Document:

<PAGE>

                                                                    EXHIBIT 10.6

                               The Morse Company
                       12770 Coit Road, Suite 1216, LB 76
                                Dallas, TX 75251
                                 (972) 980-2800

                       Contact:  Scott A. Morse, CCIM
                                 Scott M. Jessen, CCIM
                                 Mark A. Taylor, Transaction Director

                           CHORUM TECHNOLOGIES, INC.

                              LEASE SUMMARY SHEET

Landlord:                GUS Enterprises - XII L.L.C, C/O Mr. Jeffrey Swanson
Address:                 Cabot Advisors
City/State:              Two Center Plaza, Suite 200, Boston. MA 02108-1906
Phone:                   617-624-6902
Site Address:            1301 and 1303 East Arapaho Road, Richardson, TX 75081
Lease Date:              November 11. 1999
Term:                    61 Months
Commencement:            December 1, 1999
Termination:             December 31, 2004
Size:                    56,023 square feet
Rental Rate:             $10.00 Gross square foot
Monthly Rental:          $46,685.83
Total Rental:            $2,801,149.80
Security Deposit:        $500,000 Declining Letter of Credit
Prepaid Rental:          N/A
Escalation Provision:    2000 Base Year
Parking:                 Total:  220
Finish Allowance:        $630,000.00
Expansion:               First Fight of Refusal on adjacent building
Renewal Option:          One (1) - Two (2) year renewal
Special Provisions:      One (1) month free rent
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                                 CABOT ADVISORS
                                 --------------
                          INDUSTRIAL REAL ESTATE LEASE
                          ----------------------------
                            Multi-Tenant Gross Form
                            -----------------------

                               TABLE OF CONTENTS

ARTICLE 1 - BASIC TERMS.......................................................1

ARTICLE 2 - PREMISES..........................................................3

ARTICLE 3 - LEASE TERM........................................................3

ARTICLE 4-  RENT..............................................................3

ARTICLE 5 - PROPERTY TAXES....................................................5

ARTICLE 6 - UTILITIES.........................................................6

ARTICLE 7 - INSURANCE.........................................................6

ARTICLE 8 - COMMON AREAS......................................................9

ARTICLE 9 - USE OF PREMISES..................................................11

ARTICLE 10 - CONDITION AND MAINTENANCE OF PREMISES...........................13

ARTICLE 11 - DAMAGE OR DESTRUCTION...........................................16

ARTICLE 12 - CONDEMNATION....................................................17

ARTICLE 13 - ASSIGNMENT AND SUBLETTING.......................................18

ARTICLE 14 - DEFAULTS AND REMEDIES...........................................19

ARTICLE 15 - PROTECTION OF LENDERS...........................................23

ARTICLE 16 - LEGAL COSTS.....................................................24

ARTICLE 17 - MISCELLANEOUS PROVISIONS........................................25

EXHIBIT A - THE PROPERTY....................................................A-1

EXHIBIT B - THE PREMISES....................................................B-1
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EXHIBIT C - RULES AND REGULATIONS...........................................C-1

EXHIBIT D - TENANT IMPROVEMENTS/ALLOWANCE...................................D-1

EXHIBIT E - INTENTIONALLY DELETED...........................................E-1

EXHIBIT F - HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE......................F-1

EXHIBIT G - RIGHT OF FIRST REFUSAL..........................................G-1

EXHIBIT H - OPTION TO EXTEND................................................H-1

EXHIBIT I - ENVIRONMENTAL ASSESSMENT........................................I-1
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                            ARTICLE 1 - BASIC TERMS

The following terms used in this Lease shall have the meanings set forth below.

1.01 Date Of Lease:                       November 11, 1999

1.02 Landlord (legal entity):             GUS Enterprises - XII, L.L.C., a New
                                          Jersey limited liability company

1.03 Tenant (legal entity):               Chorum Technologies, Inc., a
                                          Delaware corporation

1.04 Tenant's Guarantor:                  N/A

1.05 Address of Property:                 1301 and 1303 East Arapaho Road
                                          Richardson, Texas 75081

1.06 Property Rentable Area:              Approximately 112,046 square feet

1.07 Premises Rentable Area:              Approximately 56,023 square feet

1.08 Tenant's Initial Pro Rata Share:     50%

1.09 Lease Term:                          61 months beginning on the Lease
                                          Commencement Date, subject to
                                          extension as provided in Exhibit H

1.10 Lease Commencement Date:             December 1,1999

1.11 Permitted Uses:                      Office, laboratory, and light
                                          manufacturing

1.12 Broker(s):                           Mark V Commercial Real Estate; The
                                          Morse Company

1.13 Initial Security Deposit:            $500,000 (See Section 17.16)

1.14 Parking Spaces Allocated to Tenant:  220 spaces
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1.15 Base Rent:

-------------------------------------------------------------------------
Months             Base Rent Per Month *          Base Rent Per Year *
-------------------------------------------------------------------------
1                  $0.00
-------------------------------------------------------------------------
2 - 61             $46,685.83                     $560,230.00
-------------------------------------------------------------------------

*Plus any applicable sales and/or rental tax

1.16 Other Charges Payable by Tenant:

     (i)    Real Property Taxes (Article 5);
     (ii)   Utilities (Article 6);
     (iii)  Insurance Premiums (Article 7);
     (iv)   CAM Expenses (Article 8);

1.17 Address of Landlord for Notices:

     c/o Cabot Advisors
     Two Center Plaza, Suite 200
     Boston, MA 02108-1906
     Attn: Jeffrey Swanson

1.18 Address of Tenant for Notices:

     1301 East Arapaho Road
     Richardson, TX 75081
     Attn: Kent Coker

1.19 Fiscal Year:  December 31

1.20 Base Year:    2000

1.21 Exhibits:     Exhibit A  The Property
                   Exhibit B  The Premises
                   Exhibit C  Rules & Regulations
                   Exhibit D  Tenant Improvements/Allowance
                   Exhibit E  Guaranty of Lease (INTENTIONALLY DELETED)
                   Exhibit F  Hazardous Materials Disclosure Certificate
                   Exhibit G  Right of First Refusal
                   Exhibit H  Option to Extend
                   Exhibit I  Environmental Assessment
<PAGE>

                              ARTICLE 2 - PREMISES

2.01 Premises. The Premises are described in Exhibit B and are a part of the
     --------                                ----------
Property, which is described in Exhibit A. The Property includes all the land,
                                ---------
building(s), and all other improvements located on the land including the common
areas described in Article 8.

                             ARTICLE 3 - LEASE TERM

3.01 Lease of Premises for Lease Term. Landlord leases the Premises to Tenant
     --------------------------------
and Tenant leases the Premises from Landlord for the Lease Tenn. The Lease Term
shall begin on the Lease Commencement Date.

3.02 Delay in Commencement. Landlord shall not be liable, except in the case of
     ---------------------
Landlord's gross negligence or willful misconduct, to Tenant if Landlord shall
not deliver possession of the Premises to Tenant on the Lease Commencement Date.
Landlord's non-delivery of the Premises to Tenant on that date shall not affect
this Lease or the obligations of Tenant under this Lease, and the Lease
Commencement Date shall be postponed to the date possession of the Premises
shall be delivered to Tenant. In such event, Landlord and Tenant shall execute
an amendment to this Lease setting forth the Lease Commencement Date and
expiration date of this Lease. Failure to execute such amendment shall not
affect the Lease Commencement Date and expiration date of this Lease.

3.03 Earl Occupancy. If Tenant shall occupy the Premises prior to the Lease
     --------------
Commencement Date, Tenant's occupancy of the Premises shall be subject to all of
the provisions of this Lease. Early occupancy of the Premises shall not advance
the expiration date of this Lease. Tenant shall pay Base Rent and all charges
specified in this Lease during the early occupancy period.

3.04 Holding Over. Tenant shall vacate the Premises upon the expiration or
     ------------
earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages, costs, liabilities and expenses,
including attorneys' fees, which Landlord shall incur on account of Tenant's
delay in so vacating the Premises. If Tenant shall not vacate the Premises upon
the expiration or earlier termination of this Lease, the Base Rent shall be
increased to 150% of the Base Rent then in effect and Tenant's obligation to pay
Additional Rent shall continue, but nothing herein shall limit any of Landlord's
rights or Tenant's obligations arising from Tenant's failure to vacate the
Premises, including, without limitation, Landlord's right to repossess the
Premises and remove Tenant therefrom at any time after the expiration or earlier
termination of this Lease and Tenant's obligation to reimburse and indemnify
Landlord as provided in the preceding sentence.

                                ARTICLE 4 - RENT

4.01 Base Rent. On the first day of each month during the Lease Term, Tenant
     ---------
shall pay to Landlord the Base Rent as described in Section 1.15 of this Lease
in lawful money of the United States, in advance and without offset, deduction,
or prior demand. The Base Rent shall be payable
<PAGE>

at Landlord's address or at such other place or to such other person as Landlord
may designate in writing from time to time.

4.02 Additional Rent. All sums payable by Tenant under this Lease other than
     ---------------
Base Rent shall be deemed "Additional Rent;" the term "Rent" shall mean Base
Rent and Additional Rent. Landlord shall estimate in advance and charge to
Tenant the following costs, to be paid with the Base Rent on a monthly basis
throughout the Lease Term: (i) all Real Property Taxes for which Tenant is
liable under Article 5 of this Lease, (ii) all utility costs (if utilities are
not separately metered) for which Tenant is liable under Article 6 of this
Lease, (iii) all insurance premiums for which Tenant is liable under Article 7
of this Lease and (iv) all CAM Expenses for which Tenant is liable under Article
8 of this Lease. Collectively, the aforementioned Real Property Taxes,
insurance, utility, and CAM Expenses shall be referred to as the "Total
Operating Costs" Landlord may adjust its estimates of Total Operating Costs at
any time, consistent with the practices of landlords of like and comparable
properties in the area, but no more than two (2) times during any calendar year,
based upon Landlord's experience and reasonable anticipation of costs. Such
adjustments shall be effective as of the next Rent payment date after notice to
Tenant. Within one hundred twenty (120) days after the end of each Fiscal Year
during the Lease Term, Landlord shall deliver to Tenant a statement prepared in
accordance with generally accepted accounting principles setting forth, in
reasonable detail, the Total Operating Costs paid or incurred by Landlord during
the preceding fiscal year and Tenant's Pro Rata Share (as defined in Section
4.05 of this Lease) of such expenses. Within thirty (30) days after Tenant's
receipt of such statement, there shall be an adjustment between Landlord and
Tenant, with payment to or credit given by Landlord (as the case may be) in
order that Landlord shall receive the entire amount of Tenant's share of such
costs and expenses for such period. In addition to its obligation to pay Base
Rent and Tenant's Pro Rata Share of Total Operating Expenses, Tenant is required
hereunder to pay directly to suppliers, vendors, carriers, contractors, etc.
certain insurance premiums, utility costs, personal property taxes, maintenance
and repair costs and other expenses, collectively "Additional Expenses." If
Landlord pays for any Additional Expenses in accordance with the terms of this
Lease, Tenant's obligation to reimburse such costs shall be an Additional Rent
obligation payable in full with the next monthly Rent payment. Unless this Lease
provides otherwise, Tenant shall pay all Additional Rent then due with the next
monthly installment of Base Rent. Rent for any partial month shall be prorated.

4.03 Late Charge. Tenant hereby acknowledges that late payment by Tenant to
     -----------
Landlord of Rent and 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. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any loan secured by the Property. Accordingly, if any
installment of Rent or any other sums due from Tenant shall not be received by
Landlord within five (5) days following the due date, Tenant shall pay to
Landlord a late charge equal to five percent (5%) of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder.
<PAGE>

4.04 Interest. Any Rent or other amount due to Landlord, if not paid when due,
     --------
shall bear interest from the date due until paid at the rate of fifteen percent
(15%) per annum or, if a higher rate is legally permissible, at the highest rate
legally permitted, provided that interest shall not be payable on late charges
incurred by Tenant nor on any amounts upon which late charges are paid by Tenant
to the extent such interest would cause the total interest to be in excess of
that legally permitted. Payment of interest shall not excuse or cure any default
hereunder by Tenant. Notwithstanding the preceding, the failure to pay Rent when
due shall not incur interest charges for the first two (2) occurrences in any
consecutive twelve (12) month period if payment is made by Tenant within five
(5) days of written notice of such failure to pay.

4.05 Tenant's Pro Rata Share. "Tenant's Pro Rata Share" shall be calculated by
     -----------------------
dividing the Premises Rentable Area by the Property Rentable Area, which is
leased or held for lease by tenants, as of the date on which the computation
shall be made. Tenant's Initial Pro Rata Share is set forth in Section 1.08 and
is subject to adjustment based on the aforementioned formula.

                           ARTICLE 5 - PROPERTY TAXES

5.01 Real Property Taxes. Landlord shall pay the "Base Real Property Taxes", as
     -------------------
defined hereunder, on the Property during the Lease Tenn. Base Real Property
Taxes are Real Property Taxes, as described in Section 5.02 hereunder,
applicable to the Property for the Base Year. If the improvements on the
Property are not completed as of the Property assessment date of such tax fiscal
year, Base Real Property Taxes shall be adjusted to reflect taxes as shown on
the first tax bill which incorporates the fully assessed value of the property
after construction of the improvements. Tenant shall pay to Landlord Tenant's
Pro Rata Share of the amount, if any, by which the Real Property Taxes payable
during the Lease Term exceed the Base Real Property Taxes. Tenant shall make
such payments in accordance with Section 4.02. If Landlord shall receive a
refund of any Real Property Taxes with respect to which Tenant shall have paid
Tenant's Pro Rata Share, Landlord shall refund to Tenant, Tenant's Pro Rata
Share of such refund after deducting therefrom the costs and expenses incurred
in connection therewith.

5.02 Definition of "Real Property Tax." "Real Property Tax" shall mean taxes,
     ----------------------------------
assessments (special, betterment, or otherwise), levies, fees, rent taxes,
excises, impositions, charges, water and sewer rents and charges, and all other
government levies and charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, which are imposed or levied upon or assessed against
the Property or any Rent or other sums payable by any tenants or occupants
thereof. Real Property Tax shall include Landlord's costs and expenses of
contesting any Real Property Tax, up to and not to exceed the amount of tax
savings realized from such efforts. If at any time during the term the present
system of ad valorem taxation of real property shall be changed so that in lieu
of the whole or any part of the ad valorem tax on real property, or in lieu of
increases therein, there shall be assessed on Landlord a capital levy or other
tax on the gross rents received with respect to the Property or a federal,
state, county, municipal, or other local income, franchise, excise or similar
tax, assessment, levy, or charge (distinct from any now in effect) measured by
or based, in whole
<PAGE>

or in part, upon gross rents, then all of such taxes, assessments, levies, or
charges, to the extent so measured or based, shall be deemed to be a Real
Property Tax.

5.03 Personal Property Taxes. Tenant shall pay directly all taxes charged
     -----------------------
against trade fixtures, furnishings, equipment, inventory, or any other personal
property belonging to Tenant. Tenant shall use its best efforts to have personal
property taxed separately from the Property. If any of Tenant's personal
property shall be taxed with the Property, Tenant shall pay Landlord the taxes
for such personal property within fifteen (15) days after Tenant receives a
written statement from Landlord for such personal property taxes.

                             ARTICLE 6 - UTILITIES

6.01 Utilities. Tenant shall promptly pay, directly to the appropriate supplier,
     ---------
the cost of all natural gas, heat, cooling, energy, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Premises, allocable to the period from the time Tenant shall first enter the
Premises, throughout the Lease Term and thereafter as long as Tenant shall
remain in the Premises (collectively, the "Occupancy Period"), together with any
related installation or connection charges or deposits (collectively "Utility
Costs"). If any services or utilities are jointly metered with other premises,
Landlord shall make a reasonable determination of Tenant's proportionate share
of such Utility Costs and Tenant shall pay such share to Landlord in accordance
with Section 4.02. Landlord shall not be liable for damages, consequential or
otherwise, nor shall there be any rent abatement arising out of any curtailment
or interruption whatsoever in utility services. Utilities serving the Common
Areas (as defined in Article 8) exclusively shall be accounted for as described
in Article 8.

                             ARTICLE 7 - INSURANCE

7.01 Liability Insurance. During the Occupancy Period, Tenant shall maintain in
     -------------------
effect commercial general liability insurance insuring Tenant against liability
for bodily injury, property damage (including loss of use of property) and
personal injury at the Premises, including contractual liability. Such insurance
shall name Landlord, its property manager, any mortgagee, and Cabot Advisors, as
additional insureds. The initial amount of such insurance shall be Five Million
Dollars ($5,000,000) per occurrence and shall be subject to periodic increases
specified by Landlord based upon inflation, increased liability awards,
recommendation of Landlord's professional insurance advisers, and other relevant
factors. The liability insurance obtained by Tenant under this Section 7.01
shall (i) be primary and (ii) insure Tenant's obligations to Landlord under
Section 7.09. The amount and coverage of such insurance shall not limit Tenant's
liability nor relieve Tenant of any other obligation under this Lease. Landlord
may also obtain commercial general liability insurance in an amount and with
coverage determined by Landlord insuring Landlord against liability with respect
to the Premises and the Property. The policy obtained by Landlord shall not
provide primary insurance, shall not be contributory and shall be excess over
any insurance maintained by Tenant.
<PAGE>

7.02 Worker's Compensation Insurance. During the Occupancy Period, Tenant shall
     -------------------------------
maintain in effect Worker's Compensation Insurance (including Employers'
Liability Insurance) in the statutory amount covering all employees of Tenant
employed or performing services at the Premises, in order to provide the
statutory benefits required by the laws of the state in which the Premises are
located.

7.03 INTENTIONALLY DELETED.
     ---------------------

7.04 Personal Property Insurance. During the Occupancy Period, Tenant shall
     ---------------------------
maintain in effect Personal Property Insurance covering leasehold improvements
paid for by Tenant and Tenant's personal property and fixtures from time to time
in, on, or at the premises, in an amount not less than 100% of the full
replacement cost, without deduction for depreciation, providing protection
against events protected under "All Risk Coverage," as well as against sprinkler
damage, vandalism, and malicious mischief. Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under an applicable
provision herein. If the Premises are not repaired or restored following damage
or destruction in accordance with other provisions herein, Landlord shall
receive any proceeds from the Personal Property Insurance allocable to Tenant's
leasehold improvements.

7.05 INTENTIONALLY DELETED.
     ---------------------

7.06 Landlord's Property and Rental Income Insurance. During the Lease Term,
     -----------------------------------------------
Landlord shall maintain in effect all risk insurance covering loss of or damage
to the Property in the amount of its replacement value with such endorsements
and deductibles as Landlord shall determine from time to time. Landlord shall
have the right to obtain flood, earthquake, and such other insurance as Landlord
shall determine from time to time or shall be required by any lender holding a
security interest in the Property. Landlord shall not obtain insurance for
Tenant's fixtures or equipment or building improvements installed by Tenant.
During the Lease Term, Landlord shall also maintain a rental income insurance
policy, with loss payable to Landlord, in an amount equal to one (1) year's Base
Rent, plus estimated Real Property Taxes, CAM Expenses, Utility Costs and
insurance premiums for one (1) year. Tenant shall be liable for the payment of
any deductible amount under Landlord's insurance maintained pursuant to this
Article 7, in an amount not to exceed Twenty-Five Thousand Dollars ($25,000).
Tenant shall not do or permit anything to be done which shall invalidate any
such insurance. Any increase in the cost of Landlord's insurance due to Tenant's
use or activities at the Premises shall be paid by Tenant to Landlord as
Additional Rent hereunder.

7.07 Payment of Insurance Premiums.
     -----------------------------

(a) Landlord shall pay the premiums of the insurance policies maintained by
Landlord under Section 7.06 and Section 7.01 (if applicable), and Tenant shall
reimburse Landlord for Tenant's Pro Rata Share of the amount, if any, by which
such premiums exceed the Base Premiums, as defined hereunder, allocable to the
Occupancy Period. Tenant shall make such reimbursement payments in accordance
with Section 4.02. If the Property has been previously fully occupied, the Base
Premiums shall be the insurance premiums
<PAGE>

applicable to the Base Year. If the Property has not been previously fully
occupied or has been occupied less than twelve (12) months, the Base Premiums
shall be the lowest annual premiums reasonably available as of the Lease
Commencement Date for the insurance (meeting the provisions of Section 7.08
hereunder) described in Section 7.06 and Section 7.01 (if applicable).

(b)  Tenant shall pay directly the premiums of the insurance policies maintained
     by Tenant under Sections 7.01, 7.02, 7.03, 7.04, and 7.05.

7.08 General Insurance Provisions.
     ----------------------------

(a) Any insurance which Tenant shall be required to maintain under this Lease
shall include a provision which requires the insurance carrier to give Landlord
not less than thirty (30) days' written notice prior to any cancellation or
modification of such coverage.

(b) Prior to the earlier of Tenant's entry into the Premises or the Lease
Commencement Date, Tenant shall deliver to Landlord an insurance company
certificate that Tenant maintains the insurance required by Sections 7.01, 7.02,
7.03, 7.04 and 7.05 and not less than thirty (30) days prior to the expiration
or termination of any such insurance, Tenant shall deliver to Landlord renewal
certificates therefor. Tenant shall provide Landlord with copies of the policies
promptly upon request from time to time. If Tenant shall fail to deliver any
certificate or renewal certificate to Landlord required under this Lease within
the prescribed time period or if any such policy shall be canceled or modified
during the Lease Term without Landlord's consent, Landlord may obtain such
insurance, in which case Tenant shall reimburse Landlord, as Additional Rent,
for 110% of the cost of such insurance within ten (10) days after receipt of a
statement of the cost of such insurance.

(c) Tenant shall maintain all insurance required under this Lease with companies
having a "General Policy Rating" of A-, X or better, as set forth in the most
current issue of the Best Key Rating Guide.

(d) Landlord and Tenant, on behalf of themselves and their insurers, each hereby
waive any and all rights of recovery against the other, the officers, members,
partners, employees, agents, or representatives of the other, and the officers,
members, partners, employees, agents or representatives of each of the,
foregoing, for loss of or damage to its property or the property of others under
its control, if such loss or damage shall be covered by any insurance policy in
force (whether or not described in this Lease) at the time of such loss or
damage, or required to be carried under this Article 7. All property insurance
carried by either party shall contain a waiver of subrogation against the other
party to the extent such right shall have been waived by the insured party prior
to the occurrence of loss or injury.

          7.09 Indemnity. To the fullest extent permitted by law, Tenant hereby
               ---------
waives all claims against Landlord, its agents, advisors, employees, members,
officers, directors, partners, trustees, beneficiaries and shareholders (each a
"Landlord Party"), and the agents, advisors, employees,
<PAGE>

members, officers, directors, partners, trustees, beneficiaries and shareholders
of each Landlord Party (collectively "the Indemnitees") for damage to any
property or injury to or death of any person in, upon or about the Premises or
the Property arising at any time and from any cause, and Tenant shall hold
Indemnitees harmless from and defend Indemnitees from and against all claims,
liabilities, judgments, demands, causes of action, losses, damages, costs and
expenses including reasonable attorney's fees for damage to any property or
injury to or death of any person arising in or from (i) the use or occupancy of
the Premises by Tenant or persons claiming under Tenant, except such as is
caused by the gross negligence or willful misconduct of Landlord, its agents,
employees or contractors, or (ii) arising from the negligence or willful
misconduct of Tenant, its employees, agents, contractors, or invitees in, upon
or about the Property, or (iii) arising out of any breach or default by Tenant
under this Lease. The foregoing shall include reasonable investigation costs and
all reasonable costs and expenses incurred by Landlord in connection with any
claim or demand made under this Section. The provisions of this Section 7.09
shall survive the expiration or termination of this Lease with respect to any
damage, injury, or death occurring prior to such time.

                            ARTICLE 8 - COMMON AREAS

8.01 Common Areas. As used in this Lease, "Common Areas" shall mean all areas
     ------------
within the Property which are available for the common use of tenants of the
Property and which are not leased or held for the exclusive use of Tenant or
other tenants, including, but not limited to, parking areas, driveways,
sidewalks, access roads, landscaping, and planted areas. Landlord, from time to
time, may change the size, location, nature, and use of any of the Common Areas,
convert Common Areas into leasable areas, construct additional parking
facilities (including parking structures) in the Common Areas, and increase or
decrease Common Area land or facilities. Tenant acknowledges that such
activities may result in inconvenience to Tenant. Such activities and changes
are permitted if they do not materially affect Tenant's use of the Premises.

8.02 Use of Common Areas. Tenant shall have the non-exclusive right (in common
     -------------------
with other tenants and all others to whom Landlord has granted or may grant such
rights) to use the Common Areas for the purposes intended, subject to such
reasonable rules and regulations ("Rules and Regulations") as Landlord may
establish or modify from time to time and as initially set forth in Exhibit C.
                                                                    ---------
Tenant shall abide by all such Rules and Regulations and shall use its best
efforts to cause others who use the Common Areas with Tenant's express or
implied permission to abide by Landlord's Rules and Regulations. At any time,
Landlord may close any Common Areas to perform any acts in the Common Areas as,
in Landlord's reasonable judgment, are desirable to maintain or improve the
Property. Tenant shall not interfere with the rights of Landlord, other tenants,
or any other person entitled to use the Common Areas.

8.03 Vehicle Parking. Tenant shall be entitled to use the 220 Parking Spaces
     ---------------
Allocated to Tenant without paying any additional Rent. Tenant's parking shall
not be reserved and shall be limited to vehicles no larger than standard size
automobiles or pickup utility vehicles. Tenant shall not cause large trucks or
other large vehicles to be parked within the Property or on the adjacent public
streets except in accordance with the Rules and Regulations. Vehicles shall be
parked only in striped parking spaces and not in driveways or other locations
not specifically designated for
<PAGE>

parking. Handicapped spaces shall only be used by those legally permitted to use
them. Tenant shall not park at any time more vehicles in the parking area than
the number of Parking Spaces Allocated to Tenant.

8.04 Common Area Maintenance. Subject to Articles 11 and 12, Landlord shall
     -----------------------
maintain the Common Areas in good order, condition, and repair. Common Area
Maintenance expenses ("CAM Expenses") are all costs and expenses associated with
the operation and maintenance of the Common Areas and the repair and maintenance
of the heating, ventilation, air conditioning, plumbing, electrical, utility,
and safety systems (to the extent not performed by Tenant), including, but not
limited to, the following: gardening and landscaping; snow removal; utility,
water and sewage services for the Common Areas; maintenance of signs (other than
tenants' signs); worker's compensation insurance; personal property taxes;
rental or lease payments paid by Landlord for rented or leased personal property
used in the operation or maintenance of the Common Areas; fees for required
licenses and permits; routine maintenance and repair of roof membrane,
flashings, gutters, downspouts, roof drains, skylights and waterproofing; repair
and maintenance of paving (including sweeping, striping, repairing, resurfacing,
and repaving); general maintenance; painting; lighting; cleaning; refuse
removal; security and similar items; reserves for roof replacement, exterior
painting and other appropriate reserves; capital repairs and replacements as set
forth below; and a property management fee not to exceed 3% of gross receipts.
Landlord may cause any or all of such services to be provided by third parties
and the cost of such services shall be included in CAM Expenses. With respect to
any CAM Expenses which are included for the benefit of the Property and other
property, Landlord shall make a reasonable allocation of such cost between the
Property and such other property. CAM Expenses shall not include: (a) the cost
of capital repairs and replacements, provided, however, that the annual
amortized value (based on the useful life of the item under generally accepted
accounting principles) of any such capital repair or replacement to the Common
Areas or the plumbing, electrical, utility and safety systems serving the
Property shall be included in the CAM Expenses each year during the term of this
Lease consistent with Landlord's obligations under Section 10.03; and (b) the
cost of capital-improvements, provided, however, that the annual amortized value
(based on the useful life of the item under generally accepted accounting
principles) of any capital improvement undertaken to reduce CAM Expenses or made
in order to comply with legal requirements shall be included in CAM Expenses
each year during the term of this Lease.

8.05 Tenant's Payment of CAM Expenses. Tenant shall pay Tenant's Pro Rata Share
     --------------------------------
of the amount, if any, by which CAM Expenses exceed the Base CAM Expenses, as
defined hereunder, allocable to the Lease Term. The Base CAM Expenses shall be
the CAM Expenses for the Base Year. Notwithstanding anything to the contrary,
Tenant shall be responsible for Tenant's Pro Rata Share of utilities for the
Common Areas.

8.06 Tenant Audit. Tenant shall have the right to audit the CAM Expenses, during
     ------------
normal business hours at the property manager's office by providing Landlord
with at least ten (10) business days prior notice, no more than one time per
calendar year, and if such audit shows a discrepancy of more than 5% of CAM
Expenses charged to Tenant, Landlord will pay the reasonable cost of the audit
in an amount not to exceed $2,000.
<PAGE>

                          ARTICLE 9 - USE OF PREMISES

9.01 Permitted Uses. Tenant may use the Premises only for the Permitted Uses.
     --------------

9.02 Manner of Use. Tenant shall not cause or permit the Premises to be used in
     -------------
any way which shall constitute a violation of any law, ordinance, restrictive
covenants or governmental regulation or order, which shall annoy or interfere
with the rights of tenants of the Property, or which shall constitute a nuisance
or waste. Tenant shall obtain and pay for all permits, including a certificate
of occupancy, and shall promptly take all actions necessary to comply with all
applicable statutes, ordinances, notes, regulations, orders, covenants and
requirements regulating the use by Tenant of the Premises, including the
Occupational Safety and Health Act and the Americans With Disabilities Act

("ADA"). Notwithstanding anything to the contrary in this Lease, Tenant's
  ---
obligation to comply with the ADA shall be limited to the interior of the
Premises, and Landlord shall be obligated to comply with the ADA as it relates
to the exterior of the Premises.

9.03 Hazardous Materials. Prior to executing this Lease, Tenant has completed,
     -------------------
executed and delivered to Landlord a Hazardous Materials Disclosure Certificate
("Initial Disclosure Certificate"), a fully completed copy of which is attached
hereto as Exhibit F and incorporated herein by this reference. Tenant covenants,
          ----------
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes all
Hazardous Materials (as defined below) which will be manufactured, treated, used
or stored on or about the Premises by Tenant or Tenant's agents. Tenant shall on
each anniversary of the Lease Commencement Date and at such other times as
Tenant desires to manufacture, treat, use or store on or about the Premises new
or additional Hazardous Materials which were not listed on the Initial
Disclosure Certificate, complete, execute and deliver to Landlord an updated
Disclosure Certificate (each, an "Updated Disclosure Certificate") describing
Tenant's then current and proposed future uses of Hazardous Materials on or
about the Premises, which Updated Disclosure Certificate shall be in the same
format as that which is set forth in Exhibit G or in such updated format as
                                     ----------
Landlord may require from time to time. Tenant shall deliver an Updated
Disclosure Certificate to Landlord not less than thirty days prior to the date
Tenant intends to commence the manufacture, treatment, use or storage of new or
additional Hazardous Materials on or about the Premises, and Landlord shall have
the right to approve or disapprove such new or additional Hazardous Materials in
its sole and absolute discretion. Tenant shall make no use of Hazardous
Materials on or about the Premises except as described in the Initial Disclosure
Certificate or-as otherwise approved by Landlord in writing in accordance with
this Section 9.03.

As used in this Lease, the term "Hazardous Material" shall mean any flammable
items, explosives, radioactive materials, oil, hazardous or toxic substances,
material or waste or related materials, including any substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials" or "toxic substances" now or subsequently regulated under
any applicable federal, state or local laws or regulations, including without
limitation petroleum-based products, paints, solvents, lead, cyanide, DDT,
printing inks, acids, pesticides, ammonia compounds and other chemical products,
asbestos, PCBs and similar
<PAGE>

compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant, its agents, employees, contractors, sublessees or
invitees without (a) the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, and (b) complying with all applicable
federal, state and local laws or ordinances pertaining to the transportation,
storage, use or disposal of such Hazardous Materials, including but not limited
to obtaining proper permits. Landlord shall be entitled to take into account
such other factors or facts as Landlord may reasonably determine to be relevant
in determining whether to grant or withhold consent to Tenant's proposed
activity with respect to Hazardous Material. In no event, however, shall
Landlord be required to consent to the installation or use of any storage tanks
on the Property.

If Tenant's transportation, storage, use or disposal of Hazardous Materials on
the Premises results in the contamination of the soil or surface or ground water
or loss or damage to person(s) or property, then Tenant agrees to: (a) notify
Landlord immediately of any contamination, claim of contamination, loss or
damage, (b) after consultation with the Landlord, clean up the contamination in
full compliance with all applicable statutes, regulations and standards and (c)
indemnify, defend and hold Landlord harmless from and against any claims, suits,
causes of action, costs and fees, including attorney's fees and costs, arising
from or connected with any such contamination, claim of contamination, loss or
damage. Tenant agrees to fully cooperate with Landlord and provide such
documents, affidavits and information as may be requested by Landlord (i) to
comply with any environmental law, (ii) to comply with the request of any
lender, purchaser or tenant, and/or (iii) for any other reason deemed necessary
by Landlord in its sole discretion. Tenant shall notify Landlord promptly in the
event of any spill or other release of any Hazardous Material at, in, on, under
or about the Premises which is required to be reported to a governmental
authority under any environmental law, will promptly forward to Landlord copies
of any notices received by Tenant relating to alleged violations of any
environmental law and'-will promptly pay when due any fine or assessment against
Landlord, Tenant or the Premises relating to any violation of an environmental
law during the term of this Lease. If a lien is filed against the Premises by
any governmental authority resulting from the need to expend or the actual
expending of monies arising from an act or omission, whether intentional or
unintentional, of Tenant, its agents, employees or invitees, or for which Tenant
is responsible, resulting in the releasing, spilling, leaking, leaching,
pumping, emitting, pouring, emptying or dumping of any Hazardous Material into
the waters or onto land located within or without the State where the Premises
is located, then Tenant shall, within thirty (30) days from the date that Tenant
is first given notice that such lien has been placed against the Premises (or
within such shorter period of time as may be specified by Landlord if such
governmental authority has commenced steps to cause the Premises to be sold
pursuant to such lien) either (i) pay the claim and remove the lien, or (ii)
furnish a cash deposit, bond, or such other security with respect thereto as is
satisfactory in all respects to Landlord and is sufficient to effect a complete
discharge of such lien on the Premises. Landlord shall have the right, but not
the obligation, without in any way limiting Landlord's other rights and remedies
under this Lease, to enter upon the Premises, or to take such other actions as
it deems necessary or advisable, to investigate, clean up, remove or remediate
any Hazardous Materials or contamination by Hazardous
<PAGE>

Materials present on, in, at, under or emanating from the Premises or the
Property in violation of Tenant's obligations under this Lease or under any laws
regulating Hazardous Materials. Notwithstanding any other provision of this
Lease, Landlord shall have the right, at its election, in its own name or as
Tenant's agent, to negotiate, defend, approve and appeal, at Tenant's expense,
any action taken or order issued by any governmental agency or authority with
any governmental agency or authority against Tenant, Landlord or the Premises or
Property relating to any Hazardous Materials or under any related law or the
occurrence of any event or existence of any condition that would cause a breach
of any of the covenants set forth in this Section 9.03. Prior to or promptly
after the expiration or termination of this Lease, Landlord may require an
environmental audit of the Premises by a qualified environmental consultant. If
the environmental audit finds contamination caused by the Tenant, Tenant shall
pay the costs of such an environmental audit and shall, at it sole cost and
expense, take all actions recommended in such audit to remediate any
environmental conditions. The provisions of this Section 9.03 shall survive the
expiration or earlier termination of this Lease.

9.04 Signs and Auctions. Tenant shall not place any signs on the Property
     ------------------
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Subject to design approval by Landlord and
compliance with all applicable governmental requirements, Tenant may, at its
sole cost and expense, place identifying signage on the Premises. Tenant shall
not conduct or permit any auctions or sheriff's sales at the Property.

9.05 Landlord's Access. Landlord or its agents may enter the Premises at all
     -----------------
reasonable times to show the Premises to potential buyers, investors or tenants
or other parties; to do any other act or to inspect and conduct tests in order
to monitor Tenant's compliance with all applicable environmental laws and all
laws governing the presence and use of Hazardous Material; or for any other
purpose Landlord deems necessary. Landlord shall give Tenant a minimum of 24-
hour prior notice (which may be oral) of such entry, except in the case of an
emergency, in which event Landlord shall make reasonable efforts to notify
Tenant. Landlord may place customary "For Sale" or "For Lease" signs on the
Premises.

               ARTICLE 10 - CONDITION AND MAINTENANCE OF PREMISES

10.01 Existing Conditions. Except as provided in Section 10.03 and Exhibit D
      -------------------                                          ---------
attached hereto, Tenant shall accept the Property and the Premises in their
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Except as provided
herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation as to the condition of the Property or the suitability
of the Property for Tenant's intended use. Tenant represents and warrants that
Tenant has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto.

10.02 Exemption of Landlord from Liability. Tenant shall insure its personal
      ------------------------------------
property under an all risk full replacement cost property insurance policy as
provided in Section 7.04. Landlord shall not be liable for any damage or injury
to the person, business (or any loss of income
<PAGE>

therefrom), goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers or any other person or about the Property,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in or about
Property, or from other sources or places; or (d) any act or omission of any
other tenant of the Property. Tenant shall give Landlord prompt notice upon the
occurrence of any accident or casualty at the Premises. Landlord shall not be
liable for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Tenant. The provisions of
this Section 10.02 shall not, however, exempt Landlord from liability for
Landlord's gross negligence or willful misconduct.

10.03 Landlord's Obligations. Subject to the provisions of Article 11 (Damage or
      ----------------------
Destruction) and Article 12 (Condemnation), and except for damage caused by any
act or omission of Tenant, or Tenant's employees, agents, contractors or
invitees, Landlord shall keep the foundation, roof, building systems (other than
the heating, ventilating and air conditioning system), structural supports and
exterior walls of the improvements on the Property in good order, condition and
repair. However, Landlord shall not be obligated to maintain or repair windows,
doors, plate glass or the interior surfaces of walls. Tenant shall promptly
report in writing to Landlord any defective condition known to it which Landlord
is required to repair. Tenant hereby waives the benefit of any present or future
law which provides Tenant the right to repair the Premises- or Property at
Landlord's expense or to terminate this Lease because of the condition of the
Property or Premises. Notwithstanding anything to the contrary in this Lease, if
any part of the HVAC system requires repair or replacement prior to the first
anniversary of the Lease Commencement Date, Landlord, at its sole cost and
expense, shall be responsible for prompt repair or replacement of such part.
Landlord and Tenant further agree that, in the event such repair or replacement
is required to be made prior to the first anniversary of the Lease Commencement
Date, Tenant shall have such repair or replacement work completed and shall
invoice Landlord for the reasonable costs of such repairs or replacements.
Notwithstanding the preceding, except in an emergency (to be determined in
Tenant's reasonable discretion), prior to undertaking such repair or replacement
work, Tenant shall provide Landlord with a scope of work and an estimation of
cost, and Landlord shall have three (3) business days in which to approve or
disapprove such costs, its approval not to be unreasonably withheld.

10.04 Tenant's Obligations.
      --------------------

(a) Repair and Maintenance. Except as provided in Exhibit D, Section 10.03,
    ----------------------
Article 11 (Damage or Destruction) and Article 12 (Condemnation), Tenant shall
keep all portions of the Premises (including systems and equipment) and the
heating, ventilating and air conditioning system in good order, condition and
repair (including repainting and refinishing, as needed). If any portion of the
Premises or any system or equipment in the Premises which Tenant shall be
obligated to repair can not be fully repaired or restored, Tenant shall promptly
replace such portion of the Premises or system or equipment, regardless of
whether the benefit of such replacement extends beyond the Lease Term.  Tenant
shall maintain a preventive maintenance contract providing for the regular
inspection
<PAGE>

and maintenance of the heating and air conditioning system by a heating and air
conditioning contractor, such contract and such contractor to be approved by
Landlord. In the event Tenant fails to maintain such preventive maintenance
contract during the Lease Term, Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility for maintenance of the heating
and air conditioning system at Tenant's expense. Tenant shall be responsible, at
its sole cost and expense, for janitorial service to the Premises. Landlord
shall, at Tenant's expense, repair any damage to the portions of the Property
Landlord shall be required to maintain caused by Tenant's acts or omissions.
Notwithstanding anything to the contrary in this Section 10.04, Tenant's
responsibility as to the existing HVAC system only, such limitation not to
include any additional HVAC components Tenant adds as part of Tenant's
Improvement Work (as defined in Exhibit D) for which Tenant shall be solely
responsible, until the first anniversary of the Lease Commencement Date shall be
limited to routine maintenance, Landlord assuming responsibility for any repairs
or replacements during the first Lease year (subject to the provisions of
Section 10.03 above).

(b) Tenant's Expense. Tenant shall fulfill all of Tenant's obligations under
    ----------------
this Section 10.04 at Tenant's sole expense. If Tenant shall fail to maintain,
repair or replace the Premises as required by this Section 10.04, Landlord may,
upon thirty (30) days' prior notice to Tenant (except that no notice shall be
required in the case of an emergency), enter the Premises and perform such
maintenance or repair (including replacement, as needed) on behalf of Tenant. In
such case, Tenant shall reimburse Landlord for all costs reasonably incurred in
performing such maintenance, repair or replacement immediately upon demand.

10.05 Alterations. Additions. and Improvements.
      ----------------------------------------

(a) Tenant's Work. Tenant shall not make any installations, alterations,
    -------------
additions, or improvements in or to the Premises, either (i) with estimated
costs exceeding $10,000 or (ii) affecting the building systems or the structural
or exterior components of the Premises, including, without limitation, any
apertures in the walls, partitions, ceilings or floors, without on each occasion
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed in the case of (i) above but may be withheld in
Landlord's sole discretion as the proposed work relates to (ii) above. Any such
work so approved by Landlord shall be performed only in accordance with plans
and specifications therefor approved by Landlord. Tenant shall procure at
Tenant's sole expense all necessary permits and licenses before undertaking any
work on the Premises and shall perform all such work in a good and workmanlike
manner employing materials of good quality and so as to conform with all
applicable zoning, building, fire, health and other codes, regulations,
ordinances and laws and with all applicable insurance requirements. If requested
by Landlord on work requiring Landlord's approval, Tenant shall furnish to
Landlord prior to commencement of any such work a bond or other security
acceptable to Landlord assuring that any work by Tenant will be completed in
accordance with the approved plans and specifications and that all
subcontractors will be paid. Tenant shall employ for such work only contractors
reasonably approved by Landlord and shall require all contractors employed by
Tenant to carry worker's compensation insurance in accordance
<PAGE>

with statutory requirements and commercial general liability insurance covering
such contractors on or about the Premises with a combined single limit not less
than $3,000,000 and shall submit certificates evidencing such coverage to
Landlord prior to the commencement of such work. Tenant shall indemnify and hold
harmless Landlord from all injury, loss, claims or damage to any person or
property occasioned by or growing out of such work. Landlord may inspect the
work of Tenant at reasonable times and given notice of observed defects. Upon
completion of any such work, Tenant shall provide Landlord with "as built"
plans, copies of all construction contracts and proof of payment for all labor
and materials.

(b) No Liens. Tenant shall pay when due all claims for labor and material
    --------
furnished to the Premises and shall at all times keep the Property free from
liens for labor and materials. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Premises,
regardless of whether Landlord's consent to such work is required. Landlord may
record and post notices of non-responsibility on the Premises.

10.06 Condition upon Termination. Upon the expiration or termination of this
      --------------------------
Lease, Tenant shall surrender the Premises to Landlord broom clean and in the
condition which Tenant shall have been required to maintain the Premises under
this Lease. Tenant shall not be obligated to repair any damage which Landlord is
required to repair under Article 11 (Damage or Destruction). Landlord may
require Tenant to remove any alterations, additions or improvements (whether or
not made with Landlord's consent) prior to the expiration of the Lease and to
restore the Premises to their prior condition, all at Tenant's expense. With
respect to any alterations, additions or improvements which require Landlord's
approval, at the time of such approval Landlord shall specify if Tenant shall
not be required to remove the same, and such items shall become Landlord's
property and shall be surrendered to Landlord upon the expiration or earlier
termination of the Lease, except that Tenant may remove any of Tenant's
machinery or equipment, including clean room equipment, fixtures and related
components, which can be removed without damage to the Property. Tenant shall
repair, at Tenant's expense, any damage to the Property caused by the removal of
any such machinery or equipment. In no event, however, shall Tenant remove any
of the following materials or equipment (which shall be deemed Landlord's
property), without Landlord's prior written consent; unless the same shall have
been installed by Tenant at its expense: any power wiring or wiring panels;
lighting or lighting fixtures; wall coverings; drapes, blinds or other window
coverings; carpets or other floor coverings; heaters, air: conditioners or any
other heating or air conditioning equipment; fencing or security gates; or other
similar building operating equipment.

                       ARTICLE 11- DAMAGE OR DESTRUCTION

11.01 Damage to Premises.
      ------------------

(a)  If the Premises shall be destroyed or rendered untenantable, either wholly
or in part, by fire or other casualty ("Casualty"), Tenant shall immediately
notify Landlord in
<PAGE>

writing upon the occurrence of such Casualty. In the event of any Casualty that
would take more than 120 days from the date of Casualty to restore, Landlord may
elect either to (i) repair the damage caused by such casualty as soon as
reasonably possible, in which case this Lease shall remain in full force and
effect, or (ii) terminate this Lease as of the date the casualty occurred.
Landlord shall notify Tenant, within thirty (30) days after receipt of notice of
the occurrence of the casualty, whether Landlord elects to repair the damage or
terminate this Lease and the time Landlord's consultants estimate the
restoration shall take (the "Casualty Notice"). If Landlord shall elect to
                             ---------------
repair the damage, Tenant shall pay Landlord the portion of the "deductible
amount" (if any and not to exceed $25,000) under Landlord's insurance allocable
to the damage to the Premises and, if the damage shall have been due to an act
or omission of Tenant, or Tenant's employees, agents, contractors or invitees,
the difference between the actual cost of repair and any insurance proceeds
received by Landlord. If the restoration is estimated to take more than 270 days
from the date of the Casualty and provided the Casualty has not been caused by
Tenant, Tenant may elect to terminate this Lease by providing written notice to
Landlord within thirty (30) days from receipt of the Casualty Notice.

(b) If the casualty to the Premises shall occur during the last six (6) months
of the Lease Term and the damage shall be estimated by Landlord to require more
than thirty (30) days to repair, either Landlord or Tenant may elect to
terminate this Lease as of the date the casualty shall have occurred, regardless
of the sufficiency of any insurance proceeds. The party electing to terminate
this Lease shall give written notification to the other party of such election
within ten (10) days after Tenant's notice to Landlord of the occurrence of the
casualty.

11.02 Temporary Reduction of Rent. If the Property shall be destroyed or damaged
      ---------------------------
by casualty and Landlord shall determine to repair or restore the Property
pursuant to the provisions of this Article 11, any Rent (Base and Additional)
payable during the period of such damage, repair and/or restoration shall be
reduced according to the degree, if any, to which Tenant's use of the Premises
shall be impaired. Such reduction shall not exceed-the sum of one year's payment
of Base Rent, insurance premiums and Real Property Taxes. Except for such
possible reduction in Rent, Tenant shall not be entitled to any compensation,
reduction or reimbursement from Landlord as a result of any damage, destruction,
repair, or restoration of the Property.

11.03 Waiver. Tenant waives the protection of any statute, code or judicial
      ------
decision which shall grant a tenant the right to terminate a lease in the event
of the damage or destruction of the leased property and the provisions of this
Article 11 shall govern the rights and obligations of Landlord and Tenant in the
event of any damage or destruction of or to the Property.

                           ARTICLE 12 - CONDEMNATION

12.01 Condemnation. If more than twenty percent (20%) of the floor area of the
      ------------
Premises or more than twenty-five percent (25%) of the parking on the Property
shall be taken by eminent domain, either Landlord or Tenant may terminate this
Lease as of the date the condemning authority
<PAGE>

takes title or possession, by delivering notice to the other within ten (10)
days after receipt of written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall take title or
possession). If neither Landlord nor Tenant shall terminate this Lease, this
Lease shall remain in effect as to the portion of the Premises not taken, except
that the Base Rent shall be reduced in proportion to the reduction in the floor
area of the Premises. If this Lease shall be terminated, any condemnation award
or payment shall be distributed to the Landlord. Tenant shall have no claim
against Landlord for the value of the unexpired lease term or otherwise.

                     ARTICLE 13 - ASSIGNMENT AND SUBLETTING

13.01 Landlord's Consent Required. Other than an assignment or sublease to an
      ---------------------------
Affiliate, no portion of the Premises or of Tenant's interest in this Lease
shall be acquired by any other person or entity, whether by sale, assignment,
mortgage, sublease, transfer, operation of law, or act of Tenant, without
Landlord's prior written consent, except as provided in Section 13.02 below.
Landlord shall have the right to grant or withhold its consent (reasonably
exercised) as provided in Section 13.04 below. Any attempted transfer without
consent shall be void and shall constitute a non curable breach of this Lease.
For purposes of this Lease, the term "Affiliate" means (a) an entity that
directly or indirectly controls, is controlled by or is under common control
with Tenant, (b) a successor corporation related to Tenant by merger,
consolidation, nonbankruptcy reorganization or government action; or (c) a
purchaser of substantially all of Tenant's assets and liabilities. The term
"control" means the power to direct the management of such entity through voting
--------
rights, ownership or contractual obligations. For purposes of this Lease, sale
of Tenant's capital stock through any public exchange or issuances for purposes
of raising financing shall not be deemed an assignment, subletting, or any other
transfer of the Lease or Premises.

13.02 No Release of Tenant. No assignment or transfer shall release Tenant or
      --------------------
change Tenant's primary liability to pay the Rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of Rent from any
other person shall not be a waiver of any provision of this Article 13. Consent
to one transfer shall not be deemed a consent to any subsequent transfer or a
waiver of the obligation to obtain consent on subsequent occasions. If Tenant's
assignee or transferee shall default under this Lease, Landlord may proceed
directly against Tenant without pursuing remedies against the assignee or
transferee. Landlord may consent to subsequent assignments or modifications of
this Lease by Tenant's transferee without notifying Tenant or obtaining its
consent, and such action shall not release Tenant from any of its obligations or
liabilities under this Lease as so assigned or modified. Notwithstanding the
preceding, as an accommodation to Tenant, Landlord shall use reasonable efforts
to notify Tenant of any subsequent assignment to a non-affiliate of the then
current tenant; provided, however, that Landlord's failure to so notify Tenant
shall not be considered a default hereunder.

13.03 Offer to Terminate. If Tenant shall desire to assign this Lease, except to
      ------------------
an Affiliate, or sublease more than 50% of the Premises, except to an Affiliate,
for substantially the remaining term of the Lease, Tenant shall offer to
Landlord in writing, the right to terminate this Lease as of the date specified
in the offer. If Landlord shall elect in writing to accept the offer to
terminate within twenty (20) days after receipt of notice of the offer, this
Lease shall terminate as of the date
<PAGE>

specified in such offer and all the terms and provisions of this Lease governing
termination shall apply. If Landlord shall not so elect, Tenant shall then
comply with the provisions of this Article 13 applicable to such assignment or
sublease.

13.04 Landlord's Consent. Tenant's request for consent under Section 13.01 shall
      ------------------
set forth the details of the proposed sublease, assignment or transfer,
including the name, business and financial condition of the prospective
transferee, financial details of the proposed transaction (e.g., the term of and
the rent and security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant. Landlord shall
have the right to withhold consent, reasonably exercised, or to grant consent,
based on the following factors: (i) the business of the proposed assignee or
subtenant and the proposed use of the Premises; (ii) the net worth and financial
condition of the proposed assignee or subtenant; (iii) Tenant's compliance with
all of its obligations under this Lease; and (iv) such other factors as Landlord
may reasonably deem relevant. If Tenant shall assign or sublease, the following
shall apply: Tenant shall pay to Landlord as Additional Rent fifty percent (50%)
of the Proceeds (defined below) on such transaction (such amount being
Landlord's share) as and when received by Tenant, unless Landlord shall give
notice to Tenant and the assignee or subtenant that Landlord's Share shall be
paid by the assignee or subtenant to Landlord directly. Proceeds shall mean (a)
all rent and all fees and other consideration paid for or in respect of the
assignment or sublease, including fees under any collateral agreements less (b)
the rent and other sums payable under this Lease (in the case of a sublease of
less than all of the Premises, allocable to the subleased premises) and all
costs and expenses directly incurred by Tenant in connection with the execution
and performance of such assignment or sublease for reasonable real estate
broker's commissions, standard costs or fees, and reasonable costs of renovation
or construction of tenant improvements required under such assignment or
sublease. Tenant shall be entitled to recover such reasonable costs and expenses
before Tenant shall be obligated to pay Landlord's Share to Landlord. Tenant
shall provide Landlord a written statement certifying all amounts to be paid
from any assignment or sublease of the Premises within thirty (30) days after
the transaction shall be signed and from time to tune thereafter on Landlord's
request, and Landlord may inspect Tenant's books and records to verify the
accuracy of such statement. On written request, Tenant shall promptly furnish to
Landlord copies of all the transaction documentation, all of which shall be
certified by Tenant to be complete, true and correct. Tenant shall promptly
reimburse Landlord for all reasonable legal costs and expenses incurred by
Landlord in connection with a request for a sublease or assignment of this
Lease, not to exceed $1,000.

                       ARTICLE 14 - DEFAULTS AND REMEDIES

14.01 Covenants and Conditions. Tenant's performance of each of Tenant's
      ------------------------
obligations under this Lease is a condition as well as a covenant. Tenant's
right to continue in possession of the Premises is conditioned upon such
performance. Time is of the essence in the performance by Tenant of all
covenants and conditions.
<PAGE>

14.02 Defaults. Each of the following shall be an event of default under this
      --------
Lease:

(a) Tenant shall abandon or vacate the Premises (Tenant shall have the right to
vacate the Premises on the condition that Tenant pays any costs associated with
such vacating including, without limitation, (i) any increase in the cost of
insurance premiums resulting from such vacating and (ii) any repair or cleanup
costs associated with vandalism to the Premises);

(b) Tenant shall fail to pay Rent or any other sum payable under this Lease
within five (5) days after it is due; provided, however, that the failure to pay
such amount shall not be an event of default for the first two (2) occurrences
in any consecutive twelve (12) month period if payment is made by Tenant within
five (5) days of written notice of such failure to pay;

(c) Tenant shall fail to perform any of Tenant's other obligations under this
Lease and such failure shall continue for a period of fifteen (15) days after
notice from Landlord; provided that if more than fifteen (15) days shall be
required to complete such performance, Tenant shall not be in default if Tenant
shall commence such performance within the fifteen (15) day period and shall
thereafter diligently pursue its completion.

(d) (i) Tenant shall make a general assignment or general arrangement for the
benefit of creditors; (ii) a petition for adjudication of bankruptcy or for
reorganization or rearrangement shall be filed by or against Tenant and shall
not be dismissed within sixty (60) days; (iii) a trustee or receiver shall be
appointed to take possession of substantially all of Tenant's assets located at
the Premises or Tenant's interest in this Lease and possession shall be
subjected to attachment, execution or other judicial seizure which shall not be
discharged within sixty (60) days. If a court of competent jurisdiction shall
determine that any of the acts described in this subsection (d) is not a default
under this Lease, and a trustee shall be appointed to take possession (or if
Tenant shall remain a debtor in possession) and such trustee or Tenant shall
assign, sublease, or transfer-Tenant's interest hereunder, then Landlord shall
receive, as Additional Rent, the excess, if any, of the rent (or any other
consideration) paid in connection with such assignment, transfer or sublease
over the rent payable by Tenant under this Lease.

14.03 Remedies. On the occurrence of an event of default by Tenant, Landlord
      --------
may, at any time thereafter, with or without notice or demand (except as
provided in Section 14.02) and without limiting Landlord in the exercise of any
right or remedy which Landlord may have:

(a) Terminate this Lease by written notice to Tenant or by entry, at Landlord's
option. Tenant shall then immediately quit and surrender the Premises to
Landlord, but Tenant shall remain liable as hereinafter provided. Following
termination, without prejudice to other remedies Landlord may have by reason of
Tenant's default or of such termination, Landlord may (i) peaceably reenter the
Premises upon voluntary surrender by Tenant or
<PAGE>

remove Tenant therefrom and any other persons occupying the Premises, using such
legal proceedings as may be available; (ii) repossess the Premises or relet the
Premises or any part thereof for such term (which may be for a term extending
beyond the Lease Term), at such rental and upon such other terms and conditions
as Landlord in Landlord's sole discretion shall determine, with the right to
make alterations and repairs to the Premises; and (iii) remove all personal
property therefrom. Following termination, Landlord shall have all the rights
and remedies of a landlord provided at law and in equity. The amount of damages
Tenant shall pay to Landlord following termination shall include all Rent unpaid
up to the termination of this Lease, costs and expenses incurred by Landlord due
to such Event of Default and, in addition, Tenant shall pay to Landlord as
damages, at the election of Landlord (if Landlord shall elect subsection (y)
below, it may cease such election at any time), either (x) the amount,
discounted to present value at the then Federal Reserve Bank discount rate, by
which, at the time of the termination of this Lease or of Tenant's right to
possession (or at any time thereafter if Landlord shall have initially elected
damages under subsection (y) below), (i) the aggregate of the Rent and other
charges projected over the period commencing with such termination and ending on
the expiration date of this Lease exceeds (ii) the aggregate projected rental
value of the Premises for such period, or (y) amounts equal to the Rent and
other charges which would have been payable by Tenant had this Lease or Tenant's
right to possession not been so terminated, payable upon the due dates therefor
specified herein following such termination and until the expiration date of
this Lease, provided, however, that if Landlord shall re-let the Premises during
such period, Landlord shall credit Tenant with the net rents received by
Landlord from such re-letting, such net rents to be determined by first
deducting from the gross rents as and when received by Landlord from such re-
letting the expenses incurred or paid by Landlord in terminating this Lease, and
the expenses of re-letting, including, without limitation, altering and
preparing the Premises for new tenants, brokers' commissions, legal fees and all
other similar and dissimilar expenses properly chargeable against the Premises
and the rental therefrom, it being understood that any such reletting may be for
a period equal to or shorter or longer than the remaining Lease Term; and
provided, further, that (i) in no event shall Tenant be entitled to receive any
excess of such net rents over the sums payable by Tenant to Landlord hereunder
and (ii) in no event shall Tenant be entitled in any suit for the collection of
damages pursuant to this subsection (y) to a credit in respect of any net rents
from a re-letting except to the extent that such net rents are actually received
by Landlord prior to the commencement of such suit. If the Premises or any part
thereof should be re-let in combination with other space, then proper
apportionment on a square foot area basis shall be made of the rent received
from such re-letting and of the expenses of re-letting. In calculating the Rent
and other charges under subsection (x) above, there shall be included, in
addition to the Rent other considerations agreed to be paid or performed by
Tenant, on the assumption that all such considerations would have remained
constant (except as herein otherwise provided) for the balance of the full Term
hereby granted. Landlord may, but need not, re-let the Premises or any part
thereof for such rent and on such terms as it shall determine (including the
right to re-let the Premises for a greater or lesser term than the Lease Term,
the right to re-let the Premises as part of a larger area and the right to
change the character or use made of the Premises). Suit or suits for the
recovery of such damages,
<PAGE>

or any installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the Term of this Lease would have expired if
it had not been terminated hereunder. In lieu of any other damages or indemnity
and in lieu of full recovery by Landlord of all sums payable under the foregoing
provisions of this Section 14.03(a), Landlord may, by notice to Tenant, at any
time after this Lease shall be terminated under this Article 14 or shall be
otherwise terminated for breach of any obligation of Tenant and before such full
recovery, elect to recover, and Tenant shall thereupon pay, as liquidated
damages, an amount equal to the aggregate of the Base Rent and Additional Rent
due for the twelve (12) months ended immediately prior to such termination plus
the amount of Base Rent and Additional Rent of any kind accrued and unpaid at
the time of termination.

(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant has abandoned the Premises. In such
event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due.

(c)  Pursue any other remedy now or hereafter available to Landlord under the
laws or judicial decisions of the state in which the Property is located.

If Landlord terminates Tenant's right-to possession without terminating the
Lease after an event of default, Landlord shall use commercially reasonable
efforts to relet the Premises; provided, however, (a) Landlord shall not be
obligated to accept any tenant proposed by Tenant, (b) Landlord shall have the
right to lease any other space controlled by Landlord first, and (c) any
proposed tenant shall meet all of Landlord's leasing criteria.

14.04 Repayment of "Free" Rent. If this Lease provides for a postponement of any
      ------------------------
Base Rent or Additional Rent, a period of "free" Rent, reduced Rent, early
occupancy, or other Rent concession, such postponed Rent, "free" Rent, reduced
Rent or other Rent concession shall be referred to herein as the "Abated Rent".
Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Tenant has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all Rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Premises in the physical condition required
by this Lease. Tenant acknowledges that its right to receive credit for the
Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual
performance of its obligations under this Lease. If an event of default shall
occur, the Abated Rent shall immediately become due and payable in full and this
Lease shall be enforced as if there were no such Rent abatement or other Rent
concession. In such case Abated Rent shall be calculated based on the full
initial rent payable under this Lease.

14.05 Automatic Termination: Damages. Notwithstanding any other term or
      ------------------------------
provision hereof to the contrary, this Lease shall terminate on the occurrence
of any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 14.03 hereof, including the filing of an unlawful detainer
action against Tenant. On any termination, Landlord's damages for default
<PAGE>

shall include all costs and fees, including reasonable attorneys' fees that
Landlord shall incur in connection with the filing, commencement, pursuing
and/or defending of any action in any bankruptcy court or other court with
respect to the Lease, the obtaining of relief from any stay in bankruptcy
restraining any action to evict Tenant, or the pursuing of any action with
respect to Landlord's right to possession of the Premises. All such damages
suffered (apart from Base Rent and other Rent payable hereunder) shall
constitute pecuniary damages which shall be reimbursed to Landlord prior to
assumption of the Lease by Tenant or any successor to Tenant in any bankruptcy
or other proceedings.

14.06 Cumulative Remedies. Except as otherwise expressly provided herein, any
      -------------------
and all rights and remedies which Landlord may have under this Lease and at law
and equity shall be cumulative and shall not be deemed inconsistent with each
other, and any two or more of all such rights and remedies may be exercised at
the same time to the greatest extent permitted by law.

                       ARTICLE 15 - PROTECTION OF LENDERS

15.01 Subordination. At Landlord's election this Lease shall be automatically
      -------------
subordinate to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Tenant shall cooperate with Landlord and any lender which shall
acquire a security interest in the Property or the Lease. Tenant shall execute
such further documents and assurances as such lender may require, provided that
Tenant's obligations under this Lease shall not be increased in any material way
(the performance of ministerial acts shall not be deemed material), and Tenant
shall not be deprived of its rights under this Lease. If any ground lessor,
beneficiary or mortgagee elects to have this Lease prior to the lien of its
ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.

15.02 Attornment. If Landlord's interest in the Property is acquired by any
      ----------
ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a
foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Property and recognize such transferee or successor
as Landlord under this Lease. Tenant waives the protection of any statute or
rule of law which shall give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.

15.03 Signing of Documents. Tenant shall sign and deliver any instrument or
      --------------------
documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so.

15.04 Estoppel Certificates. Within ten (10) business days after Landlord's
      ---------------------
request, Tenant shall execute, acknowledge and deliver to Landlord a written
statement certifying: (i) that none of the terms or provisions of this Lease
have been changed (or if they have been changed, stating how they have been
changed); (ii) that this Lease has not been canceled or terminated; (iii) the
last date of payment of the Base Rent and other charges and the time period
covered by such payment;

<PAGE>

(iv) that Landlord is not in default under this Lease (or if Landlord is claimed
to be in default, setting forth such default in reasonable detail); and (v) such
other information with respect to Tenant or this Lease as Landlord may
reasonably request or which any prospective purchaser or encumbrancer of the
Property may require. Landlord may deliver any such statement by Tenant to any
prospective purchaser or encumbrancer of the Property, and such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct. If
Tenant shall not deliver such statement to Landlord within such ten (10)
business day period, Landlord, and any prospective purchaser or encumbrancer,
may conclusively presume and rely upon the following facts: (i) that the terms
and provisions of this Lease have not been changed except as otherwise
represented by Landlord; (ii) that this Lease has not been canceled or
terminated except as otherwise represented by Landlord; (iii) that not more than
one month's Base Rent or other charges have been paid in advance; and (iv) that
Landlord is not in default under this Lease. In such event, Tenant shall be
estopped from denying the truth of such facts.

15.05 Tenant's Financial Condition. Within ten (10) days after request from
      ----------------------------
Landlord from time to time, Tenant shall deliver to Landlord Tenant's audited
financial statements for the latest available two (2) fiscal years (the latest
year ending no more than twelve (12) months prior to Landlord's request). Such
financial statements shall be delivered to Landlord's mortgagees and lenders and
prospective mortgagees, lenders and purchasers. Tenant represents and warrants
to Landlord that each such financial statement shall be true and accurate as of
the date of such statement. All financial statements shall be confidential and
shall be used only for the purposes set forth in this Lease.

                            ARTICLE 16 - LEGAL COSTS

16.01 Legal Proceedings. If either party brings a legal action to enforce any
      -----------------
term of the Lease or seek damages (or as to Landlord, seek possession of the
Premises) for a breach of the Lease, the prevailing party in such action shall
be entitled to its reasonable attorneys fees and costs incurred in such action.
Such costs shall include legal fees and costs incurred for the negotiation of a
settlement, enforcement of rights or otherwise. Tenant shall also indemnify
Landlord against and hold Landlord harmless from all costs, expenses, demands
and liability, including without limitation, legal fees and costs, Landlord
shall incur if Landlord shall become or be made a party to any claim or action
(a) instituted by Tenant against any third party, or by any third party against
Tenant, or by or against any person holding any interest under or using the
Premises by license of or agreement with Tenant; (b) for foreclosure of any lien
for labor or material furnished to or for Tenant or such other person; (c)
otherwise arising out of or resulting from any act or transaction of Tenant or
such other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy or similar proceeding. Tenant shall defend Landlord
against any such claim or action at Tenant's expense with counsel reasonably
acceptable to Landlord or, at Landlord's election, Tenant shall reimburse
Landlord for any legal fees or costs Landlord shall incur in any such claim or
action.

16.02 Landlord's Consent. Tenant shall pay Landlord's reasonable fees and
      ------------------
expenses, including, without limitation, legal, engineering and other
consultants' fees and expenses, incurred
<PAGE>

in connection with Tenant's request for Landlord's consent under Article 13
(Assignment and Subletting) or in connection with any other act by Tenant which
requires Landlord's consent or approval under this Lease.

                     ARTICLE 17 - MISCELLANEOUS PROVISIONS

17.01 Non-Discrimination. Tenant agrees that it will not permit any
      ------------------
discrimination against, or segregation of, any person or group of persons on the
basis of race, color, sex, creed, national origin or ancestry in the leasing,
subleasing, transferring, occupancy, tenure or use of the Premises or any
portion thereof.

17.02 Landlord's Liability: Certain Duties.
      ------------------------------------

(a) Bind and Inure: Limitation of Landlord's Liability. The obligations of this
    --------------------------------------------------
Lease shall run with the land, and this Lease shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
No owner of the Property shall be liable under this Lease except for breaches of
Landlord's obligations occurring while owner of the Property. The obligations of
Landlord shall be binding upon the assets of Landlord which comprise the
Property but not upon other assets of Landlord. No individual partner, trustee,
stockholder, officer, member, director, employee, advisor or beneficiary of
Landlord, or any partner, trustee, stockholder, officer, member, director,
employee, advisor or beneficiary of any of the foregoing, shall be personally
liable under this Lease and Tenant shall look solely to Landlord's interest in
the Property, and return of Tenant's Security Deposit under this Lease, if any,
in pursuit of its remedies upon an event of default hereunder, and the general
assets of Landlord, its partners, trustees, stockholders, members, officers,
employees, advisors or beneficiaries, and the partners, trustees, stockholders,
members, officers, employees, advisors or beneficiaries of any of the foregoing,
shall not be subject to levy, execution or other enforcement procedure for the
satisfaction of the remedies of Tenant.

(b) Notice. Tenant shall give written notice of any failure by Landlord to
    ------
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address shall have been furnished to Tenant. Landlord
shall not be in default under this Lease unless Landlord (or such ground lessor,
mortgagee or beneficiary) shall fail to cure such non-performance within thirty
(30) days after receipt of Tenant's notice. However, if such non-performance
shall reasonably require more than thirty (30) days to cure, Landlord shall not
be in default if such cure shall be commenced within such thirty (30) day period
and thereafter diligently pursued to completion.

17.03 Severability. A determination by a court of competent jurisdiction that
      ------------
any provision of this Lease or any part thereof is illegal or unenforceable
shall not cancel or invalidate the remainder of such provision of this Lease,
which shall remain in full force and effect.
<PAGE>

17.04 Interpretation. The captions of the Articles or Sections of this Lease are
      --------------
not a part of the terms or provisions of this Lease. Whenever required by the
context of this Lease, the singular shall include the plural and the plural
shall include the singular. The masculine, feminine and neuter genders shall
each include the other, in any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's agents, employees,
contractors, invitees, successors or others using the Premises with Tenant's
expressed or implied permission. This Lease shall not, and nothing contained
herein, shall create a partnership or other joint venture between Landlord and
Tenant.

17.05 Incorporation of Prior Agreements: Modifications. This Lease is the only
      ------------------------------------------------
agreement between the parties pertaining to the lease of the Premises and no
other agreements shall be effective. All amendments to this Lease shall be in
writing and signed by all parties. Any other attempted amendment shall be void.

17.06 Notices. All notices, requests and other communications required or
      -------
permitted under this Lease shall be in writing and shall be personally delivered
or sent by certified mail, return receipt requested, postage prepaid or by a
national overnight delivery service which maintains delivery records. Notices to
Tenant shall be delivered to Tenant's Address for Notices. Notices to Landlord
shall be delivered to Landlord's Address for Notices. All notices shall be
effective upon delivery (or refusal to accept delivery). Either party may change
its notice address upon written notice to the other party.

17.07 Waivers. All waivers shall be in writing and signed by the waiving party.
      -------
Landlord's failure to enforce any provision of this Lease or its acceptance of
Rent shall not be a waiver and shall not prevent Landlord from enforcing that
provision or any other provision of this Lease in the future. No statement on a
payment check from Tenant or in a letter accompanying a payment check shall be
binding on Landlord. Landlord may, with or without notice to Tenant, negotiate
such check without being bound by to the conditions of such statement.

17.08 No Recordation. Tenant shall not record this Lease. Either Landlord or
      ----------------
Tenant may require that a notice, short form or memorandum of this Lease
executed by both parties be recorded. The party requiring such recording shall
pay all transfer taxes and recording fees.

17.09 Bindinig Effect: Choice of Law. This Lease shall bind any party who shall
      ------------------------------
legally acquire any rights or interest in this Lease from Landlord or Tenant,
provided that Landlord shall have no obligation to Tenant's successor unless the
rights or interests of Tenant's successor are acquired in accordance with the
terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.

17.10 Corporate Authority: Partnership Authority. If Tenant is a corporation,
      ------------------------------------------
each person signing this Lease on behalf of Tenant represents and warrants that
(s)he has full authority to do so and that this Lease binds the corporation.
Within thirty (30) days after this Lease is signed, Tenant shall deliver to
Landlord a certified copy of a resolution of Tenant's Board of Directors
authorizing the execution of this Lease or other evidence of such authority
reasonably acceptable to Landlord.
<PAGE>

If Tenant is a partnership or limited liability company, each person or entity
signing this Lease for Tenant represents and warrants that he or it is a general
partner of the partnership or a manager or managing member of the company, that
he or it has full authority to sign for the partnership or company and that this
Lease binds the partnership or company and all general partners of the
partnership or the company and its members. Within thirty (30) days after this
Lease is signed, Tenant shall deliver to Landlord a copy of Tenant's recorded
statement of partnership or certificate of limited partnership or certificate of
formation or organization.

17.11 Joint and Several Liability. All parties signing this Lease as Tenant
      ---------------------------
shall be jointly and severally liable for all obligations of Tenant.

17.12 Force Majeure. If Landlord can not perform any of its obligations due to
      -------------
events beyond Landlord's reasonable control, the time provided for performing
such obligations shall be extended by a period of time equal to the duration of
such events. Events beyond Landlord's reasonable control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.

17.13 Execution of Lease. This Lease may be executed in counterparts and, when
      ------------------
all counterpart documents are executed, the counterparts shall constitute a
single binding instrument. Landlord's delivery of this Lease to Tenant shall not
be deemed to be an offer to lease and shall not be binding upon either party
until executed and delivered by both parties.

17.14 Survival. All representations and warranties of Landlord and Tenant, and
      --------
all obligations of Tenant to pay Additional Rent hereunder, shall survive the
termination of this Lease.

17.15 Examination of Lease. Submission of this Lease to Tenant shall not
      --------------------
constitute an option to lease, and this Lease shall not be effective until
execution and delivery by both Landlord and Tenant.

17.16 Security Deposit. The Security Deposit may be in the form of an
      ----------------
unconditional, irrevocable letter of credit from a bank reasonably acceptable to
Landlord in Landlord's standard form of letter of credit. The letter of credit
shall either provide that it does not expire until the end of the third
anniversary of the Lease Term or, if it is for less than such period, shall be
renewed by Tenant at least 30 days prior to its expiration during such time. The
letter of credit shall decrease on each anniversary of the Lease Commencement
Date so that it shall be equal to $500,000 for the first Lease year, $400,000
for the second Lease year, and $250,000 for the third Lease year. Prior to its
expiration, Tenant shall deliver to Landlord the amount of one (1) month Base
Rent for the remainder of the Term (and any extensions thereof). The letter of
credit shall provide that it may be drawn down upon by Landlord at any time
Landlord delivers its site draft to the bank. If Landlord sells or conveys the
Premises, Tenant shall, at Landlord's request, cooperate in having the letter of
credit transferred to the purchaser. If the letter of credit is ever drawn upon
by Landlord pursuant to the terms of the Lease and this Section, Tenant shall
within ten (10) days thereafter cause the letter of credit to be restored to the
amount called for under this Section.
<PAGE>

For purposes of this Section 17.16, references to "Security Deposit" shall mean
either the applicable letter of credit or the deposit of funds, as applicable.
Landlord may, at its option, apply all or part of the Security Deposit to any
unpaid Rent or other charges due from Tenant, cure any other defaults of Tenant,
or compensate Landlord for any loss or damage which Landlord may suffer due to
Tenant's default. If Landlord shall so use any part of the Security Deposit,
Tenant shall restore the Security Deposit to its full amount within ten (10)
days after Landlord's request. No interest shall be paid on the Security
Deposit, no trust relationship is created herein between Landlord and Tenant
with respect to the Security Deposit, and the Security Deposit may be commingled
with other funds of Landlord. Upon expiration or termination of this Lease not
resulting from Tenant's default and after Tenant shall have vacated the Premises
in the manner required by this Lease, Landlord shall pay to Tenant any balance
of the Security Deposit not applied pursuant to this Section 17.16 within thirty
(30) days of vacating the Premises.

17.17 Limitation of Warranties. Landlord and Tenant expressly agree that there
      ------------------------
are and shall be no implied warranties of merchantability, habitability,
suitability, fitness for a particular purpose or of any other kind arising out
of this Lease, and there are no warranties which extend beyond those expressly
set forth in this Lease. Without limiting the generality of the foregoing,
Tenant expressly acknowledges that Landlord has made no warranties or
representations concerning any hazardous materials or other environmental
matters affecting any part of the Property and Landlord hereby expressly
disclaims and Tenant waives any express or implied warranties with respect to
any such matters. Landlord has provided to Tenant, without representation or
warranty, a copy of the Phase I environmental assessment relating to the
Premises prepared by Smith Technology Corporation dated April 4, 1997, Project #
05-7937-88, a copy of which is attached hereto as Exhibit I.
                                                  ---------

17.18 No Other Brokers. Tenant represents and warrants to Landlord that the
      ----------------
Brokers are the only agents, brokers, finders or other parties with whom Tenant
has dealt who may be entitled to any commission or fee with respect to this
Lease or the Premises or the Property. Tenant agrees to indemnify and hold
Landlord harmless from any claim, demand, cost or liability, including, without
limitation, attorneys' fees and expenses, asserted by any party other than the
Brokers based upon dealings of that party with Tenant.

17.19 Landlord's Lien/Security Interest. Tenant hereby grants Landlord a
      ---------------------------------
security interest, and this Lease constitutes a security agreement, within the
meaning of and pursuant to the Uniform Commercial Code of the state in which the
Premises are situated as to all of Tenant's property situated in, or upon, or
used in connection with the Premises (except for merchandise sold in the
ordinary course of business) as security for all of Tenant's obligations
hereunder, including, without limitation, the obligation to pay rent. Such
personalty thus encumbered includes specifically all trade and other fixtures
for the purpose of this Section and inventory, equipment, contract rights,
accounts receivable and the proceeds thereof. In order to protect such security
interest, Tenant shall execute such financing statements and file the same at
Tenant's expense at the state and county Uniform Commercial Code filing offices
as often as Landlord in its discretion shall require; and Tenant hereby
irrevocably appoints Landlord its agent for the purpose of executing and filing
such
<PAGE>

financing statements on Tenant's behalf as Landlord shall deem necessary.
Landlord agrees, upon request by Tenant, to subordinate its landlord's lien to
any lender or any equipment lender or lessor of Tenant pursuant to Landlord's
standard form of subordination, such subordination agreement to be timely
executed and delivered by Landlord.
<PAGE>

                     SIGNATURE PAGE OF THE LEASE AGREEMENT
                        DATED November 11, 1999, BETWEEN
                         GUS ENTERPRISES - XII, L.L.C.
                                      and
                           CHORUM TECHNOLOGIES, INC.

Signed on November 11, 1999

LANDLORD:

GUS ENTERPRISES - XII, L.L.C.

     By:   Cabot Advisors, Inc., its authorized agent

           By:
                 ----------------------------------
                        President

Signed on November 10, 1999

TENANT:

CHORUM TECHNOLOGIES, INC.

          By:    /s/ Scott Grout
                 -----------------------------------
                 Its: President and CEO
<PAGE>

                                  EXHIBIT "A"
                                  -----------

BEING a 6.3925 acre tract of land situated in the Baurch Cantrell Survey,
Abstract No. 265 and being all of Lot 9, Block 8 of Corporate Square, Lot 9,
Block 8. a Replat of Corporate Square, Lot 9, Block 8, an addition to the City
of Richardson, Texas, as recorded in Volume 91207, Page 1606 of Map Records,
Dallas County, Texas and being more particularly described as follows:

BEGINNING at a 518 inch iron rod found for corner in the north right-of-way line
of Arapaho Road (a variable width R.O.W.) and being in the west line of Duck
Creek Channel Drainage Easement (Tract A) as recorded in Volume 78023, Page 299,
Deed Records, Dallas County, Texas, said point also being the southeast corner
of said Lot 9, Block 8, and bearing South 89 degrees 54 minutes 00 seconds West,
a distance of 161.53 feet from the intersection of the north right-of-way line
of said Arapaho Road with the west right-of-way line of Plano Road (a 140 foot
R.O.W. at this point);

THENCE along the north right-of-way line of said Arapaho Road the following
three (3) courses:

(1) South 89 degrees 54 minutes 00 seconds West, a distance of 368.50 feet to a
112 inch iron rod set for corner;

(2) South 00 degrees 06 minutes 00 seconds East, a distance of 10.00 feet to an
"X" cut set in concrete for corner;

(3) South 89 degrees 54 minutes 00 seconds West, a distance of 336.36 feet to a
1/2 inch iron rod found for the beginning of a curve to the right having a
central angle of 90 degrees 01 minutes 15 seconds, a radius of 25.00 feet and a
chord which bears North 45 degrees 05 minutes 22 seconds West, a distance of
35.36 feet;

THENCE northwesterly, along said curve and along said north right-of-way line,
an arc distance of 39.28 feet to a 1/2 inch iron rod found for corner in the
east right-of-way line of Presidential Drive (a 60 foot R.O.W.);

THENCE North 00 degrees 04 minutes 45 seconds West, along the said east right-
of-way line, a distance of 411.09 feet to a 1/2 inch iron rod for the northwest
corner of said Lot 9, Block 8;

THENCE North 89 degrees 59 minutes 59 seconds East, a distance of 605.93 feet to
a 1/2 inch iron rod found for corner in the west line of said Duck Creek
Drainage Easement and being the northeast comer of said Lot 9, Block 8;

THENCE South 06 degrees 04 minutes 45 seconds East, along the west line of said
Duck Creek Drainage Easement, a distance of 176.96 feet to a 1/2 inch iron rod
found for the beginning of a curve to the left, having a central angle of 22
degrees 01 minutes 15 seconds, a radius of 327.50 feet and a chord which bears
South 17 degrees 05 minutes 23 seconds East, a distance of 125.10 feet;

THENCE in a southeasterly direction along the said curve and along said easement
line, an arc distance of 125.87 feet to a 5/8 inch iron rod found for corner;

THENCE South 28 degrees 06 minutes 00 seconds East, continuing along said
easement line, a distance of 146.56 feet to the POINT OF BEGINNING and
containing 278,457 square feet or 6.3925 acres of land, more or less.
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------
                                                                    The Premises
                                                                 1303 Arapaho Rd
                                                                  Richardson, TX

                                 [MAP OF AREA]
<PAGE>

                                   EXHIBIT C
                             RULES AND REGULATIONS

1. No advertisements, pictures or signs of any sort shall be displayed on or
outside the Premises without the prior written consent of Landlord. This
prohibition shall include any portable signs or vehicles placed within the
parking lot, common areas or on streets adjacent thereto for the purpose of
advertising or display. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.

2. Tenant shall not park or store motor vehicles, trailers or containers outside
the Premises after the conclusion of normal daily business activity except in
approved areas specifically designated by Landlord, acting reasonably.

3. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord without the prior written consent of Landlord.
Landlord shall not unreasonably withhold or delay any request by Tenant to add
additional roof-mounted HVAC units to the Premises.

4. All window coverings and window films or coatings installed by Tenant and
visible from outside of the building require the prior written approval of
Landlord. Except for dock shelters and seals as may be expressly permitted by
Landlord, no awnings or other projections shall be attached to the outside walls
of the building.

5. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance on, in or around the Premises unless approved by Landlord.
Tenant shall not use, keep or permit to be used or kept any flammable or
combustible materials without proper governmental permits and approvals.

6. Tenant shall not use, keep or permit to be used or kept food or other edible
materials in or around the Premises in such a manner as to attract rodents,
vermin or other pests. Tenant shall not permit cooking in or about the Premises
other than in microwave ovens.

7. Tenant shall not use or permit the use of the Premises for lodging or
sleeping, for public assembly, or for any illegal or immoral purpose.

8. Tenant shall park motor vehicles only in those general parking areas as
designated by Landlord except for active loading and unloading. During loading
and unloading of vehicles or containers, Tenant shall not unreasonably interfere
with traffic flow within the industrial park and loading and unloading areas of
other tenants.

9. Storage of propane tanks, whether interior or exterior, shall be in secure
and protected storage enclosures approved by the local fire department and, if
exterior, shall be located in areas specifically designated by Landlord. Safety
equipment, including eye wash stations and approved neutralizing agents, shall
be provided in areas used for the maintenance and charging of lead-acid
<PAGE>

batteries. Tenant shall protect electrical panels and building mechanical
equipment from damage from forklift trucks.

10.  Tenant shall not disturb, solicit or canvas any occupant of the building or
industrial park and shall cooperate to prevent same.

11.  No person shall go on the roof of the Property without Landlord's
permission except to perform obligations under its lease.

12.  No animals (other than seeing eye dogs) or birds of any kind may be brought
into or kept in or about the Premises.

13.  Machinery, equipment and apparatus belonging to Tenant which cause noise or
vibration that may be transmitted to the structure of the Premises to such a
degree as to be objectionable to Landlord or other tenants or to cause harm to
the Premises shall be placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or other devices sufficient to eliminate the transmission
of such noise and vibration. Tenant shall cease using any such machinery which
causes objectionable noise and vibration which can not be sufficiently
mitigated.

14.  All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or exterior loading areas overnight.

15.  Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks of sufficient
size to prevent damage to the asphalt paving surfaces. No parking or storing of
such trailers will be permitted in the auto parking areas of the industrial park
or on streets adjacent thereto.

16.  Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall use only tires that do not damage the asphalt.

17.  Tenant shall be responsible for the safe storage and removal of all
pallets. Pallets shall be stored behind screened enclosures at locations
approved by the Landlord.

18.  Tenant shall be responsible for the safe storage and removal of all trash
and refuse. All such trash and refuse shall be contained in suitable receptacles
stored behind screened enclosures at locations approved by Landlord. Landlord
reserves the right to remove, at Tenant's expense and without further notice,
any trash or refuse left elsewhere outside of the Premises or in the industrial
park.

19.  Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.

20.  Tenant shall appoint an Emergency Coordinator who shall be responsible for
assuring notification of the local fire department in the event of an emergency,
assuring that sprinkler
<PAGE>

valves are kept open and implementing the Factory Mutual "Red Tag Alert" system
including weekly visual inspection of all sprinkler system valves on or within
the Premises.
<PAGE>

                                   EXHIBIT D

                         TENANT IMPROVEMENTS/ALLOWANCE
                         -----------------------------

Landlord shall deliver the Premises to Tenant in "broom-clean" condition.
Additionally, during the first thirty (30) days of the Lease Term, Landlord
shall have the roof inspected. Roof leaks, if any, discovered during such
inspection shall be promptly repaired at Landlord's sole cost and expense.
Landlord shall repair the exterior walls of the Premises in order to remove the
damage caused by the removal of Micrografx signage such that the finish on each
exterior wall shall be substantially consistent with the others. Such exterior
repair shall be performed at Landlord's sole cost and expense. Landlord agrees
to inspect the existing HVAC systems and warrants the existing HVAC systems to
be in good working order as of the Lease Commencement Date. If any part of the
existing HVAC system requires repair or replacement prior to the first
anniversary of the Lease Commencement Date, Landlord, at its sole cost and
expense, shall be responsible for repair or replacement of such part. Landlord
and Tenant further agree that, in the event such repair or replacement is
required to be made prior to the first anniversary of the Lease Commencement
Date, Tenant shall have such repair or replacement work completed and shall
invoice Landlord for the reasonable costs of such repairs or replacements.
Notwithstanding the preceding, except in an emergency (to be determined in
Tenant's reasonable discretion), prior to undertaking such repair or replacement
work, Tenant shall provide Landlord with a scope of work and an estimation of
cost, and Landlord shall have three (3)-business days in which to approve or
disapprove such costs, its approval not to be unreasonably withheld.

Other than as set forth above, Landlord shall have no obligation to pay for the
construction of Tenant's improvement work ("Tenant's Improvement Work").
However, Landlord agrees to contribute toward the cost of construction of
Tenant's Improvement Work an amount up to $630,000 (the "Allowance"). The
construction costs may include the following without limitation: costs of labor,
contractor's overhead/profit and supervision, construction management fees,
taxes, insurance, utility connections and distribution, equipment, supplies and
materials furnished for construction of Tenant's Improvement Work; governmental
fees and charges for required land surveys, soil and structural reports,
permits, plan checks, and inspections for Tenant's Improvement Work; and charges
of Tenant's design and engineering professionals. Tenant's Improvement Work
shall include any work deemed necessary by Tenant for the operation of its
business on the Premises, subject to any governmental requirements and
Landlord's prior approval, said approval not to be unreasonably withheld by
Landlord.

Prior to commencement of any work, Tenant shall obtain Landlord's approval of
final plans and specifications for Tenant's Improvement Work (the "Plans"),
which approval shall not be unreasonably withheld, conditioned, or delayed.

Tenant's Improvement Work shall be completed in a professional workmanlike
manner utilizing only contractors and subcontractors fully licensed and bonded
in the State of Texas and as reasonably approved by Landlord. Tenant shall be
responsible for obtaining all required permits and licenses from applicable
governmental authorities.
<PAGE>

Landlord's payment of the Allowance shall be made promptly from the date
invoices are received by Landlord, and Landlord's payment of the Allowance shall
be expressly conditioned upon receipt of said invoices. If the Allowance has
been totally expended, Landlord (or its agent) shall forward all further
invoices which are in Landlord's possession to Tenant for payment by Tenant as
required under the terms of this Lease. Prior to any payment of the Allowance,
Landlord shall verify the following (with Tenant's cooperation): Tenant's
Improvement Work shall have been substantially completed in accordance with the
Plans and any governmental requirements; and all mechanics lien rights of all
contractors, suppliers, subcontractors, or materialmen furnishing labor,
supplies or materials in the construction or installation of Tenant's
Improvement Work have been unconditionally waived, released, or extinguished.

Tenant shall have the right, at its sole cost and expense, and subject to
Landlord's prior design approval and any applicable governmental requirements or
limitations, to paint the accent stripe on the exterior of the Premises in a
color consistent with Tenant's logo.
<PAGE>

                                   EXHIBIT E

                               GUARANTY OF LEASE

                             INTENTIONALLY DELETED
<PAGE>

                                   EXHIBIT F
                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as lessee. After a lease agreement is signed by you and the Landlord
(the "Lease"), on an annual basis in accordance with the provisions of Article 9
of the signed Lease, you are to provide an update to the information initially
provided by you in this certificate. The information contained in the Initial
Hazardous Materials Disclosure Certificate and each annual certificate provided
by you thereafter will be maintained in confidentiality by Landlord subject to
release and disclosure as required by (i) any lenders and owners and their
respective environmental consultants, (ii) any prospective purchasers) of all or
any portion of the property on which the Premises are located, (iii) Landlord to
defend itself or its lenders, members, partners, shareholders, advisors or
representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease. Any questions regarding this certificate should be directed
to, and when completed, the certificate should be delivered to:

Landlord:  Cabot Advisors
           Two Center Plaza
           Boston, MA 02108
           Attn: Jeffrey Swanson

                    PLEASE COMPLETE FROM THIS POINT FORWARD

Name of Tenant:

Mailing Address:

Contact Person, Title and Telephone Number(s):

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):

Address of Premises:

Length of Initial Term:

I . GENERAL INFORMATION

Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled, services and activities
<PAGE>

to be provided or otherwise conducted. Existing lessees should describe any
proposed changes to on-going operations.

2.  USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

2.1 Will any Hazardous Materials be used, generated, stored or disposed of in,
on or about the Premises? Existing lessees should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.

Wastes                  Yes [ ]   No [ ]
Chemical Products       Yes [ ]   No [ ]
Other                   Yes [ ]   No [ ]

If yes is marked, please explain:

2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous Materials to
    be used, generated, stored or disposed of in, on or about the Premises,
    including the applicable hazard class and an estimate of the quantities of
    such Hazardous Materials at any given time; estimated annual throughput; the
    proposed location(s) and method of storage (excluding nominal amounts of
    ordinary household cleaners and janitorial supplies which are not regulated
    by any Environmental Laws); and the proposed location(s) and method of
    disposal for each Hazardous Material, including, the estimated frequency,
    and the proposed contractors or subcontractors. Existing lessees should
    attach a list setting forth the information requested above and such list
    should include actual data from on-going operations and the identification
    of any variations in such information from the prior year's certificate.

3.  STORAGE TANKS AND SUMPS

3.1 Is any above or below ground storage of gasoline, diesel, petroleum, or
other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing lessees should describe any such actual or proposed
activities.

Yes [ ]  No [ ]

If yes is marked, please explain:
<PAGE>

4.  WASTE MANAGEMENT

4.1 Has your company been issued an EPA Hazardous Waste Generator I.D. Number?
    Existing lessees should describe any additional identification numbers
    issued since the previous certificate.

                        Yes [ ]  No [ ]

4.2 Has your company filed a biennial or quarterly report as a hazardous waste
    generator? Existing lessees should describe any new reports filed.

                        Yes [ ]  No [ ]

    If yes, attach a copy of the most recent report filed.

5.  WASTEWATER TREATMENT AND DISCHARGE

5.1 Will your company discharge wastewater or other wastes to:

storm drain?        sewer?
surface water?      no wastewater or other
                    wastes discharged.

Existing lessees should indicate actual discharges. If so, describe the nature
and return of any proposed or actual discharge(s).

5.2 Will any such wastewater or waste be treated before discharge?

                        Yes [ ]  No [ ]

If yes, describe the type of treatment proposed to be conducted. Existing
lessees should describe the actual treatment conducted.

6.  AIR DISCHARGES

6.1 Do you plan for any air filtration systems or stacks to be used
in your company's operations in, on or about the Premises that will discharge
into the air, and will such air emissions be monitored? Existing lessees should
indicate whether or not there
<PAGE>

are any such air filtration systems or stacks in use in, on or about the
Premises which discharge into the air and whether such air emissions are being
monitored.

                        Yes [ ]  No [ ]

If yes, please describe:

6.2 Do you propose to operate any of the following types of equipment, or any
    other equipment requiring an air emissions permit? Existing lessees should
    specify any such equipment being operated in, on or about the Premises.

Spray booth(s)
Dip tank(s)
Drying oven(s)
Incinerator(s)
Other (Please Describe)
No Equipment Requiring Air Permits

If yes, please describe:

7.  HAZARDOUS MATERIALS DISCLOSURE

7.1 Has your company prepared or will it be required to prepare a Hazardous
Materials management plan ("Management Plan") pursuant to Fire Department or
other governmental or regulatory agencies' requirements? Existing lessees should
indicate whether or not a Management Plan is required and has been prepared.

                        Yes [ ]  No [ ]

If Yes, attach a copy of the Management Plan. Existing lessees should attach a
copy of any required updates to the Management Plan.

7.2 [Applicable to California only] Are any of the Hazardous Materials, and in
particular chemicals, proposed to be used in your operations in, on or about the
Premises regulated under Proposition 65? Existing lessees should indicate
whether or not there are any new Hazardous Materials being so used which are
regulated under Proposition 65.

                        Yes [ ]  No [ ]

If yes; please describe:
<PAGE>

8.  ENFORCEMENT ACTIONS AND COMPLAINTS

8.1 With respect to Hazardous Materials or Environmental Laws, has your company
ever been subject to any agency enforcement actions, administrative orders, or
consent decrees or has your company received requests for information, notice or
demand letters, or any other inquiries regarding its operations? Existing
lessees should indicate whether or not any such actions, orders or decrees have
been, or are in the process of being, undertaken or if any such requests have
been received.
                        Yes [ ]  No [ ]

If yes, describe the actions, orders or decrees and any continuing compliance
obligations imposed as a result of these actions, orders or decrees and also
describe any requests, notices or demands, and attach a copy of all such
documents. Existing lessees should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Article 9 of the Lease.

8.2 Have there ever been, or are there now pending, any lawsuits against your
    company regarding any environmental or health and safety concerns?

                        Yes [ ]  No [ ]

    If yes, describe any such lawsuits and attach copies of the complaint(s),
    cross complaint(s), pleadings and all other documents related thereto as
    requested by Landlord. Existing lessees should describe and attach a copy of
    any new complaint(s), cross-complaint(s), pleadings and other related
    documents not already delivered to Landlord pursuant to the provisions of
    Article 9 of the Lease.

8.3 Have there been any problems or complaints from adjacent tenants, owners or
other neighbors at your company's current facility with regard to environmental
or health and safety concerns? Existing lessees should indicate whether or not
there have been any such problems or complaints from adjacent tenant, owners or
other neighbors at, about or near the Premises.

                        Yes [ ]  No [ ]
<PAGE>

If yes, please describe. Existing lessees should describe any such problems or
complaints not already disclosed to Landlord under the provisions of the Lease.

9.  PERMITS AND LICENSES

9.1 Attach copies of all Hazardous Materials permits and licenses
issued to your company with respect to its proposed operations in, on or about
the Premises, including, without limitation, any wastewater discharge permits,
air emissions permits, and use permits or approvals. Existing lessees should
attach copies of any new permits and licenses as well as any renewals of permits
or licenses previously issued.
<PAGE>

The undersigned hereby acknowledges and agrees that this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease, and
will be attached thereto as an exhibit. The undersigned further acknowledges and
agrees that this Hazardous Materials Disclosure Certificate is being delivered
in accordance with, and as required by, the provisions of Article 9 of the
Lease.  The undersigned further acknowledges and agrees that the Landlord and
its partners, members, lenders, employees, agents and representatives may, and
will, rely upon the statements, representations, warranties, and certifications
made herein and the truthfulness thereof in entering into the Lease and the
continuance thereof throughout the term, and any renewals thereof, of the Lease.
I (print name) _____________ acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.

TENANT:

By:________________________
Its:_______________________

Date:____________________
<PAGE>

                                   EXHIBIT G
                             RIGHT OF FIRST REFUSAL

(a) "Offered Space" shall mean any space in the building commonly referred to as
     -------------
1301 East Arapaho Road, Richardson, Texas.

(b) Provided that as of the date of the giving of Landlord's Notice, (x) Tenant
is the Tenant originally named herein, (y) Tenant actually occupies all of the
Premises originally demised under this Lease and any premises added to the
Premises, and (z) no event of default or event which but for the passage of time
or the giving of notice, or both, would constitute an event of default has
occurred and is continuing, if at any time during the Lease Term any lease for
any portion of the Offered Space shall expire and if Landlord intends to enter
into a lease (the "Proposed Lease") for such Offered Space with anyone (a
"Proposed Tenant"), Landlord shall first offer to Tenant the right to lease the
Offered Space upon all the terms and conditions of the Proposed Lease.

(c) Such offer shall be made by Landlord to Tenant in a written notice
(hereinafter called the "Offer Notice") which offer shall designate the space
                         ------------
being offered and shall specify the terms for such Offered Space which shall be
the same as those set forth in the Proposed Lease. Tenant may accept the offer
set forth in the Offer Notice by delivering to Landlord an unconditional
acceptance (hereinafter called "Tenant's Notice") of such offer within 5
                                ---------------
business days after delivery by Landlord of the Offer Notice to Tenant. Time
shall be of the essence with respect to the giving of Tenant's Notice. If Tenant
does not accept (or fails to timely accept) an offer made by Landlord pursuant
to the provisions of this Exhibit with respect to the Offered Space designated
in the Offer Notice, Landlord shall be under no further obligation with respect
to such space by reason .of this Addendum. In order to send the Offer Notice,
Landlord does not need to have negotiated a complete lease with the Proposed
Tenant but may merely have agreed upon the material economic terms for the
Proposed Lease, and Tenant must make its decision with respect to the Offered
Space as long as it has received a description of such material economic terms.

(d) Tenant must accept all Offered Space offered by Landlord at any one time if
it desires to accept any of such Offered Space and may not exercise its right
with respect to only part of such space.

(e) If Tenant at any time after the third anniversary of the Lease Commencement
Date declines any Offered Space offered by Landlord, Tenant shall be deemed to
have irrevocably waived all further rights under this Exhibit, and Landlord
shall be free to lease the Offered Space to the Proposed Tenant including on
terms which may be less favorable to Landlord than those set forth in the
Proposed Lease.
<PAGE>

                                   EXHIBIT H

                                OPTION TO EXTEND

A. Provided that as of the time of the giving of the Extension Notice and the
Commencement Date of the Extension Term, (x) Tenant is the Tenant originally
named herein (or a permitted assignee of Tenant under the Lease), (y) Tenant (or
a permitted assignee of Tenant under the Lease) actually occupies substantially
all of the Premises initially demised under this Lease and any space added to
the Premises, and (z) no material Event-of Default exists (including the passage
of any applicable curative period, if any), then ,Tenant shall have the right to
extend the Primary Term for an additional term of two (2) years (such additional
term is hereinafter called the "Extension Term") commencing on the day following
                                --------------
the expiration of the Term (hereinafter referred to as the "Commencement Date of
                                                            --------------------
the Extension Term"). Tenant shall send Landlord notice (hereinafter called the
------------------
"Extension Notice") of its election to extend the Term of the Lease at least
 ----------------
eight (8) months prior to the scheduled expiration date of the Term.

B. The Base Rent payable by Tenant to Landlord during the Extension Term shall
be equal to $54,155.57 per month or $649,866.84 per year.

C. The determination of Base Rent does not reduce the Tenant's obligation to pay
or reimburse Landlord for costs and other reimbursable items as set forth in the
Lease, and Tenant shall reimburse and pay Landlord as set forth in the Lease
with respect to such costs and other items with respect to the Premises during
the Extension Term.

D. Except for the Base Rent as set forth above, Tenant's occupancy of the
Premises during the Extension Term shall be on the same terms and conditions as
are in effect immediately prior to the expiration of the Term; provided,
however, Tenant shall have no further right to any options to renew or extend
the Lease.

E. If Tenant does not send the Extension Notice within the period set forth in
Paragraph (A) above, Tenant's right to extend the Term for the Extension Term
shall automatically terminate. Time is of the essence as to the sending of the
Extension Notice.

F. Landlord shall have no obligation to refurbish or otherwise improve the
Premises for the Extension Term. The Premises shall be tendered on the-
Commencement Date of the Extension Term in their then "as-is" condition.

G. If the Lease is extended for the Extension Term, then Landlord shall prepare
and Tenant shall execute an amendment to the Lease confirming the extension of
the Term and the other provisions applicable thereto.

H. If Tenant exercises its right to extend the term of the Lease for the
Extension Term pursuant to this Exhibit H, the term "Term" as used in the Lease,
shall be construed to include, to the extent applicable, the Extension Term,
except as provided in (D) above.
<PAGE>

                                   EXHIBIT I

                            ENVIRONMENTAL ASSESSMENT
<PAGE>

                               The Morse Company
                        Corporate Real Estate Solutions

April 27, 2000

Mr. Tyler Dawson
CHORUM TECHNOLOGIES, INC.
1303 East Arapaho Road
Richardson, Texas 75081

Re:  Second Amendment to the Lease Dated November 11, 1999 between GUS
     Enterprises and Chorum Technologies, Inc.

Dear Tyler:

Enclosed is one (1) fully executed Second Amendment for the expansion space for
your corporate headquarters at 1301 East Arapaho Road. We appreciate the
opportunity to work with you and Chorum on this expansion and will be available
to you at anytime should you have questions or we can be of further assistance.

Thanks for your efforts and your patience.

Very truly yours,
The Morse Company

     /s/ Scott A. Morse

Scott A. Morse, CCIM
President

SAM:mm

Enclosures
<PAGE>

                      SECOND AMENDMENT TO LEASE AGREEMENT

This Second Amendment To Lease Agreement (this "Amendment") is made and entered
into by and between Gus Enterprises - XII, L.L.C., a New Jersey limited
liability company (hereinafter "Landlord") and Chorum Technologies, Inc., a
Delaware corporation (hereinafter "Tenant").

                                   RECITALS:
                                   --------

A. Landlord and Tenant have previously entered into that certain Lease Agreement
dated as of November 11, 1999 as amended (the "Lease"), pursuant to which
Landlord leases to Tenant 56,023 square feet of office, laboratory and light
manufacturing space in that certain property commonly referred to as 1301 and
1303 East Arapaho Road, Richardson, Texas 75081 (the "Existing Premises"), all
as more particularly described in the Lease; and

B. Landlord and Tenant desire to enter into this Amendment for the purpose of
evidencing their mutual understanding and agreements with respect to the
expansion of the Premises to include that approximately 11,484 square feet of
space in the building commonly referred to as 1301 East Arapaho Road,
Richardson, Texas 75081, such expansion space more particularly depicted on
attached Exhibit A (the "Expansion Premises"), on the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1.  Recitals. The Recitals set forth above are incorporated by reference herein
    ---------
as a substantive part of this Amendment.

2.  Defined Terms. Any capitalized terms not otherwise defined herein
    -------------
shall have the meaning set forth in the Lease.

3.  Expansion Premises. Effective as of the Expansion Commencement
    ------------------
Date (hereinafter defined), (i) Tenant shall lease from Landlord and Landlord
shall lease to Tenant, pursuant to the terms of the Lease (as herein modified),
the Expansion Premises. The "Expansion Commencement Date" shall mean May 1,
2000, subject to the provisions of this Paragraph 3. From and after the
Expansion Commencement Date, all references in the Lease to the "Premises" shall
mean and refer to the Expansion Premises, as well as the Existing Premises,
except as set forth in this Amendment.  Tenant acknowledges and agrees that its
use of the Expansion Premises, as well as the Existing Premises, shall be
restricted to the permitted uses of the Existing Premises as set forth in the
Lease.

4.  Expansion Term; Basic Rent for the Expansion Term. The period of
    -------------------------------------------------
time from the Expansion Commencement Date through and including April 30, 2003,
shall be referred to herein as the "Expansion Term". Basic Rent pertaining to
the Expansion Premises for the Expansion Term shall be equal to $12,441.00 per
month. Rent for any partial month shall be prorated.

5.  Tenant's Proportionate Share. From and after the Expansion
    ----------------------------
Commencement Date, Tenant's Proportionate Share for the Expansion Premises shall
be equal to 20.29%.

6.  Condition of the Premises; Landlord's Work. Tenant agrees and
    ------------------------------------------
acknowledges that Landlord is making no warranties, expressed or implied, as to
the suitability of the Expansion Premises for any particular use, and Landlord
shall have no obligation with respect to the improvement or refurbishment of the
Expansion Premises, except as provided on Exhibit B attached hereto.
                                          ---------
<PAGE>

7.  Security Deposit. Upon execution of this Amendment by all
    ----------------
parties, Tenant shall deposit with the Landlord $12,441.00 (one month Base Rent)
as a Security Deposit. Upon expiration of termination of the Expansion Term, not
resulting from Tenant's default and after Tenant shall have vacated the
Premises, in the manner required by the Lease, Landlord shall pay to Tenant any
balance of the Security Deposit not applied pursuant to this section or Section
17.16 of the Lease within thirty (30) days of vacating the Expansion Premises.
It is the intent that the terms and conditions set out in Section 17.16 of the
Lease apply to the Expansion Premises as well.

8.  Right to Extend. With respect to the Expansion Premises, Tenant
    ---------------
shall have one (1) right to extend the Expansion Term for a period of twenty
(20) months as more particularly set out on Exhibit C attached hereto.
                                            ----------

9.  Additional Parking Spaces. An additional 45 parking spaces shall
    -------------------------
be allocated to Tenant.

10. Ratification. Landlord and tenant hereby confirm that, except as
    ------------
amended herein, the Lease remains in full force and effect, as written, and
Landlord and Tenant hereby ratify, approve and confirm the Lease in every
respect. In the event of any conflicts or inconsistencies between the provisions
of the Lease and the provisions of this Amendment, the provisions of this
Amendment shall control.

11. Entire Agreement. Landlord and Tenant hereby agree that the Lease
    ----------------
and this Amendment represent the entire agreement between the parties with
respect to the Premises, and the Lease, as amended by this Amendment, may not be
changed, modified or altered except by written agreement signed by Landlord and
Tenant.

12. Governing Law. This Agreement shall be construed under and
    -------------
enforceable in accordance with the laws of the State of Texas. This Amendment
shall be binding upon and shall inure to the benefit of the Landlord and Tenant
and their respective successors and assigns.

13. Counterparts. This Amendment may be executed by the parties
    ------------
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment To Lease
Agreement to be effective as of the latest date of execution evidenced below.

LANDLORD:                                      TENANT:

GUS ENTERPRISES - XII, L.L.C.                  CHORUM TECHNOLOGIES, INC.

By:  Cabot Advisors, Inc., its
     authorized agent

     By:    /s/ Janine M. Cobb                 By:   /s/ Tyler Dawson
            ----------------------------             ----------------------

     Name:  Janine M. Cobb                     Name:  Tyler Dawson
            ----------------------------              ---------------------

     Title: President                          Title: VP Operations
            ----------------------------              ---------------------

     Date:  4/25  , 2000                       Date:  4/24  , 2000
            ----------------------------              ---------------------

<PAGE>

                                   EXHIBIT B

                    TENANT IMPROVEMENTS/ALLOWANCE

Landlord shall deliver the Expansion Premises to Tenant in "broom clean"
condition. Landlord shall have no obligation to pay for the construction of
Tenant's improvement work ("Tenant's Improvement Work"). However, Landlord
                            -------------------------
agrees to contribute toward the cost of construction of Tenant's Improvement
Work an amount up to $287,100.00 (the "Allowance") for construction commenced
                                       ---------
during the Expansion Term. The construction costs shall include the following
without limitation: costs of labor, contractor's overhead/profit and
supervision, conviction management fees, taxes, insurance, utility connections
and distribution, equipment, supplies and materials furnished for construction
of Tenant's Improvement Work; governmental fees and charges for required land
surveys, permits, plan checks, and inspections for Tenant's Improvement Work;
and charges of Tenant's design and engineering professionals. Tenant's
Improvement Work shall include any work deemed necessary by Tenant for the
operation of its business on the Expansion Premises, subject to any governmental
requirements and Landlord's prior approval, said approval not to be unreasonably
withheld by Landlord.

Prior to commencement of any work, Tenant shall obtain Landlord's approval of
final plans and specifications for Tenant's Improvement Work (the "Plans"),
                                                                   -----
which approval shall not be unreasonably withheld, conditioned or delayed.

Tenant's Improvement Work shill be completed in a professional workmanlike
manner utilizing only contractors and subcontractors fully 1icsensed and bonded
in the State of Texas and as reasonably approved by Landlord and as required
under this; Lease. Tenant shall be responsible for obtaining all required
permits and licenses from applicable governmental authorities.

Landlord's payment of the Allowance shall be made thirty (30) days after
Landlord receives proof of completion and evidence that Tenant has paid all
invoices in connection with Tenant's Improvement Work. Prior to any payment of
the Allowance, Landlord shall verify the following (with Tenant's cooperation):
Tenant's Improvement Work shall have been substantially completed in accordance
with the Plans and any governmental requirements; and all mechanic's lien rights
of all contractors, suppliers, subcontractors, or materialmen furnishing labor,
supplies or materials in the construction or installation of Tenant's
Improvement Work have been unconditionally waived, released, or extinguished.
<PAGE>

                                   EXHIBIT C

                                RIGHT TO EXTEND

1. Provided that as of the time of the giving of the Extension Notice and the
Commencement Date of the Extension Term, (x) Tenant is the Tenant originally
named herein (or a permitted assignee of Tenant under the Lease), (y) Tenant (or
a permitted assignee of Tenant under the Lease) actually occupies all of the
Premises initially demised under the Lease and any space added to the Premises,
and (z) no event of default exists (including the passage of any applicable
curative period, if any), then Tenant shall have the right to extend the term of
the Expansion Term for an additional term of twenty (20) months (such additional
term is hereinafter called the "Extension Term") commencing on the day following
the expiration of the Expansion Term (hereinafter referred to as the
"Commencement Date of the Extension Term"). Tenant shall send Landlord notice
(hereinafter called the "Extension Notice") of its election to extend the term
of the Lease at least nine (9) months prior to the scheduled expiration date of
the Expansion Term.

2. The Base Rent payable by Tenant to Landlord during the Extension Term shall
be equal to the Market Rate (hereinafter defined) as of the first day of the
Extension Term. Within thirty (30) days after receipt of the Extension Notice,
Landlord shall determine and send Tenant written notice of Landlord's good faith
estimate of prevailing market rents for space similar to the Premises within a
one (1) mile radius of the Premises (space "similar to the Premises" for
purposes of this rental determination shall refer to office, laboratory, light
manufacturing or bulk distribution/warehouse space in buildings possessing
similar characteristics in age, size, location, and interior/exterior condition)
for a renewal term similar to the Extension Term with comparable terms and
conditions. Tenant shall then have a period of thirty (30) days within which to
in good faith accept or reject in writing Landlord's estimate of prevailing
market rents. Failure of Tenant to send such notice shall be deemed an approval
by Tenant of Landlord's estimate. If Tenant timely notifies Landlord that Tenant
in good faith rejects Landlord's estimate, Landlord and Tenant shall endeavor
for a period of thirty (30) days to reach agreement on prevailing market rents.
If Landlord and Tenant are unable to reach agreement on prevailing market rents
within such thirty (30) day period, the determination of prevailing market rents
shall be resolved by binding arbitration as provided below. Landlord's estimate
of prevailing market rents, if accepted .(or deemed accepted) by Tenant as above
provided, or prevailing market rents as determined either by Landlord and
Tenant, or by binding arbitration pursuant to this Addendum, shall be herein
referred to as the "Market Rate." Notwithstanding anything to the contrary in
                    -----------
this Exhibit, in no event shall the Market Rate be less than the Base Rent owing
by Tenant at the expiration of the Expansion Term.

If pursuant to the foregoing provisions of this Section the determination of
prevailing market rents is to be resolved by binding arbitration, such
arbitration shall be conducted in accordance with the terms of this paragraph.
Landlord and Tenant shall each select a competent, qualified arbitrator who
shall be an M.A.I. appraiser and, if such arbitrators are unable to reach
agreement within fifteen (15) days, the first two arbitrators shall: (i) if the
recommendations as to the prevailing market rent of the two arbitrators are
amounts within ten percent (10%) of the other, add the two recommendations and
divide by two to get a binding determination or (ii) if the recommendations are
not within ten percent (10%) of the other, appoint a third arbitrator who shall
be an M.A.I. appraiser (or if they are unable to agree upon a third arbitrator,
either may apply to the Chief Judge of the applicable district court under which
jurisdiction the Premises is subject, and such judge shall appoint the third
arbitrator). Within ten (10) days after his appointment, the third arbitrator
shall consult with the first two arbitrators and the third arbitrator shall
choose, as a final resolution of such dispute, the recommendation of one of the
first two arbitrators, without modification, as such third arbitrator may deem
most appropriate under all of the circumstances. The decision of the
<PAGE>

       Approval for lease of 11,484 square feet in 1301 Arapaho building.
                 (amendment to original lease of 1303 Arapaho)

     /s/ Tyler Dawson                                           4/24/00
-----------------------------------------------------------------------
Tyler Dawson                                                    Date

     /s/ Kent Coker                                             4/24/00
-----------------------------------------------------------------------
Kent Coker                                                      Date

     /s/ Scott Grout                                            4/24/00
-----------------------------------------------------------------------
Scott Grout                                                     Date
<PAGE>

                      THIRD AMENDMENT TO LEASE AGREEMENT

THIS THIRD AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and entered
into between GUS ENTERPRISES - XII, L.L.C., a New Jersey limited liability
company ("Landlord"), and CHORUM TECHNOLOGIES, INC., a Delaware corporation
("Tenant").

                                   RECITALS:

A. Landlord and Tenant have entered into that certain Lease Agreement dated as
of November 11,1999, as amended by Amendment to Lease Agreement dated as of
February 9, 2000, and Second Amendment to Lease Agreement dated as of April 25,
2000 (the "Lease"), pursuant to which Landlord is currently leasing to Tenant
(a) approximately 56,023 square feet of space comprising that certain property
commonly known as 1303 East Arapaho Road, Richardson, Texas 75081 (the "1303
Premises") and (b) approximately 11,484 square feet of space in that certain
property commonly known as 1301 East Arapaho Road, Richardson, Texas 75801 (the
"1301 Premises"), all as more particularly described in the Lease (collectively,
the "Existing Premises").

B. Landlord and Tenant desire to enter into this Amendment for the purpose of
evidencing their mutual understanding and agreements with respect to the
expansion of the Existing Premises to include that approximately 45,129 square
feet of space in the building commonly referred to as 1301 East Arapaho Road,
Suite 100, Richardson, Texas, adjacent to the 1301 Premises and comprising the
remainder of the 1301 building (the "Additional Expansion Premises"), the
extension of the Lease, and certain modifications to the terms and provisions of
the Lease.

NOW, THEREFORE, in consideration of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

1.   Defined Terms. Except as otherwise expressly provided in this
Amendment, all defined terms used herein shall have the same respective meanings
as are provided for such defined terms in the Lease.

2.   Recitals. The above Recitals are incorporated into this Amendment
as a substantive part hereof.

3. Additional Expansion Premises. Subject to the terms and conditions of this
Amendment, effective as of October 1, 2000 (the "Additional Expansion
Commencement Date"), Tenant shall lease from Landlord and Landlord shall lease
to Tenant, pursuant to the terms of the Lease (as herein modified), the
Additional Expansion Premises. Subject to the terms of this Amendment, from and
after the Additional Expansion Commencement Date, all references in the Lease to
the "Premises" shall mean the Existing Premises and the Additional Expansion
Premises together (a total of approximately 112,636 square feet of space).
Tenant acknowledges and agrees that its
<PAGE>

use of the Additional Expansion Premises shall be restricted to the permitted
uses of the Existing Premises as set forth in the Lease.

The Additional Expansion Premises is currently occupied by another tenant (the
"Existing Tenant"). The Existing Tenant has vacated the Additional Expansion
Premises, and Landlord expects to enter into a termination agreement with the
Existing Tenant relating to the Additional Expansion Premises (the "Termination
Agreement") on or before September 30, 2000. In the event Landlord and the
Existing Tenant have not entered into the Termination Agreement by such date,
the Additional Expansion Commencement Date shall be the date one (1) day
business day after the effective date of the Termination Agreement. Tenant and
Landlord agree to execute an amendment to the Lease setting forth the Additional
Expansion Commencement Date if such date is not October 1, 2000. In the event
the Additional Expansion Commencement Date has not occurred by November 1, 2000,
Tenant shall have the right to terminate this Amendment by providing written
notice to Landlord prior to the Additional Expansion Commencement Date. In the
event the Additional Expansion Commencement Date has not occurred by January 1,
2001, Landlord shall have the right to terminate this Amendment by providing
written notice to Tenant prior to the Additional Expansion Commencement Date. So
long as Landlord exercises commercially reasonable efforts to reach agreement
with the Existing Tenant on a Termination Agreement, Landlord shall not
otherwise be or become liable for any damages incurred by Tenant as a result of
its inability to use and occupy the Additional Expansion Premises.

4. Additional Expansion Term; Extension of the Term as to the 1301 Premises. The
Term of the Lease as it relates to the Additional Expansion Premises shall run
from the Additional Expansion Commencement Date to expire sixty (60) months
thereafter (the "Additional Expansion Term"). As an example, if the Additional
Expansion Commencement Date is October 1, 2000, the Additional Expansion Term
shall expire on September 30, 2005.

The Term of the Lease as it relates to the 1301 Premises is scheduled to expire
on April 30, 2003. From and after the Additional Expansion Commencement Date,
the Term of the Lease as it relates to the 1301 Premises shall be extended to
run coterminously with the Additional Expansion Term and expire at the same time
as the Additional Expansion Term. Base Rent and the tenant improvement allowance
for the 1301 Premises shall remain the same for the Additional Expansion Term.

5. Base Rent for the Additional Expansion Premises. Base Rent for the Additional
Expansion Premises during the Additional Expansion Term shall be equal to
$47,009.38 per month (plus any applicable sales and/or rental tax). The Base
Year for the Additional Expansion Premises shall continue to be 2000 as with the
Existing Premises.

6. Security Deposit. Within fifteen (15) days of execution of this Amendment by
both Landlord and Tenant, Tenant shall deliver to Landlord an additional
security deposit in the amount of $200,000 (the "Additional Security Deposit").
The Additional Security Deposit may be in the form of an unconditional,
irrevocable letter of credit from a bank reasonably acceptable to Landlord in
Landlord's standard form of letter of credit. Said letter of credit shall either
provide that it does not expire until the expiration of the Additional Expansion
Term or, in the alternative, shall be renewed by Tenant at least 30 days prior
to its expiration during such time.
<PAGE>

Said letter of credit shall provide that it may be drawn down upon by Landlord
at any time Landlord delivers its site draft to the bank. If Landlord sells or
conveys the Premises, Tenant shall, at Landlord's request, cooperate in having
said letter of credit transferred to the purchaser. If the letter of credit is
ever drawn upon by Landlord pursuant to the terms of the Lease and this
Paragraph, Tenant shall within ten (10) days thereafter cause the letter of
credit to be restored to the amount called for under this Paragraph.

7. Condition of the Additional Expansion Premises; Allowance. Tenant agrees and
acknowledges that Landlord is making no warranties, expressed or implied, as to
the suitability of the Additional Expansion Premises for any particular use, and
Landlord shall have no obligation with respect to the improvement or
refurbishment of the Additional Expansion Premises, except as provided on
Exhibit A attached hereto or as otherwise set forth in this Paragraph.

Prior to November 1, 2000, Landlord shall clean, repair and service all existing
HVAC units for the Additional Expansion Premises to enable Tenant to obtain a
service agreement on each unit for the balance of the term. Subject to the terms
of this Paragraph, Tenant shall be responsible for all maintenance and repair of
such units. Landlord hereby warrants the existing HVAC units in the Additional
Expansion Premises to be in good working order as of the Additional Expansion
Commencement Date. If any part of the existing HVAC system in the Additional
Expansion Premises requires repair or replacement prior to the first anniversary
of the Additional Expansion Commencement Date, Landlord, at its sole cost and
expense, shall be responsible for repair or replacement of such part. Landlord
and Tenant further agree that, in the event such repair or replacement is
required to be made prior to the first anniversary of the Additional Expansion
Commencement Date, Tenant shall have such repair or replacement work completed
and shall invoice Landlord for the reasonable costs of such repairs or
replacements. Notwithstanding the preceding, except in an emergency (to be
determined in Tenant's reasonable discretion), prior to undertaking such repair
or replacement work, Tenant shall provide Landlord with a scope of work and an
estimation of cost, and Landlord shall have three (3) business days in which to
approve or disapprove such costs, its approval not to be unreasonably withheld.

Prior to November 1, 2000,:  Landlord shall replace or repair, as needed, the
outside doors to the Additional Expansion Premises to make them operational and
repair any roof or window leaks in the Additional Expansion Premises.
Additionally, at Landlord's sole cost and expense, Landlord shall remove the
existing sign on the 1301 Arapaho Road building and shall repair the damage to
the exterior wall caused by the removal of such signage such that the exterior
finish shall be substantially consistent with the other three (3) walls.

8.     Parking. Tenant shall have the right to use all of the parking
and loading areas on the Property.

9. Right to Extend. With respect to the Additional Expansion Premises, Tenant
shall have one (1) right to extend the Additional Expansion Term for a period of
sixty (60) months as more particularly set out on Exhibit B attached hereto.

10.    Tenant's Pro Rata Share. From and after the Additional Expansion
Commencement Date, Tenant's Pro Rata Share shall be 100%.
<PAGE>

11. Painting of Exterior. Tenant is hereby granted the right to paint the
exterior of the building located at 1301 Arapaho Road to make it consistent with
the general appearance of the 1303 Arapaho Road building, including the addition
of a blue stripe around the 1301 Arapaho Road building, consistent with that
around the 1303 Arapaho Road building.

12. Ratification. Landlord and Tenant hereby confirm that; except as amended,
the Lease remains in full force and effect, as written, and Landlord and Tenant
hereby ratify, approve and confirm the Lease in every respect. In the event of
any conflicts or inconsistencies between the provisions of the Lease and the
provisions of this Amendment, the provisions of this Amendment shall control.

13. Entire Agreement. Landlord and Tenant hereby agree that the Lease and this
Amendment represent the entire agreement between the parties with respect to the
Premises, and the Lease, as amended by this Amendment, may not be changed,
modified or altered except by written agreement signed by Landlord and Tenant.

14. Governing Law. This Amendment shall be construed under the and enforceable
in accordance with the laws of the State of Texas. This Amendment shall be
binding upon and shall inure to the benefit of Landlord and Tenant and their
respective successors and assigns.

15. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.

IN WITNESS WHEREOF the parties hereto have executed this Amendment to be
effective as of the latest date of execution reflected below (the "Effective
Date").

LANDLORD:                                      TENANT:

GUS ENTERPRISES - XII, L.L.C.                  CHORUM TECHNOLOGIES, INC.

By:  Cabot Advisors, Inc., its
     authorized agent

                                               By:   /s/ Tyler Dawson
                                                     ----------------------
     By:    /s/ Janine M. Cobb
            ----------------------------
                                               Name:
                                                      ---------------------
     Name:
            ----------------------------
                                               Title: VP Operations
                                                      ---------------------
     Title: President
            ----------------------------
                                               Date:  September 25, 2000
                                                      ---------------------
     Date:  September 29, 2000
            --------------------------
<PAGE>

                                   EXHIBIT A

                         TENANT IMPROVEMENTS/ALLOWANCE

Landlord shall deliver the Additional Expansion Premises to Tenant in "broom
clean" condition. Landlord shall have no obligation to pay for the construction
of Tenant's improvement work ("Tenant's Improvement Work"). However, Landlord
agrees to contribute toward the cost of construction of Tenant's Improvement
Work an amount up to $225,645.00 (the "Allowance") for construction commenced
during the Additional Expansion Term. The construction costs shall include the
following without limitation: costs of labor, contractor's overhead/profit and
supervision, construction management fees, taxes, insurance, utility connections
and distribution, equipment, supplies and materials furnished for construction
of Tenant's Improvement Work; governmental fees and charges for required land
surveys, permits, plan checks, and inspections for Tenant's Improvement Work;
and charges of Tenant's design and engineering professionals. Tenant's
Improvement Work shall include any work deemed necessary by Tenant for the
operation of its business in the Additional Expansion Premises, including
building signage, subject to any governmental requirements and Landlord's prior
approval, said approval not to be unreasonably withheld by Landlord.

Prior to commencement of any work, Tenant shall obtain Landlord's approval of
final plans and specifications for Tenant's Improvement Work (the "Plans"),
which approval shall not be unreasonably withheld, conditioned or delayed.

Tenant's Improvement Work shall be completed in a professional workmanlike
manner utilizing only contractors and subcontractors fully licensed and bonded
in the State of Texas and as reasonably approved by Landlord and as required
under this Lease. Tenant shall be responsible for obtaining all required permits
and licenses from applicable governmental authorities.

Landlord's payment of the Allowance shall be made thirty (30) days after
Landlord receives proof of completion and evidence that Tenant has paid all
invoices in connection with Tenant's Improvement Work. Prior to any payment of
the Allowance, Landlord shall verify the following (with Tenant's cooperation):
Tenant's Improvement Work shall have been substantially completed in accordance
with the Plans and any governmental requirements; and all mechanics lien rights
of all contractors, suppliers, subcontractors, or materialmen furnishing labor,
supplies or materials in the construction or installation of Tenant's
Improvement Work have been unconditionally waived, released, or extinguished.<PAGE>

                                                                    Exhibit 10.7

LEASE AGREEMENT
PROJECT: CARDINAL TECHNOLOGY CENTER

1.    DEFINITIONS AND BASIC PROVISIONS.

A.    Date of Lease:  4-1-98

B.    "Landlord":     Cardinal Collins Tech Center, Inc., a Texas corporation

C.    Address:        c/o Kennedy Associates Real Estate Counsel, Inc.
                      1215 4th Avenue, Suite 2400
                      Seattle, Washington 98161

D.    "Tenant":       Macro-Vision Communications, Inc.

E.    Address:        1155 E. Collins Boulevard, Suite 200
                      Richardson, Texas 75081

F.  "Building": The structure commonly known as Building Three - 1155 E. Collins
Boulevard and which is located on the tract of land (the "Land") described by on
Exhibit "B" attached hereto and made a part hereof for all purposes.

G.  "Premises": That certain 20,200 square feet of rentable area contained
within the Building (the "Rentable Area in the Premises"), and as outlined and
hatched on the plan attached hereto as Exhibit "A" and made a part hereof for
all purposes.

H.  "Project": The Building, the parking facilities, and other structures,
improvements, landscaping, fixtures, appurtenances and other common areas now or
hereafter, constructed or erected on the Land.

I.  "Rentable Area in the Project" shall be 45,880 square feet of rentable area
unless modified as provided herein.

J.  "Tenant's Proportionate Share" shall be forty-four percent (44%), which is
the ratio between the Rentable Area in the Premises and the Rentable Area in the
Project. If the Rentable Area in the Premises and/or the Rentable Area in the
Project changes, Tenant's Proportionate Share shall be adjusted effective as of
the date of such change.

K.   "Commencement Date": April 1, 1998 , or the date upon which Tenant occupies
the Premises with the prior written consent of Landlord, whichever shall first
occur (subject to the provisions of the "Exhibit D" attached hereto). Upon
request of either party hereto, Landlord and Tenant agree to execute and deliver
a written declaration in recordable form expressing the Commencement Date
hereof.
<PAGE>

L.  "Term": Commencing on the Commencement Date and ending sixty-two (62) months
after the Commencement Date, plus any partial calendar month following the
Commencement Date, unless sooner terminated as provided herein.

M.  "Base Rental": $0.00 per month for the first two (2) months of the Term of
this Lease; $15,991.67 per month for the next (12) months of the Term of this
Lease; then $19,779.17 per month for the remainder of the Term of this Lease;
each such monthly installment shall be due and payable on the first day of each
calendar month, in advance, without demand, deduction or setoff whatsoever.

N.  "Prepaid Rental": $15,991.67 to be applied to the first accruing monthly
installments of rental.

O.  "Security Deposit": $19,779.17

P.  "Permitted Use": The Premises shall be used only for laboratory,
manufacturing and general office purposes in connection with Tenant's business
operation and for such other lawful purposes as may be incidental thereto.

Q.   "Common Area": That part of the Project designated by Landlord from time to
time for the common use of all tenants, including among other facilities,
sidewalks, service corridors, curbs, truckways, loading areas, private streets
and alleys, lighting facilities, delivery passages, parking areas, decks and
other parking facilities, landscaping and other common facilities.

R.  "Broker": Scott Jessen and Scott Morse of The Morse Company

Each of the foregoing definitions and basic provisions shall be construed in
conjunction with the references thereto contained In the other provisions of
this Lease and shall be limited by such other provisions. Each reference in this
Lease to any of the foregoing definitions and basic provisions shall be
construed to incorporate each term set forth above under such definition or
provision.

2.  GRANTING CLAUSE. In consideration of the obligations of Tenant to pay rent
as herein provided and in consideration of the other terms, covenants and
conditions hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby leases from Landlord, the Premises as described above, to have and to
hold such premises for the Term of the Lease, all upon the terms and conditions
set forth in this Lease.

3.   BASE RENTAL. As rental for the lease and use of the Premises, Tenant will
pay Landlord or Landlord's assigns, without demand and without deduction,
abatement or setoff (except as otherwise expressly provided for herein in
Paragraph 17 hereof and Paragraph 19 hereof), the Base Rental in the manner
specified in Paragraph 1.M hereof in lawful money of the United States. If the
Term of this Lease does not commence on the first day of a calendar month,
Tenant shall pay to Landlord in advance a pro rata part of such sum as rental
for such first partial month. Tenant shall not pay any installment of rental
more than one (1) month in advance. All past due installments of rental or other
payment specified in this Lease shall bear interest at the
<PAGE>

highest lawful rate per annum from the date due until paid. In addition, Tenant
shall pay Landlord upon demand a late charge in an amount equal to five percent
(5%) of any installments of rental or other payments specified herein if not
paid within five (5) days of the date when due and payable.

If Tenant fails to timely pay two (2) consecutive installments of Base Rental,
or other payment specified herein, or any combination thereof, Landlord may
require Tenant to pay (in addition to any interest) Base Rental and other
payments specified herein (as estimated by Landlord, if necessary) quarterly in
advance, and, in such event, all future payments shall be made on or before the
due date in cash or by cashier's check or money order, and the delivery of
Tenant's personal or corporate check shall no longer constitute payment thereof.
Any acceptance of Tenant's personal or corporate check thereafter by Landlord
shall not be construed as a waiver of the requirement that such payments be made
in cash or by cashier's check or money order. Any amount so estimated by
Landlord and paid by Tenant shall be adjusted promptly after actual figures
become available and paid or credited to Landlord or Tenant, as the case may be.

4.    ADDITIONAL RENTAL AND OPERATING EXPENSES.

4.1   The term "Operating Expenses" shall mean all reasonable and necessary
expenses, costs and disbursements of every kind and nature which Landlord shall
pay or become obligated to pay because of or in connection with the ownership,
operation, maintenance, repair, replacement, protection and security of the
Project, determined on an accrual basis or cash method (at Landlord's option),
including, without limitation the following:

(a)  Salaries and wages of all employees engaged in the operation, maintenance
and security of the Project, including taxes, insurance and benefits (including
pension, retirement and fringe benefits) relating thereto;

(b)  Cost of supplies and materials used in the operation, maintenance and
security of the Project;

(c)  Cost of all utility service (including water, power and sewage service)
supplied to the Project, with the sole exception of utility services supplied to
tenants of the Project at their respective premises and directly paid for by
such tenants;

(d)  Cost of all maintenance, repair and replacement of, and any service
agreements for the Project and the equipment therein, including, without
limitation, any of the following (if provided): parking facilities, landscaping,
fire protection, sprinklers, trash removal, window cleaning, and elevator
maintenance;

(e)  Cost of all insurance relating to the Project, including the cost of
casualty, rental and liability insurance applicable to the Project and
Landlord's personal property used in connection therewith;

(f)  All taxes, assessments and governmental charges (foreseen or unforeseen,
general or special, ordinary or extraordinary) whether federal, state, county or
municipal and whether they
<PAGE>

be levied by taxing districts or authorities presently taxing the Project or by
others subsequently created or otherwise, and any other taxes and assessments
attributable to the Project or its operation, and all taxes of whatsoever nature
that are imposed in substitution for or in lieu of any of the taxes, assessments
or other charges herein defined (collectively, the "Taxes"); provided, however,
that Operating Expenses shall not include taxes paid by tenants of the Project
as a separate charge on the value of their leasehold improvements, death taxes,
excess profits taxes, transfer taxes, franchise taxes and state and federal
income taxes;

(g)  Cost of repairs and general maintenance applicable to all equipment used in
repairing and maintaining the Project, but specifically excluding repairs and
general maintenance paid by proceeds of insurance or by Tenant or by other third
parties;

(h)  Cost of improvement items, including installation thereof, which are
acquired primarily for the purpose of reducing Operating Expenses and/or
complying with laws, ordinances or regulations of governmental authorities or
agencies having jurisdiction over the Project, the amount of all such costs to
be amortized over the useful life of the improvement together with interest at
the lower of Landlord's then current cost of unsecured financing or the maximum
rate allowed by law on the unamortized balance;

(i)  Cost of repair and maintenance of the landscape and parking areas and
periodic painting of the building exterior, and

(j)  Reasonable management fees paid by Landlord to third parties or to
management companies owned by, or management divisions of, Landlord such fees
not to exceed 4% of the Base Rental and Additional Rental.

To the extent that any Operating Expenses are attributable to the Project and
other projects of Landlord, a fair and reasonable allocation of such Operating
Expenses shall be made between the Project and such other projects.

Notwithstanding anything seemingly to the contrary contained herein, Operating
Expenses shall not include the following:

(i)    Depreciation;

(ii)   Interest and principal payments on mortgage and other non-operating debts
of Landlord;

(iii)  Allowances or other costs (including the cost of plans, permits and
licenses) incurred with respect to the installation of tenant improvements made
for other tenants in the Project or in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Project;

(iv)   Real estate commissions, legal fees, tenant incentives, marketing and
advertising expenses and other costs incurred by Landlord in leasing or
attempting to lease the Project; and
<PAGE>

(v)    Executive salaries or the salaries of non-management employees, except to
the extent of actual time expended at or on behalf of the Project by such non-
management employees.

4.2  For purposes hereof, "Tenant's Share of Operating Expenses" shall mean
Tenant's Proportionate Share of Operating Expenses. Landlord shall have the
right to estimate the amount of Tenant's Share of Operating Expenses which will
be incurred with respect to each calendar year during the Term of this Lease,
Tenant shall pay to Landlord monthly on the first day of each calendar month
during such calendar year in question, as additional rental, an amount equal to
one-twelfth (1/12th) of the estimated amount of Tenant's Share of Operating
Expenses.  Until such time as an estimate of Operating Expenses with respect to
any particular calendar year is delivered to Tenant, Tenant shall pay to
Landlord, on the first day of January and the first day of each calendar month
thereafter during such calendar year in question the amount of such additional
rental which shall have been payable by Tenant under this paragraph with respect
to the month of December immediately preceding such calendar year. Thereafter,
at such time as the estimate of Operating Expenses with respect to such calendar
year is delivered to Tenant, Tenant shall pay to Landlord within thirty (30)
days following receipt of such estimate the amount by which (i) the product of
one-twelfth (1/12th) of the amount of such estimate multiplied by the number of
calendar months in such calendar year which shall have wholly or partially
expired exceeds (ii) the amount of such additional rental which shall have been
theretofore paid under this paragraph with respect to such calendar months.
Landlord agrees to provide to Tenant a statement of the Operating Expenses
incurred with respect to each calendar year on or about ninety (90) days (or as
soon thereafter as reasonably possible) following the end of such respective
calendar year. If Tenant's Share of Operating Expenses actually incurred with
respect to any calendar year exceeds the estimate of Tenant's Share of Operating
Expenses theretofore paid by Tenant for such calendar year, then Tenant shall
pay to Landlord the amount of such excess within thirty (30) days following
receipt of notice from Landlord setting forth Tenant's Share of Operating
Expenses for the calendar year in question. If Tenant's Share of Operating
Expenses with respect to any calendar year is less than the estimate of Tenant's
Share of Operating Expenses theretofore paid by Tenant for such calendar year,
then Landlord shall credit the difference to Tenant against the next due
installments of the estimated amount of Tenant's Share of Operating Expenses or,
if at the expiration of the Lease, shall refund to Tenant. In no event shall
Tenant ever be entitled to a credit with respect to any calendar year in excess
of the additional rental payments made under this paragraph with respect to such
calendar year. If the Commencement Date of this Lease is not the first day of a
calendar year or the expiration or termination date of this Lease is not the
last day of a calendar year, then Tenant's Share of Operating Expenses with
respect to such calendar year shall be prorated. The provisions of this
paragraph shall survive the expiration or earlier termination of this Lease.

4.3  Landlord agrees to keep books and records reflecting the Operating
Expenses. Tenant, at its expense, shall have the right, within six (6) months
after receiving Landlord's statement of Operating Expenses for a particular
calendar year, to audit Landlord's books and records respectively relating to
Operating Expenses for such calendar year; or, at Landlord's sole option,
Landlord may provide such audit prepared by a certified public accountant
selected by Landlord. If within such six (6) month period Tenant does not give
Landlord written notice stating in reasonable detail any objection to the
statement of Operating Expenses, Tenant shall be deemed to have approved such
statement in all respects.
<PAGE>

4.4   Should Tenant desire any additional services beyond those which Landlord
is expressly obligated to provide pursuant to this Lease or should Tenant desire
rendition of any of such services outside the normal times of Landlord for
providing such service, Landlord may (at Landlord's option), upon reasonable
advance notice from Tenant to Landlord, furnish such services, and Tenant agrees
to pay Landlord such charges as may be agreed on between Landlord and Tenant,
but in no event at a charge less than Landlord's actual cost plus overhead for
the additional services provided.

5.   TAXES.

5.1  Tenant shall be liable for the timely payment of all taxes levied or
assessed against personal property, furniture or fixtures or equipment placed by
Tenant in the Premises. If any such taxes for which Tenant is liable are levied
or assessed against Landlord or Landlord's property and if Landlord elects to
pay the same, or if the assessed value of Landlord's property is increased by
inclusion of personal property, furniture or fixtures or equipment placed by
Tenant in the Premises, and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord upon demand that part of such taxes for
which Tenant is liable hereunder.

5.2  If at any time during the Term of this Lease, a tax or excise on rental, a
sales tax or other tax however described (except any inheritance, estate, gift,
income or excess profit tax imposed upon Landlord) is levied or assessed against
Landlord by any taxing authority having jurisdiction on account of Landlord's
interest in this Lease, or the rentals or other charges payable hereunder, as a
substitute in whole or in part for, or in addition to, the taxes described
elsewhere in this paragraph, Tenant shall pay to Landlord as additional rental
upon demand the amount of such tax or excise. In the event that any such tax or
excise is levied or assessed directly against Tenant, Tenant shall pay the same
at such times and in such manner as such taxing authority shall require.

6.   PREPAID RENTAL AND SECURITY DEPOSIT. Landlord acknowledges receipt from
Tenant of the sum stated in Paragraph 1.N hereof to be applied to the first
accruing monthly installments of rental, Landlord further acknowledges receipt
from Tenant of a Security Deposit in the amount stated in Paragraph 1.O hereof
to be held by Landlord, without obligation for interest, as security for
Tenant's performance hereunder, it being expressly understood that the Security
Deposit is not an advance rental deposit or measure of Landlord's damages in
case of Tenant's default. Upon the occurrence of any default hereunder by
Tenant, Landlord may, without prejudice to any other remedy provided herein or
by law, use the Security Deposit to pay any arrears in rent and any other
damage, injury, expense (including legal expenses) or liability caused by such
default. If any or all of such Security Deposit is so used, Tenant agrees
promptly following demand by Landlord to restore such Security Deposit. If
Tenant is not then in default hereunder, any remaining balance of such Security
Deposit shall be returned by Landlord to Tenant upon termination of this Lease
less the cost of restoring the Premises to its original condition, normal wear
and tear excluded. If Landlord sells or transfers the Premises, or a substantial
part thereof, Landlord shall have the right to transfer such Security Deposit to
the transferee, and Landlord shall be thereupon released from all liability for
return of such Security Deposit, and Tenant shall look solely to such transferee
for the return and thereof.
<PAGE>

7.  ACCEPTANCE OF PREMISES. Taking possession of the Premises by Tenant shall be
conclusive evidence that Tenant: (a) accepts the Premises as suitable for the
purposes for which they are leased; (b) accepts the Building and every part and
appurtenance thereof as being in a good and satisfactory condition; and (c)
waives any defects (other than latent defects in equipment servicing or directly
affecting the occupancy of the Premises, except such equipment which is
installed by Tenant or by others at Tenant's direction or request) in the
Premises or the Building, except for the completion of those items, if any, on
Landlord's punch list. By taking possession of the Premises, Tenant, to the full
extent permitted by law, waives any and all warranties, express or implied,
currently existing or hereinafter created, relating to the condition of the
Premises, including, without limitation, any warranty of suitability or fitness
for a particular purpose. Landlord shall not be liable, except for gross
negligence or willful misconduct, to Tenant or any of its agents, employees,
licensees, servants, or invitees for any injury or damage to person or property
due to the condition or design of or any defect in the Project or its mechanical
system and equipment which may exist or occur, and Tenant, for itself and its
agents, employees, licensees, servants, and invitees, expressly assumes all
risks of injury or damage to person or property, either proximate or remote,
resulting from the condition of the Premises or the Project.

8.   USE OF PREMISES. The Premises shall be used and occupied only for the
Permitted Use stated In Paragraph 1.P hereof and not otherwise. Notwithstanding
the foregoing. without Landlord's prior written consent, Tenant shall not
receive, store or otherwise handle any product, material or merchandise which is
explosive, or highly inflammable or hazardous. Tenant will conduct its business
and control its agents in such a manner that such use of the Premises will not
create any nuisance or interfere with, annoy or disturb other tenants of the
Project, if any there are. Tenant shall, at its own expense, obtain any and all
governmental licenses and permits necessary for its use.

9.   REPAIR AND MAINTENANCE.

9.1  Landlord shall, at it sole lost and expense, maintain and make necessary
repairs of damage to the roof, foundation, and the structural soundness of the
exterior walls (excluding all windows, window glass, plate glass, and all
doors). Subject to the provisions of Paragraph 4 of the Lease, Landlord shall
further maintain the Common Areas. Tenant shall give immediate written notice to
Landlord of the need for maintenance, repairs or corrections. Landlord shall not
be required to make any improvements, replacements or repairs of any kind or
character to the Premises except as expressly set forth in this section. In
addition to the provisions of Paragraph 4 above, it is expressly understood that
Tenant shall pay for any damage to the roof, foundation or to the structural
soundness of exterior walls, which is caused by the act of Tenant, or of
Tenant's employees, agents or invitees, or which is caused by Tenant's default
hereunder.

9.2   Tenant shall, at its own risk and expense, maintain all other parts of the
Premises in good repair and condition (including all necessary replacements),
including, but not limited to, all fixtures installed by Tenant, walls,
carpeting and other floor covering, plumbing, windows, window glass, plate
glass, doors, heating, ventilation and air conditioning systems (the "HVAC
Systems"), fire protection sprinkler system, downspouts, dock bumpers and other
electrical,
<PAGE>

mechanical, and electromotive installation, equipment, and fixtures and also
including trash removal, all utility repairs in ducts, conduits, pipes and
wiring, and any sewer stoppage located in, under, and above the Premises. Tenant
shall take good care of all leasehold improvements and its fixtures, and suffer
no waste. Tenant shall be responsible for all pest control and extermination.
Should Tenant neglect to keep and maintain the Premises, then Landlord shall
have the right, but not the obligation, to have the work done and any reasonable
costs therefor shall be charged to Tenant as additional rental and shall become
payable by Tenant with the payment of the rental next due and shall bear
interest thereon at the maximum rate allowable from the date of demand until
paid. At the termination of this Lease, Tenant shall deliver the Premises "broom
clean" in the same good order and condition as existed at the Commencement Date
ordinary wear and tear excepted.

Throughout the Term of the Lease, Tenant shall contract with a qualified and
properly insured contractor to service and maintain the HVAC Systems on a
regularly scheduled basis, but not less than once every three (3) months. Such
service shall include, but not be limited to, cleaning of the coil and condenser
units on each unit; checking the electrical connections, the oil and refrigerant
for leaks, the safety device, the blower belt for wear, tension and alignment,
the expansion valve, coil temperature, and condensate drain; and maintaining the
lubrication and addition of Freon. Tenant shall secure, at its sole cost and
expense, and shall provide Landlord with a copy of the service contract,
providing for the maintenance as described in above, within sixty (60) days
following the Commencement Date of this Lease, and thereafter, Tenant shall
renew such service contract to Landlord prior to expiration of the then existing
service contract. Landlord acknowledges that Tenant may use its maintenance
staff to perform the services required herein, provided that a verifiable record
of such service is kept by Tenant.

9.3  Tenant agrees it shall not locate or install or cause to be located or
installed in the Common Area any bike racks, newspaper holder stands, vending
machines of any kind, mailboxes, telephone booths, mobile homes, fences, or any
other device of a similar nature which would impede or obstruct the Common Area.
Tenant further agrees to keep said sidewalk and service area swept and free from
trash, rubbish, garbage and other refuse, and additionally to maintain in a neat
and clean condition that area to the rear of the Premises designated as the
garbage or refuse collection area for the use of Tenant.

10.   ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

10.1  Tenant shall not create any openings in the roof or exterior walls, or
make any alterations, additions, or improvements to the Premises or install any
structures or equipment on the roof of the Building or any portion of the Common
Area without the prior written consent of Landlord. Tenant may, however, but at
its own cost and expense and in a good and workmanlike manner, make such
alterations of a nonstructural nature to the Premises provided (i) Tenant
complies with all applicable governmental laws, ordinances and regulations, (ii)
such alterations do not affect the mechanical or the structural integrity of the
Building, alter the character or the storefront of the Building, or adversely
affect the utility systems, and (iii) the cost of any such alterations does not
exceed $10,000.00. Tenant expressly agrees to indemnify landlord for any and all
damages resulting from or caused by Tenant penetrating the roof or exterior
walls of the Premises. Tenant shall have the right to erect or install shelves,
bins and machinery and clean rooms, provided that
<PAGE>

Tenant complies with all applicable governmental laws, ordinances, and
regulations. Tenant shall have the right to remove at the termination of this
Lease, such items so installed by Tenant, provided Tenant is not then in
default; however, Tenant shall, prior to the termination of this Lease, repair
any damage caused by such removal and, if requested by Landlord, offer Landlord
(prior to such removal) sufficient security to insure Landlord that the proper
repairs will be made.

All alterations, additions or improvements made by Tenant (including, without
limitation, HVAC Systems, offices and improvements in and pertaining to such
offices, partitions, floor coverings, etc.), together with such other property
as Tenant leaves in or on the Premises at the termination of this Lease, shall
become the property of Landlord at the termination of this Lease; however,
Tenant shall promptly remove, if Landlord so elects, any or all alterations,
additions, and improvements specified by Landlord provided Landlord notifies
Tenant in writing that such improvements will require future removal at the time
of Landlord's approval of such alterations and improvements, and any other
property placed in the Premises by Tenant, and Tenant shall repair any damage
caused by such removal. The provisions of this paragraph shall survive the
expiration or earlier termination of this Lease.

10.3  Landlord retains the exclusive right to make additions, changes or
improvements, whether structural or otherwise, in and about the Building, or any
part thereof, and for such purposes to enter upon the Premises, and, during the
continuance of any of said work, to temporarily close doors, entryways, public
space and corridors in the Building, to interrupt or temporarily suspend
Building services and facilities, and to change the arrangement and location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets, or other public parts of the Building, all without abatement of rent or
affecting any of Tenant's obligations hereunder, so long as the Premises are
reasonably accessible and that Tenant is not deprived of substantial use and
enjoyment of the Premises.

11.  SIGNS. Tenant shall not, without Landlord's prior written consent, which
consent shall not be unreasonably withheld, (a) install, alter or replace any
exterior lighting, decorations, paintings, awnings, canopies or the like, or (b)
erect, install, alter or replace any signs, window or door lettering, placards,
decorations or advertising media of any type which can be viewed from the
exterior of the Premises. All signs, lettering, placards, decorations and
advertising media shall conform in all respects to the sign criteria established
by Landlord for the Project from time to time in the exercise of its sole
discretion, and shall be subject to the prior written approval of Landlord as to
construction, method of attachment, size, shape, height, lighting, color and
general appearance. Tenant shall be solely responsible for all costs associated
with the installation and maintenance of such signs. All signs are subject to
applicable laws and deed restrictions and shall conform to any national, local
or municipal ordinance or regulation. All signs shall be kept in good condition
and in proper operating order at all times. At Landlord's option and request,
Tenant shall remove all signs at the termination of this Lease, and shall repair
any damage and close any holes caused by such removal, with such repairs to be
made in good workmanlike manner. Tenant shall not erect any signs on the roof or
paint or otherwise deface the exterior walls of the Building. Notwithstanding
anything contained herein to the contrary, Tenant may install, at it sole cost
and expense, such building mounted signage and monument signage to be in
reasonable accordance with the specifications as described in the attached
<PAGE>

Exhibit "E". as may be modified upon the reasonable consent of Landlord, and
provided such signage shall conform to any national, local or municipal
ordinance or regulation.

12.  INSURANCE.

12.1 Tenant shall not permit the Premises to be used in any way which would, in
the opinion of Landlord, be extra hazardous (on account of fire or otherwise) or
in any way increase the cost of or render void any insurance coverage in place
with respect to the Building or any contents in the Building belonging to other
tenants in the Building. Tenant warrants to Landlord that the Permitted Use as
defined in Paragraph 1.P herein accurately reflects Tenant's original intended
use of the Premises, and that the minimum insurance coverage shall be obtained
by Tenant and in force as of the Commencement Date. If, at any time during the
Term of this Lease, the State Board of Insurance or other insurance authority,
or any insurer disallows any of Landlord's sprinkler credits or imposes an
additional penalty or surcharge in Landlord's sprinkler credits or imposes an
additional penalty or surcharge in Landlord's insurance premiums because of
Tenant's original or subsequent placement or use of storage racks or bins,
method of storage or nature of Tenant's inventory or any other act of Tenant,
Tenant agrees to pay as additional rental the increase in Landlord's insurance
premiums. If an increase in the fire and extended coverage premium paid by
Landlord for the Building is caused by Tenant's use or occupancy of the
Premises, or if Tenant wrongfully vacates the Premises and causes an increase,
then Tenant shall pay as additional rental the amount of such increase to
Landlord.

12.2  Landlord shall maintain fire and extended coverage insurance on the
Building and the Premises in such amounts as Landlord's mortgagees shall
require. Payments for losses thereunder shall be made solely to Landlord or the
mortgagees of Landlord as their respective interests shall appear. Tenant shall
maintain at its expense, in an amount equal to full replacement cost, fire and
extended coverage insurance, issued by and binding upon a company approved by
Landlord, on all of its personal property, including removable trade fixtures,
located within the Premises. Tenant shall provide Landlord with current
certificates of insurance evidencing Tenant's compliance with this Subsection
12.2 and Subsection 12.3, and Tenant shall obtain the agreement of Tenant's
insurers to notify Landlord of any change in coverage or that a policy is due to
expire at least thirty (30) days prior to such expiration.

12.3  Tenant shall maintain, at its expense, a policy or policies of commercial
general liability insurance with respect to the respective activities of each in
the Building with the premiums thereon fully paid on or before the due date,
issued by and binding upon an insurance company approved by Landlord, and
providing minimum protection of not less than $1,000,000 combined single limit
coverage of bodily injury, property damage or combination thereof. Tenant's
liability insurance shall name Landlord as an additional insured. Landlord shall
not be required to maintain insurance against thefts within the Premises,
Building or Project.

12.4  Except as otherwise provided herein, any insurance which may be carried by
Landlord or Tenant against any loss or damage to the Building and other
improvements situated on the Project or in the Premises shall be for the sole
benefit of the party carrying such insurance and under its sole control.
<PAGE>

13.  WAIVER OF SUBROGATION. Notwithstanding any provision in this Lease to the
contrary, Landlord and Tenant each hereby waives any and all rights of recovery,
claim, action, or cause of action, against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Premises, or any
improvements thereto, or the Building of which the Premises are a part, or any
improvements thereto, or any personal property of such party therein, by reason
of fire, the elements, or any other cause which is or would be insured against
under the terms of the property insurance policies carried or required to be
carried under the terms of this Lease by the respective parties hereto,
regardless of cause or origin, including negligence of the other party hereto,
its agents, officers, or employees, and Landlord and Tenant each covenants that
no insurer shall hold any right of subrogation against such other party (and all
such insurance policies shall be amended or endorsed to reflect such waiver of
subrogation). This waiver of subrogation provision shall be effective to the
full extent, but only to the extent, that it does not impair the effectiveness
of insurance policies of Landlord and Tenant.

14.   LANDLORD'S RIGHT OF ENTRY.

14.1  Landlord and its authorized agents shall have the right to enter the
Premises during normal working hours for the following purposes: (a) inspecting
the general condition and state of repair of the Premises, (b) making of repairs
required or authorized herein, (c) showing the Premises to any current or
prospective purchaser, tenant, mortgagee or any other party, (d) or for any
other reasonable purpose. During the final 180-day period of the Term of this
Lease, Landlord and its authorized agents shall have the right to erect on or
about the Premises a customary sign advertising the property for lease or for
sale. Furthermore, in the event of any emergency (defined to be any situation in
which Landlord reasonably perceives imminent danger or injury to person and/or
damage or loss of property), Landlord and its authorized agents shall have the
right to enter the Premises at any time without notice.

14.2  In any circumstance where Landlord is permitted to enter upon the
Premises, whether for the purpose of curing any default of Tenant, repairing
damage resulting from fire or other casualty or an eminent domain taking or is
otherwise permitted hereunder or by law to go upon the Premises, no such entry
shall constitute an eviction or disturbance of Tenant's use and possession of
the Premises or a breach by Landlord of any of Landlord's obligations hereunder
or render Landlord liable for damages for loss of business or otherwise or
entitle Tenant to be relieved from any of Tenant's obligations hereunder or
grant Tenant any right of setoff or recoupment or other remedy; and in
connection with any such entry incident to performance of repairs, replacements,
maintenance or construction; all of the aforesaid provisions shall be applicable
notwithstanding that Landlord may elect to take building materials in, to or
upon the Premises that may be required or utilized in connection with-such entry
by Landlord.

15.   UTILITY SERVICES.

15.1  Landlord shall provide, at the beginning of this Lease, tile normal and
customary utility connections into the Premises. Tenant shall pay the cost of
all initial utility connection charges and all utility usage charges for
utilities that are separately metered with respect to the Premises, including,
but not limited to, all charges for telephone, gas, water and electricity used
on the Premises. Tenant shall also pay for replacement of all electric light
lamps, bulbs or tubes.
<PAGE>

Landlord shall have the right at any time and from time to time during the Term
of this Lease to install equipment within the Premises for the purpose of
measuring Tenant's electrical usage therein.

15.2   No interruption or malfunction of any of such services shall constitute
an eviction or disturbance of Tenant's use and possession of the Premises or the
Building or a breach by Landlord of any of Landlord's obligations hereunder or
render Landlord liable for damages or entitle Tenant to be relieved from any of
Tenant's obligations hereunder (including the obligation to pay rental) or grant
Tenant any right of setoff or recoupment. In the event of any such interruption,
however, Landlord shall use reasonable diligence during normal business hours to
restore such service or cause same to be restored in any circumstances in which
such restoration is within the reasonable control of Landlord and the
interruption was not caused in whole or in part by Tenant's fault.
Notwithstanding the foregoing, if Tenant is not in default under this Lease and
Tenant shall be without electricity or water to the Premises and such
interruption in service is directly caused by Landlord's gross negligence or
willful misconduct, then in such event Tenant shall be entitled to a rental
abatement for each day that service is interrupted. Tenant expressly agrees to
notify any utility service requesting or requiring such notice of Tenants
intention to vacate the Premises. This notice requirement shall be in addition
to any other notice requirement specified herein.

16.   ASSIGNMENT AND SUBLEASING. Tenant may not, without the prior written
consent of the Landlord, which consent shall not unreasonably withheld or
delayed, assign this Lease (or permit any assignment of this Lease by operation
of law) or sublet the Premises or any portion thereof or mortgage, pledge or
hypothecate its leasehold interest or grant any license within the Premises, and
any attempt to do any of the foregoing without the prior written consent of
Landlord shall be void and no effect. In any case where Landlord consents to an
assignment, sublease, mortgage, pledge or hypothecation of the leasehold, the
undersigned Tenant will nevertheless remain directly and primarily liable for
the performance of all covenants, duties and obligations of Tenant and Landlord
shall be permitted to enforce the provisions of this Lease against the
undersigned Tenant and/or any assignee, subtenant or other transferee without
demand upon or proceeding in any way against any other person The acceptance of
an assignment or subletting of the Premises by any assignee or subtenant shall
be construed as a promise on the part of such assignee or subtenant to be bound
by and perform all of the terms, conditions and covenants by which Tenant herein
is bound. No such assignment or subletting shall be construed to constitute a
novation or to waive the requirement for obtaining consent to any subsequent
assignment or subletting. In the event of default by Tenant after this Lease has
been assigned or while the Premises are sublet, Landlord, in addition to any
other remedies provided herein (or provided by law), may at Landlord's option,
collect directly from such assignee or subtenant all rents becoming due to
Tenant under such assignment or subletting, and Landlord may apply such rent
against any sums due to Landlord by Tenant hereunder. No direct collection by
Landlord from any such assignee or subtenant shall release Tenant from Tenant's
primary responsibility under the Lease (as aforesaid) and from the further
performance of Tenant's obligations hereunder. If Landlord consents to any
subletting or assignment by Tenant as hereinabove provided, and subsequently any
rental or other sums received by Tenant under any such sublease are in excess of
the rent and other sums payable by Tenant under this Lease, or any additional
consideration is paid to Tenant by the assignee under any such assignment, then
<PAGE>

Landlord may, at its sole option, declare such excess rental under any sublease
or such additional consideration for an assignment (after deducting the
reasonable expenses incurred by Tenant of such sublease) to be due and payable
by Tenant to Landlord as additional rent hereunder.  Landlord shall have the
right to transfer, assign, mortgage, convey and sublease all or any part of the
Premises and this Lease, and nothing contained in this Lease shall be construed
as a restriction upon Landlord's right to do any of the foregoing. If Landlord
transfers this Lease, either specifically or by virtue of a transfer of all or
any part of the Premises, then Landlord shall thereby be released from all
obligations arising hereunder after such transfer, and Tenant agrees to look
solely to such assignee for performance of such obligations.

17.   FIRE AND CASUALTY DAMAGE.

17.1  Tenant shall immediately give notice to Landlord (the "Casualty Notice")
if the Building or the Premises are damaged or destroyed.

17.2  If the Premises or any portion of the Building shall be totally damaged or
destroyed by an insured peril and in Landlord's estimation, rebuilding or
repairs cannot be completed within one hundred eighty (180) days after
Landlord's receipt of the Casualty Notice, then either Landlord or Tenant
(provided Tenant or its employees, agents or invitees did not cause such damage)
may terminate this Lease by delivering to the other written notice thereof
within twenty (20) days after Landlord's receipt of the Casualty Notice, in
which case, the rent shall be abated during the unexpired portion of this Lease,
effective upon the date Landlord received the Casualty Notice. Time is of the
essence with respect to the delivery of such notices.

17.3  If this Lease is not terminated as provided under Paragraph 17.2, then
Landlord shall repair and reconstruct the Premises and/or the Building to
substantially the same condition in which they existed immediately prior to such
damage or destruction, except that Landlord shall not be required to rebuild,
repair or replace any part of the partitions, fixtures and other improvements or
personal property which may have been installed by Tenant or is required to be
covered by Tenant's insurance pursuant to Paragraph 12 of this Lease.

17.4  If the Premises are untenantable, in whole or in part, during the period
beginning on the date of Landlord's receipt of the Casualty Notice and ending on
the date of substantial completion of Landlord's repair or restoration work (the
"Repair Period"), then the rent for such period shall be reduced to such extent
as may be fair and reasonable under the circumstances and the Term shall be
extended by the number of days in the Repair Period and this Lease shall
continue in full force and effect. Any insurance which may be carried by
Landlord or Tenant against loss or damage to the Building or to the Premises
shall be for the sole benefit of the party carrying such insurance under its
control, and it is understood that Landlord shall in no event be obligated to
carry insurance on Tenant's contents.

18.   HOLD HARMLESS. Landlord shall not be liable to Tenant or Tenant's
employees, agents or invitees or to any other person whomsoever, for any injury
to person or damage to property on or about the Building and/or Premises caused
by the negligence or misconduct of Tenant, its employees, invitees, licensees or
agents and Tenant agrees to defend and indemnify Landlord and hold Landlord
harmless from any loss, expense or claims arising out of any such
<PAGE>

damage or injury, including but not limited to, court costs and reasonable
attorneys' fees. Landlord shall not be liable or responsible for any injury or
damage which may be caused by the Building or the Premises becoming out of
repair unless caused by Landlord's gross negligence or willful misconduct. The
provisions of this paragraph shall survive the expiration or earlier termination
of this Lease.

19.    CONDEMNATION.

19.1   If, during the Term of this Lease or any extension or renewal thereof,
all or substantially all of the Premises should be taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by right
of eminent domain, or should be sold to the condemning authority under threat of
condemnation (the "Taking"), this Lease shall terminate and the rent shall be
abated during the unexpired term of this Lease, effective as of the date of such
Taking.

19.2   If less than substantially all of the Premises shall be subject to the
Taking, this Lease shall not terminate but Landlord may, at Landlord's sole
option and at its sole cost and expense, repair or modify the Building and the
Premises and the rent payable hereunder during the unexpired portion of the Term
shall be adjusted to such extent as may be fair and reasonable under the
circumstances. In the event that (a) Landlord chooses not to make such repairs
or modifications or (b) any such repairs or modifications cannot, within ninety
(90) days, render the Premises reasonably tenantable or suitable for Tenant's
Permitted Use, this Lease shall terminate, the rent shall be abated for the
unexpired term of this Lease and all rights and obligations relating to the
unexpired term of this Lease shall cease. Tenant shall have no claim to any
portion of the condemnation award. Notwithstanding anything contained herein to
the contrary, Tenant shall be entitled to make a separate claim for damages
suffered by Tenant on account of a taking of personal property, moving expenses,
severance expenses and/or business interruption expenses.

20.    HOLDING OVER. If Tenant should remain in possession of the Premises after
the expiration of the Term of this Lease. without the execution by Landlord and
Tenant of a new lease or an extension of this Lease, then Tenant shall be deemed
to be occupying the Premises as a tenant-at-sufferance, subject to all the
covenants and obligations of this Lease and at a daily rental of one hundred and
twenty five percent (125%) of the per day rental provided for the last month of
the Term of this Lease, computed on the basis of a thirty (30) day month. The
inclusion of the preceding sentence shall not be construed as Landlord's consent
for Tenant to hold over. If any property not belonging to Landlord remains at
the Premises after the expiration of the Term of this Lease, Tenant hereby
authorizes Landlord to make such disposition of such property as Landlord may
desire without liability for compensation or damages to Tenant in the event that
such property is the property of Tenant; and in the event that such property is
the property of someone other than Tenant. Tenant agrees to indemnify and hold
Landlord harmless from all suits, actions, liability, loss, damages and expenses
in connection with or incident to any removal, exercise or dominion over and/or
disposition of such property by Landlord.

21.    DEFAULTS.

21.1   Each of the following acts or omissions of Tenant or occurrences shall
constitute an "Event of Default":
<PAGE>

(a)   Failure or refusal by Tenant to timely pay rental or other payments
hereunder.

(b)   Failure to perform or observe any covenant or condition of this Lease by
Tenant to be performed or observed, other than the payment of rental or other
payments hereunder, and such failure shall continue for a period of thirty (30)
days following written notice to Tenant of such failure.

(c)   Abandonment or vacating of the Premises or any significant portion.

(d)   The filing or execution or occurrence of any one of the following: (i) a
petition in bankruptcy or other insolvency proceeding by or against Tenant, (ii)
petition or answer seeking relief under any provision of the Bankruptcy Act,
(iii) an assignment for the benefit of creditors or composition, (iv) a petition
or other proceeding by or against Tenant for the appointment of a trustee,
receiver or liquidator of Tenant or any of Tenant's property, or (v) a
proceeding by any governmental authority for the dissolution or liquidation of
Tenant.

21.2  This Lease and the Term and estate hereby granted and the demise hereby
made are subject to the limitation that if and whenever any Event of Default
shall occur, Landlord may, at Landlord's option, in addition to all other rights
and remedies given hereunder or by law or equity, do any one (1) or more of the
following:

(a)   Terminate this Lease, in which event Tenant shall immediately surrender
possession of the Premises to landlord.

(b)   Enter upon and take possession of the Premises and expel or remove Tenant
and any other occupant therefrom, with or without having terminated the Lease.

(c)   Alter locks and other security devices at the Premises.

21.3  Exercise by Landlord of any one (1) or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises by Tenant, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. No such alteration of security devices and no removal or
other exercise of dominion by Landlord over the property of Tenant or others at
the Premises shall be deemed unauthorized or constitute a conversion, Tenant
hereby consenting, after any Event of Default, to the aforesaid exercise of
dominion over Tenant's property within the Building. All claims for damages by
reason of such re-entry and/or possession and/or alteration of locks or other
security devices are hereby waived, as are all claims for damages by reason of
any distress warrant, forcible detainer proceedings, sequestration proceedings
or other legal process. Tenant agrees that any re-entry by Landlord may be
pursuant to judgment obtained in forcible detainer proceedings or other legal
proceedings or without the necessity for any legal proceedings, as Landlord may
elect, and Landlord shall not be liable in trespass or otherwise.
<PAGE>

21.4  In the event that Landlord elects to terminate this Lease by reason of an
Event of Default, then, notwithstanding such termination, Tenant shall be liable
for and shall pay to Landlord the sum of all rental and other indebtedness
accrued to the date of such termination, plus, as damages, an amount equal to
the then present value of the rental reserved hereunder for the remaining
portion of the Term of this Lease (had such Term not been terminated by Landlord
prior to the expiration of the Term of this Lease), less the then present value
of the fair rental value of the Premises for such period, the undersigned
parties hereby stipulating that such fair rental value shall in no event be
deemed to exceed the then present value of the rental reserved for such period.

In the event that Landlord elects to terminate the Lease by reason of an Event
of Default, in lieu of exercising the rights of Landlord under the preceding
paragraph of this Paragraph 21.4, Landlord may instead hold Tenant liable for
all rental and other indebtedness accrued to the date of such termination, plus
such rental and other indebtedness as would otherwise have been required to be
paid by Tenant to Landlord during the period following termination of the Term
of this Lease measured from the date of such termination by Landlord until the
expiration of the Term of this Lease (had Landlord not elected to terminate the
Lease on account of such Event of Default) diminished by any net sums thereafter
received by Landlord through reletting the Premises during said period (after
deducting expenses incurred by Landlord as provided in Paragraph 21.6 hereof).
Actions to collect amounts due by Tenant provided for in this paragraph of this
Paragraph 21.4 may be brought from time to time by Landlord during the aforesaid
period, on one (1) or more occasions, without the necessity of Landlord's
waiting until the expiration of such period, and in no event shall Tenant be
entitled to any excess of rental (or rental plus other sums) obtained by
reletting over and above the rental provided for in this Lease.

21.5  In the event that Landlord elects to repossess the Premises without
terminating this Lease, then Tenant shall be liable for and shall pay to
Landlord all rental and other indebtedness accrued to the date of such
repossession, plus rental required to be paid by Tenant to Landlord during the
remainder of the Term of this Lease until the expiration of the Term of this
Lease, diminished by any net sums thereafter received by Landlord through
reletting the Premises during said period (after deducting expenses incurred by
Landlord as provided in Paragraph 21.6 hereof). In no event shall Tenant be
entitled to any excess of any rental obtained by reletting over and above the
rental herein reserved. Actions to collect amounts due by Tenant as provided in
this Paragraph 21.5 may be brought from time to time, on one (1) or more
occasions, without the necessity of Landlord's waiting until the expiration of
the Term of this Lease.

21.6  In case of an Event of Default, Tenant shall also be liable for and shall
pay to Landlord in addition to any sum provided to be paid above: (i) broker's
fees incurred by Landlord in connection with reletting the whole or in part of
the Premises, (ii) the cost of removing and storing Tenant's or other occupant's
property, (iii) the cost of repairing, altering, remodeling or otherwise putting
the Premises into condition acceptable to a new tenant or tenants, and (iv) all
reasonable expenses incurred by Landlord in enforcing Landlord's remedies,
including reasonable attorneys' fees. Past due rental and other past due
payments shall bear interest from maturity at the highest lawful rate per annum
until paid.
<PAGE>

21.7   In the event of termination or repossession of the Promises for an Event
of Default, Landlord shall not have any obligation to relet or attempt to relet
the Premises, or any portion thereof, or to collect rental after reletting; but
Landlord shall have the option to relet or attempt to relet; and in the event of
reletting, Landlord may relet the whole or any portion of the Premises for any
period to any tenant and fee any use and purpose.

21.8   If  Tenant should fail to make any payment or cure any default hereunder
within the time herein permitted, Landlord, without being under any obligation
to do so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account of Tenant (and enter the Premises for
such purpose), and thereupon Tenant shall be obligated to, and hereby agrees to,
pay Landlord, upon demand, all costs, expenses and disbursements (including
reasonable attorneys' fees) incurred by Landlord in taking such remedial action.

21.9   In the event of any default by Landlord, Tenant's exclusive remedy shall
be an action for damages (Tenant hereby waiving the benefit of any laws granting
Tenant a lien upon the property of Landlord and/or upon rental due Landlord),
but prior to any such action Tenant will give Landlord written notice specifying
such default with particularity, and Landlord shall thereupon have thirty (30)
days (plus such additional reasonable period as may be required in the exercise
by Landlord of due diligence) in which to cure any such default. Unless and
until Landlord fails to so cure any default. Tenant shall not have any remedy or
cause of action by reason thereof. All obligations of Landlord hereunder will be
construed as covenants, not conditions; and all such obligations will be binding
upon Landlord only during the period of Landlord's possession of the Building
and not thereafter. Under no circumstances whatsoever shall Landlord ever be
liable hereunder for consequential damages or special damages.

21.10  The liability of Landlord to Tenant for any default by Landlord under
the terms of this Lease shall be limited to the proceeds of sale on execution of
the interest of Landlord in the Building and in the Land, and neither Landlord,
nor any party comprising Landlord, shall be personally liable for any
deficiency. This clause shall not be deemed to limit or deny any remedies which
Tenant may have in the event of default by Landlord hereunder which do not
involve the personal liability of Landlord.

21.11  No waiver by the parties hereto of any default or breach of any term,
condition, or covenant of this Lease shall be deemed to be a waiver of any
subsequent default or breach of the same or of any other term condition, or
covenant contained herein. No receipt of money by Landlord from Tenant after the
expiration of the Term of this Lease, or after the service of any notice, or
after the commencement of any suit, or after final judgment for possession of
the Premises, shall reinstate, continue or extend the Term of this Lease or
affect any such notice, demand or suit or imply consent for any action for which
Landlord's consent is required.

21.12  The term "Landlord" shall mean only the owner, for the time being, of the
Building, and in the event of the transfer by such owner of its interest in the
Building, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the Term of this Lease upon
each new owner for the duration of such owner's ownership.
<PAGE>

22.   LANDLORD'S LIEN. (INTENTIONALLY OMITTED)

23.   SUBORDINATION. Tenant accepts this Lease subject and subordinate to any
ground lease, mortgage, deed of trust or other lien presently existing or
hereafter placed upon the Premises or upon the Building or any part thereof, and
to any renewals, modifications, extensions and refinancing thereof, which might
now or hereafter constitute a lien upon the Building or any part thereof, and to
zoning ordinances and other building and fire ordinances and governmental
regulations relating to the use of the Premises; but Tenant agrees that any such
ground lessor, mortgagee and/or beneficiary of any deed of trust or other lien
("Landlord's Mortgagee") and/or Landlord shall have the right at any time to
subordinate such ground lease, mortgage, deed of trust or other lien to this
Lease on such terms and subject to such conditions as such Landlord's Mortgagee
may deem appropriate in its discretion. Upon demand, Tenant agrees to execute
such further instruments subordinating this Lease, as Landlord may request, and
such nondisturbance and attornment agreements, as any such Landlord's Mortgagee
shall request, in form reasonably satisfactory to Landlord's Mortgagee. Upon
foreclosure of the Building or upon acceptance of a deed in lieu of such
foreclosure, Tenant hereby agrees to attorn to the new owner of such property
after such foreclosure or acceptance of a deed in lieu of foreclosure, if so
requested by such new owner of the Building.

24.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS.

24.1  Tenant, at Tenant's own expense, (a) shall comply with all federal,
state, municipal, fire underwriting and other laws, ordinances, orders, rules
and regulations applicable to the Premises and the business conducted therein by
Tenant, (b) shall not engage in any activity which would cause Landlord's fire
and extended coverage insurance to be cancelled or the rate therefor to be
increased (or, at Landlord's option, Tenant shall pay any such increase to
Landlord immediately upon demand as additional rental in the event of such rate
increase by reason of such activity), (c) shall not commit, and shall cause
Tenant's agents, employees and invitees not to commit, any act which is a
nuisance or annoyance to Landlord or to other tenants, or which might, in the
exclusive judgment of Landlord, damage Landlord's goodwill or reputation, or
tend to injure or depreciate the Building, (d) shall not commit or permit waste
in the Premises or the Building, (e) shall not paint, erect or display any sign,
advertisement, placard or lettering which is visible in the corridors or lobby
of the Building or from the exterior of the Building without Landlord's prior
written approval, and (f) shall not occupy or use, or permit any portion of the
Premises to be occupied or used, for any business or purpose other than the
Permitted Use specified in Paragraph 1.P. hereof. If a controversy arises
concerning Tenant's compliance with any federal, state, municipal or other laws,
ordinances, orders, rules or regulations applicable to the Premises and the
business conducted therein by Tenant, Landlord may retain consultants of
recognized standing to investigate Tenant's compliance. If it is determined that
Tenant has not complied as required, Tenant shall reimburse Landlord on demand
for all consulting and other costs incurred by Landlord in such investigation.

24.2  Tenant, and Tenant's agents, employees and invitees shall comply fully
with all requirements of the rules and regulations of the Building which are
attached hereto as Exhibit "C" and made a part hereof. Landlord shall at all
times have the right to change such rules and regulations or to amend or
supplement them in such manner as may be deemed advisable for the
<PAGE>

safety, care and cleanliness of the Premises and the Building and for
preservation of good order therein, all of which rules and regulations, changes
and amendments shall be forwarded to Tenant and shall be carried out and
observed by Tenant. Tenant shall further be responsible for the compliance with
such rules and regulations by the employees, agents and invitees of Tenant.
Landlord hereby reserves the right to designate, or otherwise control the
allocation of, parking spaces for the Premises. Notwithstanding any provisions
herein to the contrary, throughout the Lease Term, Landlord shall provide Tenant
with one (1) undesignated parking space for every two hundred seventy-five (275)
square feet of Rentable Area in the Premises, such parking spaces to include
those obtained by restriping the loading area as depicted in the attached
Exhibit "F". All changes and amendments in the rules and regulations of the
Building will be sent by Landlord to Tenant in writing and shall thereafter be
carried out and observed by Tenant. No outside storage or accumulation of
supplies, inventory, building materials or debris shall be permitted without
prior written consent from the Landlord. Tenant expressly agrees to comply with
and conform to all restrictive covenants of record or subsequently filed of
record affecting the Premises.

25.   NOTICES. Any notice which may or shall be given under the terms of this
Lease shall be in writing and shall be either delivered by hand (including
commercially recognized messenger and express mail service) or sent by United
States Mail, registered or certified, return receipt requested, postage prepaid,
addressed to the parties herein at their respective addresses set out below, or
at such other addresses as either party may have theretofore specified by
written notice delivered in accordance herewith. Such address may be changed
from time to time by either party by giving notice as provided herein.

LANDLORD:           Cardinal Collins Tech Center. Inc.
                    C/o Kennedy Associates Real Estate Counsel, Inc.
                    1215 4th Avenue, 2400 Financial Center
                    Seattle, Washington 98161
                    ATTN: Vice President of Asset Management

WITH COPIES TO:     Haynes & Boone, LLP
                    901 Main Street, Suite 3100
                    Dallas, Texas 75202
                    ATTN: Mr. Richard K. Martin

TENANT:             Macro-Vision Communications, Inc.
                    1155 B. Coltins Boulevard, Suite 200
                    Richardson, Texas 75081
                    ATTN:  __________________________

Notice shall be deemed given when delivered (if delivered by hand) or, whether
actually received or not, three (3) days from when postmarked (if sent by mail).
If the term "Tenant" as used in this Lease refers to more than one (1) person
and/or entity, any notice given as aforesaid to any one of such persons and/or
entities shall be deemed to have been duly given to Tenant.
<PAGE>

26.   FINANCIAL STATEMENTS. Tenant shall, upon request by Landlord (but not more
often than twice per annum), provide current certified by an officer of Tenant
financial statements to Landlord during the Term of this Lease. Such financial
statements shall be compiled using generally accepted accounting principles.

27.   SPRINKLERS. If there now is or shall be installed in the Building a
sprinkler system, and such system or any of its components shall be damaged or
injured or not in proper working order by reason of any act or omission of
Tenant, Tenant's agents servants, employees, licensees or visitors. Tenant shall
forthwith restore the same to good working condition at Tenant's own expense;
and if the Board of Fire Underwriters or any bureau, department or official of
the state or local government require or recommend that any changes,
modifications, alterations or additional sprinkler heads or other equipment be
made or supplied by reason of Tenant's business, or the location of partitions,
trade fixtures or other contents of the Premises, or for any other reason, or if
any such changes, modifications alterations, additional sprinkler heads or other
equipment become necessary to prevent the imposition of a penalty or charge
against the full allowance for a sprinkler system in the fire insurance rate as
fixed by the Board of Fire Underwriters, or by any fire insurance company,
Tenant shall, at Tenant's expense, promptly make and supply such changes,
modifications, alterations, additional sprinkler heads or other equipment.

28.   RELOCATION OF PREMISES. [INTENTIONALLY OMITTED)

29.   COMMON AREA. The Common Area, as defined in Paragraph 1.Q hereof, shall be
subject to Landlord's sole management and control and shall be operated and
maintained in such manner as Landlord in Landlord's discretion shall determine.
Landlord reserves the right to change from time to time the dimensions and
location of the Common Areas and to place, construct or erect other improvements
on any part of the Land without the consent of Tenant. Tenant, and Tenant's
employees and invitees shall have the nonexclusive right to use the Common Area
as constituted from time to time, such use to be in common with Landlord, other
tenants of the Building and other persons entitled to use the same, and subject
to such reasonable and non-discriminatory rules and regulations governing use as
Landlord may from time to time prescribe. Tenant shall not solicit business or
display merchandise within the Common Area, or distribute handbills therein, or
take any action which would interfere with the rights of other persons to use
the Common Area. Landlord may temporarily close any part of the Common Area for
such periods of time as may be necessary to prevent the public from obtaining
prescriptive rights or to make repairs or alterations.

30.   BROKERAGE. Tenant represents and warrants that it has dealt with no other
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than Broker
specified in Paragraph 1.R hereof, and Tenant agrees to indemnify and hold
Landlord harmless from and against any claims by any other broker, agent or
other person claiming a commission or other form of compensation by virtue of
having dealt with Tenant with regard to this leasing transaction. The provisions
of this Paragraph 30 shall survive the termination of this Lease.

<PAGE>

31.   HAZARDOUS WASTE.

31.1  The term "Hazardous Substances," as used in this Lease shall mean
pollutants, contaminants, toxic or hazardous wastes, or any other substances,
the use and/or the removal of which is required or the use of which is
restricted, prohibited or penalized by any "Environmental Law," which term shall
mean any federal, state or local law, ordinance or other statute of a
governmental or quasi-governmental authority relating to pollution or protection
of the environment.

31.2  Other than in the ordinary course of Tenant's business or practice, Tenant
hereby agrees that (i) no activity will be conducted on the Premises that will
produce any Hazardous Substance; (ii) the Premises will not be used in any
manner for the storage of any Hazardous Substances; (iii) no portion of the
Premises will be used as a landfill or a dump; (iv) Tenant will not install any
underground tanks of any type; (v) Tenant will not allow any surface or
subsurface conditions to exist or come into existence that constitute, or with
the passage of time may constitute a public or private nuisance; and (vi) Tenant
will not permit any Hazardous Substances to be brought onto the Premises, and if
so brought thereon, then the same shall be immediately removed with proper
disposal, and all required cleanup procedures shall be diligently undertaken
pursuant to all Environmental Laws. To the extent used in the ordinary course of
Tenant's business or practice, Tenant shall manage, handle, and provide
safeguards for the Premises, the remainder of the Project, and all persons
coming to the Premises, or to the Project, in accordance with Environmental Law.
Tenant shall provide Landlord with a written list of any Hazardous Substances
handled by it in its ordinary course of business at the Premises as well as
properly completed Material Safety Data Sheets.

31.3  If Tenant so contaminates the Premises, then Tenant shall diligently
institute proper and thorough cleanup procedures at Tenant's sole cost, and
Tenant agrees to indemnify and hold Landlord harmless from all claims, demands,
actions, liabilities, costs, expenses, damages and obligations of any nature
arising from or as a result of Tenant's failure to comply with this Paragraph 31
and/or the presence of Hazardous Substances in or on the Premises created by
Tenant.  The foregoing indemnification and the responsibilities of Tenant shall
survive the termination or expiration of this Lease.

31.4  Landlord or Landlord's representative shall have the right but not the
obligation to enter the Premises for the purpose of determining whether there
exists on the Premises any Hazardous Substances of ensuring compliance with all
Environmental Laws. The right granted to Landlord herein to perform inspections
shall not create a duty on Landlord's part to inspect the Premises, or liability
on the part of Landlord for Tenant's use, storage or disposal of Hazardous
Substances, it being understood that Tenant shall be solely responsible for all
liability is connection therewith.

32.   THEFT OR BURGLARY. Landlord shall not be liable to Tenant for losses to
Tenant's property or personal injury caused by criminal acts or entry by
unauthorized persons into the Premises, the Building or the Common Area.

33.   ESTOPPEL CERTIFICATE. Tenant agrees that Tenant shall from time to time
upon request by Landlord execute and deliver to Landlord a statement in
recordable forth certifying
<PAGE>

(i) that the Lease is unmodified and in full force and effect (or, if there have
been modifications, that the same is in full force and effect as so modified),
(ii) the dates to which rental and other charges payable under this Lease have
been paid, and (iii) that Landlord is not in default hereunder (or, if Landlord
is in default, specifying the nature of such default). Tenant further agrees
that Tenant shall from time to time upon request by Landlord execute and deliver
to Landlord an instrument in recordable form acknowledging Tenant's receipt of
any notice of assignment of this Lease by Landlord.

34.    BANKRUPTCY AND INSOLVENCY.

34.1   In the event that Tenant shall became a debtor in a case filed under
Chapter 7 of the Bankruptcy Code end Tenant's trustee or Tenant shall elect to
assume this Lease for the purpose of assigning the same or, otherwise, such
election and assignment may be made only if the provisions of paragraph 34.2 end
34.4 are satisfied as if the election to assume were made in a case filed under
Chapter 11 of the Bankruptcy Code. If Tenant or Tenant's trustee shall fail to
elect to assume this Lease within ninety (90) days after the filing of such
petition or such additional time as provided by the court within such 90-day
period, this Lease shall be deemed to have been rejected. Immediately thereupon,
Landlord shall be entitled to possession of the Premises without further
obligation to Tenant or Tenant's trustee and this Lease upon the election of
Landlord shall terminate, but Landlord's right to be compensated for damages
(including, without limitation, liquidated damages pursuant to any provision
hereof or the exercise of any other remedies in any such proceeding shall
survive, whether or not this Lease shall be terminated.

34.2   In the event that Tenant shall become a debtor in a case filed under
Chapter 1l of the Bankruptcy Code, or in a case filed under Chapter 7 of the
Bankruptcy Code which is transferred to Chapter 11, Tenant's trustee or Tenant,
as debtor-in-possession, must elect to assume this Lease in whole within one
hundred twenty (120) days from the date of the filing of the petition under
Chapter 11 or the transfer thereto or Tenant's trustee or the debtor-in-
possession shall be deemed to have rejected this Lease. In the event that
Tenant, Tenant's trustee or the debtor-in-possession has failed to perform all
of Tenant's obligations under this Lease within the time periods (excluding
grace periods) required for such performance, no election by Tenant's trustee or
the debtor-in-possession to assume this Lease, whether under Chapter 7 or
Chapter 11, shall be permitted or effective unless each of the following
conditions have been satisfied:

(a)    Tenant's trustee or the debtor-in-possession has cured all defaults under
this lease, or has provided Landlord with Assurance (as defined below) that it
will cure all defaults susceptible of being cured by the payment of money within
ten (10) days from the date of such assumption and that it will cure all other
defaults under this Lease which are susceptible of being cured by the
performance of any act promptly after the date of such assumption.

(b)    Tenant's trustee or the debtor-in-possession has compensated Landlord, or
has provided Landlord with Assurance that within ten (10) days from the date of
such assumption, it will compensate Landlord for any actual pecuniary loss
incurred by Landlord arising from the default of Tenant, Tenant's trustee, or
the debtor-in-possession as indicated in any statement of actual pecuniary loss
sent by Landlord to Tenant's trustee or the debtor-in-possession.
<PAGE>

(c)    Tenant's trustee or the debtor-in- possession has provided Landlord with
Assurance of the future performance of each of the obligations of Tenant,
Tenant's trustee or the debtor-in-possession under this Lease, and, Tenant's
trustee or the debtor-in-possession shall also (i) deposit with Landlord, as
security for the timely payment of rent hereunder, an amount equal to three (3)
installments of Base Rental (at the rate then payable) which shall be applied to
installments of Base Rental in the inverse order in which such installments
shall become due, provided all the terms and provisions of this Lease shall have
been complied with, and (ii) pay in advance to Landlord on the date each
installment of Base Rental is payable a pro rata share of Tenant's annual
obligations for additional rent and other sums pursuant to this Lease, such that
Landlord shall hold funds sufficient to satisfy all such obligations as they
become due. The obligations imposed upon Tenant's trustee or the debtor-in-
possession by this paragraph shall continue with respect to Tenant or any
assignee of this Lease after completion of bankruptcy proceedings.

(d)    The assumption of this Lease will not breach or cause a default under any
provision of any other lease, mortgage, financing arrangement or other agreement
by which Landlord is bound.

For purposes of this Paragraph 34, Landlord and Tenant acknowledge that
"Assurance" shall mean no less than: Tenant's trustee or the debtor-in-
possession has and will continue to have sufficient unencumbered assets after
the payment of all secured obligations and administrative expenses to assure
Landlord that sufficient funds will be available to fulfill the obligations of
Tenant under this Lease and (x) there shall have been deposited with Landlord,
or the Bankruptcy Court shall have entered an order segregating, sufficient cash
payable to Landlord, and/or (y) Tenant's trustee or the debtor-in-possession
shall have granted a valid and perfected first lien and security interest in,
and/or mortgage on, the property of Tenant, Tenant's trustee or the debtor-in-
possession, acceptable as to value and kind to Landlord, to secure to Landlord
the obligation of Tenant, Tenant's trustee or the debtor-in-possession to cure
the defaults under this Lease, monetary and/or nonmonetary, within the time
periods set forth above.

34.3   In the event that this Lease is assumed in accordance with paragraph 34.2
and thereafter Tenant is liquidated or files or has filed against it a
subsequent petition under Chapter 7 or Chapter 11 of the Bankruptcy Code,
Landlord may, at its option, terminate this Lease and all rights of Tenant
hereunder by giving Tenant notice of election to so terminate within thirty (30)
days after the occurrence of any such event.

34.4   If Tenant's trustee or the debtor-in-possession has assumed this Lease
pursuant to the terms and provisions of paragraphs 34.1 or 34.2 for the purpose
of assigning (or elects to assign) this Lease, this Lease may be so assigned
only if the proposed assignee (the "Assignee") has provided adequate assurance
of future performance of all of the terms, covenants and conditions of this
Lease to be performed by Tenant. Landlord shall be entitled to receive all cash
proceeds of such assignment. As used herein "adequate assurance of future
performance" shall mean no less than that each of the following conditions has
been satisfied:
<PAGE>

(a)   The Assignee has furnished Landlord with either (i)(A) a copy of a credit
rating of Assignee which Landlord reasonably determines to be sufficient to
assure the future performance by Assignee of Tenant's obligations under this
Lease, and (B) a current financial statement of Assignee audited by a certified
public accountant indicating a net worth and working capital in amounts which
Landlord reasonably determines to be sufficient to assure the future performance
by Assignee of Tenant's obligations under this Lease, or (ii) a guarantee or
guarantees, in form and substance satisfactory to Landlord, from one or more
persons with a credit rating and net worth which Landlord reasonably determines
to be sufficient to assure the future performance by Assignee of Tenant's
obligations under this Lease.

(b)   Landlord has obtained all consents or waivers from others required under
any lease, mortgage, financing arrangement or other agreement by which Landlord
is bound to permit Landlord to consent to such assignment.

(c)   The proposed assignment will not release or impair any guaranty of the
obligations of Tenant (including the Assignee) under this Lease.

34.5  When, pursuant to the Bankruptcy Code, Tenant's trustee or the debtor-in-
possession shall be obligated to pay reasonable use and occupancy charges for
the use of the Premises, such charges shall not be less than the Base Rental,
additional rent and other sums payable by Tenant under this Lease.

34.6  Neither the whole nor any portion of Tenant's interest in this Lease or
its estate in the Premises shall pass to any Trustee, receiver, assignee for the
benefit creditors, or any other person or entity, by operation of law or
otherwise under the laws of any state having jurisdiction of the person or
property of Tenant unless Landlord shall have consented to such transfer. No
acceptance by Landlord of rent or any other payments from any such trustee,
receiver, assignee, person or other entity shall be deemed to constitute such
consent by Landlord nor shall it be deemed a waiver of Landlord's right to
terminate this Lease for any transfer of Tenant's interest under this Lease
without such consent.

34.7  Tenant expressly waives any right it might have to offset rentals or to
terminate this Lease upon the bankruptcy of Landlord.

35.   CANCELLATION OPTION. Notwithstanding the provisions contained herein, If
Tenant is not then in default of any of the terms, conditions, or covenants of
the Lease, Tenant, but not any assignee, transferee or subtenant of Tenant, is
hereby granted a one-time option to cancel this Lease to be effective thirty six
(36) months following Commencement Date (the "Cancellation Date") under the
following terms and conditions.

(a)   Tenant shall notify Landlord of its intention to cancel this Lease no
later than nine (9) months prior to the Cancellation Date;

(b)   Tenant shall pay to Landlord (i) on or before the Cancellation Date
"Reimbursable Expenses" equal to the remaining portion of the rent which
represents the not present value as of cite date of such payment of the
amortized Tenant Improvement Allowance and Leasing
<PAGE>

Commissions (collectively the "Landlord's Lease Expenses") at an 11% per annum
interest rate (e.g., every $10,000.00 of Landlord's Lease Expense would equal
$4,622.61 in Reimbursable Expenses); and (ii) on or before three (3) months
prior to the Cancellation Date, a 'Termination Payment" in the amount of
$59.337.50:

(c)   Tenant's failure to notify Landlord or pay the Reimbursable Expenses and
the Termination Payment within the time period set forth above shall
automatically terminate the Cancellation Option; and

(d)   Upon exercise by Tenant of its option to cancel within the period provided
above, and the payment by Tenant to Landlord of the Reimbursable Expenses and
Termination Payment within the period provided above, and effective as of the
Cancellation Date, this Lease shall terminate and the right of Tenant to lease,
use, and occupy the Premises shall terminate and Tenant shall vacate and
surrender possession to Landlord of the Premises. Except as otherwise expressly
provided in this paragraph. the cancellation of this lease shall be subject to
all of the provisions of this Lease relating to the termination of this Lease
and the respective rights, powers, duties, obligations, and liabilities of both
Landlord and Tenant.

36.   MISCELLANEOUS,

36.1  QUIET ENJOYMENT. Tenant, upon payment of the rent and performance of the
covenants herein contained, shall quietly have, hold and enjoy the Premises
subject to the terms and provisions of this Lease.

36.7  LIENS BY TENANT. In no event shall Tenant have the right to create or
permit there to be established any lien or encumbrance of any nature against the
Premises or the Building for any improvement or improvements by Tenant, and
Tenant shall fully pay the cost of any improvement or improvements made or
contracted for by Tenant. Any mechanic's lien filed against the Premises or the
Building for work claimed to have been done, or materials claimed to have been
furnished to Tenant, shall be duly discharged by Tenant within ten (10) days
after the filing of the lien.

36.3  ATTORNEYS' FEES. If, on account of any breach or default by Tenant or
Landlord of its obligations to the other party under the terms, conditions and
covenants of this Lease, it shall become necessary for either party to employ an
attorney to enforce or defend any of its rights or remedies hereunder, then the
prevailing party shall be entitled to reasonable attorneys' fees, court costs
and related expenses incurred therein, whether or not legal suit is actually
brought.

36.4  FORCE MAJEURE. Whenever a period of time is herein described for the
taking of action by Landlord, Landlord shall not be liable or responsible for,
and there shall be excluded from the computation of such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions; or any other cause not
reasonably within the control of Landlord and which Landlord, by the exercise of
due diligence, is unable, wholly or in pert, to prevent or overcome.
<PAGE>

36.5  INDEPENDENT OBLIGATIONS OF TENANT. The obligation of Tenant to pay all
rental and other sums hereunder provided to be paid by Tenant and the obligation
of Tenant to perform Tenant's other covenants and duties hereunder constitute
independent, unconditional obligations to be performed at all times provided for
hereunder, save and except only when an abatement thereof or reduction therein
is hereinabove expressly provided for and not otherwise. Tenant waives and
relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or offset against any rental and other sums
provided hereunder to be paid Landlord by Tenant. Tenant waives and relinquishes
any right to assort, either as a claim or as a defense, that Landlord is bound
to perform or is liable for the nonperformance of any implied covenant or
implied duty of Landlord not expressly herein set forth.

36.6  TIME IS OF ESSENCE. In all instances where Tenant is required to pay any
sum or do any act at a particular indicated time or within an indicated period,
it is understood that time is of the essence,

36.7  RECORDATION: This Lease shall not be recorded by either party without the
consent of the other.

36.8  APPLICABLE LAW AND VENUE. All monetary obligations of Landlord and Tenant
(including, without limitation, any monetary obligation of Landlord or Tenant
for damages for any breach of the respective covenants, duties or obligations of
Landlord or Tenant hereunder) are performable in the county in which the
Building is located and in the county in which Landlord's principal business
office is located. The laws of the State in which the Building is located shall
govern the interpretation, validity, performance and enforcement of this Lease.

36.9  JOINT AND SEVERAL LIABILITY. If Tenant is composed of more than one (1)
entity, each entity comprising Tenant shall be jointly and "Severally liable for
the performance of the obligations of Tenant under this Lease, including
specifically, without limitation, the payment of rental and all other sums
payable hereunder.

36.10 SUBMISSION OF LEASE NOT AN OFFER. Submission of this Lease for
examination does not constitute an offer, right of first refusal, reservation
of, or option for, the Premises or any other premises in the Building. This
Lease shall become effective only upon execution and delivery by both Landlord
and Tenant.

36.11 AUTHORITY TO DO BUSINESS. Tenant warrants that Tenant is, and shall
remain throughout the Term of this Lease, authorized to do business and in good
standing in the State in which the Building is located. Tenant agrees, upon
request by Landlord, to furnish Landlord satisfactory evidence of Tenant's
authority for entering into this Lease.

36.12 RELATIONSHIP OR PARTIES. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent, or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of the computation of rental, nor any other provision contained herein,
nor
<PAGE>

any acts of the parties hereto, shall be deemed to create any relationship
between the parties hereto other than the relationship of landlord and tenant.

36.13  USE OF LANGUAGE. Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular shall be held
to include the plural, unless the context otherwise requires. The captions or
headings of paragraphs in this Lease are inserted for convenience only, and
shall not be considered in construing the provisions hereof, if any question of
intent should arise.

36.11  SUCCESSORS. The provisions of this Lease shall be binding upon and inure
to the benefit of the heirs, personal representatives, successors and assigns of
the parties, but this provision shall in no way alter the restriction herein in
connection with assignment, subletting and other transfer by Tenant. All rights,
powers, privileges, immunities and duties of Landlord under this Lease,
including, but not limited to, any notices required or permitted to be delivered
by Landlord to Tenant hereunder, may, at Landlord's option, be exercised or
performed by Landlord's attorney or agent.

36.15  SEVERABILITY. If any term or provision of this Lease shall, to any
extent, be held invalid or unenforceable by a final judgment of a court of
competent jurisdiction, the remainder of this Lease shall not be affected
thereby.

37.    ENTIRE AGREEMENT. It is expressly agreed by Tenant, as a material
consideration for the execution of this Lease, that this Lease with the specific
references to written extrinsic documents, is the entire agreement of the
parties; that no prior representations, warranties, understandings,
stipulations, agreements or promises pertaining to this Lease or the Premises
shall be binding on Landlord unless such representations, warranties,
understandings, stipulations, agreements or promises are expressly stated in
this Lease or the documents incorporated herein. All exhibits, attachments,
annexed instruments and addenda referred to herein shall be considered a part
hereof for all purposes with the same force and effect as if copied at full
length herein. It is likewise agreed that this Lease may not be altered, waived,
amended or extended except by an instrument in writing, signed by both Landlord
and Tenant.

EXECUTED as of the day and year first above written.

LANDLORD: CARDINAL COLLINS TECH CENTER, INC., a Texas Corporation

By:      /s/ Michael McCormick
   ------------------------------
Name:    Michael McCormick
     ----------------------------
Title:      Vice President
      ---------------------------

TENANT:  MACRO-VISION COMMUNICATION, INC.

By:      /s/ Jian-Yu Liu
   -------------------------------
Name:    Jian-Yu Liu
     -----------------------------
Title:      President
      ----------------------------
<PAGE>

EXHIBIT "A"
PREMISES
<PAGE>

EXHIBIT "B"
LEGAL DESCRIPTION

BUILDING 3:

Lot 1. Block B, Collins Business Park, an addition to the City of Richardson,
Texas according to the plat recorded in Volume 97028, Page 1850 of the Deed
Records of Dallas County, Texas.
<PAGE>

EXHIBIT "C"
BUILDING RULES AND REGULATIONS

1.  Landlord agrees to furnish Tenant two keys without charge. Additional keys
will be furnished at a fee. Tenant agrees to deposit a reasonable amount fixed
by Landlord from time to time for each key issued by Landlord to Tenant for
Tenant's offices, and upon termination of this Lease, Tenant agrees to return
all keys to Landlord. Landlord shall refund any amount deposited upon return of
all keys.

2.  Tenant shall not alter any lock or install any new or additional locks or
any bolts or windows of the Premises, without the prior written consent of
Landlord.

3.  No Tenant shall at any time occupy any part of the Premises as sleeping or
lodging quarters.

4.  Landlord will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the Premises, the Building or the Common Area
regardless of whether such loss occurs when area is locked against entry or not.

5.  No birds, fowl, or animals shall be brought into or kept in or about the
Premises.

6.  The water closets and other water fixtures shall not be used for any purpose
other than those for which they were constructed, and any damage resulting to
them from misuse, or the defacing or injury of any part of the Premises shall be
borne by the person who shall occasion it. No person shall waste water by
interfering with the faucets or otherwise.

7.  No person shall disturb the other occupants of the Building by the use of
any musical instruments, the making of unseemly noises, causing objectionable
odors, or other unreasonable use.

8.  Any action or condition not meeting the highest standard of dignity and good
taste should be reported directly to Landlord.

9.  No signs, advertisements or notices shall be allowed in any form on windows
or doors inside or outside the Premises or any other part of the Building, and
no signs except in uniform location and uniform styles fixed by Landlord shall
be permitted on exterior identification pylons, if any, in the public corridors
or on corridor doors or entrances to the Premises. No draperies, shutters, or
other window covering shall be installed on exterior windows or walls or windows
and doors facing public corridors without Landlord's written approval. Landlord
shall have the right to require installation and continued use of uniform window
covering for such windows.

10.  Tenant shall not place, install or operate in the Premises or in any other
part of the Building any engine, stove or cook thereon or therein, or place or
use in or about the Premises any explosives, gasoline, kerosene, oil, acids,
caustics or any (other than with a microwave oven)
<PAGE>

other inflammable, explosive or hazardous materials, fluid or substance without
the prior written consent of Landlord.

11.  Employees of Landlord shall not receive or carry messages for or to any
tenant or other person, nor contract with or render free or paid services to any
tenant or tenant's agents, employees or invitees. In the event any of Landlord's
employees perform any such services, such employee shall be deemed to be the
agent of any such tenant regardless of whether or how payment is arranged for
services, and Landlord is expressly relieved from and all liability in
connection with any such services and any associated injury or damage to person
or property.

12.  None of the entries, sidewalks, vestibules, elevator shafts, passages,
doorways or hallways and similar areas shall be blocked or obstructed, or any
rubbish, litter, trash or material of any nature placed, emptied or thrown into
such areas, or such areas be used at any time for any purpose except for ingress
or egress by Tenant, Tenant's agents, employees or invitees to and from the
Premises and for going from one to another part of the Building.

13.  Tenant and Tenant's employees, agents and invitees shall observe and comply
with the driving and parking signs and markers on the premises or parking
facilities surrounding the Building.

14.  Landlord shall have the right to prescribe the weight and position of
safes, computers and other heavy equipment which shall, in all cases, in order
to distribute their weight, stand on supporting devices approved by Landlord.
All damage done to the Premises or to the Building by placing in or taking out
any property of Tenant, or done by Tenants property while in the Premises or the
Building, shall be repaired immediately at the sole expense of Tenant.
<PAGE>

EXHIBIT "D"
WORK LETTER

1.  TENANT IMPROVEMENTS: Reference herein to "Tenant Improvements" shall include
all work to be done in the Premises pursuant to the Plans and Specifications
(defined in paragraph 2 below) including, without limitation, any modification
to the Building or shell improvements and any structural modifications to the
Building.

PLANS & SPECIFICATIONS: Within four (4) weeks after execution of the Lease by
both Landlord and Tenant, Tenant shall submit to Landlord for Landlord's
approval the final working drawings and specifications for the Tenant
Improvements (the "Plans and Specifications") as prepared by Tenant's architect.

The Plans and Specifications must be consistent with Landlord's standard
specifications (herein referred to as the "Standards" or "Building Standards")
for tenant improvements for the Building, as the same may be changed from time
to time by Landlord and are subject to Landlord's final approval. Within five
(5) business days following the date of Landlord's receipt of the Plans and
Specifications, Landlord will advise Tenant of Landlord's approval or
disapproval of the Plans and Specifications. If Landlord disapproves any aspect
of the Plans and Specifications, Landlord shall so notify Tenant and specify the
reasons for such disapproval. Landlord may also specify how any such disapproved
item may be made reasonably acceptable to Landlord, and Tenant shall, within
five (5) business days thereafter, deliver to Landlord revised Plans and
Specifications incorporating the revisions required by Landlord.

Tenant shall have the sole responsibility for compliance of the Plans and
Specifications with all applicable statutes, codes, ordinances and other
regulations, and the approval of the Plans and Specifications by Landlord shall
not constitute an indication, representation or certification by Landlord that
such Plans and Specifications are in compliance with said statutes, codes,
ordinances and other regulations.

3.  LANDLORD'S APPROVALS: Tenant shall secure Landlord's prior written approval
of the Tenant Improvements including architect, architect's designs, Plans and
Specifications, subcontractors, permits, licenses and contracts to be used.
Landlord's approval shall not be required for change orders provided that the
Tenant Improvements are constructed in substantial accordance with the Plans and
Specifications. All approvals by Landlord must be in writing.

4.  SELECTION OF CONTRACTOR: Tenant shall enter into a construction contract
(the "Construction Contract") with FACS Facility Services, Inc. (the
"Contractor") for the construction of the Tenant Improvements. The Construction
Contract shall be approved by the Landlord. Except as hereinafter provided, the
Construction Contract shall provide that the Contractor shall obtain competitive
bids from a minimum of three (3) mutually acceptable subcontractors for each of
the principal portions of construction of the Tenant Improvements including
those who furnish materials or equipment fabricated to a special design. Unless
Landlord and Tenant shall mutually agree to the contrary, the subcontractor
which submitted the lowest bid shall be deemed to be the selected subcontractor.
Notwithstanding anything contained herein to the contrary, Contractor shall
perform with the Contractor's own personnel the
<PAGE>

electrical portion of the construction of the Tenant Improvements. The cost of
such electrical work shall be the sum of the actual costs incurred for such work
plus a contractors fee equal to six percent (6%) of such cost.

5.  CONSTRUCTION OF TENANT IMPROVEMENTS: Tenant shall be responsible for
construction of the Tenant Improvements by Contractor. Such construction shall
be in a good and workmanlike manner and in accordance with the Plans and
Specifications. Construction of the Tenant Improvements shall be deemed
substantially complete (subject to completion of punchlist items) upon receipt
by Landlord of the following:

(a) a certificate of Occupancy from the city and upon certification of such fact
by Tenant's architect;

(b) a certificate from Contractor certifying that the Tenant Improvements have
been completed in substantial accordance with the approved Plans and
Specifications;

(c) evidence reasonably satisfactory to Landlord that no mechanic's or materials
men's lien or other encumbrance has been filed and remains in effect against the
property;

(d) a final affidavit and lien release from Contractor and final lien releases
or waivers by all subcontractors, material men and other parties who have
supplied labor, material or services for the construction of the Tenant
improvements or who otherwise might be entitled to claim a contractual,
statutory or constitutional lien against the property;

(e) Tenant shall have delivered to Landlord a written statement, certified as
correct by Tenant, setting forth in reasonable detail the out-of-pocket
construction costs insured by Tenant with respect to Tenant Improvements
together with all proof, reasonably satisfactory to Landlord that such invoices
have been paid in full and such other information with respect to the
construction of the Tenant Improvements as landlord may reasonably require to
enable Landlord to substantiate the costs set forth in Tenant's written
statement; and

(f) Tenant shall have delivered to Landlord a Certificate of Substantial
Completion (as such term is defined in American Institute of Architects Document
B141, Owner Architect Agreement) with respect to the Tenant Improvements, issued
by the architect, which shall include the architect's certification that the
Tenant Improvements have been substantially completed in accordance with the
approved Plans and Specifications.

6.  TENANT IMPROVEMENT ALLOWANCE:

(a) Landlord hereby grants to Tenant a "Tenant Improvement Allowance" in an
amount not to exceed $20.00 per square foot of Rentable Area in the Premises as
provided in Paragraph 1.G of the Lease for construction of the Tenant
Improvements

(b) The Tenant Improvement Allowance shall be used only for:
<PAGE>

(i)    Payment of the cost of preparing the space plan and the Tenant
Improvement Plans, including mechanical, electrical, plumbing and structural
drawings and of all other aspects necessary to complete the Tenant Improvement
Plans, not to exceed $1.76 per square foot of Rentable Area in the Premises;

(ii)   Payment of the cost of plan check, permit and license fees relating to
construction of the Tenant Improvements; and

(iii)  Payment for the cost of construction of the Tenant Improvements,
including, but not limited to, the following:

(A)    Installation within the Premises of all partitioning, doors, floor
coverings, ceilings, wall coverings and painting, millwork and similar items;

(B)    All electrical wiring, lighting fixtures, outlets and switches, and other
electrical work to be installed with the Premises;

(C)    The furnishing and installation of all duct work, terminal boxes,
diffusers and accessories required for the completion of the hearing,
ventilation and air conditioning systems within the Premises;

(D)    Any additional Tenant requirements including, but not limited to, odor
control, special healing, ventilation and air conditioning, noise or vibration
control or other special systems;

(E)    All fire and life safety control systems including, without limitation,
fire walls, halon, fire alarms, piping, wiring and accessories, installed within
the Premises;

(F)    All plumbing, fixtures, pipes and accessories to be installed within the
Premises;

(G)    Testing and inspection costs; and

(H)    Contractors' fees, subject to Landlord's reasonable approval, including
any fees based on general conditions.

(c)    In the event that the cost of installing the Tenant Improvements are less
than the Tenant Improvement Allowance, and provided Tenant is not then in
default of any of the terns, conditions, or covenants of the Lease, Tenant, but
not any assignee, transferee or subtenant of Tenant, may elect to use such
unused portion of the Tenant Improvement Allowance for construction of future
tenant improvements (the "Future Improvements") within the Premises upon the
same terms and conditions as provided in the Workletter with the following
exceptions: (i) Construction of the Future Improvements shall be substantially
complete on or before forty-eight (48) months following Commencement Date and
(ii) request for payment from the unused Tenant Improvement Allowance shall be
made no later than thirty (30) days following substantial completion of the
Future Improvements.
<PAGE>

If Tenant (i) fails to substantially complete such Future Improvements within
said period, (ii) fails to request payment for the construction of such Future
Improvements from the unused Tenant Finish Allowance or (iii) becomes in default
of this Lease, then such unused Tenant Finish Allowance shall not be refunded to
Tenant or available to Tenant as a credit against any obligations of Tenant
under the Lease but instead shall be the sole property of Landlord.

7.   PAYMENT FOR THE TENANT IMPROVEMENTS: Tenant shall be solely responsible for
all related construction costs and expense, subject to reimbursement from the
Tenant Finish Allowance as herein provided. On or before the 20th day of each
month, Tenant shall notify Landlord in writing that a portion of the Tenant
Improvements have been substantially completed in accordance with the Plans &
Specifications, submitting Contractor's request for payment. Landlord shall
inspect the construction and upon verification of substantial completion,
Landlord shall, within (20) business days from receipt of Tenant's notice, issue
payment jointly to Tenant and Contractor for ninety percent (90%) of the actual
cost of the construction completed during that period. Tenant shall provide
Landlord with evidence of payment to and lien releases from the Contractor
and/or any subcontractors. Final payment of the ten percent (10%) of accrued
retainage shall not be made until thirty (30) days after substantial completion
of the Tenant Improvements. Such payments shall be charged against the Tenant
Improvement Allowance and Landlord's total obligation for payment shall not
exceed that amount

As conditioned precedent to each payment, Tenant must satisfy the following
requirements:

(a)  There shall be no event of default which has occurred and is continuing
beyond any applicable notice and grace period pursuant to the terms of this
Lease.

(b)  Tenant shall procure and deliver to Tenant the lien releases and/or waivers
of mechanic's liens and receipted bills showing that of the date of the
immediately preceding payment all amounts due to parties who furnish materials
or services or performed labor of any kind in connection with the Tenant
Improvements, have been paid in full.

8.   WAIVER AND INDEMNIFICATION:

(a)  Tenant hereby waives all claims against Landlord for damages to goods,
wares and merchandise in, and upon, or about the Premises from any incident
arising at any time during the period in which Tenant's agents are installing
signs, fixtures, or any other equipment and/or constructing any improvements in
the Demised Premises. Tenant will also hold Landlord exempt and harmless from
any damage or injury to any person arising from the construction of the Tenant
Improvements by Tenant.

(b)  In the event of dispute between Tenant and Contractor and/or any
subcontractors regarding any issue related to construction of the Tenant
Improvements, including, but not limited to, completion dates, quality of work,
warranties, etc., Landlord shall not be liable for and Tenant will indemnify and
save harmless Landlord of and from any such claim or dispute.

9.   INSURANCE: Prior to commencement of construction of the Tenant
Improvements, Tenant shall provide Landlord with a copy of the Contractor and/or
subcontractors policy of
<PAGE>

worker's compensation insurance, in accordance with statutory law, and liability
insurance with a limit of no less than $2,000,000 and such other policies of
insurance as Landlord may require in its reasonable discretion. Such insurance
policy or policies shall name Landlord and Tenant as additional insureds.

10.  AS BUILT PLANS AND SPECIFICATIONS: Upon completion of the Tenant
Improvements, Tenant shall deliver to Landlord an "as built" set of the Plans
and Specifications.
<PAGE>

EXHIBIT "E"
SIGN SPECIFICATIONS

BUILDING MOUNTED

 .  To be located on the top band of the building
 .  Size not to exceed 3' high by 12' wide
 .  Font style, logo, and color to be consistent with that used in Tenant's
   business operation
 .  Letters may be backlit with white neon

MONUMENT SIGNAGE
<PAGE>

EXHIBIT "F"
PARING AREA

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