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                                                                   Exhibit 10.12

RENAULT & HANDLEY
INDUSTRIAL & COMMERCIAL REAL ESTATE



      THIS LEASE, executed in duplicate at Palo Alto, California, this 30th day
of June, 2000, by and between


PARTIES

     Zanker Development Co., a Joint Venture

and

      Galileo Technology Ltd.

Hereinafter referred to respectively as "Lessor" and "Lessee", without regard to
number or gender,


PREMISES

      1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee hires from
Lessor, those certain premises, hereinafter referred to as "the Premises,"
situated in the City of San Jose, County of Santa Clara, State of California,
and more particularly described as follows:


      An approximate 40,746 square foot freestanding industrial building
commonly known as 2350 Zanker Road.


USE

      2. The Premises shall be used and occupied by Lessee solely for the
following purposes:

General office, administration, warehouse and distribution and related legal
uses and for no other purpose without the prior written consent of Lessor.


TERM

      3. The term shall be for Ten (10) years and three months, commencing on
the 1st day of October 2000 and ending on the 31st day of December 2010.


RENTAL

      4. Base Monthly Rent shall be payable to Lessor on the first day of each
calendar month during the term, in advance and without defense, deduction or
offset at the address set forth in paragraph 23 below, or at such other place or
places as may be designated from time to time by the Lessor. If the Commencement
Date occurs on a date other than the first day of the calendar month in which it
occurs, the Base Monthly Rent due on the first day of the second and last
calendar months of the term shall be prorated. Base Monthly Rent shall be due in
the following amounts:

      Eighty One Thousand Four Hundred Ninety Two and No/100ths Dollars
($81,492.00) shall be due upon execution of this Lease representing rental due
January 1, 2001. One Hundred Sixty Two Thousand Nine Hundred Eighty Four and
No/100ths Dollars ($162,984.00) shall be due on January 1, 2001 representing
rental due February 1, 2001 and March 1, 2001. Eighty One Thousand Four Hundred
Ninety Two and No/100ths Dollars ($81,492.00) shall be due on April 1, 2001 and
on the first day of each and every month to and including December 1, 2001.
Eighty Five Thousand Five Hundred Fifty Six and 60/100ths Dollars ($85,566.60)
shall be due on January 1, 2002 and on the first day of each and every month to
and including December 1, 2002. Eighty Nine Thousand Six Hundred Forty One and
20/100ths Dollars ($89,641.20) shall be due on January 1, 2003 and on the first
day of each and every month to and including December 1, 2003. Ninety Three
Thousand Seven Hundred Fifteen and 80/100ths Dollars ($93,715.80) shall be due
on January 1, 2004 and on the first day of each and every month to and including
December 1, 2004. Ninety Seven Thousand Seven Hundred Ninety and 40/100ths
Dollars ($97,790.40) shall be due on January 1, 2005 and on the first day of
each and every month to and including December 1, 2005.

      Commencing on January 1, 2006, Lessor and Lessee agree that the Base
Monthly Rent shall be adjusted to reflect the then current fair market monthly
rental ("FMV") for a manufacturing, administrative and warehouse building. Base
Monthly Rent for the balance of the Term commencing on January 1, 2007 shall
increase annually by a factor of 5%. FMV for the Premises shall be based on the
improvements as shown on the attached Exhibit "A". In no event, however, shall
the adjusted Base Monthly Rent be less than that paid during the prior year
without the consent of the Lessor. In establishing the FMV for the Premises, the
parties shall consider only direct leases for comparable space in San Jose
occurring during the calendar year 2005. Considerations in establishing
comparability of recently leased spaces shall include age and quality of the
building and interior improvements, parking ratio and relative proximity to the
Premises.

      Lessor and Lessee shall negotiate FMV not less than four (4) months or
more than six (6) months prior to January 1, 2006. In the event Lessor and
Lessee cannot agree upon FMV by September 15, 2005, then each party shall within
five (5) days, select a licensed commercial real estate broker who is active in
commercial and industrial rentals in the San Jose market and the two brokers so
appointed shall meet within twenty-one (21) days of their appointment to make a
determination of FMV, taking into account the considerations set forth above.
The

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determination of the brokers as set forth herein shall be binding upon the
parties. If the two brokers cannot reach agreement within five (5) days of their
initial meeting, then the two shall immediately thereafter appoint a third
broker (not affiliated with Renault & Handley) with the same qualifications and
within twenty-one (21) days of the third broker's appointment, all shall meet to
make a determination of FMV. If agreement cannot be reached, then the two
closest opinions shall be averaged, and such figure shall become the adjusted
Base Monthly Rent and be binding on both parties. Each party shall pay the fee
of their respective broker and both parties shall share the cost of the third
broker, if necessary.

      In addition, Lessee shall pay to Lessor with the Base Monthly Rent, as
additional rent, a monthly management fee equal to three percent (3%) of the
Base Monthly Rent. All other costs and charges payable by Lessee in accordance
with the terms of this Lease (including property taxes, insurance premiums and
maintenance costs) shall be deemed to be additional rent.


SECURITY DEPOSIT

      5. Lessee has deposited with Lessor $118,163.40 as security for the full
and faithful performance of each and every term, provision, covenant and
condition of this Lease. In the event Lessee defaults with respect to any of the
terms, provisions, covenants or conditions of this Lease, including, but not
limited to the payment of rent, Lessor may use, apply or retain the whole or any
part of such security for the payment of any rent in default or for any other
sum which Lessor may spend or be required to spend by reason of Lessee's
default. Should Lessee faithfully and fully comply with all of the terms,
provisions, covenants and conditions of this Lease, the security or any balance
thereof shall be returned to Lessee or, at the option of Lessor, to the last
assignee of Lessee's interest in this Lease at the expiration of the term
hereof. Lessee shall not be entitled to any interest on said security deposit.


POSSESSION

      6. If Lessor, for any reason whatsoever, cannot deliver possession of the
Premises to Lessee at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable, nor shall Lessor, or
Lessor's agents, be liable to Lessee for any loss or damage resulting therefrom;
but in that event the commencement and termination dates of the Lease and all
other dates affected thereby shall be revised to conform to the date of Lessor's
delivery of possession. Notwithstanding the foregoing, if the period of delay of
delivery exceeds 60 days, Lessee, at his or its option, may declare this Lease
null and void by notice to Lessor at any time prior to delivery of the Premises.


ACCEPTANCE OF PREMISES AND CONSENT TO SURRENDER

      7. By entry hereunder, the Lessee accepts the Premises from Lessor in its
"as is", "where is" condition. Lessor has made no representations or warranties
respecting the Premises and Lessee has investigated and inspected the Premises
and has satisfied itself that the Premises are suitable for the Lessee's
intended use thereof and are in compliance with applicable laws and codes;
provided, however, Lessor hereby warrants that it shall repair any material
defects in the roof covering, HVAC, electrical and plumbing systems existing as
of the commencement of the Lease, provided Lessee gives Lessor written notice
specifying such defects in reasonable detail within thirty (30) days following
commencement of this Lease. Lessor shall have no obligation to contribute toward
any improvements to the Premises whatsoever. The Lessee agrees on the last day
of the term hereof, or on sooner termination of this Lease, to surrender to
Lessor the Premises, which shall, except as otherwise provided in paragraph 9
below, include all alterations, additions, and improvements which may have been
made in, to, or on the Premises by Lessor or Lessee, in the same good condition
as at Lessee's entry into the Premises excepting for such wear and tear as would
be normal for the period of the Lessee's occupancy. The Lessee, on or before the
end of the term or sooner termination of this Lease, shall remove all Lessee's
personal property and trade fixtures from the premises and all property not so
removed shall be deemed to be abandoned by the Lessee. If the Premises are not
surrendered at the end of the term or sooner termination of this Lease, the
Lessee shall indemnify the Lessor against loss or liability resulting from delay
by the Lessee in so surrendering the Premises including, without limitation, any
claims made by any succeeding tenant founded on such delay.


USES PROHIBITED

      8. Lessee shall not commit, or suffer to be committed, any waste upon the
Premises, or any nuisance, or other act or thing which may disturb the quiet
enjoyment of any other tenant in or around the buildings in which the Premises
may be located, or allow any sale by auction upon the Premises, or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, or place any loads upon the floor, walls, or roof which endanger the
structure, or place any harmful liquids in the drainage system of the building.
No waste materials or refuse shall be dumped upon or permitted to remain upon
any part of the Premises outside of the building proper. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the buildings proper.


ALTERATIONS AND ADDITIONS

      9. Lessee shall make no alterations, additions or improvements to the
Premises or any part thereof (collectively "Alterations") without first
obtaining the prior written consent of the Lessor. All Alterations shall be in
accordance with plans and specifications approved by Lessor and shall be carried
out by a reputable licensed contractor and in compliance with all applicable
laws, codes, rules and regulations. The Lessor may impose as a condition to the
aforesaid consent such additional requirements as Lessor may deem necessary in
Lessor's sole discretion, including without limitation requirements respecting
the manner in which the work is done, Lessor's right of approval of the
contractor by whom the work is to be performed, and the times during which it is
to be accomplished. Upon approval by Lessor, Lessor shall designate any or all
of the alterations to be removed upon the expiration of the Lease. All
Alterations not specified to be removed shall at the expiration of earlier
termination of the lease become the property of the Lessor and remain upon and
be surrendered with the Premises. All movable furniture, business and trade
fixtures, and machinery and equipment shall remain the property of the Lessee
and may be removed by the Lessee at any time during the Lease term when Lessee
is not in default hereunder. Items which are not to be deemed as movable
furniture, business and trade fixtures, or machinery and equipment shall include
heating, lighting, electrical systems, air conditioning, partitioning,
carpeting, or any other installation which has become an integral part of the
Premises. The Lessee will give the Lessor five (5) business days notice prior to
the commencement of any Alterations work and will at all times permit notices of
non-responsibility to be posted and to remain posted until the completion of
Alterations.

MAINTENANCE OF PREMISES

      10. Lessee shall, at Lessee's sole cost, keep and maintain the Premises
and appurtenances and every part thereof, including but not limited to, glazing,
sidewalks, plumbing, and electrical systems, any store front, exterior paint and
all components of the interior of the Premises in good order, condition, and
repair. Lessor shall, at Lessor's sole cost

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and expense, maintain the structural integrity of the exterior walls, and
structural portions of the roof, foundations and floors, except that Lessee
shall pay, as additional rent, the cost of any repairs or replacements
necessitated by the negligence or wrongful act of the Lessee or Lessee's agents
or employees. Lessor shall, at Lessee's sole cost and expense, maintain, repair
and (if necessary in the judgment of Lessor's experts) replace the roof
covering, HVAC system, landscaping and parking lot surface ("Lessor's
Maintenance Services") during the term of this Lease, as may be extended. Lessee
shall reimburse Lessor as Additional Rent the cost incurred by Lessor in
performing Lessor's Maintenance Services, without mark-up, within thirty (30)
days after receipt of invoice from Lessor; provided, however, that (except where
replacement of the parking lot surface, landscaping, roof or HVAC components are
necessitated by the acts of the Lessee or Lessee's agents or employees, in which
event Lessee shall pay the costs thereof in a lump sum on demand), costs of
replacement (as opposed to repair) of the foregoing shall be amortized over the
useful life thereof, and Lessee shall pay Lessor as Additional Rent a monthly
payment equal to the monthly amortization, together with interest on the
unamortized amount at an annual rate of twelve percent (12%). Lessee expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford the Lessee the right to make repairs at Lessor's expense or to
terminate this Lease because of Lessor's failure to keep the Premises in good
order, condition or repair.


FIRE AND EXTENDED COVERAGE INSURANCE AND SUBROGATION

      11. Lessee shall not use, or permit the Premises, or any part thereof, to
be used, for any purposes other than that for which the Premises are hereby
leased and no use shall be made or permitted to be made on the Premises, nor
acts done, which will cause a cancellation of any insurance policy covering said
Premises, or any part thereof, nor shall Lessee sell or permit to be kept, used
or sold, in or about the Premises, any article which may be prohibited by the
standard form of fire insurance policies. Lessee shall, at its sole cost and
expense, comply with any and all requirements, pertaining to the Premises, of
any insurance organization or company, necessary for the maintenance of
reasonable fire and public liability insurance, covering said building and
appurtenances.

            11.1 Lessee shall, at its expense, obtain and keep in force during
the term of this Lease a policy of commercial general liability insurance
(including cross liability) insuring Lessee, Lessor, Lessor's Officers, Lessor's
property manager and Lessor's lender, against any liability arising out of the
condition, use, occupancy or maintenance of the Premises. Evidence of coverage
must be in the form of a certificate of insurance accompanied by the appropriate
additional insured endorsements. Such insurance policy shall have a combined
single limit for both bodily injury and property damage in an amount not less
than Two Million and no/100ths Dollars ($2,000,000), which aggregate amount
shall be specific to the Premises. The limits of said insurance shall not limit
the liability of Lessee hereunder.

            11.2 Lessee shall at its expense, keep in force during the term of
this Lease, a policy of fire and property damage insurance in a "special" form
with a sprinkler leakage endorsement, insuring Lessee's inventory, fixtures,
equipment and personal property within the Premises for the full replacement
value thereof. Upon execution of this Lease and annually thereafter upon renewal
of such policies, Lessee shall provide Lessor with certificates of insurance,
together with appropriate endorsements, evidencing coverages the Lessee is
required to carry pursuant to 11.1 and 11.2. The policies shall provide for
thirty (30) days advance written notice of cancellation to Lessor and Lessor's
lender.

            11.3 Lessor shall maintain a policy of commercial general liability
insurance and a policy or policies of fire and property damage insurance in a
"special" form, with sprinkler leakage and, at the option of Lessor, earthquake
endorsements, covering loss or damage to the building, including Lessee's
leasehold improvements installed with the written consent of Lessor, for the
full replacement cost thereof.

            11.4 Lessee shall pay to Lessor as additional rent, during the term
hereof, upon receipt of an invoice therefore, one hundred percent (100%) of the
premiums and deductibles (provided, the deductible amount shall be amortized
over the useful life of the improvement for which such insurance deductible is
applicable and Lessee shall only be obligated to reimburse Lessor for the
amortized portion of the deductible amount that occurs during the term of this
Lease) for any insurance obtained by Lessor pursuant to 11.3 above. Lessor may
obtain such insurance for the Premises separately, or together with other
property which Lessor elects to insure together under blanket policies of
insurance. In such case Lessee shall be liable for only such portion of the
premiums for such blanket policies as are allocable to the Premises. It is
understood and agreed that Lessee's obligation under this paragraph shall be
prorated to reflect the Commencement Date and Expiration Date of the Lease.

            11.5 Lessee and Lessor each hereby waive any and all rights of
recovery against the other, or against the officers, directors, employees,
partners, agents and representatives of the other, for loss of or damage to the
property of the waiving party or the property of others under its control, to
the extent such loss or damage is insured against under any insurance policy
carried or required to be carried by Lessor or Lessee hereunder. Each party
shall notify their respective insurance carriers of this waiver.


ABANDONMENT

      12. Lessee shall not abandon the Premises at any time during the term; and
if Lessee shall abandon or surrender the Premises, or be dispossessed by process
of law, or otherwise, any personal property belonging to Lessee and left on the
Premises shall be deemed to be abandoned, at the option of Lessor, except such
property as may be mortgaged to Lessor.


FREE FROM LIENS

      13. Lessee shall keep the Premises and the property in which the Premises
are situated, free from any liens arising out of any work performed, materials
furnished, or obligations incurred by Lessee.


COMPLIANCE WITH GOVERNMENTAL REGULATIONS

      14. Lessee shall, at its sole cost and expense, comply with all statutes,
codes, ordinances, rules, regulations and other requirements of all Municipal,
State and Federal authorities (collectively, "Laws") now in force, or which may
hereafter be in force, pertaining to the Premises, and shall faithfully observe
in the use of the Premises all Municipal ordinances and State and Federal
statutes now in force or which may hereafter be in force. The judgment of any
court of competent jurisdiction, or the admission of Lessee in any action or
proceeding against Lessee, whether Lessor be a party thereto or not, that Lessee
has violated, or that the Premises are not in compliance with, any Laws in the
use of the Premises, shall be conclusive of that fact as between Lessor and
Lessee. Lessee's obligations under this paragraph 14 shall include the
obligation to make, at Lessee's sole cost, any alterations or improvements to
the Premises which are required by applicable Laws, provided that (a) as to such
alterations or improvements which are not required by reason of Lessee's
particular use of the Premises or by reason of other alterations or improvements

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being undertaken by Lessee, Lessee shall only be required to pay an allocable
portion of the costs of such required alterations or improvements based on the
ratio of the remaining lease term to the useful life of such alterations or
improvements, and (b) Lessee shall not be required to pay any portion of the
cost of alterations or improvements which are legally required to be made as of
the date of this Lease and as to which Lessor receives notice of such
requirement prior to the date thirty (30) days after the date Lessor delivers
possession of the Premises to Lessee.


INDEMNIFICATION OF LESSOR

      15. Neither Lessor nor Lessor's agents, nor any shareholder, constituent
partner or other owner of Lessor or any agent of Lessor, nor any contractor,
officer, director or employee of any thereof shall be liable to Lessee and
Lessee waives all claims against Lessor and such other persons for any injury to
or death of any person or for loss of use of or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, unless caused
solely by the gross negligence or willful misconduct of Lessor, its agents or
employees. Lessee agrees to indemnify and hold Lessor, Lessor's agents, the
shareholders, constituent partners and/or other owners of Lessor or any agent of
Lessor, and all contractors, officers, directors and employees of any thereof
(collectively, "Indemnitees"), and each of them, harmless from and to protect
and defend each Indemnitee against any and all claims, demands, suits,
liability, damage or loss and against all costs and expenses, including
reasonable attorneys' fees incurred in connection therewith, (a) arising out of
any injury or death of any person or damage to or destruction of property
occurring in, on or about the Premises, from any cause whatsoever, unless caused
solely by the gross negligence or willful misconduct of such Indemnitee, or (b)
occurring in, on or about the Premises, when such claim, injury or damage is
caused or allegedly caused in whole or in part by the act, neglect, default, or
omission of any duty by Lessee, its former or current agents, contractors,
employees, invitees, or subtenants, or (c) arising from any failure of Lessee to
observe or perform any of its obligations hereunder. The provisions of this
paragraph shall survive the termination of this Lease with respect to any claims
or liability occurring prior to such termination.


ADVERTISEMENTS AND SIGNS

      16. Lessee will not place or permit to be placed, in, upon or about the
Premises any unusual or extraordinary signs, or any signs not approved by the
city or other governing authority. The Lessee will not place, or permit to be
placed, upon the Premises, any signs, advertisements or notices without the
written consent of the Lessor first had and obtained. Any sign so placed on the
Premises shall be so placed upon the understanding and agreement that Lessee
will remove same at the termination of the tenancy herein created and repair any
damage or injury to the Premises caused thereby, and if not so removed by Lessee
then Lessor may have same so removed at Lessee's expense.


UTILITIES

      17. Lessee shall pay for all water, gas, heat, light, power, telephone
service and all other service supplied to the Premises. If the Premises are not
served by a separate water meter, Lessee shall pay to Lessor its share of the
water bill for the entire property covered by said bill and of which the
Premises are a part, as determined by Lessor based on square footage or other
equitable method.


ATTORNEY'S FEES

      18. In case suit should be brought for the possession of the Premises, for
the recovery of any sum due hereunder, or because of the breach of any other
covenant herein, the losing party shall pay to the prevailing party a reasonable
attorney's fee, which shall be deemed to have accrued on the commencement of
such action and shall be enforceable whether or not such action is prosecuted to
judgment.


DEFAULT AND REMEDIES

      19. The occurrence of any one or more of the following events (each an
"Event of Default") shall constitute a breach of this Lease by Lessee:

            (a) Lessee fails to pay any Monthly Base Rent or additional rent
      under this Lease as and when it becomes due and payable and such failure
      continues for more than ten (10) days; or

            (b) Lessee fails to perform or breaches any other covenant of this
      Lease to be performed or observed by Lessee as and when performance or
      observance is due and such failure or breach continues for more than ten
      (10) days after Lessor gives written notice thereof to Lessee; provided,
      however, that if such failure or breach cannot reasonably be cured within
      such period of ten (10) days, an Event of Default shall not exist as long
      as Lessee commences with due diligence and dispatch the curing of such
      failure or breach within such period of ten (10) days and, having so
      commenced, thereafter prosecutes with diligence and dispatch and completes
      the curing of such failure or breach within a reasonable time; or

            (c) Lessee files, or consents by answer or otherwise to the filing
      against it of, a petition for relief or reorganization or arrangement or
      any other petition in bankruptcy or for liquidation or to take advantage
      of any bankruptcy, insolvency or other debtors' relief law of any
      jurisdiction; makes an assignment for the benefit of its creditors; or
      consents to the appointment of a custodian, receiver, trustee or other
      officer with similar powers of Lessee or of any substantial part of
      Lessee's property; or

            (d) A court or government authority enters an order, and such order
      is not vacated within thirty (30) days, appointing a custodian, receiver,
      trustee or other officer with similar powers with respect to Lessee or
      with respect to any substantial part of Lessee's property; or constituting
      an order for relief or approving a petition for relief or reorganization
      or arrangement or any other petition in bankruptcy or for liquidation or
      to take advantage of any bankruptcy, insolvency or other debtors' relief
      law of any jurisdiction; or ordering the dissolution, winding-up or
      liquidation of Lessee; or

            (e) Lessee abandons the Premises.

      19.1 If an Event of Default occurs, Lessor shall have the right at any
time to give a written termination notice to Lessee and, on the date specified
in such notice, Lessee's right to possession shall terminate and this Lease
shall terminate. Upon such termination, Lessor shall have the right to recover
from Lessee:

      (i) The worth at the time of award of all unpaid rent which had been
      earned at the time of termination;

      (ii) The worth at the time of award of the amount by which all unpaid rent
      which would have been earned after termination until the time of award
      exceeds the amount of such rental loss that Lessee proves could

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      have been reasonably avoided;

      (iii) The worth at the time of award of the amount by which all unpaid
      rent for the balance of the term of this Lease after the time of award
      exceeds the amount of such rental loss that Lessee proves could be
      reasonably avoided; and

      (iv) All other amounts necessary to compensate Lessor for all the
      detriment proximately caused by Lessee's failure to perform all of
      Lessee's obligations under this Lease or which in the ordinary course of
      things would be likely to result therefrom.

The "worth at the time of award" of the amounts referred to in clauses (i) and
(ii) above shall be computed by allowing interest at the maximum annual interest
rate allowed by law for business loans (not primarily for personal, family or
household purposes) not exempt from the usury law at the time of termination or,
if there is no such maximum annual interest rate, at the rate of eighteen
percent (18%) per annum. The "worth at the time of award" of the amount referred
to in clause (iii) above shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). For the purpose of determining unpaid rent under clauses
(i), (ii) and (iii) above, the rent reserved in this Lease shall be deemed to be
the total rent payable by Lessee under this Lease, including Monthly Base Rent,
additional rent and all other sums payable by Lessee under this Lease.

      19.2 Even though Lessee has breached this Lease, this Lease shall continue
in effect for so long as Lessor does not terminate Lessee's right to possession,
and Lessor shall have all of its rights and remedies, including the right,
pursuant to California Civil Code section 1951.4, to recover all rent as it
becomes due under this Lease. Acts of maintenance or preservation or efforts to
relet the Premises or the appointment of a receiver upon initiative of Lessor to
protect Lessor's interest under this Lease shall not constitute a termination of
Lessee's right to possession unless written notice of termination is given by
Lessor to Lessee.

      19.3 The remedies provided for in this Lease are in addition to all other
remedies available to Lessor at law or in equity by statute or otherwise.


LATE CHARGES AND INTEREST

      20. Lessee hereby acknowledges that late payment by Lessee to Lessor of
rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Lessor by the
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
Lessee shall pay to Lessor a late charge equal to seven and one half percent
(7.5%) of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor shall
in no event constitute a waiver of Lessee's default with respect to such overdue
amount, nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder.

      If any rent payable under the Lease remains delinquent for a period in
excess of ten (10) calendar days, then, in addition to any late charge payable,
Lessee shall pay to Lessor interest on any rent that is not so paid from the
date due until paid at the then maximum rate of interest not prohibited or made
usurious by Law.


SURRENDER OF LEASE

      21. The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment to Lessor of any or all such
subleases or subtenancies.


TAXES

      22. The Lessee shall be liable for all taxes levied against personal
property and trade or business fixtures. The Lessee also agrees to pay, as
additional rental, during the term of this Lease and any extensions thereof, all
real estate taxes plus the yearly installments of any special assessments which
are of record or which may become of record during the term of this lease. If
the Premises are a portion of a tax parcel or parcels and this Lease does not
cover an entire tax parcel or parcels, the taxes and assessment installments
allocated to the Premises shall be pro-rated on a square footage or other
equitable basis, as calculated by the Lessor. It is understood and agreed that
the Lessee's obligation under this paragraph will be pro-rated to reflect the
commencement and termination dates of this Lease.


NOTICES

      23. All notices to be given to Lessee may be given in writing personally,
sent by next day courier, or by depositing the same in the United States mail,
postage prepaid, and addressed to Lessee at the said Premises, whether or not
Lessee has departed from, abandoned or vacated the Premises, and any other
address of Lessee set forth below. All notices to be given to Lessor may be
given in writing personally, sent by next day courier or by depositing the same
in the United States mail, postage prepaid, and addressed to Lessor at the
following address or such other address as Lessor may, from time to time
designate:

     c/o Renault & Handley
      2500 El Camino Real
     Palo Alto, CA  94306

If not delivered personally, notices shall be deemed delivered as of the third
business day after being mailed, or if sent by courier, the next business day
after being sent.

ENTRY BY LESSOR

      24. Lessee shall permit Lessor and his agents to enter into and upon the
Premises at all reasonable times for the purpose of inspecting the same or for
the purpose of maintaining the building in which the Premises are situated, or
for the purpose of making repairs, alterations or additions to any other portion
of said building, including the erection and maintenance of such scaffolding,
canopies, fences and props as may be required without any rebate of rent and
without any liability to Lessee for any loss of occupation or quiet enjoyment of
the Premises thereby

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<PAGE>   6

occasioned; and shall permit Lessor and his agents, at any time within ninety
days prior to the expiration of this Lease, to place upon the Premises any usual
or ordinary "For Sale" or "For Lease" signs and exhibit the Premises to
prospective tenants at reasonable hours.


DESTRUCTION OF PREMISES

      25. In the event of a partial destruction of the Premises during the term
of this Lease from any cause covered by insurance carried, or required to be
carried, by Lessor under this Lease, Lessor shall forthwith repair the same,
provided such repairs can be made within one hundred eighty (180) days under the
laws and regulations of State, Federal, County or Municipal authorities, but
such partial destruction shall in no way annul or void this Lease, except that
Lessee shall be entitled to a proportionate reduction of rent while such repairs
are being made, such proportionate reduction to be based upon the extent to
which the making of such repairs shall interfere with the business carried on by
Lessee in the Premises. If the cause for such repairs is not so covered by
insurance or cannot be made in one hundred eighty (180) days, Lessor may, at his
option, make same within a reasonable time, this Lease continuing in full force
and effect and the rent to be proportionately reduced as aforesaid in this
paragraph provided. In the event that Lessor does not so elect to make such
repairs the cause of which is not so covered by insurance or cannot be made in
one hundred eighty (180) days, or such repairs cannot be made under such laws
and regulations, this Lease may be terminated at the option of either party. In
respect to any partial destruction which Lessor is obligated to repair or may
elect to repair under the terms of this paragraph, the provision of Section
1932, Subdivision 2, and of Section 1933, Subdivision 4, of the Civil Code of
the State of California are waived by Lessee. In the event that the building in
which the Premises may be situated be destroyed to the extent of not less than
331/3% the replacement cost thereof, Lessor may elect to terminate this Lease,
whether the Premises be injured or not. A total destruction of the building in
which the Premises may be situated shall terminate this Lease. In the event of
any dispute between Lessor and Lessee relative to the provisions of this
paragraph, they shall each select an arbitrator, the two arbitrators so selected
shall select a third arbitrator and the three arbitrators so selected shall hear
and determine the controversy and their decision thereon shall be final and
binding upon both Lessor and Lessee, who shall bear the cost of such arbitration
equally between them.


ASSIGNMENT AND SUBLETTING

      26. The Lessee shall not assign, transfer, or hypothecate the leasehold
estate under this Lease, or any interest therein, and shall not sublet the
Premises, or any part thereof, or any right or privilege appurtenant thereto, or
suffer any other person or entity to occupy or use the Premises, or any portion
thereof, without, in each case, the prior written consent of the Lessor. Lessor
shall not unreasonably withhold, delay or condition its consent to a subletting
or assignment. In the event Lessee is allowed to assign, transfer or sublet the
whole or any part of the Premises, with the prior written consent of Lessor,
then no assignee, transferee or sublessee shall assign or transfer this Lease,
either in whole or in part, or sublet the whole or any part of the Premises,
without also having obtained the prior written consent of the Lessor. In the
event of any approved assignment or subletting during the period from December
1, 2000 to December 1, 2003, Lessee shall pay to the Lessor, as additional
rental, zero percent (0%) of all assignment proceeds and rents received by the
Lessee from its assignee or sublessee which are in excess of the amount payable
by the Lessee to the Lessor hereunder, after deducting the amount of any market
rate real estate brokerage commissions paid by Lessee in connection with the
assignment or subletting. In the event of any approved assignment or subletting
during the period from December 1, 2003 to December 1, 2010 Lessee shall pay to
the Lessor, as additional rental, fifty percent (50%) of all assignment proceeds
and rents received by the Lessee from its assignee or sublessee which are in
excess of the amount payable by the Lessee to the Lessor hereunder, after
deducting the amount of any market rate real estate brokerage commissions paid
by Lessee in connection with the assignment or subletting. A consent of Lessor
to one assignment, transfer, hypothecation, subletting, occupation or use by any
other person shall not release Lessee from any of Lessee's obligations hereunder
or be deemed to be a consent to any subsequent similar or dissimilar assignment,
transfer, hypothecation, subletting, occupation or use by any other person. Any
such assignment, transfer, hypothecation, subletting, occupation or use without
such consent shall be void and shall constitute a breach of this Lease by Lessee
and shall, at the option of Lessor exercised by written notice to Lessee,
terminate this Lease. The leasehold estate under this Lease shall not, nor shall
any interest therein, be assignable for any purpose by operation of law without
the written consent of Lessor. As a condition to its consent, Lessor may require
Lessee to pay all expenses in connection with the assignment, and Lessor may
require Lessee's assignee or transferee (or other assignees or transferees) to
assume in writing all of the obligations under this Lease.

      Any dissolution, merger, consolidation, recapitalization or other
reorganization of Lessee, or the sale or other transfer in the aggregate over
the term of the Lease of a controlling percentage of the capital stock of Lessee
(excluding transfers over a national securities exchange), or the sale or
transfer of all or a substantial portion of the assets of Lessee, shall be
deemed a voluntary assignment of Lessee's interest in this Lease; provided that,
a merger, consolidation, recapitalization, reorganization or sale of assets
shall not require Lessor's consent hereunder unless Lessee's tangible net worth
(determined in accordance with generally accepted accounting principles)
immediately after such transaction is less than Lessee's tangible net worth
immediately prior to such transaction. The phrase "controlling percentage" means
the ownership of and the right to vote stock possessing more than fifty percent
of the total combined voting power of all classes of Lessee's capital stock
issued, outstanding and entitled to vote for the election of directors. If
Lessee is a partnership, a withdrawal or change, voluntary, involuntary or by
operation of Law, of any general partner, or the dissolution of the partnership,
shall be deemed a voluntary assignment of Lessee's interest in this Lease. In
the event that, through a merger, stock sale or other transaction, Lessee
becomes the subsidiary of any other entity (a "parent"), Lessor shall have the
right to require that the parent guaranty all of Lessee's obligations under the
Lease pursuant to a form of guaranty reasonably satisfactory to Lessor.


CONDEMNATION

      27. If any part of the premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains which is susceptible of
occupation hereunder, this Lease shall, as to the part so taken, terminate as of
the date title shall vest in the condemnor or purchaser, and the rent payable
hereunder shall be adjusted so that the Lessee shall be required to pay for the
remainder of the term only such portion of such rent as the value of the part
remaining after such taking bears to the value of the entire Premises prior to
such taking; but in such event Lessor shall have the option to terminate this
Lease as of the date when title to the part so taken vests in the condemnor or
purchaser. If all of the Premises, or such part thereof were taken so that there
does not remain a portion susceptible for occupation hereunder, this Lease shall
thereupon terminate. If a part or all of the Premises were taken, all
compensation awarded upon such taking shall go to the Lessor and the Lessee
shall have no claim thereto except as provided by law.

                                     6 of 9
<PAGE>   7

EFFECT OF CONVEYANCE

      28. The term "Lessor" as used in this Lease, means only the owner for the
time being of the land and building containing the Premises, so that, in the
event of any sale of said land or building, the Lessor shall be and hereby is
entirely freed and relieved of all covenants and obligations of the Lessor
hereunder, and it shall be deemed and construed, without further agreement
between the parties and the purchaser at any such sale, that the purchaser of
the building has assumed and agreed to carry out any and all covenants and
obligations of the Lessor hereunder. If any security be given by the Lessee to
secure the faithful performance of all or any of the covenants of this Lease on
the part of the Lessee, the Lessor may transfer and deliver the security, as
such, to the purchaser at any such sale, and thereupon the Lessor shall be
discharged from any further liability in reference thereto.


SUBORDINATION

      29. Lessee agrees that this Lease shall be subject and subordinate to any
mortgage, deed of trust or other instrument of security which has been or shall
be placed on the land and building or land or building of which the Premises
form a part, and this subordination is hereby made effective without any further
act of Lessee. The Lessee shall, at any time hereinafter, on demand, execute any
instruments, releases, or other documents that may be required by any mortgagee,
mortgagor, or trustor or beneficiary under any deed of trust for the purpose of
subjecting and subordinating this Lease to the lien of any such mortgage, deed
of trust or other instrument of security, and the failure of the Lessee to
execute any such instruments, releases or documents, shall constitute a default
hereunder. Notwithstanding Lessee's obligations, and the subordination of the
Lease, under this paragraph 29, no mortgagee, trustee or beneficiary under any
deed of trust or other instrument of security which may be placed on the
Premises shall have the right to terminate the Lease or disturb Lessee's
occupancy thereunder so long as no Event of Default has occurred and is
continuing under this Lease.


WAIVER

      30. The waiver by Lessor of any breach of any term, covenant or condition,
herein contained shall not be deemed to be a waiver of such term, covenant or
condition or any subsequent breach of the same or any other term, covenant or
condition therein contained. The subsequent acceptance of rent hereunder by
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of
any term, covenant or condition of this Lease, other than the failure of Lessee
to pay the particular rental so accepted, regardless of Lessor's knowledge of
such preceding breach at the time of acceptance of such rent.


HOLDING OVER

      31. Any holding over after the expiration or other termination of the term
of this Lease with the written consent of Lessor, shall be construed to be a
tenancy from month to month, at a rental to be negotiated by Lessor and Lessee
prior to the expiration of said term, and shall otherwise be on the terms and
conditions herein specified, so far as applicable. Any holding over after the
expiration or other termination of the term of this Lease without the written
consent of Lessor shall be construed to be a tenancy at sufferance on all the
terms set forth herein, except that the monthly rental shall be an amount equal
to one hundred fifty percent (150%) of the base monthly rent payable by Lessee
immediately prior to such holding over, or the fair market rent for the Premises
as of such date, whichever is greater.


SUCCESSORS AND ASSIGNS

      32. The covenants and conditions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto; and all of the parties
hereto shall be jointly and severally liable hereunder.


TIME

      33. Time is of the essence of this Lease.


MARGINAL CAPTIONS; COMPLETE AGREEMENT; AMENDMENT

      34. The marginal headings or titles to the paragraphs of this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed by
all of the parties hereto or their respective successors in interest.


ENVIRONMENTAL OBLIGATIONS

      35. Lessee's obligations under this Paragraph 35 shall survive the
expiration or termination of this Lease.

      35.1 As used herein, the term "Hazardous Materials" shall mean any toxic
or hazardous substance, material or waste or any pollutant or infectious or
radioactive material, including but not limited to those substances, materials
or wastes regulated now or in the future under any of the following statutes or
regulations and any and all of those substances included within the definitions
of "hazardous substances," "hazardous materials," "hazardous waste," "hazardous
chemical substance or mixture," "imminently hazardous chemical substance or
mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant," or
"solid waste" in the (a) Comprehensive Environmental Response, Compensation and
Liability Act of 1990 ("CERCLA" or "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. Section 9601 et
seq., (b) Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.
Section 6901 et seq., (c) Federal Water Pollution Control Act ("FSPCA"), 33
U.S.C. Section 1251 et seq., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401
et seq., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 et
seq., (f) Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act ("California
Superfund"), Cal. Health & Safety Code Section 25300 et seq., (h) California
Hazardous Waste Control Act, Cal. Health & Safety code Section 25100 et seq.,
(i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal. Water
Code Section 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal.
Health & Safety codes Section 25220 et seq., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code Section
25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety code Section 25280 et seq., (m) Air Resources Law, Cal. Health &
Safety Code Section 39000 et seq., and (n) regulations promulgated pursuant to
said laws or any replacement thereof, or as similar terms are defined in the
federal, state and local laws, statutes, regulations, orders or rules. The term
"Hazardous Materials" shall also mean any and all other biohazardous wastes and
substances, materials and wastes which are, or in the future become, regulated
under applicable Laws for the protection of health or the environment, or which
are classified as hazardous or toxic substances, materials or wastes, pollutants
or contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision. The term "Hazardous
Materials" shall include, without limitation, (i) trichloroethylene,
tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any
petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated
biphenyls, (v) flammable explosives, (vi) urea formaldehyde, (vii) radioactive
materials and waste, and (viii) materials and wastes that are harmful to or may
threaten human health, ecology or the environment.

            35.2 Notwithstanding anything to the contrary in this Lease, Lessee,
at its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; provided, however, that Lessee shall not be
responsible for contamination of the Premises by Hazardous Materials existing as
of the date the Premises are

                                     7 of 9
<PAGE>   8

delivered to Lessee unless caused by Lessee. Lessee shall not store, use or
dispose of any Hazardous Materials except for those Hazardous Materials
("Permitted Materials") which are (a) listed in a Hazardous Materials management
plan ("HMMP") which Lessee shall submit to appropriate governmental authorities
as and when required under applicable Laws, and (b) are either normal quantities
of ordinary office supplies or are approved in writing by Lessor. Lessee may
use, store and dispose of provided Permitted Materials provided that (i) such
Permitted Materials are used, stored, transported, and disposed of in strict
compliance with applicable Laws, and (ii) such Permitted Materials shall be
limited to the materials listed on and may be used only in the quantities
specified in the HMMP. In no event shall Lessee cause or permit to be discharged
into the plumbing or sewage system of the Premises or onto the land underlying
or adjacent to the Premises any Hazardous Materials. If the presence of
Hazardous Materials on the Premises caused or permitted by Lessee results in
contamination or deterioration of water or soil, then Lessee shall promptly take
any and all action necessary to clean up such contamination, but the foregoing
shall in no event be deemed to constitute permission by Lessor to allow the
presence of such Hazardous Materials.

            35.3 Lessee shall immediately notify Lessor in writing of:

            (a) Any enforcement, cleanup, removal, or other governmental or
regulatory action instituted, completed or threatened against Lessee related to
any Hazardous Materials;

            (b) Any claim made or threatened by any person against Lessee or the
Premises relating to damage, contribution, cost recovery compensation, loss or
injury resulting from or claimed to result from any Hazardous Materials; and,

            (c) Any reports made to any environmental agency arising out of or
in connection with any Hazardous Materials in, discharged at, or removed from
the Premises, including any complaints, notices, warnings or asserted violations
in connection therewith.

Lessee shall also supply to Lessor as promptly as possible, and in any event
within five (5) business days after Lessee first receives or sends the same,
with copies of all claims, reports, complaints, notices, warnings or asserted
violations related in any way to the existence of Hazardous Materials at, in,
under or about the Premises or Lessee's use thereof. Lessee shall, upon Lessor's
request, promptly deliver to Lessor copies of any documents or information
relating to the use, storage or disposal of Hazardous Material on or from the
Premises.

            35.4 Upon termination or expiration of the Lease, Lessee at its sole
expense shall cause all Hazardous Materials placed in or about the Premises, by
Lessee, its agents, contractors, or invitees, and all installations (whether
interior or exterior) made by or on behalf of Lessee relating to the storage,
use, disposal or transportation of Hazardous Materials to be removed from the
property and transported for use, storage or disposal in accordance and
compliance with all Laws and other requirements respecting Hazardous Materials
used or permitted to be used by Lessee. Lessee shall apply for and shall obtain
from all appropriate regulatory authorities (including any applicable fire
department or regional water quality control board) all permits, approvals and
clearances necessary for the closure of the Premises and shall take all other
actions as may be required to complete the closure of the Premises. In addition,
prior to vacating the Premises, Lessee shall undertake and submit to Lessor an
environmental site assessment from an environmental consulting company
reasonably acceptable to Lessor which site assessment shall evidence Lessee's
compliance with this Paragraph 35.

            35.5 At any time prior to expiration of the Lease term, subject to
reasonable prior notice (not less than forty-eight (48) hours) and Lessee's
reasonable security requirements and provided such activities do not
unreasonably interfere with the conduct of Lessee's business at the Leased
Premises, Lessor shall have the right to enter in and upon the Premises in order
to conduct appropriate tests of water and soil to determine whether levels of
any Hazardous Materials in excess of legally permissible levels has occurred as
a result of Lessee's use thereof. Lessor shall furnish copies of all such test
results and reports to Lessee and, at Lessee's option and cost, shall permit
split sampling for testing and analysis by Lessee. Such testing shall be at
Lessee's expense if Lessor has a reasonable basis for suspecting and confirms
the presence of Hazardous Materials in the soil or surface or ground water in,
on, under, or about the Premises, which has been caused by or resulted from the
activities of Lessee, its agents, contractors, or invitees.

            35.6 Lessor may voluntarily cooperate in a reasonable manner with
the efforts of all governmental agencies in reducing actual or potential
environmental damage. Lessee shall not be entitled to terminate this Lease or to
any reduction in or abatement of rent by reason of such compliance or
cooperation. Lessee agrees at all times to cooperate fully with the requirements
and recommendations of governmental agencies regulating, or otherwise involved
in, the protection of the environment.

            35.7 Lessee shall indemnify, defend by counsel reasonably acceptable
to Lessor, protect and hold Lessor and each of Lessor's partners, employees,
agents, attorneys, successors, and assignees, free and harmless from and against
any and all claims, damages, liabilities, penalties, forfeitures, losses or
expenses (including reasonable attorney's fees) or death of or injury to any
person or damage to any property whatsoever arising from or caused in whole or
in part, directly or indirectly by (A) the presence in, or under or about the
Premises or discharge in or from the Premises of any Hazardous Materials caused
by Lessee, its agents, employees, invitees, contractors, assignees, or Lessee's
use, analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under, about or from
the leased Premises, or (B) Lessee's failure to comply with any Hazardous
Materials Law. Lessee's obligations hereunder shall include, without limitation,
whether foreseeable or unforeseeable, all costs, of any required or necessary
repair, cleanup or detoxification or decontamination of the Premises, and the
preparation and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration or earlier
termination of the term of this Lease. For purposes of indemnity provision
hereof, any actions or omissions of Lessee or by employees, agents, assignees,
contractors or subcontractors of Lessee or others acting for or on behalf of
Lessee (whether or not they are negligent, intentional, willful or unlawful)
shall be strictly attributable to Lessee.

                                     8 of 9
<PAGE>   9

LESSOR'S RIGHT TO PERFORM

      36. If Lessee shall fail to perform any obligation or covenant pursuant to
this Lease within a reasonable period of time (not to exceed 15 days) following
notice from Lessor to do so, then Lessor may, at its election and without
waiving any other remedy it may otherwise have under this Lease or at law,
perform such obligation or covenant and Lessee shall pay to Lessor, as
Additional Rent, the costs incurred by Lessor in performing such obligation or
covenant.


THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY WHO WILL REVIEW THE
DOCUMENT AND ASSIST YOU TO DETERMINE WHETHER YOUR LEGAL RIGHTS ARE ADEQUATELY
PROTECTED. RENAULT & HANDLEY IS NOT AUTHORIZED TO GIVE LEGAL AND TAX ADVICE. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY RENAULT & HANDLEY OR ITS AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
DOCUMENT OR ANY TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR YOUR
ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT.


IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the day and
year first above written.


LESSOR                                   LESSEE

Zanker Development Co., a Joint Venture  Galileo Technology Ltd.


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                                          Its:
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