save harmless the Landlord for any and all
        liabilities, damages, costs, claims, suits or actions of any nature or
        kind including the full cost to the Landlord in resisting or defending
        the same to which the Landlord shall or may become liable or suffer
        arising out of or by reason of:

        (a)    any breach, violation or non-performance by the Tenant of any of
               its covenants and obligations under this Lease;

        (b)    any damage to property while said property shall be in or about
               the Leased Premises including the systems, furnishings and
               amenities thereof, as a result of the negligence, misuse or
               wilful act of the Tenant, its express or implied invitees,
               licensees, agents, servants or employees; and

        (c)    any injury to any invitee, licensee, agent, servant or employee
               of the Tenant, including death resulting at any time therefrom,
               occurring on or about the Leased Premises, the Property or the
               Lands;

        and this indemnity shall survive the expiry or sooner determination of
        this Lease.

7.10    DAMAGE BY TENANT

        That if the Building including the Leased Premises, the elevators,
        boilers, engines, pipes and other apparatus (or any of them) used for
        the purpose of heating, ventilating or air-conditioning the Building or
        operating the elevators, or if the water pipes, drainage pipes, electric
        lighting or other equipment of the Building or the roof or outside walls
        or other parts of the Building will not function properly or become
        damaged or destroyed through the negligence, carelessness or misuse of
        the Tenant, or of any of its invitees, licensees, agents, servants,
        employees, clients, customers or contractors, or through it or them in
        any way stopping up or injuring any heating, ventilating or air-
        conditioning apparatus, elevators, water pipes, drainage pipes or other
        equipment or parts of the Building, the expense of the necessary
        repairs, replacements or alterations shall be borne by the Tenant and
        paid forthwith on demand to the Landlord as Additional Rent.

                                   Page 106
<PAGE>
 
7.11   TENANT INSURANCE

       (a)   To maintain in force during currency of this Lease at the Tenant's
             expense insurance policies to cover the following:

             (i)     comprehensive general liability insurance with limits of
                     not less than Five Million Dollars ($5,000,000.00)
                     (including bodily injury and property damage, tenant's
                     legal liability, cross liability and contractual liability)
                     to cover all responsibilities assumed by the Tenant with
                     respect to the use or occupancy of and the business carried
                     on, in or from the Leased Premises, in amounts acceptable
                     to the Landlord;
                           
             (ii)    all risk insurance covering leasehold improvements made or
                     installed by or on behalf of the Tenant in an amount equal
                     to the full replacement value thereof; and
                           
             (iii)   any other insurance that the Landlord (or the Landlord's
                     mortgagee, if any) may reasonably require from time to time
                     in form and amounts and for insurance risks against which a
                     prudent Tenant would protect itself;
                          
       (b)   That all Tenant's insurance required hereunder shall be with
             insurers and upon terms and conditions to which the Landlord has no
             reasonable objection. Copies of all policies, or certificates
             evidencing the insurance or its renewal shall be delivered to the
             Landlord at the Landlord's request;

       (c)   That all policies of insurance to be maintained by the Tenant
             shall, in the case of general liability insurance, include the
             Landlord (and, where applicable, the Landlord's mortgagee) as
             additional insured and, in the case of all other insurance
             coverage, contain a waiver by the insurer and Tenant of any rights
             of subrogation or indemnity or any other claim to which the insurer
             might otherwise be entitled against the Landlord (and mortgagee) or
             the agents or employees of the Landlord. All such insurance
             policies shall also contain a provision prohibiting the insurer
             from cancelling or altering the insurance coverage without first
             giving the Landlord thirty (30) days prior written notice thereof;

       (d)   That if the Tenant fails to take out or maintain in force such
             insurance, the Landlord may take out the necessary insurance and
             pay the premium therefor and the Tenant shall pay to the Landlord
             the amount of such premium immediately on demand as Additional
             Rent; and

       (e)   That if both the Landlord and the Tenant have claims to be
             indemnified under any such insurance, the indemnity shall be
             applied first to the settlement of the claim of the Landlord and
             the balance, if any, to the settlement of the claim of the Tenant.

7.12   NO ABATEMENT OF RENT

       That there shall be no abatement or reduction of rent and that the
       Landlord shall not be liable for any damage howsoever caused to property
       of the Tenant or of any person subject to the Tenant which is in or upon
       or being brought to or from the Leased Premises or the Building or for
       personal injury (including death) sustained in any 

                                   Page 107
<PAGE>
 
       manner by the Tenant or any person subject to the Tenant while the Tenant
       or any such person is on or upon entering or leaving the Leased Premises
       or Building unless such property damage or personal injury may have been
       attributable to fault or neglect on the part of the Landlord or of any
       person for whom the Landlord is at law responsible, and that the Tenant
       will indemnify and save harmless the Landlord from and against all claims
       and demands made against the Landlord by any person for or arising out of
       any such property damage or personal injury.

7.13   EXHIBITING PREMISES

       To permit the Landlord or its agents or servants to enter and show the
       Leased Premises, during normal business hours, to prospective purchasers
       of the Building and may after notice of termination of this Lease has
       been given or within the last six (6) months of the Term, enter and show
       the Leased Premises to prospective tenants and erect signs stating that
       the premises are "To Let".

7.14   TENANT MAINTENANCE

       That the Tenant will maintain in good repair all plate and window glass,
       all electrical fixtures, outlets and wiring, all plumbing and plumbing
       fixtures, all heating equipment and all water and gas piping and outlets
       within the Leased Premises and that he will make good any damage caused
       by or resulting from breakage of glass, interference with the electrical,
       plumbing, heating, water or gas systems of the Building or misuse of any
       of the equipment, outlets, piping or wiring of any such system by the
       Tenant or any person subject to the Tenant and the Tenant agrees that he
       shall prior to taking possession of the Leased Premises inspect the
       entire Leased Premises and shall be satisfied they are clean and in good
       order and in a good state of repair, and that all plate and window glass
       is whole and that the sanitary arrangements in the Building are in
       satisfactory condition.

7.15   SIGNS

       The Tenant shall not paint, display, inscribe or place any sign, symbol,
       notice or lettering of any kind anywhere outside the Leased Premises
       within the Leased Premises so as to be visible from the outside of the
       Building with the exception only of an identification sign (which sign
       shall be subject to the Landlord's written approval as to size, design
       and location).

7.16   NAME OF BUILDING

       Not to refer to the Building by any name other than that designated from
       time to time by the Landlord and the Tenant shall use the name of the
       Building for the business address of the Tenant but for no other purpose.

7.17   KEEP TIDY

       The Tenant shall provide its own cleaning and janitorial services. At the
       end of each business day, the Tenant shall leave the Leased Premises in a
       tidy condition.

7.18   DELIVERIES

       The Tenant shall receive, ship, take delivery of and allow and require
       suppliers or others to deliver or take delivery of merchandise, supplies,
       fixtures, equipment,

                                   Page 108
<PAGE>
 
       furnishings, wares or merchandise only through the loading entrance and
       other facilities provided for that purpose and at the times set by the
       Landlord.

7.19   NOTICE OF DAMAGE

       To notify the Landlord promptly of any damage to or defect in the Leased
       Premises or the Building or any part thereof including any electrical,
       plumbing, heating, ventilating, air-conditioning, water, sprinkler or gas
       systems or equipment, or the water pipes, gas pipes, telephone lines or
       electrical apparatus within or leading to the Leased Premises, and in
       case of fire to give immediate notice thereof to the Fire Department.

7.20   ALTERATIONS, ETC

       The Tenant will not make or erect in or to the Leased Premises any
       installations, alterations, additions or partitions or remove or change
       the location or style of any installations, alterations, equipment,
       outlets, piping or wiring relating to the electrical, plumbing, water,
       gas, air-conditioning, heating or ventilating systems without submitting
       drawings and specifications to the Landlord and obtaining the Landlord's
       prior written consent in each instance. The Tenant must further obtain
       the Landlord's prior written consent to any change or changes in such
       drawings and specifications submitted as aforesaid. The Tenant's request
       for such consent shall be in writing and accompanied by an adequate
       description of contemplated work and with appropriate working drawings
       and specifications thereof. The Landlord's cost of having its architects
       or engineers examine such drawings and specifications shall be payable by
       the Tenant. The Landlord may require that any and all work be performed
       by the Landlord's contractors or workmen or by contractors or workmen
       engaged by the Tenant but in each case only under written contract
       approved in writing by the Landlord and subject to all reasonable
       conditions which the Landlord may impose and subject to inspection by and
       reasonable supervision of the Landlord. The Landlord may at its option
       require that only the Landlord's contractors be engaged for any
       mechanical, electrical, plumbing, structural or sprinkler work to be done
       in the Leased Premises. Any work performed by or for the Tenant shall be
       performed by competent workmen whose labour union affiliations are not
       incompatible with those of any workmen who may be employed in the
       Building by the Landlord, its contractors or subcontractors. The cost of
       all such work and of all materials, labour and services involved therein
       and of all services, necessitated thereby shall be at the sole cost and
       expense of the Tenant and shall be completed in a good and workmanlike
       manner and with reasonable diligence in accordance with the description
       of the work approved by the Landlord. Any such alterations, additions,
       and fixtures shall, when made or installed, be and become the property of
       the Landlord without payment being made therefor; provided that upon the
       determination of this Lease the Landlord may at its option require the
       Tenant, or itself at the Tenant's expense, to remove the same and to
       restore the Leased Premises to the condition in which they were at the
       commencement of this Lease.

7.21   CONSTRUCTION LIENS

       The Tenant covenants that he will not suffer or permit during the Term
       hereof any construction or other liens for work, labour, services or
       material ordered by him or for the cost of which he may be in any way
       obligated to attach to the Leased Premises or the Building or the Land
       and that whenever and so often as any such liens shall attach or claims
       therefor shall be filed, the Tenant shall within twenty (20) days after
       the

                                   Page 109
<PAGE>
 
       Tenant has notice of the claim for lien, procure the discharge thereof by
       payment or by giving security or in such manner as is or may be required
       or permitted by law.

7.22   SECURITY

       The Tenant will maintain on the Leased Premises sufficient moveable
       property to guarantee the payment of one (1) year's Annual Rent and
       Additional Rent.

7.23   HAZARDOUS SUBSTANCES

       (a)   The Tenant shall not cause or permit any Hazardous Substances to be
             brought onto, created in, released or discharged from, placed or
             disposed of, at or near the Building or Lands;

       (b)   The Tenant shall not cause or permit to occur any violation of any
             federal, provincial, municipal or local law, ordinance, or
             regulation, now or hereinafter enacted (the "Laws"), relating to
             environmental conditions on, under, at, near or about the Building
             or Lands, or relating to the Landlord, the Tenant or the Building,
             air, soil or ground water condition, including without limitation,
             the generation, storage or disposal of Hazardous Substances;

       (c)   For the purposes of this section, "Hazardous Substances" means any
             substance, or class of substance or mixture of substances which may
             be detrimental to the environment, plant or animal life, or human
             health and includes, without limitation, flammable, explosives, or
             radioactive materials, asbestos, polychlorinated biphenyls (PCBs),
             chemicals believed to cause cancer or reproductive toxicity,
             pollutants, contaminants, hazardous wastes, toxic substances and
             related materials, petroleum and petroleum products, any substance
             that, if added to water, may degrade or alter or form part of a
             process of degradation or alteration of the quality or temperature
             of that water to the extent that it is detrimental to its use by
             man or by any animal, fish or plant, and substances declared to be
             hazardous or toxic under any law or regulation now or hereafter
             enacted or promulgated by any governmental authority having
             jurisdiction over the Landlord, the Tenant, the Leased Premises or
             the Building (the "Authorities");

       (d)   The Tenant shall, at its own expense, comply with the Laws;

       (e)   The Tenant shall, at its own expense, make all submissions to,
             provide all information required by, and comply with all
             requirements of the Authorities under the Laws;

       (f)   The Tenant shall indemnify, defend and hold harmless the Landlord,
             the Landlord's mortgagees, any manager of the building, and their
             respective officers, directors, beneficiaries, shareholders,
             partners, agents and employees, from all fines, suits, procedures,
             claims and actions of every kind, and all costs associated
             therewith (including legal fees on a solicitor and his own client
             basis and consultants' fees) arising out of or in any way connected
             with any deposit, spill, discharge, or other release of Hazardous
             Substances that occurs during the Term or any renewal or extension
             period, at or from the Premises, or which arises at any time from
             the Tenant's use or occupancy of the Premises, or from the Tenant's
             failure to 

                                   Page 110
<PAGE>
 
             provide all information, make all submissions, and take all steps
             required by this Section or by the Authorities;

       (g)   Notwithstanding any other provision of this Lease, if the Tenant
             creates or brings to the Leased Premises any Hazardous Substances
             or if the conduct of the Tenant's business shall cause there to be
             any Hazardous Substances at or near the Leased Premises, or
             discharged or released on, under or about the Premises, the
             building or the lands upon which the building is constructed, the
             air, soil or ground water, then, notwithstanding any rule of law to
             the contrary, such Hazardous Substances shall be and remain the
             sole and exclusive property of the Tenant and shall not become the
             property of the Landlord, notwithstanding the degree of affixation
             to the Premises of the Hazardous Substances or the goods containing
             the Hazardous Substances. This affirmation of the Tenant's interest
             in the Hazardous Substances or the goods containing the Hazardous
             Substances shall not however prohibit the Landlord from dealing
             with such material as otherwise provided for in this Lease.

7.24   NUISANCE

       The Tenant shall not cause or maintain any nuisance in or about the
       Leased Premises, and shall keep the Leased Premises free of debris,
       rodents, vermin and anything of a dangerous noxious or offensive nature
       or which could create a fire hazard (through undue load on electrical
       circuits or otherwise) or undue vibration, heat or noise.

8.00   LANDLORD'S COVENANTS

       The Landlord further covenants with the Tenant:

8.01   QUIET ENJOYMENT

       The Landlord covenants with the Tenant that if the Tenant pays the Annual
       Rent, Additional Rent and all other sums reserved herein and observes and
       performs the covenants, conditions and agreements set out in this Lease,
       the Tenant shall and may peaceably possess and enjoy the Leased Premises
       during the Term without interruption or disturbance from the Landlord.

8.02   TAXES, ETC

       To pay or cause to be paid all taxes and rates, municipal, parliamentary
       or otherwise, including, without limiting the generality of the
       foregoing, water rates with respect to the Lands, the Building or
       assessed against the Landlord in respect thereof, except those directly
       assessed or charged to or payable by the Tenant or assessed or charged
       with reference to the use or occupation of the Leased Premises and except
       as otherwise provided in this Lease.

8.03   HEATING AND AIR-CONDITIONING

       To provide for heating and air-conditioning 24 hours per day and seven
       (7) days a week so that when heat is reasonably required for the
       reasonable use of the Leased Premises the Landlord will furnish heat
       therefor up to a reasonable temperature and when the heating system is
       not in use and the Landlord considers that air-conditioning is reasonably
       required it will operate the air-conditioning systems in the Building.
       The said heating and air-conditioning systems will be maintained by the
       Landlord during

                                   Page 111
<PAGE>
 
       normal business hours except during the making of repairs and should the
       Landlord make default in so doing, it shall not be liable for any
       indirect or consequential damages for personal discomfort or illness due
       to such default. The Landlord reserves the right to stop the services of
       the heating and/or air-conditioning equipment when necessary by reason of
       any accident or any repairs, alterations or improvements which, in the
       judgment of the Landlord, are desirable or necessary to be made until
       such repairs, alterations or improvements shall have been completed. The
       Landlord shall have no further responsibility or liability for failure to
       supply the said heating and/or air-conditioning service when prevented
       from doing so, by strikes or by any cause beyond the Landlord's
       reasonable control or by orders or regulations by any body or authority
       having jurisdiction or by other reason of any failure of electrical
       current, steam or water or suitable power supply or inability upon the
       exercise of reasonable diligence to obtain such electrical current, steam
       or water for the operation of the heating or air-conditioning equipment.

8.04   REPAIR OF STRUCTURE

       To repair, replace and maintain the structural parts of the Building, and
       to perform such repairs, replacements and maintenance with reasonable
       dispatch, and in a good and workmanlike manner, at any time and from time
       to time, and notwithstanding anything contained herein to the contrary,
       the Tenant shall not be entitled to compensation for any inconvenience,
       nuisance or discomfort occasioned thereby.

8.05   DELAYS IN PROVISION OF SERVICES

       It is understood and agreed that whenever and to the extent that the
       Landlord shall be unable to fulfil, or shall be delayed or restricted in
       the fulfilment of any obligation hereunder in respect of the supply or
       provision of any service or utility or the doing of any work or the
       making of any repairs by reason of being unable to obtain the material,
       goods, equipment, service, utility or labour required to enable it to
       fulfil such obligation or by reason of any statute, law or order-in-
       council or any regulation or order passed or made pursuant thereto or by
       reason of the order or direction of any administrator, controller or
       board, or any governmental department or officer or other authority, or
       by reason of not being able to obtain any permission or authority
       required thereby, or by reason of any other cause beyond its control
       whether of the foregoing character or not, the Landlord shall be entitled
       to extend the time for fulfilment of such obligation by a time equal to
       the duration of such delay or restriction, and the Tenant shall not be
       entitled to compensation for any inconvenience, nuisance, discomfort,
       direct or indirect or consequential damage or damages thereby occasioned.

9.00   TENANT'S FIXTURES

       The Tenant may install its usual trade fixtures in the usual manner,
       provided such installation does not damage the structure of the Leased
       Premises or the Building and provided further that the Tenant shall have
       submitted detailed plans and specifications for such trade fixtures to
       the Landlord and obtained its written consent thereto which consent shall
       not be unreasonably withheld.

9.01   REMOVAL OF TENANT'S FIXTURES

       Provided that the Tenant may remove his trade or tenant's fixtures;
       provided further, however, that all installations, alterations,
       additions, partitions, and fixtures other than trade or tenant's fixtures
       in or upon the Leased Premises, whether placed there by the Tenant or the
       Landlord, shall immediately upon such placement, be the Landlord's

                                   Page 112
<PAGE>
 
        property without compensation therefor to the Tenant and, except as
        hereinafter mentioned in this paragraph shall not be removed from the
        Leased Premises by the Tenant at any time either during or after the
        term. Notwithstanding anything herein contained, the Landlord shall be
        under no obligation to repair or maintain the Tenant's installations,
        alterations, additions, partitions and fixtures or anything in the
        nature of a leasehold improvement made or installed by the Tenant or
        Landlord or third party; and further, notwithstanding anything herein
        contained, the Landlord shall have the right upon termination of this
        Lease by affluxion of time or otherwise or within six (6) months
        thereafter to require the Tenant to remove, or require the Tenant to pay
        to the Landlord the cost to remove, any installations, alterations,
        additions, partitions and fixtures or anything in the nature of a
        leasehold improvement made or installed by the Tenant, the Landlord or a
        third party, whether for the Tenant or a previous occupant, and make
        good any damage caused to the Leased Premises by such installation or
        removal.

10.00   DAMAGE OR DESTRUCTION OF LEASED PREMISES

        Provided that if during the continuation of this Lease, the Building or
        the Leased Premises are destroyed or damaged by any cause whatsoever,
        then the following provisions shall apply:

10.01   PARTIAL DAMAGE

        If damage shall occur to the Building or the Leased Premises so that all
        or part of the Leased Premises are rendered untenantable by damage from
        fire or other casualty which, in the reasonable opinion of the
        Landlord's architect, can be substantially repaired under applicable
        laws and governmental regulations within ninety (90) days from the date
        of such casualty (employing normal construction methods without overtime
        or other premium), the Landlord shall cause such damage to be repaired
        with all reasonable speed.

10.02   TOTAL DAMAGE

        If the Building or the Leased Premises are damaged to such an extent
        that the Leased Premises are rendered untenantable by damage from fire
        or other casualty which, in the reasonable opinion of the Landlord's
        architect, cannot be substantially repaired under applicable laws and
        governmental regulations within ninety (90) days from the date of such
        casualty (employing normal construction methods without overtime or
        other premium), then either the Landlord or Tenant may elect to
        terminate this Lease as of the date of such casualty by written notice
        delivered to the other not more than ten (10) days after receipt of such
        architect's opinion (failing which the Landlord shall cause such damage
        to be repaired at its own expense with all reasonable speed).

10.03   OBLIGATION TO REPAIR

        The Landlord's obligation to repair as set forth in the preceding two
        paragraphs hereof is conditional upon the Landlord receiving adequate
        proceeds from policies of insurance maintained in respect of such
        casualties or, if such proceeds are not made available to the Landlord,
        the Landlord electing to obtain its own financing for such repairs. In
        the event that no such proceeds of insurance are available to the
        Landlord and if the Landlord elects not to obtain its own financing for
        such repairs, then the Landlord shall, by notice in writing to the
        Tenant delivered within ten (10) days after receipt of the opinion of
        the Landlord's architect, notify the Tenant that the Lease is
        terminated, which termination shall be effective as of the date of such
        casualty. In

                                   Page 113
<PAGE>
 
        calculating the amount of insurance proceeds available, the Landlord
        will be deemed to have received the deductible portion of any insurance
        policy.

10.04   ABATEMENT OF RENT

        If the Landlord is required to repair the damage pursuant to the
        provisions hereof and does not elect to terminate the Lease, the Annual
        Rent and Additional Rent payable by the Tenant under this Lease shall be
        proportionately reduced to the extent that the Leased Premises are
        thereby rendered unusable by the Tenant in its business from the date of
        such casualty until completion by the Landlord of the repairs to the
        Leased Premises and the Building so that the Leased Premises are
        thereafter fully usable by the Tenant in its business.

10.05   DAMAGE TO 50% OF BUILDING

        Notwithstanding anything otherwise contained in this Lease, if fifty
        percent (50%) or more of the rentable area of the Building is damaged or
        destroyed and if, in the reasonable opinion of the Landlord's Architect,
        the said rentable area cannot be rebuilt or made fit for the purposes of
        the tenants thereof within ninety (90) days of the date of such
        casualty, the Landlord may, at its option, terminate this Lease by
        giving notice of termination to the Tenant within thirty (30) days of
        the date of such casualty and the Tenant shall, with reasonable dispatch
        and expedition, but in any event within sixty (60) days after delivery
        of the notice of termination, deliver up possession of the Leased
        Premises to the Landlord and the rent and other payments for which the
        Tenant is liable hereunder shall be apportioned and paid to the date
        possession is so delivered up.

10.06   COMPLETION OF REPAIR

        Provided that, if, upon the completion by the Landlord of any repairs
        required as a result of any such destruction or damage, a dispute shall
        arise between the Landlord and the Tenant as to whether or not the
        Leased Premises have been made fit for the purposes of the Tenant under
        this Lease, the Landlord may, at its option, terminate this Lease by
        giving thirty (30) days notice to the Tenant and if such notice shall be
        given this Lease shall, at the expiration of such period, be at an end
        and the Tenant shall deliver up the Leased Premises to the Landlord or
        whom it may appoint and the Landlord may, on demand, recover the full
        rental hereby reserved computed from the date on which such repairs were
        completed up to the date on which the Tenant is required to vacate.

11.00   LIABILITY FOR DAMAGE TO PROPERTY

        In the absence of negligence or wilful act or default on the part of the
        Landlord, its servants, agents or workmen, the Landlord shall not be
        liable or responsible in any way for any loss, damage or injury to any
        person or for any loss of or damage to any property belonging to the
        Tenant, to employees of the Tenant or to any other person while such
        property is in the Leased Premises or in the Building or in or on the
        surrounding, Lands and buildings owned by the Landlord, the areaways,
        the parking garages, the parking areas, lawns, sidewalks, reflective
        pools, steps, platforms, corridors, stairways or elevators whether or
        not any such property has been entrusted to employees of the Landlord
        and without limiting the generality of the foregoing, the Landlord shall
        not be liable for any damage to any such property caused by theft or
        breakage or by steam, water, rain or snow which may leak into, issue or
        flow from any part of the Building or from the water, steam or drainage
        pipes or plumbing works of

                                   Page 114
<PAGE>
 
        the Building or from any other place or quarter or for any damage caused
        by or attributable to the condition or arrangement of any electric or
        other wiring or for any damage caused by smoke or anything done or
        omitted by any other tenant in the Building or for any other loss
        whatsoever with respect to the Leased Premises, goods placed therein or
        any business carried on therein.

12.00   DEFAULT OF TENANT

        Provided and it is hereby expressly agreed that if and whenever the
        Annual Rent or Additional Rent hereby reserved or any part thereof shall
        not be paid on the day appointed for payment thereof, whether lawfully
        demanded or not, or in case of breach or non-observance or non-
        performance of any of the covenants, agreements, provisos, conditions or
        Rules and Regulations on the part of the Tenant to be kept, observed or
        performed, or in case the Leased Premises shall be vacated or remain
        unoccupied for fifteen (15) days or in case the Term shall be taken in
        execution or attachment for any cause whatever, then and in every such
        case, it shall be lawful for the Landlord thereafter to enter into and
        upon the Leased Premises or any part thereof in the name of the whole
        and the same to have again, repossess and enjoy as of its former estate,
        anything in this Lease contained to the contrary notwithstanding other
        than the proviso to this paragraph; PROVIDED that the Landlord shall not
        at any time have the right to re-enter and forfeit this Lease by reason
        of the Tenant's default in the payment of the rent reserved by this
        Lease, unless and until the Landlord shall have given to the Tenant
        written notice setting forth the default complained of and the Tenant
        shall have the right during five (5) business days next following the
        date on such notice to cure any such default in payment of rent. In case
        without the written consent of the Landlord, the Leased Premises shall
        be used by any other person than the Tenant or for any other purpose
        than that for which the same were let or in case the Term or any of the
        goods and chattels of the Tenant shall be at any time seized in
        execution or attachment by any creditor of the Tenant or if the Tenant
        makes any bulk sale, then in any such case this lease shall, at the
        option of the Landlord, cease and determine and the Term shall
        immediately become forfeited and void in accordance with the provisions
        of Section 15, RIGHT OF TERMINATION, herein.

13.00   BANKRUPTCY

        Provided further that, in case without the written consent of the
        Landlord, the Leased Premises shall be used by any other person than the
        Tenant or for any other purposes than that for which the same were let
        or in case the Term or any of the goods and chattels of the Tenant shall
        be at any time seized in execution or attachment by any creditor of the
        Tenant or by the Tenant making any assignment for the benefit of
        creditors or any bulk sale or become bankrupt or insolvent or take the
        benefit of any act now or hereafter in force for bankrupt or insolvent
        debtors, or, if the Tenant is a corporation and any order shall be made
        for the winding up of the Tenant, or other termination of the corporate
        existence of the Tenant, then in any such case this Lease shall, at the
        option of the Landlord, cease and determine and the Term shall
        immediately become forfeited and void and the then current month's rent
        and the next ensuing three (3) months rent shall immediately become due
        and be paid and the Landlord may re-enter and take possession of the
        Leased Premises as though the Tenant or other occupant or occupants of
        the Leased Premises was or were holding over after the expiration of the
        Term without any right whatever.

14.00   RE-ENTRY BY LANDLORD

                                   Page 115
<PAGE>
 
        The Tenant further covenants and agrees that on the Landlord's becoming
        entitled to re-enter upon the Leased Premises under any of the
        provisions of this Lease, the Landlord, in addition to all other rights,
        shall have the right to enter the Leased Premises as the agent of the
        Tenant either by force or otherwise, without being liable for any
        prosecution therefor and to relet the Leased Premises as the agent of
        the Tenant, and to receive the rent therefor and as the agent of the
        Tenant, to take possession of any furniture or other property on the
        Leased Premises and to sell the same at public or private sale without
        notice and to apply the proceeds of such sale and any rent derived from
        reletting the Leased Premises upon account of the rent under this Lease,
        and the Tenant shall be liable to the Landlord for the deficiency, if
        any.

15.00   RIGHT OF TERMINATION

        The Tenant further covenants and agrees that on the Landlord becoming
        entitled to re-enter upon the Leased Premises under any of the
        provisions of this Lease, the Landlord, in addition to all other rights,
        shall have the right to determine forthwith this Lease and the Term by
        leaving upon the Leased Premises notice in writing of its intention so
        to do, and thereupon, rent shall be computed, apportioned and paid in
        full to the date of such determination of this Lease and any other
        payments for which the Tenant is liable under this Lease shall be paid
        and the Tenant shall immediately deliver up possession of the Leased
        Premises to the Landlord, and the Landlord may re-enter and take
        possession of the same.

16.00   DISTRESS

        The Tenant waives and renounces the benefit of any present or future
        statute taking away or limiting the Landlord's right of distress, and
        covenants and agrees that notwithstanding any such statute, none of the
        goods and chattels of the Tenant on the Leased Premises at any time
        during the Term shall be exempt from levy by distress for rent in
        arrears. In the event that the Tenant shall remove or permit the removal
        of any of its goods or chattels from the Leased Premises, the Landlord
        may within thirty (30) days thereafter and if the Tenant is in arrears
        of rent, seize such goods and chattels wherever the same may be found
        and may sell or otherwise dispose of the same as if they had actually
        been distrained upon the Leased Premises by the Landlord for arrears of
        rent.

17.00   NON-WAIVER

        No condoning, excusing or overlooking by the Landlord of any default,
        breach or non-observance by the Tenant at any time or times in respect
        of any covenant, proviso or condition herein contained shall operate as
        a waiver of the Landlord's rights hereunder in respect of any continuing
        or subsequent default, breach or non-observance, or so as to defeat or
        affect in any way the rights of the Landlord herein in respect of any
        such continuing or subsequent default or breach, and no waiver shall be
        inferred from or implied by anything done or omitted by the Landlord
        save only express waiver in writing. All rights and remedies of the
        Landlord in this Lease contained shall be cumulative and not
        alternative.

18.00   CHANGES TO BUILDING

        The Landlord hereby reserves the right at any time and from time to time
        to make changes in, additions to, subtractions from or rearrangements of
        the Building including, without limitation, all improvements at any time
        thereon, all entrances and exits thereto, and to grant, modify and
        terminate easements or other agreements

                                   Page 116
<PAGE>
 
        pertaining to the use and maintenance of all or parts of the Building
        and to make changes or additions to the pipes, conduits, utilities and
        other necessary building services in the Leased Premises which serve
        other premises, provided that prior to the commencement of the Term, the
        Landlord may alter or relocate the Leased Premises to the extent found
        necessary by the Landlord to accommodate changes in construction design
        or facilities including major alterations and relocations. The Landlord
        agrees that in performing such alterations, it shall do so in a manner
        so as to minimize any material interference with the Tenant's use and
        enjoyment of the Leased Premises.

19.00   SEVERANCE OF LAND

        The Landlord shall have the right from time to time to sever (for
        purposes of sale, lease, mortgage, charge or otherwise) any part or
        parts of the Land or any buildings or improvements thereon, including
        the creation of rights-of-way, easements and parking arrangements which
        the Landlord deems necessary and the Tenant hereby consents to any such
        severance and agrees to execute, at no cost to the Landlord, any
        documents or consents which the Landlord may request for these purposes.
        If any part or parts of the Land or the buildings or improvements on the
        lands are so severed and are deemed by the Landlord to no longer form
        part of the property, such part or parts shall be excluded from the
        Lands and the property for the purposes of this Lease at the time
        designated by the Landlord and the Tenant shall when requested by the
        Landlord, execute, at no cost to the Landlord, a release of any interest
        in the Lands so excluded.

20.00   COSTS OF COLLECTION

        The Tenant shall pay, as Additional Rent, all costs, expenses and legal
        fees (on a solicitor and his client basis) that may be incurred or paid
        by or on behalf of the Landlord in enforcing the covenants and
        provisions of this Lease.

21.00   PROFITS AND REMEDIES BY LANDLORD

        In addition to all rights and remedies available to the Landlord under
        the provisions of this Lease or by statute or the general law in the
        event of any default by the Tenant of the provisions of this Lease:

21.01   PAYMENTS TO THIRD PARTIES

        The Landlord shall have the right at all times to remedy or attempt to
        remedy any default of the Tenant, and in so doing, may make any payments
        due or alleged to be due by the Tenant to third parties and may enter
        upon the Leased Premises to do any work or other things therein, and in
        any such event, all costs and expenses of the Landlord in remedying or
        attempting to remedy such default shall be payable by the Tenant to the
        Landlord forthwith upon demand as Additional Rent.

21.02   NON-PAYMENT OF ADDITIONAL RENT

        The Landlord shall have the same rights and remedies in the event of any
        non-payment by the Tenant of any amounts payable by the Tenant under any
        provision of this Lease and the parking agreement as in the case of non-
        payment of rent and may be recovered by the Landlord as rent by any and
        all remedies available to the Landlord for the recovery of rent in
        arrears.

                                   Page 117
<PAGE>
 
21.03   INTEREST ON ARREARS

        The Landlord shall, if the Tenant shall fail to pay any Monthly Rent,
        Additional Rent or other amounts from time to time payable by it to the
        Landlord hereunder promptly when due, be entitled to interest on all
        such Annual Rent, Additional Rent and other amounts which are unpaid and
        overdue under this Lease and the parking agreement, such interest to be
        compounded monthly thereon and to be computed at a rate equal to two
        percent (2%) per annum in excess of the minimum lending rate to prime
        commercial borrowers from time to time charged by the Royal Bank of
        Canada or such other chartered bank as the Landlord may designate, from
        the date upon which such Monthly Rent, Additional Rent and other amounts
        was due until actual payment thereof.

22.00   NOTICE

        Any notice required or contemplated by any provisions of this Lease
        shall be given in writing, enclosed in a sealed envelope addressed, in
        the case of notice to the Landlord c/o Kanata Research Park Corporation,
        600 March Road, P.O. Box l3600, Kanata, Ontario, Canada, K2K 2E6 and in
        the case of notice to the Tenant, to it at the Leased Premises in the
        event of a notice of distress and otherwise to it at 600 March Road,
        P.O. Box l3600, Kanata, Ontario, Canada, K2K 2E6 and mailed by
        registered mail, postage prepaid or telefaxed. The time of giving of
        such notice shall be conclusively deemed to be, if mailed the third
        (3rd) business day after the day of such mailing, if telefaxed, the next
        business day following the date sent as evidenced by the sender's
        transmittal record. Such notice shall also be sufficiently given if and
        when the same shall be delivered, in the case of notice to the Landlord,
        to an executive officer of the Landlord, and in the case of notice to
        the Tenant, to him personally or to an executive officer, manager or a
        person who appears to be in charge, of the Tenant if the Tenant is a
        corporation. Such notice, if delivered, shall be conclusively deemed to
        have been given and received at the time of such delivery. If, in this
        Lease, two or more persons are named as Tenant, such notice shall also
        be sufficiently given if and when the same shall be delivered personally
        to any one of such persons. Provided that either party may, by notice to
        the other, from time to time, designate another address in Canada to
        which notices mailed more than ten (10) days thereafter shall be
        addressed. The word "notice" in this paragraph shall include any
        request, demand, direction, or statement in this Lease provided or
        permitted to be given by the Landlord to the Tenant or by the Tenant to
        the Landlord.

23.00   SUBORDINATION, POSTPONEMENT, ATTORNMENT

        The Tenant shall promptly upon the written request of the Landlord,
        enter into an agreement:

        (a)   subordinating the Term and the rights of the Tenant hereunder to
              any mortgage, charge, ground lease, trust deed or debenture
              present or future and all renewals, modifications, replacements or
              extensions thereof, which may affect the Leased Premises, the
              Property, the Lands or the Building;

        (b)   agreeing that the Term hereof shall be subsequent in priority to
              any such mortgage, charge, ground lease, trust deed or debenture;

        provided that the Tenant's obligations under this paragraph shall be
        conditional upon any such mortgagee or secured party entering into a 
        non-disturbance agreement with

                                   Page 118
<PAGE>
 
        the Tenant under which the Tenant's continued possession of the Leased
        Premises is ensured notwithstanding any act taken by the mortgagee or
        secured party.

23.01   TENANT'S RIGHT TO POSSESSION
        
        Notwithstanding any postponement or subordination referred to herein,
        the Tenant acknowledges that its obligations under this Lease shall
        remain in full force and effect notwithstanding any action at any time
        taken by a mortgagee, chargee or ground lessor to enforce the security
        of any mortgage charge, ground lease, trust deed or debenture; provided,
        however, that any postponement or subordination given hereunder shall
        reserve to the Tenant the right to continue in possession of the Leased
        Premises under the terms of this Lease so long as the Tenant shall not
        be in default hereunder.

23.02   ATTORNMENT BY TENANT
        
        The Tenant, whenever requested by any mortgagee (including any trustee
        under a deed of trust and mortgage), chargee or ground lessor, shall
        attorn to such mortgagee, chargee or ground lessor as a tenant upon all
        the terms of this Lease.

24.00   CERTIFICATE
        
        The Tenant agrees that he will at any time and from time to time upon
        not less than five (5) days' prior notice execute and deliver to the
        Landlord or any mortgagee of the Lands (including a deed of trust and
        mortgage) a statement in writing certifying that this Lease is
        unmodified and in full force and effect (or, if modified, stating the
        modifications and that the same is in full force and effect as
        modified), the amount of the Annual Rental then being paid hereunder,
        the dates to which the same, by instalments or otherwise, and other
        charges hereunder have been paid, and whether or not there is any
        existing default on the part of the Landlord of which the Tenant has
        notice.

25.00   REGISTRATION
        
        The Tenant covenants and agrees with the Landlord that the Tenant will
        not register this Lease in this form in any Registry Office or the Land
        Titles Office. If the Tenant desires to make a registration for the
        purposes only of giving notice of this Lease, then the parties hereto
        shall contemporaneously with the execution of this Lease execute a short
        form thereof solely for the purpose of supporting an application for
        registration of notice thereof.
        
26.00   PLANNING ACT
        
        Where applicable, this Lease shall be subject to the condition that it
        is effective only if The Planning Act, 1983, as amended is complied
        with. Pending such compliance the Term and any renewal thereof shall be
        deemed to be for a total period of one (1) year less than the maximum
        lease Term permitted by law without such compliance.
        
27.00   TRANSFER BY LANDLORD
        
        In the event of a sale, transfer or lease by the Landlord of the
        Building, the Lands or a portion thereof containing the Leased Premises
        or the assignment by the Landlord of this Lease or any interest of the
        Landlord hereunder, the Landlord shall, without further written
        agreement, to the extent that such purchaser, transferee or lessee has
        become bound by the covenants and obligations of the Landlord hereunder,
        be freed,

                                   Page 119
<PAGE>
 
        released and relieved of all liability or obligations under this Lease
        incurred or arising after the date of such sale, transfer or lease.

28.00   NO ADVERTISING OF LEASED PREMISES
        
        The Tenant shall not print, publish, post, display or broadcast any
        notice or advertisement to the effect that the whole or any part of the
        Leased Premises are for rent, and it shall not permit any broker or
        other person to do so without the consent in writing of the Landlord.

29.00   TIME OF ESSENCE
        
        Time shall be of the essence of this Lease.
        
30.00   LAWS OF ONTARIO
        
        This Lease shall be deemed to have been made in and shall be construed
        in accordance with the Laws of the Province of Ontario.

31.00   SEVERABILITY OF COVENANTS
        
        The Landlord and the Tenant agree that all of the provisions of this
        Lease are to be construed as covenants and agreements as though the
        words importing such covenants and agreements were used in each separate
        paragraph hereof. Should any provision or provisions of this Lease be
        illegal or not enforceable it or they shall be considered separate and
        severable from the Lease and its remaining provisions shall remain in
        force and be binding upon the parties hereto as though the said
        provision or provisions had never been included.

32.00   HEADINGS
        
        The captions appearing in the margin or the headings contained in this
        Lease have been inserted as a matter of convenience and for reference
        only and in no way define, limit or enlarge the scope or meaning of this
        Lease or of any provision hereof.
        
33.00   SCHEDULES
        
        The following Schedules attached hereto form part of this Lease:
        Schedules: "A", "B", "C", "D", "E" "F"  and "G"
        
34.00   LEASE ENTIRE AGREEMENT
        
        The Tenant acknowledges that there are no covenants, representations,
        warranties, agreements or conditions expressed or implied, collateral or
        otherwise forming part of or in any way affecting or relating to this
        Lease save as expressly set out in this Lease and that this Lease
        constitutes the entire agreement between the Landlord and the Tenant and
        may not be modified except as herein explicitly provided or except by
        subsequent agreement in writing of equal formality hereto executed by
        the Landlord and the Tenant.

                                   Page 120
<PAGE>
 
35.00   INTERPRETATION

        IN THIS INDENTURE:
        
        (a)   "herein", "hereof", "hereby", "hereunder", "hereto", 
              "hereinafter", and similar expressions refer to this indenture and
              not to any particular paragraph, section or other portion thereof,
              unless there is something in the subject matter or context
              inconsistent therewith.
        

        (b)   "business day(s)" means any of the days from Monday to Friday of 
              each week inclusive unless such day is a statutory holiday or 
              public holiday.
        
        (c)   "normal business hours" means the hours from 8:00 a.m. to 
              6:00 p.m. on business days.
        
36.00   SUCCESSORS
        
        This indenture and everything herein contained shall enure to the
        benefit of and be binding upon the respective heirs, executors,
        administrators, permitted successors and assigns, of the Tenant and
        other legal representatives as the case may be, of each and every of the
        parties hereto, and every reference herein to any party hereto shall
        include the heirs, executors, administrators, permitted successors,
        assigns and other legal representatives of such party, and where there
        is more than one tenant or there is a female party or a corporation, the
        provisions hereof shall be read with all grammatical and gender changes
        thereby rendered necessary and all covenants shall be deemed joint and
        several.

                                   Page 121
<PAGE>
 
37.00   JOINT AND SEVERAL COVENANT
        
        If more than one person executes this Lease as Tenant, each such person
        shall be bound jointly and severally with the other(s), waiving the
        benefit of division and discussion, for the fulfilment of all of the
        obligations of Tenant hereunder.


        IN WITNESS WHEREOF the parties hereto have hereunto affixed their 
corporate seals duly attested to by the hands of their proper signing officers 
authorized in that behalf.


SIGNED, SEALED AND DELIVERED   )
in the presence of:            )        KANATA RESEARCH PARK
                               )        CORPORATION
                               )
                               )
                               )                                     c/s
                               ) Per: /s/ Bronwen A. Heins
                               )     ------------------------------------------
                               ) Name:    Bronwen A. Heins
                               ) Title:   Corporate Secretary
                               ) I have the authority to bind the corporation
                               )
                               )        NEWBRIDGE NETWORKS
                               )        CORPORATION
                               )
                               )
                               )                                     c/s
                               ) Per: /s/ Donald Mills
                               )     ------------------------------------------
                               ) Name:    Donald Mills
                               ) Title:   Vice President, Administration
                               )
                               )
                               ) Per: /s/ Peter Nadeau
                               )     ------------------------------------------
                               ) Name:    Peter Nadeau
                               ) Title:   Vice President, Legal Services
                               )
                               )I/We have the authority to bind the corporation.

                                   Page 122
<PAGE>
 
                                 SCHEDULE "A"
                                 ------------
 
                               LEGAL DESCRIPTION
                               -----------------


   Monmouth Building - 359 Terry Fox Drive
   
   FIRSTLY: Parcel 8-4, Section March 4, Part of Lot 8, Concession 4, formerly
   Township of March, now in the City of Kanata, Regional Municipality of Ottawa
   Carleton, designated as Part 1, Plan 4R-12934 (Part of PIN 04517-0468)

   SECONDLY: Parcel 2-1, Section 4M-642, Block 2, Registered Plan 4M-642, City 
   of Kanata designated as Parts 2, 3, 4, 5, 6 & 7 on Plan 4R-12934
   
   Subject to an easement over the said Part 5 on Plan 4R-12934
   
   Subject to an easement over the said Part 3 on Plan 4R-12934
   
   (Part of PIN 04517-0489)

                                   Page 123
<PAGE>
 
                                  SCHEDULE "B"
                                  ------------

                                  FLOOR PLAN
                                  ----------




                                   Page 124
<PAGE>
 
                                 SCHEDULE "C"
                                 ------------

                             RULES AND REGULATIONS
                             ---------------------

The Tenant and its invitees and employees shall observe the following rules and
regulations (as added to, amended or modified from time to time by the
Landlord).

1.   The sidewalks, entrances, elevators, stairways, passageways, shipping areas
     and corridors of the Building shall not be obstructed or used for any other
     purpose by the Tenant than for ingress and egress to and from the Leased
     Premises; the Tenant shall not place or allow to be placed in such areas or
     facilities any waste paper, garbage, refuse or anything that shall tend to
     make them appear unclean or untidy.

2.   The Tenant and its employees shall use washrooms only for the purpose for 
     which they were designed and nothing shall be placed in toilets that might
     cause them to block.

3.   The Tenant shall not make any noise which might disturb other tenants and 
     no animals or bicycles or other vehicles other than appropriate vehicles
     for the Tenant's use shall be brought into the Leased Premises or the
     Building.

4.   The Leased Premises shall not be used as overnight sleeping accommodation, 
     for public sales nor for entertaining purposes.

5.   The Tenant shall make arrangements with the Landlord ahead of time to 
     install any machines or equipment which may substantially increase the load
     on the electrical systems, installations will not be made until the
     Landlord's consent is obtained.

6.   Windows will not be left open so as to admit rain or snow.

7.   The Tenant will not alter any existing locks nor will any additional locks 
     or similar devices be attached to any door or window without the
     Landlord's written consent.

8.   Keys or other devices which are made available to the Tenant for the 
     purpose of providing access to the exterior doors of the Building shall not
     be duplicated and shall be returned to the Landlord immediately upon
     termination of the Lease.

9.   All adjustments to mechanical equipment such as thermostats, radiators, 
     diffusers, etc. shall be made by the Landlord's staff and no one else.

10.  It shall be the responsibility of the Tenant to prevent any person from 
     throwing objects out of windows or into the ducts or stairwells of the
     Building, and the Tenant shall pay for any cost, damage or injury resulting
     from any such acts.

11.  The Tenant shall provide adequate receptacles for garbage, refuse and 
     waste paper and all such garbage, refuse and waste paper shall be placed in
     such containers. The Leased Premises shall be kept in a tidy, healthy and
     clean condition.

12.  The Tenant shall not bring upon the Leased Premises any safes, heavy 
     equipment, motors or any other thing which might overload floors or damage
     the Leased Premises or the Building.

                                   Page 125
<PAGE>
 
13.  The Tenant shall not use or keep inflammable materials in the Leased 
     Premises.

14.  The Landlord shall have the right to establish rules and regulations 
     governing the use of the parking facilities from time to time and the
     Tenant hereby agrees to observe and abide by all such rules and
     regulations.

15.  Smoking is prohibited in all common areas of the Building.


The foregoing rules and regulations, as from time to time amended, are not
necessarily of uniform application, but may be waived in whole or in part in
respect of other tenants without affecting their enforceability with respect to
the Tenant or the Leased Premises. There is no obligation on the Landlord to
enforce the rules and regulations, and the Landlord shall not be liable by
reason of their non-enforcement.

                                   Page 126
<PAGE>
 
                                 SCHEDULE "D"
                                 ------------

                                    PARKING
                                    -------


1.     During the Term the Landlord hereby agrees to allow the Tenant, its
       employees, agents and invitees shall park their vehicles in the parking
       facilities located on the Lands ("parking facilities").

2.     The Landlord shall not be responsible for any theft, loss or damage to
       the Tenant's vehicles whatsoever, or for injury to the Tenant or others
       in the parking facilities.

3.     The Landlord shall have the right to establish rules and regulations
       governing the use of the parking facilities from time to time and the
       Tenant hereby agrees to observe and abide by all such rules and
       regulations.

                                   Page 127
<PAGE>
 
                                 SCHEDULE "E"
                                 ------------

                                OPTION TO RENEW
                                ---------------

1.     Provided the Tenant is in good standing, during the Term has not been in
       substantial default under this Lease and has not assigned this Lease or
       sublet all or a portion of the Leased Premises, the Tenant shall have and
       is hereby granted an option to renew this Lease for a further term of
       five (5) years provided that in order to exercise this option, the Tenant
       shall be required to give to the Landlord notice of the exercise of such
       option in writing not less than six (6) months prior to the date of
       expiry of the initial Term.

2.     Any renewal pursuant to this proviso shall be on the same terms and
       conditions contained in this Lease except:

       (a)  there shall be no additional right of renewal, and no Leasehold
            Improvements;

       (b)  the Annual Rent payable by the Tenant for such renewal period shall
            be in accordance with rates for similar premises in a similar
            location and as agreed upon by the Landlord and Tenant and shall in
            no event be less than the Annual Rent paid during the last year of
            the Term; such agreement to be reached not later than three (3)
            months prior to the expiry of the original Term. Failing such
            agreement, either party shall submit the matter to arbitration in
            accordance with the following terms:

                 The dispute shall be submitted to a single arbitrator to be
                 agreed upon by the parties, provided that if a single
                 arbitrator cannot be agreed upon by the parties hereto within
                 ten (10) days after the appointment of a single arbitrator has
                 been requested by one of the parties in writing, then the
                 dispute shall be referred to a board of three arbitrators, one
                 to be appointed by each of the Landlord and the Tenant and a
                 third arbitrator to be appointed by the first two arbitrators
                 in writing; and if either the Landlord or the Tenant shall
                 refuse or neglect to appoint an arbitrator within ten (10) days
                 after the other party shall have appointed an arbitrator and
                 shall have served a written notice upon the party so refusing
                 or neglecting to appoint an arbitrator requiring such party to
                 make such appointment, then the arbitrator first appointed
                 shall, at the request of the party appointing him, proceed to
                 hear and determine the dispute as if he were a single
                 arbitrator appointed by both the Landlord and the Tenant for
                 that purpose. If two arbitrators are so named within the time
                 prescribed and they do not agree within a period of ten (10)
                 days upon the appointment of the third arbitrator, then upon
                 the application of either the Landlord or the Tenant, the third
                 arbitrator shall be appointed by a Judge of the Ontario Court
                 (General Division). The determination which shall be made by
                 the said arbitrators or a majority of them, or by the single
                 arbitrator, as the case may be, shall be final and binding upon
                 the parties hereto and the costs of the arbitration and
                 remuneration of the third arbitrator, if any, shall be borne
                 equally between the parties hereto, each of the parties bearing
                 the remuneration of the arbitrator appointed by it. The
                 provisions of this paragraph shall be deemed to be submission
                 to arbitration within the provisions of The Arbitration Act of
                                                         ----------------------
                 Ontario and any statutory modification or re-enactment thereof;
                 -------
                 provided that any limitation on the remuneration of arbitrators
                 imposed by such legislation shall not have application to any
                 arbitration proceeding commenced pursuant to this paragraph.

                                   Page 128
<PAGE>
 
                                 SCHEDULE "F"
                                 ------------

                            LEASEHOLD IMPROVEMENTS
                            ----------------------


            The Landlord will, at its cost, design the Tenant's space with the
            Tenant's co-ordination. The Landlord shall, construct on behalf of
            the Tenant and install on a turnkey basis to building standards,
            those leasehold improvements agreed upon by both Landlord and Tenant
            as chosen from the Landlord's samples.

                                   Page 129
<PAGE>
 
                                 SCHEDULE "G"
                                 ------------

                               ADDITIONAL TERMS
                               ----------------

Notwithstanding anything contained in the Offer to the contrary the Tenant will
not be required to pay Annual Rent or Additional Rent on that portion of the
Leased Premises known as the second expansion space of Eighteen Thousand
(18,000) rentable square feet until August 1, 1997 or upon substantial
completion in accordance with the Construction Lien Act of Ontario whichever is
the later.

                                   Page 130
<PAGE>
 
                        DATED the 29th day of May, 1997.



BETWEEN:


                        KANATA RESEARCH PARK CORPORATION


                                                               OF THE FIRST PART

AND:

                         NEWBRIDGE NETWORKS CORPORATION


                                                              OF THE SECOND PART



--------------------------------------------------------------------------------

                                    L E A S E

--------------------------------------------------------------------------------






Prepared by:                 Bronwen A. Heins
Date Edited:
Disk Reference:  Monmouth.lse

                                   Page 131
<PAGE>
 
                       KANATA RESEARCH PARK CORPORATION


                                      AND

                        NEWBRIDGE NETWORKS CORPORATION


1.00 LEASED PREMISES............................................................
1.01 ADDITIONAL DEFINITIONS.....................................................
2.00 TERM.......................................................................
2.01 INABILITY TO GIVE OCCUPANCY................................................
2.02 EARLY OCCUPANCY............................................................
2.03 OVERHOLDING................................................................
3.00 RENT - Basic Rent..........................................................
3.01 MONTHLY RENTAL.............................................................
3.02 ADDITIONAL RENT............................................................
3.03 ESTIMATED ADDITIONAL RENTALS...............................................
3.04 DEFICIENCY OF ADDITIONAL RENT..............................................
3.05 EXCESS OF ADDITIONAL RENTAL INSTALLMENTS...................................
3.06 PRO-RATING OF ADDITIONAL RENT..............................................
3.07 PREPAYMENT OF ADDITIONAL RENT..............................................
3.08 DISPUTE AS TO AMOUNT OF ADDITIONAL RENT....................................
3.09 MANNER AND PLACE OF PAYMENT OF RENT........................................
3.10 DEFAULT....................................................................
3.11 ACCRUAL OF RENT............................................................
3.12 NET LEASE..................................................................
4.00 TENANT'S BUSINESS TAX......................................................
4.01 LANDLORD'S BUSINESS TAX....................................................
4.02 TAX ON TENANT'S LEASEHOLD IMPROVEMENTS.....................................
4.03 PROPERTY TAX...............................................................
4.04 ALLOCATION OF TAX..........................................................
4.05 SEPARATE SCHOOL TAXES......................................................
4.06 TAX APPEAL.................................................................
4.07 CAPITAL TAX................................................................
5.00 OPERATING COSTS............................................................
5.01 ALLOCATION OF OPERATING COSTS..............................................
5.02 FULL OCCUPANCY.............................................................
5.03 USE OF ELECTRICITY.........................................................
5.04 METERS.....................................................................
6.00 ASSIGNING OR SUBLETTING....................................................
6.01 REQUEST TO ASSIGN OR SUBLET................................................
6.02 ASSIGNMENT AGREEMENT.......................................................
6.03 CONSENT NOT TO RELEASE TENANT..............................................
6.04 NOTICE OF CHANGE OF CONTROL................................................
6.05 COST OF CONSENT............................................................
7.00 TENANT'S COVENANTS.........................................................
7.01 TENANT REPAIRS.............................................................
7.02 RULES AND REGULATIONS......................................................
7.03 USE OF PREMISES............................................................
7.04 INCREASE IN INSURANCE PREMIUMS.............................................
7.05 CANCELLATION OF INSURANCE..................................................
7.06 OBSERVANCE OF LAW..........................................................
7.07 WASTE AND OVERLOADING OF FLOORS............................................
7.08 INSPECTION.................................................................
7.09 INDEMNITY TO LANDLORD......................................................

                                   Page 132
<PAGE>
 
7.10 DAMAGE BY TENANT...........................................................
7.11 TENANT INSURANCE...........................................................
7.12 NO ABATEMENT OF RENT.......................................................
7.13 EXHIBITING PREMISES........................................................
7.14 TENANT MAINTENANCE.........................................................
7.15 SIGNS......................................................................
7.16 NAME OF BUILDING...........................................................
7.17 KEEP TIDY..................................................................
7.18 DELIVERIES.................................................................
7.19 NOTICE OF DAMAGE...........................................................
7.20 ALTERATIONS, ETC...........................................................
7.21 CONSTRUCTION LIENS.........................................................
7.22 SECURITY...................................................................
7.23 HAZARDOUS SUBSTANCES.......................................................
7.24 NUISANCE...................................................................
8.00 LANDLORD'S COVENANTS.......................................................
8.01 QUIET ENJOYMENT............................................................
8.02 TAXES, ETC.................................................................
8.03 HEATING AND AIR-CONDITIONING...............................................
8.04 REPAIR OF STRUCTURE........................................................
8.05 DELAYS IN PROVISION OF SERVICES............................................
9.00 TENANT'S FIXTURES..........................................................
9.01 REMOVAL OF TENANT'S FIXTURES...............................................
10.00 DAMAGE OR DESTRUCTION OF LEASED PREMISES..................................
10.01 PARTIAL DAMAGE............................................................
10.02 TOTAL DAMAGE..............................................................
10.03 OBLIGATION TO REPAIR......................................................
10.04 ABATEMENT OF RENT.........................................................
10.06 COMPLETION OF REPAIR......................................................
10.05 DAMAGE TO 50% OF BUILDING.................................................
11.00 LIABILITY FOR DAMAGE TO PROPERTY..........................................
12.00 DEFAULT OF TENANT.........................................................
13.00 BANKRUPTCY................................................................
14.00 RE-ENTRY BY LANDLORD......................................................
15.00 RIGHT OF TERMINATION......................................................
16.00 DISTRESS..................................................................
17.00 NON-WAIVER................................................................
18.00 CHANGES TO BUILDING.......................................................
19.00 SEVERANCE OF LAND.........................................................
20.00 COSTS OF COLLECTION.......................................................
21.00 PROFITS AND REMEDIES BY LANDLORD..........................................
21.01 PAYMENTS TO THIRD PARTIES.................................................
21.02 NON-PAYMENT OF ADDITIONAL RENT............................................
21.03 INTEREST ON ARREARS.......................................................
22.00 NOTICE....................................................................
23.00 SUBORDINATION, POSTPONEMENT, ATTORNMENT...................................
23.01 TENANT'S RIGHT TO POSSESSION..............................................
23.02 ATTORNMENT BY TENANT......................................................
24.00 CERTIFICATE...............................................................
25.00 REGISTRATION..............................................................
26.00 PLANNING ACT..............................................................
27.00 TRANSFER BY LANDLORD......................................................
28.00 NO ADVERTISING OF LEASED PREMISES.........................................
29.00 TIME OF ESSENCE...........................................................
30.00 LAWS OF ONTARIO...........................................................
31.00 SEVERABILITY OF COVENANTS.................................................
32.00 HEADINGS..................................................................
33.00 SCHEDULES.................................................................
34.00 LEASE ENTIRE AGREEMENT....................................................

                                   Page 133
<PAGE>
 
35.00 INTERPRETATION............................................................
36.00 SUCCESSORS................................................................
37.00 JOINT AND SEVERAL COVENANT
SCHEDULE "A"....................................................................
------------
SCHEDULE "B"....................................................................
------------
SCHEDULE "C"....................................................................
------------
SCHEDULE "D"....................................................................
------------
SCHEDULE "E"....................................................................
------------
SCHEDULE "F"....................................................................
------------
SCHEDULE "G"....................................................................
------------

                                   Page 134