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                                                                   EXHIBIT 10.15


                                LEASE AGREEMENT


This Lease Agreement is made and entered into by and between HERMAN CHRISTENSEN,
JR. AND RAYMOND P. CHRISTENSEN, jointly, the Landlord, and MMC NETWORKS, INC., a
Delaware corporation, Tenant as of this 7th day of January, 2000.

1. DEMISE: In consideration of the rents and all other charges and payments
payable by Tenant, and for the agreements, terms and conditions to be performed
by Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"Premises"), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.

2. PREMISES: The Premises demised by this Lease are approximately 128,154 square
feet of space in the building at 1144 East Arques Avenue, Sunnyvale, California
as shown on attached Exhibit A being in "as is" condition together with the
outside areas to the extent set forth in paragraph 44 below and parking set
forth in paragraph 45 below. No easement for light or air is incorporated in the
Premises.

The Premises demised by this Lease shall also include the existing Tenant
Improvements on the terms and conditions set forth.

3. TERM: The term of this Lease (the "Term") shall be for a period of 60 months
commencing on May 15, 2000.

4. RENT:

      (a) BASE RENT. Tenant shall pay to Landlord, in advance on the first day
of each calendar month, without further notice or demand and without offset or
deduction, the base monthly rent of $226,833.00.

            (1) The base monthly rent of $226,833.00 for May 15, 2000 - May 31,
2000 shall be pro-rated and be in the amount of $124,392.26.

            (2) The base monthly rental shall be adjusted at the end of each
TWELVE (12) month period within the lease term measured from the first day of
the calendar month containing the commencement date of the lease. The new base
monthly rental shall be determined by adjusting the base monthly rental for the
previous month by a percentage equal to the percentage that the Consumer Price
Index (San Francisco-Oakland-San Jose, All Urban Consumers, All Items
1982-84=100) most recently published by the U.S. Department of Labor, Bureau of
Labor Statistics, prior to the date that the rent adjustment is to be effective
has increased over the same index published twelve (12) months before said most
recently published index.

            If said consumer price index, as now constituted, shall cease to be
compiled and/or published, comparable statistics on the purchasing power of the
consumer dollar as published at the time of said discontinuance by a responsible
financial authority shall be used for making such computation. If the parties
hereto are unable to agree upon suitable substitute statistics, the rental for
the extended portion of the term shall be determined under the rules of the
American Arbitration Association with the arbitrators instructed to set an Index
based on the intent of this clause.

            In no event shall any adjustment of rental be effective to reduce
the base monthly rental below the base monthly rental for the prior month.

      Upon execution of this Lease, Tenant shall pay to Landlord the Security
Deposit in the amount and at the time hereafter set forth.

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     (b)  ADDITIONAL RENT. In addition to the Base Rent, Tenant shall pay to
Landlord, in accordance with this Paragraph 4, Tenant's proportionate share of
the following items related to the Building, the Property, and/or the Outside
Areas (as defined in Paragraph 4 (b)(3))(the "Additional Rent").

          (1)  TAXES AND ASSESSMENTS. All real estate taxes and assessments
applicable to the Term. Real estate taxes and assessments shall include any form
of assessment, license, fee, tax, levy, penalty (if a result of Tenant's
delinquency), or tax (other than net income, estate, succession, inheritance,
transfer or franchise taxes), imposed by any authority having the direct or
indirect power to tax or by any city, county, state or federal government or any
Improvement or other district or division thereof, whether such tax is (i)
determined by the area of the Premises, the Building or the Property, or any
part thereof or the Rent and other sums payable hereunder by Tenant, including,
but not limited to, any gross income or excise tax levied by any of the
foregoing authorities with respect to receipt of Rent or other sums due under
this Lease; (ii) upon any legal or equitable interest of Landlord in the
Premises, the Building or the Property, or any part thereof; (iii) upon this
transaction or any document to which Tenant is a party creating or transferring
any interest in the Premises, the Building or the Property; (iv) levied or
assessed in lieu of, in substitution for, or in addition to, existing or
additional taxes against the Premises, the Building or the Property, whether or
not now customary or within the contemplation of the parties; or (v) surcharge
against the parking area. Tenant and Landlord acknowledge that Proposition 13
was adopted by the voters of the State of California in the June, 1978 election
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such purposes as fire protection, street, sidewalk,
road, utility construction and maintenance, refuse removal and for other
governmental services which may formerly have been provided without charge to
property owners or occupants. It is the intention of the parties that all new
and increased assessments, taxes, fees, levies and charges due to Proposition 13
or any other cause are to be included within the definition of real property
taxes for purposes of this Lease.

          (2)  INSURANCE. All insurance premiums, including premiums for "all
risk", fire and extended coverage (not including earthquake endorsements)
insurance for the Building, public liability insurance, other insurance as
Landlord deems necessary, and any deductibles paid under policies of any such
insurance.

          (3)  OUTSIDE AREAS EXPENSES. All costs to operate, manage, maintain,
repair, supervise, insure (including provision of public liability insurance)
and administer the areas outside of the Building ("Outside Areas"), including
but not limited to watering, fertilizing, landscaping, tree work, spraying,
window washing of exterior window surfaces, plant and tree replacement,
lighting, building alarm system, repair of paving and sidewalks, striping,
clean-up and sweeping.

          (4)  PARKING CHARGES. Any parking charges or other costs levied,
assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building,
the Outside Areas and/or the Property. The charge shall be the smallest amount
required by law.

          (5)  MAINTENANCE AND REPAIR OF BUILDING. All costs to maintain,
repair, and replace the building, including but not limited to the roof
coverings including the metal roofing, the floor slab, and the exterior walls
(including the painting and crack sealing thereof) of the Building, and all
costs to maintain, repair and replace all utility and plumbing systems, fixtures
and equipment located outside the Building. Notwithstanding said provisions, the
cost of any improvement or replacement to the building under this sub-paragraph,
which exceeds $25,000.00 in cost and which has a useful life of more than 5
years, shall be amortized on a straight-line basis together with interest hereon
at the rate of 10% per annum, and only the amortized portion of such cost and
interest shall be included in costs recoverable by Landlord. Also
notwithstanding anything to the contrary, Landlord shall not recover any costs
for repair or replacement incurred in maintaining, repairing or replacing for
structural integrity the load bearing part of the exterior walls (other than for
painting or crack sealing), interior

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structural columns, foundation, and structural components of the roof unless
said repair or replacement was necessitated by acts of Tenant.

          (6)  MANAGEMENT AND ADMINISTRATION.  All costs for management and
administration of the Building and the Property, including a property
management fee, accounting, auditing, billing, postage, employee benefits,
payroll taxes, etc. All such expenses shall be reasonable and in accordance
with good management practices and shall not exceed 2% of annual Base Rent.

     (c)  ALLOCATION OF COSTS.

          (1)  If said real estate taxes and assessments are assessed against
the entire building and building site, each of greater extent than the
"Premises", the taxes and assessments allocated to the leased premises shall be
pro-rated on a square footage or other equitable basis, as calculated by
Landlord, such as the tax assessor's relative valuations. If the assessed
value of the Landlord's premises is increased by the inclusion therein of a
value placed upon the personal property or improvements of the Tenant, and if
the Landlord pays the taxes based on such increased assessment, the Tenant
shall, upon demand, repay to the Landlord the portion of such taxes resulting
from such increase in assessment. In the event the Premises and any improvements
installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher or lower than those of other Tenants in the building
or parcel, Tenant's share of the property taxes shall be readjusted upwards or
downwards accordingly, and Tenant agrees to such readjusted share. Such
determination shall be made by Landlord from the respective valuations assigned
in the assessor's work sheet or such other information as may be reasonably
available. Landlord's reasonable determination thereof, in good faith, shall
be conclusive. Increase in real estate taxes due to reappraisal because of
transfer of Landlord's interest to a third party, shall not be charged to
Tenant under this sub-paragraph (c) (1).

          (2)  Insurance, Outside Areas Expenses, Parking Charges, Maintenance
and repair of building, and management and administration expense shall be
charged to Tenant in proportion to that portion of the total rentable building
area on the site rented by Tenant hereunder. Until further buildings on the
site are completed, Tenant's share shall be calculated as 128,154 square
feet/163,706 square feet or 78.283%.

     (d)  PAYMENT OF ADDITIONAL RENT.

          (1)  By April 15, 2000, Landlord shall submit to Tenant an estimate
of monthly Additional Rent for the period between May 15, 2000 - December 31,
2000 and Tenant shall pay such estimated Additional Rent in advance on a
monthly basis concurrently with the payment of the Base Rent.  Tenant shall
continue to make said monthly payments until notified by Landlord of a change
therein. By March 1 of each calendar year, Landlord shall endeavor to provide
to Tenant a statement showing the actual Additional Rent due to Landlord for
the prior calendar year, prorated from the Commencement Date during the first
year. If the total of the monthly payments of Additional Rent that
Tenant has made for the prior calendar year (or portion thereof during which
this Lease was in effect) is less than the actual Additional Rent chargeable to
Tenant for such prior calendar year, then Tenant shall pay the difference in a
lump sum with thirty (30) days after receipt of such statement from Landlord.
Any overpayment by Tenant of Additional Rent for the prior calendar year shall
be promptly refunded to Tenant no later than April 15.

          (2)  The actual Additional Rent for the prior calendar year shall be
used for purposes of calculating Tenant's monthly payment of estimated
Additional Rent for the current year, subject to adjustment as provided above,
except that in any year in which resurfacing of the parking area, exterior
painting, or material roof repairs are planned, Landlord may include the
estimated cost of such work in the estimated monthly Additional Rent. Landlord
shall make final determination of Additional Rent for the year in which this
Lease terminates as soon as possible after termination. Tenant shall remain
liable for payment of any amount due to Landlord in excess of the estimated
Additional Rent previously paid by Tenant, and, conversely, Landlord shall
promptly return to Tenant any overpayment, even though the Term has expired
and Tenant has



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vacated the Premises. Failure of Landlord to submit statements as called for
herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided. Tenant shall have the right to review and audit
Landlord's records relating to Additional Rent at Tenant's expense, at
Landlord's business office, provided Tenant has given Landlord reasonable prior
notice.

     (e)  GENERAL PAYMENT TERMS.  The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder are referred to as the "Rent". All
Rent shall be paid without deduction, offset or abatement in lawful money of
the United States of America. Rent for any partial month during the Term shall
be prorated for the portion thereof falling due within the Term.

5.   LATE CHARGE:  Notwithstanding any other provision of this Lease, Tenant
hereby acknowledges that late payment to Landlord of Rent, or other amounts
due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. If
any Rent or other sums due from Tenant are not received by Landlord or by
Landlord's designated agent within ten (10) days after their due date, then
Tenant shall pay to Landlord a late charge equal to six percent (6%) of such
overdue amount, plus any attorneys' fees incurred by Landlord by reason of
Tenant's failure to pay Rent and/or other charges when due hereunder. Landlord
and Tenant hereby agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of Tenant's late
payment. Landlord's acceptance of such late charges shall not constitute a
waiver of Tenant's default with respect to such overdue amount or estop Landlord
from exercising any of the other rights and remedies granted under this Lease.

          Initials:
                    Landlord ________________    Tenant ________________

5.   SECURITY DEPOSIT:  Tenant shall deposit with Landlord the Security Deposit
in the amount of $226,833.00 as security for the full and faithful performance
of each and every term, covenant and condition of this Lease. $115,000.00 of
said Security Deposit shall be paid with the execution of this Lease and the
balance of $111,833.00 shall be paid by April 14, 2000. Landlord may use,
apply or retain the whole or any part of the Security Deposit as may be
reasonably necessary (a) to remedy Tenant's default in the payment of any Rent,
(b) to repair damage to the Premises caused by Tenant, (c) to clean the
Premises upon termination of this Lease, (d) to reimburse Landlord for the
payment of any amount which Landlord may reasonably spend or be required to
spend by reason of Tenant's default, or (e) to compensate Landlord for any
other loss or damage which Landlord may suffer by reason of Tenant's default.
Should Tenant faithfully and fully comply with all of the terms, covenants and
conditions of this Lease, within thirty days following the expiration of the
Term, the Security Deposit or any balance thereof shall be returned to Tenant
or, at the option of Landlord, to the last assignee of Tenant's interest in
this Lease. When the Security Deposit has been paid in full, Landlord shall
deposit said Security Deposit in a savings account in a bank or savings and loan
institution, and Tenant will be entitled to Interest thereon at the rate
paid by savings institution, payable to Tenant at the termination of the lease.
If Landlord so uses or applies all or any portion of said deposit, within ten
(10) days after written demand therefor Tenant shall deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to the full extent of
the above amount, and Tenant's failure to do so shall be a default under this
Lease. No part of the Security Deposit shall be considered to be held in trust,
to bear interest or another increment for its use, or to be prepayment for any
moneys to be paid by Tenant under this Lease. In the event Landlord transfers
its interest in this Lease, Landlord shall transfer the then remaining amount of
the Security Deposit to Landlord's successor in interest, and thereafter
Landlord shall have no further liability to Tenant with respect to such
Security Deposit.

7.   POSSESSION:

     (a)  TENANT'S RIGHT OF POSSESSION.  Tenant shall be entitled to early
access to the vacant part of the premises on April 15, 2000 for work as
specified in paragraph 48


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below. It is understood that certain subtenants of One World Systems may hold
over and become subtenants of Tenant subject to the terms and conditions of
this lease.

     (b)  DELAY IN DELIVERING POSSESSION. If Landlord cannot deliver possession
of the Premises to Tenant at the commencement of the Term, this Lease shall not
be void or voidable, nor shall Landlord, or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom. Tenant shall not be liable
for Rent until Landlord delivers possession of the Premises to Tenant. The
expiration date of the Term shall be extended by the same number of days that
Tenant's possession of the Premises is delayed. In the event that possession of
the premises cannot be delivered by July 15, 2000, Landlord may at its option
by notice in writing to Tenant within ten days thereafter, cancel this Lease,
in which event the Parties shall be discharged from all obligations hereunder.

     (c)  If the Premises suffer a casualty loss prior to the commencement of
this Lease, such that the Tenant will be denied the use of a material portion
of the Premises, then Tenant shall have the option of terminating this Lease
upon written notice to Landlord.

8.   USE OF PREMISES:

     (a)  PERMITTED USES. The Premises shall be used only for general office,
engineering, research and development, service and repair, and storage of
computer hardware and software products and components, to the extent permitted
by governmental regulations. No printed circuit board manufacture or wafer
fabrication shall be permitted, or any activities involving toxic substances,
except that Tenant shall be permitted to use customary office products and
cleansers and minor quantities of cleaners and solvents in connection with its
business, but as to such cleaners and solvents subject to the prior written
consent of Landlord, which shall not be unreasonably withheld.

     (b)  COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at Tenant's
expense, faithfully observe and comply with all Municipal, State and Federal
statutes, rules, regulations, ordinances, requirements, and orders, now in
force or which may hereafter be in force pertaining to the Premises or Tenant's
use thereof, including without limitation, any statutes, rules, regulations,
ordinances, requirements, or orders requiring installation of fire sprinkler
systems, and removal of asbestos placed on the Premises by Tenant, whether
substantial in cost or otherwise, and all recorded covenants, conditions and
restrictions affecting the Property ("Private Restrictions") now in force or
which may hereafter be in force; provided that no such future Private
Restrictions shall materially affect Tenant's use and enjoyment of the Premises
or Property and provided, however, that Tenant shall not be required to make
structural changes to the Premises or Building not related to Tenant's specific
use of the Premises unless the requirement for such changes is imposed as a
result of any improvements or additions made or proposed to be made at Tenant's
request. The judgement of any court of competent jurisdiction, or the admission
of Tenant in any action or proceeding against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such rule, regulation,
ordinance, statute or Private Restrictions, shall be conclusive of that fact as
between Landlord and Tenant.

9.   ACCEPTANCE OF PREMISES: By execution hereof, Tenant accepts the Premises as
suitable for Tenant's intended use and as being in good and sanitary operating
order, condition, and repair, AS IS, and without representation or warranty by
Landlord as to the condition, or use or occupancy which may be made thereof. Any
exceptions in the foregoing must be by written agreement executed by Landlord
and Tenant, and specifically set forth in Addendum One.

10.  SURRENDER: Tenant agrees that on the termination of this Lease, Tenant
shall surrender the premises in the same condition as herein agreed they have
been received by Tenant. Damage caused by war, earthquake and ordinary wear and
tear excepted but with carpets vacuumed and other floors "broom clean." At the
time of termination of this lease, Landlord may require any or all of the
alterations or additions installed by Tenant or by Landlord for the benefit of
Tenant at Tenant's request, to be removed and

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the premises restored to their original condition, whether or not said
alterations or additions have become part of the premises under paragraph 11
hereof. Upon surrender of the premises, either at the expiration of the term of
otherwise, Lessee agrees to remove all personal property and rubbish from the
premises; but if not so removed by Tenant, Landlord may have the same removed
at Tenant's expense. All property of Tenant not so removed, unless such
non-removal is consented to by Landlord, shall be deemed abandoned by Tenant,
provided that in such event Tenant shall remain liable to Landlord for all
costs incurred in storing and disposing of such abandoned property of
Tenant. If the Premises are not surrendered at the end of the term or sooner
termination of this lease, Tenant hereby indemnifies Landlord against loss or
liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay. In the event of surrender of this lease, Landlord shall have the
option of terminating all existing sub-leases or of assigning said subleases to
Landlord.

11.  ALTERATIONS AND ADDITIONS:

     (a)  Except for non-structural interior alterations and additions costing
less than $20,000.00 per alteration or addition. Tenant shall not make, or
permit to be made, any alteration or addition to the Premises, or any part
thereof, without the prior written consent of Landlord, such consent not to be
unreasonably withheld. Landlord's failure to disapprove proposed alterations or
additions within 10 working days after Landlord's receipt of the request for
approval, shall be deemed approval. Normal repair and maintenance work shall
not be deemed to be an alteration or addition to the Premises.

     (b)  Any alteration or addition to the Premises (including those in
subparagraph (a)) shall be at Tenant's sole cost and expense, in compliance
with all applicable laws and requirements requested by Landlord, and in
accordance with plans and specifications submitted in writing to Landlord and
approved as to alterations and additions costing over $20,000.00.

     (c)  All additions, alterations or improvements, including, but not
limited to, heating, lighting, electrical, air conditioning, fire
extinguishers, lighting fixtures, ballasts, light globes, and tubes, hot water
heaters, fixed partitioning, drapery, wall covering and paneling, built-in
cabinet work and carpeting installations made by Tenant, together with all
property that has become an integral part of the Building, shall at once be and
become the property of Landlord, and shall not be deemed trade fixtures, but
any or all are subject to removal pursuant to paragraph 10 hereof.
Notwithstanding the foregoing, the following Tenant improvements, if paid for
by Tenant and not included in any Tenant improvements, if paid for by Tenant
and not included in any Tenant Improvement Allowance, namely a warehouse cage
and telecommunication and computer-related equipment, including specialized
flooring, cabling, air conditioning equipment (for the sale purpose of cooling
said computers), may be removed by Tenant so long as Tenant repairs any damage
caused by such removal.

     (d)  Tenant agrees not to proceed to make such alterations or additions,
notwithstanding consent from Landlord to do so, until five (5) days after
Tenant's receipt of such consent.

12.  MAINTENANCE OF PREMISES:

     (A)  MAINTENANCE BY TENANT. Throughout the Term, Tenant shall, at its sole
expense and at all times (whether or not such portion of the Premises requiring
repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements, or the age of such portion
of the Premises), (1) keep and maintain in good order, condition, and repair,
and to repair and to replace the Premises, and every part thereof, including
glass, windows, window frames, skylights, door closers, locks, storefronts,
interior and exterior doors and door frames, and the interior of the Premises,
(excepting only those portions of the Building to be maintained by Landlord, as
provided in Paragraph 12(c) below), (2) keep and maintain in good order and
condition, repair, and replace all utility lighting, and plumbing systems,
fixtures and equipment, including without limitation, electricity, gas, fire
sprinkler and stand pipes, fire alarms, smoke detection, HVAC, water, and
sewer, located in or on the Premises, and furnish all


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expendable, including fluorescent tubes, ballasts, light bulbs, paper goods and
soaps, used in the Premises, (3) repair all damage to the Building or the
Outside Areas caused by the negligence or willful misconduct of Tenant or its
agents, employees, contractors or invitees or other persons, including vandals.
Tenant shall not do anything to cause any damage, deterioration or unsightliness
to the Building and the Outside Areas. Tenant also agrees to maintain and pay
for a service contract which meets the manufacturer's recommendations of the air
conditioning, heating and ventilating systems installed in the leased premises
and which is approved by Landlord. Landlord reserves the right to hire a
licensed HVAC contractor to inspect annually the air conditioning, heating, and
ventilating system. If this contractor finds deficiencies in the condition of
this system, Tenant agrees to make all repairs and corrections within a
reasonable period of time at Tenant's expense, and after 30 days notice pay the
cost of the inspections by Landlord's contractor. If no deficiencies are found,
Landlord shall pay for the cost of the inspections.

      (b) LANDLORD'S RIGHT TO MAINTAIN AND REPAIR AT TENANT'S EXPENSE.
Notwithstanding the foregoing, Landlord shall have the right, but not the
obligation, at Tenant's expense, to enter the Premises and perform Tenant's
maintenance, repair and replacement work. Within thirty (30) days after invoice
therefor from Landlord, Tenant shall pay all reasonable costs and expenses
incurred by Landlord in connection with such maintenance, repair and replacement
work. Landlord shall have the right to perform Tenant's maintenance, repair and
replacement work only if Tenant fails to take appropriate remedial action within
ten (10) days after receiving written notice from Landlord specifying the nature
of Tenant's failure to comply with Paragraph 12(a) of the Lease. Notwithstanding
the foregoing, if Tenant's failure to maintain, repair or replace as required by
Paragraph 12(a) of the Lease creates an immediate danger of material further
damage to the Premises, Landlord shall not be required to give the notice to
Tenant set forth in the previous sentence.

      (c) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs
12(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's Share of the
cost and expense of the following items, Landlord agrees to repair and maintain
the following items: the roof coverings (provided that Tenant installs no
additional air conditioning or other equipment on the roof that damages the
roof coverings), the floor slab, and the exterior walls (excluding any glass
therein but including the painting thereof) of the Building; the utility and
plumbing systems, (including fountain and sewer lines), fixtures and equipment
located outside the Building; and the parking areas, landscaping, sprinkler
systems, alarm system, sidewalks, driveways, curbs, and lighting systems in the
Outside Areas. Subject to the provisions of Paragraphs 4, 22, and 23, Landlord
shall maintain, repair, or replace for structural integrity the load bearing
part of exterior walls, interior structural columns, the foundation, and the
structural components of the roof (providing that Tenant installs no additional
air conditioning or other equipment on the roof that damages these components).
Landlord shall not be obligated to repair minor settlement cracks on walls or
floor of the leased premises, and shall not be responsible for the leaking of
said walls due thereto or as a result of porosity thereof. Landlord shall not be
required to repair or maintain conditions due to any act, negligence or omission
of Tenant or its agents, contractors, employees or invitees. Landlord's
obligation hereunder to repair and maintain is subject to the condition
precedent that Landlord shall have received written notice of the need for such
repairs and maintenance. Tenant shall promptly report in writing to Landlord any
defective condition known to it which Landlord is required to repair. All work
by and for Landlord shall be performed during normal working hours and not on
weekends, holidays, and after normal working hours at overtime, holiday, or
premium pay.

      (d) TENANT'S WAIVER OF RIGHTS. Tenant hereby expressly waives all rights
to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Cod Sections 1941 and 1942, and 1932 (1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.

13. LANDLORD'S INSURANCE: Landlord shall purchase and keep in force fire,
extended coverage and "all risk" insurance covering the Building, and earthquake
coverage at the option of the Landlord. Tenant shall, at its sole cost and
expense,


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comply with any and all reasonable requirements pertaining to the Premises of
any insurer necessary for the maintenance of reasonable fire and public
liability insurance, covering Building and appurtenances. Landlord, at Tenant's
cost, may maintain "Loss of Rents" insurance, insuring that the Rent will be
paid in a timely manner to Landlord for a period of at least twelve (12) months
if the Premises are destroyed or rendered unusable or inaccessible by any cause
insured against under this Lease. The premium for such Loss of Rents insurance
shall be Additional Rent as set forth in Paragraph 4(b)(2).

14.  TENANT'S INSURANCE:

     (a) PUBLIC LIABILITY INSURANCE. Tenant shall, at Tenant's expense secure
and keep in force a "broad form" public liability insurance and property damage
policy covering the Premises and the Outside Areas, insuring Tenant, and naming
Landlord and its lenders as additional insureds, against any liability arising
out of the ownership, use, occupancy or maintenance of the Premises and all
Outside Areas. The minimum limit of coverage of such policy shall be in the
amount of not less than One Million Dollars ($1,000,000.00) for injury or death
of one person in any one accident or occurrence and in the amount of not less
than One Million Dollars ($1,000,000.00) for injury or death of more than one
person in any one accident or occurrence, shall include an extended liability
endorsement providing contractual liability coverage (which shall include
coverage for Tenant's indemnification obligations in this Lease), and shall
contain a severability of interest clause or a cross liability endorsement. Such
insurance shall further insure Landlord and Tenant against liability for
property damage of at least One Million Dollars ($1,000,000.00). The limit of
any insurance shall not limit the liability of tenant hereunder. No policy shall
be cancelable or subject to reduction of coverage, without at least thirty (30)
days prior written notice to Landlord, and loss payable clauses shall be subject
to Landlord's approval. Such policies of insurance shall be issued as primary
policies and not contributing with or in excess of coverage that Landlord may
carry, by any insurance company authorized to do business in the State of
California for the issuance of such type of insurance coverage and rate A:XIII
or better in BEST'S KEY RATING GUIDE. A copy of said policy or a certificate
evidencing to Landlord's reasonable satisfaction that such insurance is in
effect shall be delivered to Landlord upon commencement of the Term, and
thereafter whenever said policies are renewed or modified, and also whenever
Landlord shall reasonably request.

     (b)  PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force and
effect on all of its fixtures and equipment on the Premises, a policy or
policies of fire and extended coverage insurance with standard coverage
endorsement to the extent of the full replacement cost thereof. During the term
of this Lease the proceeds from any such policy or policies of insurance shall
be used for the repair or replacement of the fixtures and equipment so insured.
Landlord shall have no interest in the insurance upon Tenant's equipment and
fixtures and will sign all documents reasonably necessary in connection with the
settlement of any claim or loss by Tenant. Landlord will not carry insurance on
Tenant's possessions. Tenant shall furnish Landlord with a certificate
evidencing to Landlord's reasonable satisfaction that such insurance is
currently in effect, and whenever required, shall satisfy Landlord that such
policy is in full force and effect.

15.  INDEMNIFICATION:

     (a) OF LANDLORD. Tenant shall indemnify and hold harmless Landlord and
agents, employees, partners, shareholders, directors, invitees, and independent
contractors (collectively "Agents") of Landlord against and from any and all
claims, liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees) arising from (1)
Tenant's use of the Premises or from any activity done, permitted or suffered by
Tenant, its agents, employees or independent contractors in and about the
Premises, the Building or the Property, and (2) any act, neglect, fault, willful
misconduct or omission of Tenant, or Tenant's Agents and invitees or from any
breach or default in the terms of this Lease by Tenant, and (3) any action or
proceeding brought on account of any matter in items (1) or (2). If any action
or proceeding is brought against Landlord by reason of any such claim, upon
notice from Landlord, Tenant shall defend the same at Tenant's expense by
counsel


                                                                               8
<PAGE>   9
reasonably satisfactory to Landlord. As a material part of the consideration to
Landlord, Tenant hereby assumes all risk of damage to property or injury to
persons in or about the Premises from any cause whatsoever (except that which
is caused by the sole active negligence or willful misconduct by Landlord or its
Agents or by the failure of Landlord to observe any of the terms and conditions
of this Lease), if such failure has persisted for an unreasonable period of time
after written notice of such failure, and Tenant hereby waives all claims in
respect thereof against Landlord. The obligations of Tenant under this
Paragraph 15 shall survive any termination of this Lease.

     (b) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.

16. SUBROGATION: Subject to the approval of its respective insurance carrier,
Landlord and Tenant hereby mutually waive any claim against the other during
the Term for any injury to person or loss or damage to any of their property
located on or about the Premises, the Building or the Property that is caused
by or results from perils covered by insurance carried by the respective
parties, to the extent of the proceeds of such insurance actually received with
respect to such injury, loss or damage, whether or not due to the negligence of
the other party or its agents. Because the foregoing waivers will preclude the
assignment of any claim by way of subrogation to an insurance company or any
other person, each party now agrees to immediately give to its insurer written
notice of the terms of these mutual waivers. Nothing in this Paragraph 16 shall
relieve a party of liability to the other for failure to carry insurance
required by this Lease.

17. ABANDONMENT: Tenant shall not abandon the Premises at any time during the
Term. In the event of abandonment, the rights and remedies of Tenant and
Landlord shall be determined in accordance with the applicable California
statutes in effect at the time of abandonment.

18. FREE FROM LIENS: Tenant shall keep the Premises and the Property free from
any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant.

19. ADVERTISEMENTS AND SIGNS: Tenant shall not place or permit to be placed in,
upon, or about the Premises or the Property any signs, advertisements or
notices without obtaining Landlord's prior written consent or without complying
with applicable law, and will not conduct, or permit to be conducted, any sale
by auction on the Premises or otherwise on the Property. Tenant shall remove any
sign, advertisement or notice placed on the Premises by Tenant upon the
expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the Premises or the Property caused thereby, all
at Tenant's expense. If any signs are not removed, or necessary repairs not
made, Landlord shall have the right to remove the signs and repair any damage
or injury to the Premises at Tenant's sole cost and expense.

20. UTILITIES: Tenant shall pay for all water, sewer, gas, heat, light, power,
telephone service and all other materials and services supplied to the
Premises. If Tenant fails to pay for any of the foregoing when due, Landlord
may pay the same and add such amount to the Rent.

It is further understood that certain utility services, including water, and
sewer are not separately metered to the Premises, but also serve other adjoining
premises. Landlord and Tenant agree that Landlord shall submit at regular
billing intervals, when utility bills are received, an allocation of the
monthly charges applicable to each user by area occupied by each. Said allocated
charges shall constitute additional rent. Landlord and Tenant agree that such
allocation shall cease as to any service for which Landlord shall arrange for a
separate meter for the Premises. The allocated costs shall also include the
expense of maintenance, repair and replacement of equipment providing
distribution of said utility services, which shall be charged on the same area
basis.

                                                                               9
<PAGE>   10
21.  ENTRY BY LANDLORD: Tenant shall permit Landlord and its Agents to enter
into and upon the Premises at all reasonable times, upon reasonable notice of no
less than twenty four (24) hours, (except in the case of an emergency, for which
no notice shall be required), and subject to Tenant's reasonable security
arrangements, for the purpose of inspecting the same or showing the Premises to
prospective purchasers, lenders or tenants or to alter, improve, maintain and
repair the Premises as required or permitted of Landlord under the terms hereof,
without any liability to Tenant for any loss of occupation of quiet enjoyment of
the Premises thereby occasioned (except for actual damages resulting from the
negligence or willful misconduct of Landlord or its agents); and Tenant shall
permit Landlord to post notices of non-responsibility and ordinary "for sale" or
"for lease" signs, provided that Landlord may post such "for lease" signs and
exhibit the Premises to prospective tenants only during the six (6) months prior
to termination of this Lease. No such entry shall be construed to be a forcible
or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises.

22.  DESTRUCTION AND DAMAGE:

     (a)  If the Building is damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:

          (1)  In the event of total destruction (which shall mean destruction
or damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Building, elect either to commence promptly to repair and
restore the Building and prosecute the same diligently to completion, in which
event this lease shall remain in full force and effect; or not to repair or
restore the Building, in which event this Lease shall terminate, Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
occurrence of such destruction. If Landlord elects not to restore the Building,
this Lease shall be deemed to have terminated as of the date of such total
destruction.

          (2)  In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Building for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Building
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within one hundred eighty (180) days from
the date of such destruction, Landlord shall commence and proceed diligently
with the work of repair and restoration, in which event the Lease shall continue
in full force and effect. If such repair and restoration requires longer than
one hundred eighty (180) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair or restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the destruction occurs. If Landlord elects not to
restore the Building, this Lease shall be deemed to have terminated as of the
date of such partial destruction.

          (3)  Notwithstanding anything to the contrary contained in this
Paragraph 22, in the event of damage to the Building or the Premises occurring
during the last twelve (12) months of the Term, Landlord may elect to terminate
this Lease by written notice of such election given to Tenant within thirty (30)
days after the damage occurs.

     (b)  If the Building is damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Building and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect; or not to
repair or restore the Building, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the occurrence of such damage. If Landlord elects not to restore the
Building, this Lease shall be deemed to have terminated as of the date on which
Tenant surrenders possession of the Premises to Landlord, except that if the
damage to the Premises materially impairs Tenant's ability to continue its
business



                                                                              10

<PAGE>   11
operations in the Premises, then this Lease shall be deemed to have terminated
as of the date such damage occurred.

     (c) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration, unless the damage was caused by the negligent or willful acts of
omissions of Tenant, in which event there shall be abatement of Base Rent only
to the extent of rental abatement insurance proceeds received by Landlord.
Tenant shall not be entitled to any compensation or damages for loss of use of
the whole or any part of the Premises and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.

     (d) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only those portions of the Building
and Premises which were originally provided at Landlord's expense,
substantially to their condition existing immediately prior to the occurrence
of the damage or destruction; and Tenant shall promptly repair and restore, at
Tenant's expense, Tenant's fixtures, improvements, alterations and additions in
and to the Premises or Building which were not provided at Landlord's expense.

     (e) Tenant hereby waives the provisions of California Civil Code Section
1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar law now
or hereinafter in effect, and the provisions of this Paragraph 22 shall govern
exclusively in case of such destruction.

     (f) Notwithstanding the provisions of Paragraph 22 of the Lease to the
contrary, in the event Landlord elects to repair or restore the Premises and
such repair or restoration is reasonably estimated by Landlord to require more
than one hundred eighty (180) days from the date of destruction, Landlord shall
notify Tenant and Tenant shall have ten (10) days after receipt of such notice
to elect to terminate the Lease by giving written notice of such election to
Landlord. If Tenant so elects to terminate the Lease, such termination shall be
effective as of (i) if Tenant is in possession of the Premises following such
damage or destruction the date Tenant surrenders possession of the Premises to
Landlord following Tenant's election to terminate the Lease or (ii) if Tenant
is unable to occupy the Premises following such damage and destruction, the
date on which the damage or destruction occurred.

23. CONDEMNATION: If twenty-five percent (25%) or more of the Building or the
parking area for the Premises is taken for any public or quasipublic purpose by
any lawful governmental power or authority, by exercise of the right of
appropriation, inverse condemnation, condemnation or eminent domain, or sold to
prevent such taking (each such event being referred to as a "Condemnation"),
Landlord or Tenant may, at its option, terminate this Lease as of the date
title vests in the condemning party. If the Building after any Condemnation and
any repairs by Landlord would be untenantable for the conduct of Tenant's
business operations, Tenant shall have the right to terminate this Lease as of
the date title vests in the condemning party. If either party elects to
terminate this Lease as provided herein, such election shall be made by written
notice to the other party given within thirty (30) days after the nature and
extent of such Condemnation have been finally determined. Tenant shall not
because of such taking assert any claim against Landlord. Landlord shall be
entitled to receive the proceeds of all Condemnation awards (except separate
awards for trade fixtures and relocation expense), and Tenant hereby assigns to
Landlord all of its interest in such awards. If less than twenty-five percent
(25%) of the Building or the parking area is taken, Landlord at its option may
terminate this Lease. If neither Landlord nor Tenant elects to terminate this
Lease to the extent permitted above, Landlord shall promptly proceed to restore
the Premises, to the extent of any Condemnation award received by Landlord, to
substantially their same condition as existed prior to such Condemnation,
allowing for the reasonable effects of such Condemnation, and a proportionate
abatement shall be made to the Base Rent corresponding to the time during
which, and to the portion of the floor area of the Building (adjusted for any
increase thereto resulting from any reconstruction) of which, Tenant is
deprived on account of such Condemnation and restoration. The provisions of
California Code of Civil Procedure Section 1265.130,

                                                                              11

<PAGE>   12
which allows either party to petition the Superior Court to terminate the Lease
in the event of a partial taking of the Premises, and any other applicable law
now or hereinafter enacted, are hereby waived by Landlord and Tenant.

24.   ASSIGNMENT AND SUBLETTING:

      (a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (2) assign
or transfer this Lease or any interest herein, sublet the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees, agents and Invitees of Tenant excepted) to occupy or use
the Premises, or any portion thereof, without first obtaining the written
consent of Landlord. A change in control of Tenant shall constitute an
assignment requiring Landlord's consent to the transfer, on a cumulative basis,
of more the fifty percent (50%) of the voting control of Tenant shall
constitute a change in control for this purpose. When Tenant requests
Landlord's consent to such assignment or subletting, it shall notify Landlord
in writing of the name and address of the proposed assignee or subtenant and
the nature and character of the business of the proposed assignee or subtenant
and shall provide current financial statements for the proposed assignee or
subtenant prepared in accordance with generally accepted accounting principles.
Tenant shall also provide Landlord with a copy of the proposed sublet or
assignment agreement, including all material terms and conditions thereof.
Landlord shall have the option, to be exercised within thirty (30) days of
receipt of the foregoing, to (1) cancel this Lease as of the commencement date
stated in the proposed sublease or assignment, (2) acquire from Tenant the
interest, or any portion thereof, in this Lease and/or the Premises that Tenant
proposes to assign or sublease, on the same terms and conditions as stated in
the proposed sublet or assignment agreement, (3) consent to the proposed
assignment or sublease, or (4) refuse its consent to the proposed assignment or
sublease, providing that such consent shall not be unreasonably withheld.

      (b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord may take into account the reputation and credit
worthiness of the proposed assignee or subtenant, the character of the business
proposed to be conducted in the Premises or portion thereof sought to be
subleased, and the potential impact of the proposed assignment or sublease on
the economic value of the Premises. In any event, Landlord may withhold its
consent to any assignment or sublease, if (1) the actual use proposed to be
conducted in the Premises or portion thereof conflicts with the provisions of
Paragraph 8(a) or (b) above or with any other lease which restricts the use to
which any space in the Building may be put, or (2) the proposed assignment or
sublease requires unreasonable alterations, improvements or additions to the
Premises or portions thereof.

      (c) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of the
difference, if any, between (1) the Base Rent plus Additional Rent allocable to
that part of the Premises affected by such assignment or sublease pursuant to
the provisions of this Lease, and (2) the rent and any additional rent paid by
the assignee or sublessee to Tenant, after deducting the costs of a real estate
commission, if any, incurred by Tenant in connection with any such assignment
or sublease. If the sublease is "full service" sublease, the costs of providing
full service allocable to the part of the premises being subleased shall be
added to 1) The Base Rent plus Additional rent in determining the difference.
It is agreed that "full service" subleases at a rate of $2.50 per square foot
or lower shall not be subject to any additional payment to Landlord. The
assignment or sublease agreement, as the case may be, after approval by
Landlord, shall not be amended without Landlord's prior written consent, and
shall contain a provision directing the assignee or subtenant to pay the rent
and other sums due thereunder directly to Landlord upon receiving written
notice from Landlord that Tenant is in default under this Lease with respect to
the payment of Rent. Landlord's collection of such rent and other sums shall
not constitute an acceptance by Landlord of attornment by such assignee or
subtenant. A consent to one assignment subletting, occupation or use, and
consent to any assignment or subletting shall in no way relieve Tenant of any
liability under this Lease. Any assignment or subletting without Landlord's
consent shall be void, and shall, at the option of Landlord, constitute a
Default under this Lease.


                                                                              12
<PAGE>   13
     (d)  Tenant shall pay Landlord's reasonable fees, not to exceed Five
Hundred Dollars ($500.00) per transaction, incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.

     (e)  Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 24 on Tenant's ability to assign or
transfer this Lease or any interest therein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or, use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the
time that the Lease was entered into, and shall be deemed to be reasonable at
the time that Tenant seeks to assign or transfer this Lease or any interest
herein, to sublet the Premises or any part thereof, or transfer or assign any
right or privilege appurtenant to the Premises, or to allow any other person to
occupy or use the Premises or any portion thereof.

25.  TENANT'S DEFAULT: The occurrence of any one of the following events shall
constitute an event of default on the part of Tenant ("Default"):

     (a)  The abandonment of the Premises by Tenant;

     (b)  Failure to pay any installment of Rent or to any other monies due
and payable hereunder, said failure continuing for a period of 10 calendar days
after the same is due;

     (c)  A general assignment by Tenant for the benefit of creditors;

     (d)  The filing of a voluntary petition in bankruptcy by Tenant, the
filing of a voluntary petition for an arrangement, the filing of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by Tenant's creditors, said involuntary petition remaining
undischarged for a period of sixty (60) days;

     (e)  Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;

     (f)  Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time
periods and in the manner required by Paragraph 30 or 31 or 40;

     (g)  An assignment or sublease, or attempted assignment or sublease, of
this Lease or the Premises by Tenant contrary to the provision of Paragraph 24,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;

     (h)  Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 6 above;

     (i)  Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
other Paragraphs of this Paragraph 25, which shall be governed by such other
Paragraphs), which failure constitutes for ten (10) calendar days after written
notice thereof from Landlord to Tenant provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such ten (10) day period despite reasonable diligence. Tenant shall not
be in default under this subparagraph unless Tenant fails thereafter diligently
and continuously to prosecute the cure to completion; and

     (j)  Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
Delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within (5) calendar days after
written notice thereof for any

                                                                              13
<PAGE>   14
three (3) months (consecutive or nonconsecutive) during any twelve (12) month
period. In the event of a Chronic Delinquency, in addition to Landlord's other
remedies for Default provided in this Lease, at Landlord's option, Landlord
shall have the right to require that Rent be paid by Tenant quarterly, in
advance.

Tenant agrees that any notice given by Landlord pursuant to Paragraph 25(b), (i)
or (j) above shall satisfy the requirements for notice under California Code of
Civil Procedure Section 1161, and Landlord shall not be required to give any
additional notice in order to be entitled to commence an unlawful detainer
proceeding.

26. LANDLORD'S REMEDIES:

     (a) TERMINATION. In the event of any Default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such Intention to
terminate. In the event that Landlord shall elect to so terminate this Lease,
then Landlord may recover from Tenant:

          (1) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus

          (2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus

          (3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus

          (4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, any costs or expenses reasonably and
necessarily incurred by Landlord (i) in retaking possession of the Premises;
(ii) in maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof, including such
acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or
(iv) for any other costs necessary or appropriate to relet the Premises; plus

          (5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus

          (6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.

     As used in subparagraphs (1), (2), and (3) above, the "worth at the time of
award" is computed by allowing interest at an annual rate equal to ten percent
(10%) per annum or the maximum rate permitted by law, whichever is less. Tenant
waives redemption of relief from forfeiture under California Code of Civil
Procedure Sections 1174 and 1179, or under any other present or future law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any Default of Tenant hereunder.

     (b) CONTINUATION OF LEASE. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet and assign, subject only to reasonable limitations).

                                                                              14
<PAGE>   15
     (c) RE-ENTRY. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.

     (d) RELETTING. in the event of the abandonment of the Premises by Tenant or
in the event that Landlord shall elect to re-enter as provided in Paragraph
26(b) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph 26(a), Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises. In the event that Landlord
shall elect to so relet, then rentals received by Landlord from such reletting
shall be applied in the following order: (1) to reasonable attorneys' fees
incurred by Landlord as a result of a Default and costs in the event suit is
filed by Landlord to enforce such remedies; (2) to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; (3) to the
payment of any reasonable costs of such reletting; (4) to the payment of the
costs of any reasonable alterations and repairs to the Premises; (5) to the
payment of Rent due and unpaid hereunder; and (6) the residue, if any, shall be
held by Landlord and applied in payment of future Rent and other sums payable by
Tenant hereunder as the same may become due and payable hereunder. Should that
portion of such rentals received from such reletting during any month, which is
applied to the payment of Rent hereunder, be less than the Rent payable during
the month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as ascertained, any costs and expenses reasonably
and necessarily incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.

     (e) TERMINATION. No re-entry or taking of possession of the Premises by
Landlord pursuant to his Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.

     (f) CUMULATIVE REMEDIES. The remedies herein provided are not exclusive and
Landlord shall have any and all other remedies provided herein or by law or in
equity.

     (g) NO SURRENDER. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord or surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger takes place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within (5) days after such
surrender.

27. ATTORNEY'S FEES: In the event any legal action or proceeding, including
arbitration and declaratory relief, is commenced for the purpose of enforcing
any rights or remedies pursuant to this Lease, the prevailing party shall be
entitled to recover from the non-prevailing party reasonable attorneys' fees, as
well as costs or suit, in said action or proceeding, whether or not such action
is prosecuted to judgment.

28. TAXES: Tenant shall be liable for and shall pay, prior to delinquency, all
taxes levied against personal property and trade or business fixtures of Tenant.
If any alteration, addition or improvement installed by Tenant pursuant to
Paragraph 11, or


                                                                              15
<PAGE>   16
any personal property, trade fixture or other property of Tenant, is assessed
and taxed with the Property, Tenant shall pay such taxes to Landlord within
fifteen (15) days after delivery to Tenant of a statement therefor.

29. EFFECT OF CONVEYANCE: The Term "Landlord" as used in this Lease, means only
the owner for the time being of the Property containing the Building, so that,
in the event of any sale of the Property or the Building, Landlord shall be and
hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing from and after transfer, 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 Property or the Building has assumed
and agreed to carry out any and all covenants and obligations of Landlord
hereunder.

30. TENANT'S ESTOPPEL CERTIFICATE: From time to time, upon written request of
Landlord, Tenant shall execute, acknowledge and deliver to Landlord or its
designee, a written certificate stating (a) the date this Lease was executed,
the Commencement Date of the Term and the date the Term expires; (b) the date
Tenant entered into occupancy of the Premises; (c) the amount of Rent and the
date to which such Rent has been paid; (d) that this Lease is in full force and
effect and has not been assigned, modified, supplemented or amended in any way
(or, if assigned, modified, supplemented or amended, specifying the date and
terms of any agreement so affecting this Lease); (e) that this Lease represents
the entire agreement between the parties with respect to Tenant's right to use
and occupy the Premises (or specifying such other agreements, if any); (f) that
all obligations under this Lease to be performed by Landlord as of the date of
such certificate have been satisfied (or specifying those as to which Tenant
claims that Landlord has yet to perform); (g) that all required contributions by
Landlord to Tenant on account of Tenant's improvements have been received (or
stating exceptions thereto); (h) to the best of Tenant's knowledge that on such
date there exist no defenses or offsets that Tenant has against the enforcement
of this Lease by Landlord (or stating exceptions thereto; (i) that no Rent or
other sum payable by Tenant hereunder has been paid more than one (1) month in
advance (or stating exceptions thereto); (j) that security has been deposited
with Landlord, stating the amount thereof; and (k) any other matters evidencing
the status of this Lease that may be required either by a lender making a loan
to Landlord to be secured by a deed of trust covering the Premises or by a
purchaser of the Premises. Any such certificate delivered pursuant to this
Paragraph 30 may be relied upon by a prospective purchaser of Landlord's
interest or a mortgagee of Landlord's interest or assignee of any mortgage upon
Landlord's interest in the Premises. If Tenant shall fail to provide such
certificate within ten (10) days of receipt by Tenant of a written request by
Landlord as herein provided, such failure shall, at Landlord's election,
constitute a Default under this Lease, and Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee.

31. SUBORDINATION: Landlord shall have the right to cause this Lease to be and
remain subject and subordinate to any and all mortgages, deeds of trust
("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only that in the event of the foreclosure of any such mortgage
or deed of trust, so long as Tenant is not in default, the holder thereof
("Holder") shall agree to recognize Tenant's rights under this Lease as long as
Tenant shall pay the Rent and observe and perform all the provisions of this
Lease to be observed and performed by Tenant. Within ten (10) days after
Landlord's written request, Tenant shall execute, acknowledge and deliver any
and all reasonable documents required by Landlord or the Holder to effectuate
such subordination. If Tenant fails to do so, such failure shall constitute a
Default by Tenant under this Lease. Notwithstanding anything to the contrary set
forth in this Paragraph 31, Tenant hereby attorns and agrees to attorn to any
person or entity purchasing or otherwise acquiring the Premises at any sale or
other proceeding or pursuant to the exercise of any other rights, powers or
remedies under such Encumbrance.

                                                                              16
<PAGE>   17
32.   ENVIRONMENTAL COVENANTS:

      (a) As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property, including all of those materials and substances designated
as hazardous or toxic by the city in which the Premises are located, the U.S.
Environmental Protection Agency, the Consumer Product Safety Commissions, the
Food and Drug Administration, the California Water Resources Control Board, the
Regional Water Quality Control Board, San Francisco Bay Region, the California
Air Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety
and Health, the California Department of Food and Agriculture, the California
Department of Health Services, and any federal agencies that have overlapping
jurisdiction with such California agencies, or any other governmental agency
now or hereafter authorized to regulate materials and substances in the
environment. Without limiting the generality of the foregoing, the term
"Hazardous Material" shall include all of those materials and substances
defined as "hazardous materials" or "hazardous waste" in Sections 66680 through
66685 of Title 22 of the California Administrative Code, Division 4, Chapter
30, as the same products, fractions, constituents and sub-constituents of
petroleum or petroleum-related substances, asbestos, and any other materials
requiring remediation now or in the future under federal, state or local
statutes, ordinances, regulations or policies.

      (b) Tenant represents, warrants and covenants (i) that subject to above
paragraph 8a it will use and store in, on or about the Premises, only those
Hazardous Materials that are necessary for Tenant to conduct its business
activities on the Premises, (ii) that, with respect to any such Hazardous
Materials, Tenant shall comply with all applicable federal, state and local
laws, rules, regulations, policies and authorities relating to the storage, use,
disposal or cleanup of Hazardous Materials, including, but not limited to, the
obtaining of proper permits, and (iii) that it will not dispose of any Hazardous
Materials in, on or about the Premises under any circumstances.

       (c) Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant, Landlord or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Premises, shall have the right to negotiate, defend, approve
and appeal, any action taken or order issued with regard to Hazardous Material
by an applicable governmental authority. Landlord shall immediately notify
Tenant of any inquiry, test, investigation or enforcement proceeding against the
Premises concerning a Hazardous Material on the Premises. Tenant shall pay
Landlord's cost of negotiating, defending or appealing any action or order
issued with regard to Hazardous Material by an applicable governmental authority
if Tenant caused, permitted or suffered such Hazardous Material to come onto the
Premises. Landlord agrees to indemnify, defend and hold Tenant harmless from and
against the cost and expense of any remediation or cleanup work required by any
governmental agency to be performed on the Premises as a result of any Hazardous
Materials existing on the Premises on the date of this Lease.

      (d) If Tenant's storage, use or disposal of any Hazardous Material in, on
or adjacent to the Premises results in any contamination of the Premises, the
soil or surface of groundwater (1) requiring remediation under federal, state
or local statutes, ordinances, regulations, or policies, or (2) at levels which
are unacceptable to Landlord, in Landlord's reasonable judgment, Tenant agrees
to clean up said contamination. Tenant further agrees to indemnify, defend and
hold Landlord harmless from and against any claims, liabilities, suits, causes
of action, costs, expenses or fees, including reasonable attorneys' fees and
costs arising out of or in connection with any remediation, cleanup work,
inquiry or enforcement proceeding in connection therewith, and any Hazardous
Materials currently or hereafter used, stored or disposed of by Tenant or its
agents, employees, contractors or invitees in, on or adjacent to the Premises.

      (e) Notwithstanding any other right of entry granted to Landlord under
this Lease, Landlord shall have the right upon reasonable prior written notice
(except in an

                                                                              17
<PAGE>   18
emergency or in a situation where there is a danger of immediate further
contamination, in which case no prior notice will be required) to enter the
Premises or to have consultants enter the Premises throughout the term of this
Lease for the purpose of (1) determining whether the premises are in conformity
with federal, state and local statues, regulations, ordinances, and policies
including those pertaining to the environmental condition of the Premises, (2)
conducting an environmental audit or investigation of the Premises for purposes
of sale, transfer, conveyance or financing, (3) determining whether Tenant has
complied with this Paragraph 32, and (4) determining the corrective measures, if
any, required of Tenant to ensure the safe use, storage and disposal of
Hazardous Materials, or to remove Hazardous Materials (except to the extent
used, stored or disposed of by Tenant or its agents, employees, contractors or
invitees in compliance with applicable law). Tenant agrees to provide access and
reasonable assistance for such inspections. Such inspections may include, but
are not limited to, entering the Premises or adjacent property with drill rigs
or other machinery for the purpose of obtaining laboratory samples. Landlord
shall not be limited in the number of such inspections during the term of this
Lease. To the extent such inspection disclose the presence of Hazardous
Materials used, stored or disposed of other than in accordance with subparagraph
(b)(ii) above, Tenant shall reimburse Landlord for the reasonable cost of such
inspections within ten (10) days of receipt of a written statement thereof. If
such consultants determine that the Premises are contaminated with Hazardous
Materials used, stored or disposed of by Tenant or its agents, employees,
contractors or invitees, Tenant shall, in a timely manner, at its expense,
remove such Hazardous Materials or otherwise comply with the recommendations of
such consultants to the reasonable satisfaction of Landlord and any applicable
governmental agencies. The right granted to Landlord herein to inspect the
Premises shall not create a duty on Landlord's part to inspect the Premises, or
liability of Landlord for Tenant's use, storage or disposal of Hazardous
Materials, it being understood that Tenant shall be solely responsible for all
liability in connection therewith. Landlord shall be liable for the gross
negligence or willful misconduct of Landlord or its agents, employees or
consultants in conducting the aforementioned inspections.

     (f) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste and Hazardous Materials
used, stored or disposed of by Tenant or its agents, employees, contractors or
invitees, and in a condition which complies with all governmental statutes,
ordinances, regulations and policies, recommendations of consultants hired by
Landlord, and such other reasonable requirements as may be imposed by Landlord.

     (g) Tenant's obligations under this Paragraph 32 shall survive termination
of this Lease, and tenant waives the Statute of Limitations, as to Landlord,
applicable to any action brought hereunder.

     (h) Landlord hereby discloses to Tenant that the Premises and the Property
are in an area in which contamination of soils or groundwater by Hazardous
Materials may exist. If Tenant desires more definite information regarding the
existence or possible existence of contamination by Hazardous Materials of soils
or groundwater of or beneath the Premises, the Property, or other real property
in the general area of the Property, then tenant shall investigate such matters.

33.  NOTICES: All notices and demands which may or are to be required or
permitted to be given to either party by the other hereunder shall be in writing
and shall be sent by United States mail, postage prepaid, certified, or by
personal delivery or overnight courier, addressed to the addressee at the
address for such addressee as specified herein, or to such other place as such
party may from time to time designate in a notice to the other party given as
provided herein. Notice shall be deemed given upon the earlier of actual receipt
or the date on which delivery was attempted if Tenant refuses to receive.

34.  WAIVER: The waiver of any breach of any term, covenant or condition of this
Lease 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
herein contained. The subsequent acceptance of Rent by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant, other than the failure
of Tenant to pay the

                                                                              18


<PAGE>   19
particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent. No delay or omission in
the exercise of any right or remedy of Landlord on any Default by Tenant shall
impair such a right or remedy or be construed as a waiver. Any waiver by
landlord of any Default must be in writing and shall not be a waiver of any
other Default concerning the same or any other provisions of this Lease.

24.  HOLDING OVER: Any holding over after the expiration of the Term, without
the express written consent of Landlord, shall constitute a Default and,
without limiting Landlord's remedies provided in this Lease, such holding over
shall be construed to be a tenancy at sufferance, at a rental rate of one
hundred twenty percent (120%) of the Base Rent last due in this Lease, plus
Additional Rent, and shall otherwise be on the terms and conditions herein
specified, so far as applicable.

36.  SUCCESSORS AND ASSIGNS: The terms, covenants and conditions of this Lease
shall, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all the parties hereto. If
Tenant shall consist of more than one entity or person, the obligations of
Tenant under this Lease shall be joint and several.

37.  TIME: Time is of the essence of this Lease and each and every term,
condition and provision herein.

38.  BROKERS: Landlord represents and warrants to Tenant that neither it nor
its officers or agents nor anyone acting on its behalf has dealt with any real
estate broker and Tenant represents to Landlord that it nor its officers or
agents nor anyone acting on its behalf has dealt with any real estate broker on
this transaction. Each party agrees to indemnify and hold harmless the other
from any claim or claims, and costs and expenses, including attorney's fees,
incurred by the indemnified party in conjunction with any such claim or claims
of any broker or brokers to a commission in connection with this Lease as a
result of the actions of the indemnifying party.

39.  RULES AND REGULATIONS: Tenant agrees to comply with such reasonable rules
and regulations as Landlord may adopt from time to time for the orderly and
proper operating of the Building and parking and other common areas. Such rules
may include but shall not be limited to the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant's refuse and other rubbish at the
sole cost and expense of Tenant. The rules and regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the failure of any other person to observe and abide
by any of said rules and regulations.

40.  MORTGAGE PROTECTION:

     (a) MODIFICATIONS FOR LENDER. If, in connection with obtaining financing
for the Premises or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing. Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.

     (b) RIGHTS TO CURE. Tenant agrees to give any trust deed or mortgage
holder ("Holder") by registered mail, at the same time as it is given to
Landlord, a copy of any notice of default given to Landlord, provided that
prior to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt
of such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b)), whichever shall last occur, within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary if within such twenty (20) days any Holder has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of

                                                                              19
<PAGE>   20
foreclosure proceedings, if necessary to effect such cure), in which event this
Lease shall not be terminated.

41. ENTIRE AGREEMENT: This Lease, including the Exhibits and any Addenda
attached hereto, which are hereby incorporated herein by this reference,
contains the entire agreement of the parties hereto, and no representations,
inducements, promises or agreements, oral or otherwise, between the parties,
not embodied herein or therein, shall be of any force and effect.

42. CONSTRUCTION: This Lease shall be construed and interpreted in accordance
with the laws of the State of California. The parties acknowledge and agree
that not rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall be employed in the interpretation of
this Lease, including the Exhibits and any Addenda attached hereto. All
captions in this Lease are for reference only and shall not be used in the
interpretation of this Lease. Whenever required by the context of this Lease,
the singular shall include the plural, the masculine shall include the
feminine, and vice versa. If any provision of this Lease shall be determined to
be illegal or unenforceable, such determination shall not affect any other
provision of this Lease and all such other provisions shall remain in full
force and effect.

43. REPRESENTATIONS AND WARRANTIES OF TENANT: Tenant hereby makes the following
representations and warranties, each of which is material and being relied upon
by Landlord, is true in all respects as of the date of this Lease, and shall
survive the expiration or termination of the Lease.

     (a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization and the
persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and to bind Tenant without
the consent or approval of any other person or entity. Tenant has full power,
capacity, authority and legal right to execute and deliver this Lease and to
perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Tenant, enforceable in accordance with its terms.

     (b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by any creditors, (3) suffered the
appointment of a receiver to take possession of all of substantially all of its
assets, (4) suffered the attachment or other judicial seizure of all or
substantially all of its assets, (5) admitted in writing its ability to pay its
debts as they come due, or (6) made an offer of settlement, extension or
composition to its creditors generally.

Landlord and tenant have executed and delivered this Lease as of the date first
hereinabove set forth.

44. OUTSIDE AREAS:

     (a) Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees, invitees, guests and customers shall have the nonexclusive right to
use the access roads, parking areas, and facilities provided and designated by
Landlord for the general use and convenience of the occupants of the building in
which the premises are located, which areas and facilities are referred to
herein as "Outside Area". This right shall terminate upon the termination of
this Lease. Landlord reserves the right from time to time to make changes in
the shape, size, location, amount and extent of "Outside Area:, and in painting
of exterior walls, Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the "Outside Area", and
any part or parts thereof, as Landlord may deem appropriate for the best
interests of the occupants of the building. The rules and regulations shall be
binding upon Tenant upon delivery of a copy of them to Tenant and Tenant shall
abide by them and cooperate in their observance. Such rules and regulations may
be amended by Landlord from time to time, with or without advance notice, and
all amendments shall be effective upon delivery of a copy to Tenant. Tenant
agrees to require its employees, executives,


                                                                              20
<PAGE>   21
invitees, guests and customers to abide by such rules and regulations including
parking regulations.

     (b)  Landlord shall operate, manage and maintain the "Outside Areas", and
landscaping and the surface of the exterior walls. The manner in which the
"Outside Area" shall be maintained and the expenditures for such maintenance
shall be at the discretion of Lessor.

     (c)  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 leased premises outside of the
building constructed thereon, except with the prior written consent of the
Landlord. No waste materials or refuse shall be dumped upon or permitted to
remain unreasonable upon any part of the leased premises outside of building
proper, unless approved by Landlord.

     (d)  Tenant shall not use solid hard tires on any fork lifts or dollies on
paved parking, truck loading or driveway areas, and in the event Tenant
violates this provision, Tenant shall be responsible for the cost of
resurfacing the entire area.

45.  PARKING: Motor vehicle parking shall be non-exclusive, subject to
reallocation by Landlord from time to time. Landlord reserves the right to
designate from time to time the parking spaces for vehicles of Tenant and its
guests and invitees. Said spaces shall total 474. The designation of 474 spaces
is shown on attached Exhibit B. Tenant agrees that Landlord shall have no
responsibility for policing these parking spaces or seeing that they are used
exclusively by Tenant's employees, guests, or invitees. Tenant shall not at any
time park or permit the parking of Tenant's trucks or other vehicles, or the
trucks or other vehicles of others in driveways or adjacent to loading areas as
to interfere in any way with the use of such areas, nor shall Tenant at any time
park or permit the parking of Tenant vehicles or trucks, or the vehicles or
trucks of Tenant's suppliers or invitees in any portion of the "Parking Area"
not designated by Landlord for such use by Tenant. Tenant shall not park or
permit to be parked inoperative vehicles or equipment on any portion of the
"Outside Area" and agrees that no vehicle will be parked on the "Outside Area"
for longer than sixty-six (66) hours in any seventy-two (72) hour period.

46.  CALCULATION OF AREA:

The square footage of the leased premises (approximately 128,154 square feet as
set forth in Paragraph 2) has been calculated in this manner; the area of the
leased building, measured from the outer extent (drip line) of metal and
built-up roofed areas, or the outer walls. The Premises shall be deemed for all
purposes and agreed to consist of 128,154 square feet.

47.  INTEREST OF PAST-DUE OBLIGATIONS: Any monetary payment due Landlord
hereunder, other than late charges, not received by Landlord within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 10% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 5.

48.  EARLY ACCESS AND REFURBISHMENT ALLOWANCE:

     (a) The Tenant accepts the premises in "as is" condition with the
following work to be performed by the Landlord at its cost:

          (1)  a new roof to replace the existing roof shall be installed
during the period April 15 - May 14, 2000

          (2)  the work on the roof-top HVAC equipment shown in Exhibit C shall
be completed prior to May 14, 2000.

     (b)  Landlord represents to Tenant that to the best of Landlord's
recollection, it has not received notice from any governmental agency regarding
code deficiencies in the premises. Landlord makes no representation with regard
to code conformance and


                                                                              21

<PAGE>   22
advises Tenant to thoroughly Inspect the premises and satisfy itself prior to
executing this lease.

     (c)  The vacant parts of the premises shall be accessible to Tenant
without the payment of rent under this Lease for the period April 15 - May 14,
2000, for the purposes of refurbishment and moving in. Landlord shall provide
an allowance for refurbishment of up to $200,000.00, which shall be reimbursed
to Tenant by Landlord within thirty days of receipt of paid invoices evidencing
such work. Refurbishment shall include repainting, recarpeting, alterations
approved by Landlord, governmental code conformance, and other similar work but
not any costs of procuring, constructing, or installing in the Premises any of
Tenant's personal property or trade fixtures. All of said refurbishment work
entitled to reimbursement of Tenant by Landlord must be completed by December
1, 2000, and Tenant shall forfeit any right to reimbursement as of February 1,
2001. No adjustment in rent or other terms of this Lease shall be made if the
full amount of the $200,000.00 refurbishment allowance is not reimbursed to
Tenant by February 1, 2001.


     (d)  Notwithstanding anything to the contrary above, rent for the period
April 15 - May 14, 2000 shall be paid to Landlord by Tenant for the space in
the premises currently occupied by Tenant under a sub-lease. Said rent shall be
at the same rate currently paid by Tenant less the mutually agreed upon cost of
any services deleted by Landlord.

Landlord and Tenant have executed and delivered this Lease as of the date first
hereinabove set forth.

LANDLORD                           TENANT

Herman Christensen, Jr.            MMC Networks, Inc.
and Raymond P. Christensen


/s/ HERMAN CHRISTENSEN            by: /s/ Douglas C. Spreng
------------------------------       -----------------------------------
Herman Christensen, Jr.

/s/ RAYMOND P. CHRISTENSEN        Printed
------------------------------       Name:   /s/ DOUGLAS C. SPRENG
Raymond P. Christensen                    ------------------------------

by: Herman Christensen              Title:        President & CEO
his attorney-in-fact                      ------------------------------

801 American Street
San Carlos, CA 94070-4174          By: /s/ Sena Reddy
                                      ----------------------------------

                                  Printed
                                     Name:   SENA REDDY
                                          ------------------------------

                                   Title: Executive V.P., Operations
                                         -------------------------------



                                                                              22
<PAGE>   23
                                                                      EXHIBIT 13




                                      MAP



                               CENTRAL EXPRESSWAY



                                    PHASE II




<PAGE>   24
                                                                       EXHIBIT A


                                      MAP


                               CENTRAL EXPRESSWAY


                                    PHASE II


<PAGE>   25
                                                                       EXHIBIT B


                                    [CHART]




<PAGE>   26
                                                                      EXHIBIT C

                [LETTERHEAD OF PENINSULA AIR CONDITIONING, INC.]

November 18, 1999


Herman Christensen
HERMAN CHRISTENSEN AND SONS
801 American Street
San Carlos, CA 94070

RE:  1144 East Arques
     Sunnyvale, Ca.

Dear Herman:

We have inspected the rooftop equipment at the above mentioned address and
found the equipment to be in good condition. The equipment is fifteen years old
and with good maintenance should have a five to ten year life expectancy.

We did find a couple of items that need attention:

Item #1: Condenser and evaporator coils should be cleaned on all A/C units.

Item #2: The first stage compressor in A/C unit #1 is noisy and needs to be
         checked out, additionally the evaporator coil was observed to be iced
         up and needs to be checked out.

Item #3: A/C unit #5 is discharging condensate water directly onto the roof, a
         drainpipe needs to be installed.

Item #4: Some of the rooftop A/C units have broken grease seals on the supply
         and relief fan bearings and need to be replaced.

If you have any questions, please give me a call.

Sincerely,

PENINSULA AIR CONDITIONING, INC.


/s/ ERNST HAEMMERLING
----------------------------
Ernst Haemmerling
President