Document:

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THIS LEASE, dated August 16, 1999 for reference purposes only, is made by and
between RENCO INVESTMENT COMPANY ("Landlord") and CENTILLIUM TECHNOLOGY, INC., a
California Corporation ("Tenant"), to be effective and binding upon the parties
as of the date the last of the designated signatories to this Lease shall have
executed this Lease (the "Effective Date of this Lease").

                                   ARTICLE 1
                                  REFERENCES

  1.1 REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

   A. Tenant's Address for Notices:   47211 Lakeview Blvd., Fremont, CA 94538
   B. Tenant's Representative:        William F. Mackenzie, Vice President
        Business Phone Number:        510-360-5060
        Home Phone Number:            925 461 0541
        Home Address:                 3656 Kamp Drive, Pleasanton, CA 94588
   C. Landlord's Address for Notices: 1285 Oakmead Parkway, Sunnyvale, CA 94086
   D. Landlord's Representative:      Gerald E. Hodnefield
                        Phone Number: (408) 730-5500
   E. Intended Commencement Date:     October 1, 1999
   F. Intended Term:                  55 Months
   G. Lease Expiration Date:          April 30, 2004
   H. Tenant's Punchlist Period:      Five business days from delivery of The
                                      Premises to Tenant
   I. First Month's Prepaid Rent:     $50,000.00
   J. Last Month's Prepaid Rent:      None
   K. Tenant's Security Deposit:      $100,000.00
   L. Late Charge Amount:             Ten (10%) Percent of the late amount(s)
   M. Tenants Liability Coverage:     Three Million ($3,000,000) Dollar Single
                                      Limit
   N. Undesignated and nonexclusive number of Parking Spaces: 209
   O. Leased Premises: That certain space which is a portion of that larger
building containing 93,748 square feet of leasable area referred to as RENCO 21,
(the "Project" or the "Property"), which space is shown outlined in red on the
Floor Plan attached hereto as Exhibit "B" consisting of approximately 57,567
square feet of leasable area measuring to the outside edge of the outside walls
and drip lines, including a prorata share of the electrical room and other
common spaces and, for purposes of this Lease, agreed between Landlord and
Tenant to contain said number of square feet. The Leased Premises are commonly
known by address as follows: 47211 Lakeview Blvd., Fremont California, 94538.
   P. Base Monthly Rent: The term "Base Monthly Rent" shall mean the amount of
rent due and payable on the first day of each month of the Lease Term which for
purposes of this Lease is agreed to be the monthly sum of $50,000.00 for each
full month of the first year of the Lease Term, (as adjusted in paragraph #
13.16 of this Lease), $75,557.00 for each full month of the second year of the
Lease Term, $79,334.00 for each full month of the third year of the Lease Term,
$83,301.00 for each full month of the fourth year of the Lease Term, and
$87,466.00 for each full month of the last 7 months of the Lease Term. Any
partial month shall be prorated on the basis of a 30 day month.
   Q. Permitted Use: The term "Permitted Use" shall mean that Landlord and
Tenant agree that Tenant shall use the Premises for: manufacture, assembly,
repair, sales, and distribution of electronic parts and components, and related
office and support functions and for no other use
   R. Exhibits: The term "Exhibits" shall mean the Exhibits to this Lease
which are described as follows:
          Exhibit "A" - Site Plan showing the "Project" (or "Property") and
                        delineating the Building in which the Leased Premises
                        are located.
          Exhibit "B" - Floor Plan outlining the Leased Premises.
          Exhibit "C" - Floor Plan showing space to be used by Tenant during the
                        first year of the Lease.
   S. Addenda: The term "Addenda" shall mean the Addendum (or Addenda) to this
Lease which is (or are) described as follows:

                                   ARTICLE 2
                     LEASED PREMISES, TERM AND POSSESSION

  2.1 LEASE OF PREMISES: Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord that certain interior space described above as the Leased
Premises (or "Premises"). Landlord reserves the right to install, maintain, use
and replace ducts, wires, conduits and pipes leading through the Leased Premises
in locations which will not materially interfere with Tenant's use of the Leased
Premises. Tenant's use of the Leased Premises, together with the appurtenant
right to use the Common Areas shall be conditioned upon and be subject to the
continuing compliance by Tenant with (i) all the terms and conditions of the
Lease, (ii) all Laws governing the use of the Leased Premises and the Project,
(iii) all Private Restrictions, easements and other matters now of public record
respecting the use of the Leased Premises and the Project, and (iv) all
reasonable rules and regulations from time to time established by Landlord.

  2.2 RIGHT TO USE COMMON AREAS: As an appurtenant right to Tenant's right to
the use of the Leased Premises, Tenant shall have the nonexclusive right to use
the Common Areas in conjunction with other tenants of the Project and their
invitees.

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  2.3 LEASE COMMENCEMENT DATE AND LEASE TERM: The term of this Lease shall
begin, and the Lease Commencement Date shall be deemed to have occurred, on the
Intended Commencement Date (as set forth in Article 1.1 unless Landlord is
unable to deliver possession of the Leased Premises to Tenant on the Intended
Commencement Date, in which case the Lease Commencement Date shall be as
determined pursuant to Article 2.4 below.

  2.4 DELIVERY OF POSSESSION: Landlord shall use its best efforts to deliver to
Tenant possession of the Leased Premises on or before the Intended Commencement
Date in its presently existing condition, broom clean and ready to occupy. If
Landlord is unable to so deliver possession of the Leased Premises to Tenant on
or before the Intended Commencement Date, for whatever reason, Landlord shall
not be in default under this Lease, nor shall this Lease be void, voidable or
cancelable by Tenant until the lapse of sixty days after the Intended
Commencement Date (the "delivery grace period") however, the Lease Commencement
Date shall not be deemed to have occurred until such date as Landlord notifies
Tenant that the Leased Premises are ready for occupancy. The term of the Lease
shall be extended by the delay time. If Landlord is unable to deliver possession
of the Leased Premises to Tenant within the described delivery grace period,
then Tenant's sole remedy shall be to cancel and terminate this Lease in which
case Landlord shall refund all of Tenants deposits (less costs incurred by
Landlord for commissions or interior improvements) provided the delay shall not
have been caused by Tenant, and in no event shall Landlord be liable to Tenant
for such delay. Tenant may not cancel this Lease at any time after the date
Landlord notifies Tenant the Leased Premises are Ready for Occupancy. (see
clause #13.14 of herein included)

  2.5 ACCEPTANCE OF POSSESSION: Prior to the Commencement Date, Landlord agrees
to inspect, service, and repair (as required for good and normal working
operation) all HVAC, plumbing, electrical, lighting, elevator (if applicable)
and such other building service apparatus as exists in The Premises. In
addition, Landlord shall clean any carpet stains and restore any moulding
sealants. Upon the expiration of Tenant's Punchlist Period, Tenant shall be
conclusively deemed to have accepted the condition of the Leased Premises in
their then-existing condition as so delivered by Landlord to Tenant, except as
to those items reasonably set forth in the punchlist submitted to Landlord prior
to the expiration of said period. Landlord agrees to correct all items
reasonably set forth in Tenant's punchlist, provided that such punchlist was
submitted to Landlord within Tenant's Punchlist Period. Additionally, Landlord
agrees to place in good working order all man doors and roll-up truck doors
serving the Leased Premises to the extent that such items are not in good
operating condition as of the date Tenant accepts possession of the Leased
Premises; provided that, and only if, Tenant notifies Landlord in writing of
such failures or deficiencies within fifteen business days from the date Tenant
so accepts possession of the Leased Premises.

  2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or sooner
termination of this Lease, Tenant shall remove all of Tenant's signs from the
exterior of the Building and shall remove all of Tenant's equipment, trade
fixtures, furniture, supplies, wall decorations and other personal property from
the Leased Premises, and shall vacate and surrender the Leased Premises to
Landlord in the same condition, broom clean and freshly repainted, as existed at
the Lease Commencement Date. Landlord, at Tenant's expense, shall retain a
mechanical contractor to service all heating, ventilation and air conditioning
equipment, and Tenant shall pay the cost to restore (or replace as required),
said equipment to good working order. Tenant shall repair all damage to the
Leased Premises caused by Tenant or by Tenant's removal of Tenant's property and
all damage to the exterior of the Building caused by Tenant's removal of
Tenant's signs. Tenant shall patch and refinish, to Landlord's reasonable
satisfaction, all penetrations made by Tenant or its employees to the floor,
walls or ceiling of the Leased Premises, whether such penetrations were made
with Landlord's approval or not. Tenant shall replace all stained or damaged
ceiling tiles or shall repair or replace, as necessary, all wall coverings and
clean or replace, as may be required, floor coverings to the reasonable
satisfaction of Landlord. Tenant shall replace all burned out light bulbs and
damaged or stained light lenses, and shall repaint all painted walls. Tenant
shall repair all damage caused by Tenant to the exterior surface of the Building
and the paved surfaces of the outside areas adjoining the Leased Premises and,
where necessary, replace or resurface same. Additionally, Tenant shall, prior to
the expiration or sooner termination of this Lease, remove any improvements
constructed or installed by Tenant which Landlord requests be so removed by
Tenant and repair all damage caused by such removal. If the Leased Premises are
not surrendered to Landlord in the condition required by this Article at the
expiration or sooner termination of this Lease, Landlord may, at Tenant's
expense, so remove Tenant's signs, property and/or improvements not so removed
and make such repairs and replacements not so made or hire, at Tenant's expense,
independent contractors to perform such work. Tenant shall be liable to Landlord
for all costs incurred by Landlord in returning the Leased Premises to the
required condition and Tenant shall be deemed to have impermissibly held over
until such time as such required work is completed. Tenant shall pay Base
Monthly Rent and Additional Rent in accordance with the terms of Section 13.2
(Holding Over) until such work is completed.

                                   ARTICLE 3
                   RENT, LATE CHARGES AND SECURITY DEPOSITS

  3.1 BASE MONTHLY RENT: Commencing on the Lease Commencement Date and
continuing throughout the Lease Term, Tenant shall pay to Landlord, without
prior written or oral demand in advance on the first day of each calendar month,
as base monthly rent, the amount set forth as "Base Monthly Rent" in Article 1

  3.2 ADDITIONAL RENT: Commencing on the Lease Commencement Date and continuing
throughout the Lease Term, in addition to the Base Monthly Rent, Tenant shall
pay to Landlord as additional rent (the "Additional Rent") Tenant's
Proportionate Share of all Building Operating Expenses (as defined in Article
13). Payment shall be made by one of the following methods: Landlord may bill to
Tenant, on a periodic basis not more frequently than monthly, Tenant's
Proportionate Share of such expenses (or group of expenses) as paid or incurred
by Landlord, and Tenant shall pay such share of such expenses within ten days
after receipt of a written bill therefore from Landlord; and/or Landlord may
budget the annual projected expenses and bill to Tenant on a monthly basis, one-
twelfth of the annual amount. If Landlord elects the latter of the alternatives,
Landlord shall reconcile the budgeted amounts with the actual amounts on an
annual basis during the first quarter of the subsequent year and bill Tenant for
any additional amounts or credit Tenant any overpayments against future
Additional Rent amounts. (see clause #13.15 herein contained)

  3.3 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that the
late payment by Tenant of any monthly installment of Base Monthly Rent or any
Additional Rent will cause Landlord to incur certain costs and expense not
contemplated under this Lease, the exact amounts of which are extremely
difficult

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by Landlord from Tenant within eight (8) calendar days after the same becomes
due, Tenant shall immediately pay to Landlord a late charge in an amount equal
to ten percent of the amounts due and not so paid. Landlord and Tenant agree
that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the anticipated loss Landlord
would suffer by reason of Tenant's failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rental installment or
prevent Landlord from exercising any right or remedy available to Landlord upon
Tenant's failure to pay each rental installment due under this Lease when due.
If any rent remains delinquent for a period in excess of six calendar days,
then, in addition to such late charge, Tenant shall pay to Landlord interest on
any rent that is not so paid from said sixth day at the then maximum rate of
interest not prohibited by Law until paid.

  3.4 PAYMENT OF RENT: All rent shall be paid without any abatement, deduction
or offset for any reason whatsoever, to Landlord at such address as Landlord may
designate from time to time. Tenant's obligation to pay Base Monthly Rent and
all Additional Rent shall be prorated at the commencement and expiration of the
Lease Term. The failure by Tenant to pay any Additional Rent as required
pursuant to this Lease when due shall be treated the same as a failure by Tenant
to pay Base Monthly Rent when due, and Landlord shall have the same rights and
remedies against Tenant as Landlord would have if Tenant failed to pay the Base
Monthly Rent when due.

  3.5 SECURITY DEPOSIT: Upon signing this Lease, Tenant shall immediately
deposit with Landlord the amount set forth in Article 1 as the "Security
Deposit" as security for the performance by Tenant of the terms of this Lease
and not as prepayment of rent. Landlord may apply such portion or portions of
the Security Deposit as are reasonably necessary for the following purposes: (i)
to remedy any default by Tenant in the payment of Base Monthly Rent or
Additional Rent or a late charge or interest on defaulted rent; (ii) to repair
damage to the Leased Premises caused by Tenant; (iii) to clean and repair the
Leased Premises following their surrender to Landlord if not surrendered in the
condition required pursuant to the provisions of Article 2; and (iv) to remedy
any other default of Tenant to the extent permitted by Law including, without
limitation, paying in full on Tenant's behalf any sums claimed by materialmen or
contractors of Tenant to be owing to them by Tenant for work done or
improvements made at Tenant's request to the Leased Premises. Tenant shall not
be entitled to any interest on the Security Deposit. If Landlord transfers the
Building during the Lease Term, Landlord may pay the Security Deposit to any
subsequent owner in conformity with the California Civil Code, in which event
the transferring landlord shall be released from all liability for the return of
the Security Deposit. In no event shall the Security Deposit, or any portion
thereof, be considered prepaid rent. Landlord and Tenant each agree that upon
Tenant's having an audited Profit and Loss Statement showing a profit for each
of 2 fiscal quarters subsequent to the Commencement Date, Landlord shall, upon
written demand by Tenant, return a portion of the Security Deposit equal to the
difference between $100,000 and the Base Monthly Rent in place at the time of
the profitable quarter statement.

  3.6 ADDITIONAL SECURITY DEPOSIT: In the event that the cash available to
Tenant (as shown on Tenants' Balance Sheet) at any time during the term of this
Lease becomes less than Ten Million Dollars, Tenant agrees to increase (upon
written demand by Landlord), Tenants Security Deposit to the sum of One Hundred
Thousand Dollars and such Security Deposit shall remain at that level for the
remainder of the Lease Term.

                                   ARTICLE 4
                    USE OF LEASED PREMISES AND COMMON AREAS

  4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises solely
for the "Permitted Use" as set forth in Article 1 and for no other purpose
whatsoever. Subject to the limitations contained in this Article 4, Tenant shall
have the right to use the Common Areas, in conjunction with other tenants and
during normal business hours, solely for the purposes for which they were
intended and for no other purposes whatsoever. Tenant shall not have the right
to use the exterior surfaces of exterior walls.

  4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Common Areas or the
Project which does or could (i) interfere with the rights of other tenants or
occupants of the Building or the Project, (ii) jeopardize the structural
integrity of the Building or the Project, or (iii) cause damage to any part of
the Building or the Project. Tenant shall not operate any equipment within the
Leased Premises which does or could (i) injure, vibrate or shake the Leased
Premises or the Building, (ii) damage, overload, corrode, or impair the
efficient operation of any electrical, plumbing, sewer, heating, ventilating or
air conditioning systems within or servicing the Leased Premises or the Building
or (iii) damage or impair the efficient operation of the sprinkler system (if
any) within or servicing the Leased Premises or the Building. Tenant shall not
install any equipment or antennas on or make any penetrations of the exterior
walls or roof of the Building. Tenant shall not affix any equipment to or make
any penetrations or cuts in the floor, ceiling or walls of the Leased Premises.
Tenant shall not place any loads upon the floors, walls, ceiling or roof systems
which could endanger the structural integrity of the Building or damage its
floors, foundations or supporting structural components. Tenant shall not place
any explosive, flammable or harmful fluids, including Hazardous Materials in any
sanitary or storm sewer or place any waste materials in the storm drainage
systems of the Building or the Project. Tenant shall not drain or discharge any
fluids in the landscaped areas or across the paved areas of the Project. Tenant
shall not use any area located outside the Leased Premises for the storage of
its materials, supplies, inventory or equipment, and all such materials,
supplies, inventory and equipment shall at all times be stored within the Leased
Premises. Tenant shall not commit nor permit to be committed any waste in or
about the Leased Premises, the Common Areas or the Project.

  4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere with
the businesses of or annoy other tenants of the Building or the Project. All
dust, fumes, odors and other emissions generated by Tenant's use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental
practices and exhausted from the Leased Premises in such a manner so as not to
interfere with the businesses of or annoy other tenants of the Building or the
Project, or cause any damage to the Leased Premises or the Building or any
component part thereof or the property of other tenants of the Building or the
Project.

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  4.4 TRASH DISPOSAL: Tenant shall provide trash and garbage disposal facilities
inside the Leased Premises for all of its trash, garbage and waste requirements
unless Landlord shall have provided fenced areas for "dumpsters" and shall cause
such trash, garbage and waste to be regularly removed from the Leased Premises
at Tenant's sole cost. Tenant shall keep all areas outside the Leased Premises
and all fire corridors and mechanical equipment rooms in or about the Leased
Premises free and clear of all trash, garbage, waste and boxes containing same
at all times.

  4.5 PARKING: Tenant and its employees and invitees shall have the non-
exclusive right to use, only the number of parking spaces set forth in Article 1
as "Tenant's Number of Parking Spaces". Tenant shall not, at any time, use or
permit its employees or invitees to use more parking spaces than the number so
allocated to Tenant. Tenant shall not have the exclusive right to use any
specific parking space, and Landlord reserves the right to designate from time
to time the location of the parking spaces allocated for Tenant's use. In the
event Landlord elects or is required by any Law to limit or control parking
within the Project, whether by validation of parking tickets or any other
method, Tenant agrees to participate in such validation or other program as
reasonably established by Landlord. Tenant shall not, at any time, park or
permit to be parked any trucks or vehicles adjacent to entryways or loading
areas within the Project so as to interfere in any way with the use of such
areas, nor shall Tenant, at any time, park or permit the parking of Tenant's
trucks or other vehicles, or the trucks and vehicles of Tenant's suppliers or
others, in any portion of the Common Areas not designated by Landlord for such
use. Tenant shall not, at any time, park or permit to be parked any recreational
vehicles, inoperative vehicles or equipment on any portion of the common parking
area or other Common Areas of the Project. Tenant agrees to assume
responsibility for compliance by its employees and invitees with the parking
provisions contained herein. Tenant hereby authorizes Landlord, at Tenant's sole
expense, to tow away from the Project and store until redeemed by its owner any
vehicle belonging to Tenant or Tenant's employees parked in violation of these
provisions.

  4.6 SIGNS: Tenant shall not place or install on or within any portion of the
Leased Premises, the Building, the Common Areas or the Project any sign (other
than a business identification sign first approved by Landlord in accordance
with this Article), advertisements, banners, placards or pictures which are
visible from the exterior of the Leased Premises. Tenant shall not place or
install on or within any portion of the Leased Premises, the Building, the
Common Areas or the Project any business identification sign which is visible
from the exterior of the Leased Premises until Landlord shall have first
approved in writing the location, size, content, design, method of attachment
and material to be used in the making of such sign. Any signs, once approved by
Landlord, shall be installed only in strict compliance with Landlord's approval,
at Tenant's expense, using a person first approved by Landlord to install same.
Landlord may remove any signs (not first approved in writing by Landlord),
advertisements, banners, placards or pictures so placed by Tenant on or within
the Leased Premises, the Building, the Common Areas or the Project and charge to
Tenant the cost of such removal, together with any costs incurred by Landlord to
repair any damage caused thereby, including any cost incurred to restore the
surface upon which such sign was so affixed to its original condition. Tenant
shall remove any such signs, repair any damage caused thereby, and restore the
surface upon which the sign was affixed to its original condition, all to
Landlord's reasonable satisfaction, upon the termination of this Lease.

  4.7 LANDLORD'S RIGHT TO ENTER: Landlord and its agents shall have the right to
enter the Leased Premises during normal business hours and subject to Tenant's
reasonable security measures for the purpose of (i) inspecting the same; (ii)
supplying any services to be provided by Landlord to Tenant; (iii) showing the
Leased Premises to prospective purchasers, mortgagees or tenants: (iv) making
necessary alterations, additions or repairs; (v) performing any of Tenant's
obligations when Tenant has failed to do so after giving Tenant reasonable
written notice of its intent to do so; and (vi) posting notices of non-
responsibility or "For Lease" or "For Sale" signs. Additionally, Landlord shall
have the right to enter the Leased Premises without notice to Tenant at times of
emergency.

  4.8 CONTROL OF COMMON AREAS: Landlord shall at all times have exclusive
control of the Common Areas including without limitation, the right to prohibit
mobile food and beverage or other vendors from entering the Property.

  4.9 RULES AND REGULATIONS: Landlord shall have the right from time to time to
establish reasonable rules and regulations regarding the use of the Common
Areas. Upon delivery to Tenant of a copy of such reasonable rules and
regulations, Tenant shall comply with such rules and regulations.

  4.10 OUTSIDE AREAS: No materials, pallets, supplies, tanks or containers
whether above or below ground level, equipment, finished products or semi-
finished products, raw materials, inoperable vehicles or articles of any nature
shall be stored upon or permitted to remain outside of the Leased Premises
except in fully fenced and screened areas outside the Building which have been
designed for such purpose and have been approved in writing by Landlord for such
use by Tenant.

  4.11 HAZARDOUS MATERIALS: Landlord and Tenant agree that with respect to the
existence or use of Hazardous Materials (as defined as such under current laws
or regulations as may be amended from to time) on the Property, any handling,
transportation, storage, treatment, disposal or use of Hazardous Materials, in
any amount, by Tenant, Tenant's agents, or any other party associated with
Tenant must be absolutely and completely disclosed to and approved in writing by
Landlord prior to its arrival in the Premises. Landlord may uncontestably
withhold Landlord's approval at Landlord's sole discretion. Any withholding from
Landlord of information relating to Hazardous Materials used or stored by Tenant
shall constitute a material default under the terms of the Lease and shall be
cause for lease termination at Landlord's option. Any use or storage of any
disclosed Hazardous Materials in or about the Property, which use or storage
shall have been approved by Landlord, shall strictly comply with all applicable
Hazardous Materials laws. Tenant shall, upon request by Landlord, provide proof
of approvals by the governing authorities. Landlord's consent or approval once
given shall not constitute approval for any subsequent bringing of Hazardous
Materials onto the Premises or Project. Tenant shall indemnify, defend upon
demand with counsel reasonably acceptable to Landlord, and hold harmless
Landlord from and against any and all liabilities, losses, claims, damages, lost
profits, consequential damages, interest, penalties, fines, court costs,
remediation costs, investigation costs, and other expenses which result from or
arise in any manner whatsoever out of the use, storage, treatment,
transportation, release, or disposal of Hazardous Materials on or about the
Leased Premises or the Property

                                      -4-
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contamination or deterioration to any extent of water, soil, or any part of the
Leased Premises, the Building, or the Project, then Tenant shall promptly take
any and all action necessary to remove said Hazardous Materials and to return
the Project (and any other property of whatever nature) to their condition
existing prior to the appearance of such Hazardous Materials. Landlord may at
any time and at Tenant's sole cost perform any tests or investigations
(including the installation of testing wells) it deems appropriate to determine
the presence of Hazardous Materials on the Project. The terms of this clause
shall survive the expiration or sooner termination of this Lease. In the event
that any containers of Hazardous Materials appear upon the Property or the
Premises, or materials are spilled upon the Property or the Premises, the
responsibility for which cannot be reasonably determined, Landlord is hereby
authorized to remove the containers or the spilled materials, and Tenant shall,
upon demand by Landlord, reimburse Landlord for any costs associated with such
removal and any repairs required by virtue of such removal. If such removal and
subsequent cost associated with such removal cannot be reasonably attributed to
a specific space within the Project, the costs shall be apportioned on a pro-
rata basis among all tenants in the Project.

                                   ARTICLE 5
                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

  5.1 REPAIR AND MAINTENANCE: The parties shall have the following obligations
and responsibilities with respect to the repair and maintenance of the Leased
Premises, the Building and the Common Areas.

          A. Tenant's Obligation: Tenant shall, at all times during the Lease
Term and at its sole cost and expense, regularly clean and continuously keep and
maintain in good order, condition and repair the Leased Premises and every part
thereof and all appurtenances thereto, including, without limiting the
generality of the foregoing, (i) all interior walls, floors and ceilings, (ii)
all windows, doors and skylights, (iii) all electrical wiring, conduits,
connectors and fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets and
drains, (v) all lighting fixtures, bulbs and lamps, (vi) all heating,
ventilating and air conditioning equipment located within the Leased Premises or
located outside the Leased Premises (e.g. rooftop compressors) and serving the
Leased Premises and (vii) all entranceways to the Leased Premises. Tenant, if
requested to do so by Landlord, shall hire, at Tenant's sole cost and expense, a
licensed heating, ventilating and air conditioning contractor to regularly, and
periodically inspect (not less frequently than every three months) and perform
required maintenance on the heating, ventilating and air conditioning equipment
and systems serving the Leased Premises, or alternatively, Landlord may, at its
election, contract in its own name for such regular and periodic inspections of
and maintenance on such heating, ventilating and air conditioning equipment and
systems and charge to Tenant, as Additional Rent, the cost thereof. Tenant
shall, at its sole cost and expense, repair all damage to the Building, the
Common Areas or the Project caused by the activities of Tenant, its employees,
invitees or contractors promptly following written notice from Landlord to so
repair such damage. If Tenant shall fail to perform the required maintenance or
fail to make repairs required of it pursuant to this Article within a reasonable
period of time following notice from Landlord to do so, then Landlord may, at
its election and without waiving any other remedy it may otherwise have under
this Lease or at Law, perform such maintenance or make such repairs and charge
to Tenant, as Additional Rent, the costs so incurred by Landlord for same. All
glass within or a part of the Leased Premises, both interior and exterior, is at
the sole risk of Tenant and any broken glass shall promptly be replaced by
Tenant at Tenant's expense with glass of the same kind, size and quality.

          B. Landlord's Obligation: Landlord shall, during the Lease Term or any
extensions thereof, repair the exterior structural parts of the Building
(including the foundation, concrete walls, and roof structure). Landlord shall,
also maintain in good condition and repair: the Common Areas, the roof membrane,
the exterior finishes including paint, the glazing, the landscaping, the paving
(including driving surfaces, curbs and gutters), and the electrical and plumbing
systems located outside the Leased Premises which service the Building. Landlord
shall charge Tenant, as Additional Rent, the costs incurred by Landlord in
making such repairs and maintenance.

  5.2 SERVICES AND UTILITIES: The parties shall have the following
responsibilities and obligations with respect to obtaining and paying the cost
of providing the following utilities and other services to the Leased Premises.

          A. Gas and Electricity: Tenant shall arrange, at its sole cost and
expense and in its own name, for the supply of gas and electricity to the Leased
Premises. Tenant shall be responsible for determining if the local supplier of
gas and/or electricity can supply the needs of Tenant and whether or not the
existing gas and/or electrical distribution systems within the Building and the
Leased Premises are adequate for Tenant's needs. Tenant shall pay all charges
for gas and electricity as so supplied to the Leased Premises.

          B. Water: Landlord shall provide the Leased Premises with water for
lavatory and drinking purposes only. Tenant shall pay, as Additional Rent, the
cost to Landlord of providing water to the Leased Premises.

          C. Security Service: Tenant acknowledges that Landlord is not
responsible for the security of the Leased Premises or the protection of
Tenant's property or Tenant's employees, invitees or contractors, and that to
the extent Tenant determines that such security or protection services are
advisable or necessary, Tenant shall arrange for and pay the costs of providing
same.

          D. Trash Disposal: Tenant acknowledges that Landlord is not
responsible for the disposal of Tenant's waste, garbage or trash and that Tenant
shall arrange, in its own name and at its sole cost, for the regular and
periodic removal of such waste, garbage or trash from the Leased Premises. In no
event shall Landlord be required to provide trash bins for the disposal of
Tenant's waste, garbage or trash.

  5.3 LIMITATION OF LANDLORD'S LIABILITY: Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant's property or loss of Tenant's business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord's failure to perform any maintenance or repairs to the
Project subject to the provisions of Article #12.3, or (ii) any failure,
interruption, rationing or other curtailment in the supply of water, electric
current, gas or other utility service to the Leased Premises, the Building or
the Project from whatever cause (other than Landlord's active negligence or
willful misconduct), or (iii) the unauthorized intrusion or entry into the
Leased Premises by third parties.

                                      -5-
<PAGE>

                                   ARTICLE 6
                          ALTERATIONS AND IMPROVEMENTS

  6.1 BY TENANT: Tenant shall not make any alterations to or modifications of
the Leased Premises or construct any improvements to or within the Leased
Premises without Landlord's prior written approval, and then not until Landlord
shall have first approved, in writing, the plans and specifications therefore,
which approval shall not be unreasonably withheld. All such modifications,
alterations or improvements, once so approved, shall be made, constructed or
installed by Tenant at Tenant's expense, using a licensed contractor first
approved by Landlord, in substantial compliance with the Landlord-approved plans
and specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality that match or complement the original improvements
existing as of the Lease Commencement Date. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least five
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and broad
form builder's risk insurance in an amount satisfactory to Landlord to cover any
perils relating to the proposed work not covered by insurance carried by Tenant
pursuant to Article 9. In no event shall Tenant make any modifications,
alterations or improvements to the Common Areas or any areas outside of the
Leased Premises. As used in this Article, the term "modifications, alterations
and/or improvements" shall include, without limitation, the installation of
additional electrical outlets, overhead lighting fixtures, drains, sinks,
partitions, doorways, or the like. As a part of granting Landlord's approval for
Tenant to make alterations or modifications Landlord may require Tenant to
increase the amount of it's Security Deposit to cover the cost of removing
Tenant's alterations or modifications and to restore the condition of the
Premises to it's prior condition. Tenant shall pay Landlord's reasonable costs
to inspect the construction of Tenant's alterations or modifications and to have
Landlord's architect revise Landlord's drawings to show the work performed by
Tenant.

  6.2 OWNERSHIP OF IMPROVEMENTS: All modifications, alterations or improvements
made or added to the Leased Premises by Tenant (other than Tenant's inventory,
equipment, movable furniture, wall decorations and trade fixtures) shall be
deemed real property and a part of the Leased Premises, but shall remain the
property of Tenant during the Lease Term. Any such modifications, alterations or
improvements, once completed, shall not be altered or removed from the Leased
Premises during the Lease Term without Landlord's written approval first
obtained in accordance with the provisions of the Article above. At the
expiration or sooner termination of the Lease, all such modifications,
alterations and improvements (other than Tenant's inventory, equipment, movable
furniture, wall decorations and trade fixtures) shall automatically become the
property of Landlord and shall be surrendered to Landlord as a part of the
Leased Premise as required pursuant to Article 2, unless Landlord shall require
Tenant to remove any of such modifications, alterations or improvements, in
which case Tenant shall so remove same. Landlord shall have no obligation to
reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed on
or attached to the Leased Premises by Landlord at Landlord's expense shall be
deemed real property, and a part of the Leased Premises and shall be the
property of Landlord. All lighting, plumbing, electrical, heating, ventilating
and air conditioning fixtures, partitioning, window coverings, wall coverings
and floor coverings installed by Tenant shall be deemed improvements to the
Leased Premises and not trade fixtures of Tenant.

  6.3 ALTERATIONS: Throughout the term of this Lease or any extensions thereof,
at its sole cost, Tenant shall make all modifications, alterations and
improvements to the Leased Premises that are required by any Law.

  6.4 LIENS: Tenant shall keep the Leased Premises, the Building and the
Property free from any liens and shall pay when due all bills arising out of any
work performed, materials furnished, or obligations incurred by Tenant, its
agents, employees or contractors relating to the Leased Premises.

                                   ARTICLE 7
                      ASSIGNMENT AND SUBLETTING BY TENANT

  7.1 BY TENANT: Tenant shall not sublet the Leased Premises (or any portion
thereof) or assign or encumber its interest in this Lease, whether voluntarily
or by operation of Law, without Landlord's prior written consent first obtained
in accordance with the provisions of this Article 7. Any attempted subletting,
assignment or encumbrance without Landlord's prior written consent, at
Landlord's election, shall constitute a default by Tenant under the terms of
this Lease. The acceptance of rent by Landlord from any person or entity other
than Tenant, or the acceptance of rent by Landlord from Tenant with knowledge of
a violation of the provisions of this Article, shall not be deemed to be a
waiver by Landlord of any provision of this Article or this Lease or to be a
consent to any subletting by Tenant or any assignment or encumbrance of Tenant's
interest in this Lease.

  7.2 MERGER OR REORGANIZATION: If Tenant is a corporation, any dissolution,
merger, consolidation or other reorganization of Tenant, or the sale or other
transfer in the aggregate over the Lease Term of a controlling percentage of the
capital stock of Tenant, shall be deemed a voluntary assignment of Tenant's
interest in this Lease. The phrase "controlling percentage" means the ownership
of and the right to vote stock possessing more than fifty percent of the total
combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors. If Tenant is a
partnership, a withdrawal or change, whether voluntary, involuntary or by
operation of Law, of any general partner, or the dissolution of the partnership,
shall be deemed a voluntary assignment of Tenant's interest in this Lease.

  7.3 LANDLORD'S ELECTION: If Tenant or Tenant's successors shall desire to
assign its interest under this Lease or to sublet the Leased Premises, Tenant
and Tenant's successors must first notify Landlord, in writing, of its intent to
so assign or sublet, at least thirty days in advance of the date it intends to
so assign its interest in this Lease or sublet the Leased Premises but not
sooner than sixty days in advance of such date, specifying in detail the terms
of such proposed assignment or subletting, including the name of the proposed
assignee or sublessee, the proposed assignee's or Sublessee's, intended use of
the Leased Premises, a current financial statement of such

                                      -6-
<PAGE>

XXX regarding the proposed assignee or sublessee within which to do one of the
following: (a) terminate this Lease or, in the case of a sublease of less than
all of the Leased Premises, terminate this Lease as to that part of the Leased
Premises proposed to be so sublet, either (i) on the condition that the proposed
Transferee immediately enter into a direct lease of the Leased Premises with
Landlord (or, in the case of a partial sublease, a lease for the portion
proposed to be so sublet) on the same terms and conditions contained in Tenant's
(or Tenant's successors') notice, or (ii) so that Landlord is thereafter free to
lease the Leased Premises (or, in the case of a partial sublease, the portion
proposed to be so sublet) to whomever it pleases on whatever terms are
acceptable to Landlord. In the event Landlord elects to so terminate this Lease,
then (i) if such termination is conditioned upon the execution of a lease
between Landlord and the proposed Transferee, Tenant's and Tenant's successors'
obligations under this Lease shall not be terminated until such Transferee
executes a new lease with Landlord, enters into possession, and commences the
payment of rent, and (ii) if Landlord elects simply to terminate this Lease (or,
in the case of a partial sublease, terminate this Lease as to the portion to be
so sublet), the Lease shall so terminate in its entirety (or as to the space to
be so sublet) fifteen (15) days after Landlord has notified Tenant and Tenant's
successors in writing of such election. In the case of a partial termination of
the Lease, the Base Monthly Rent and Tenant's or Tenant's successors'
proportionate share shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Leased Premises which remains subject to the Lease bears to the original area of
the Leased Premises. Landlord and Tenant or Tenant's successors shall execute a
cancellation agreement with respect to the Lease to effect such termination or
partial termination, or (b) if Landlord shall not have elected to cancel and
terminate this Lease, to either (i) consent to such requested assignment or
subletting subject to Tenant's and Tenant's successors' compliance with the
conditions set forth in Article 7.4 below or (ii) refuse to so consent to such
requested assignment or subletting, provided that such consent shall not be
unreasonably refused. It shall not be unreasonable for Landlord to withhold its
consent to any proposed assignment or subletting if (i) the proposed assignee's
or subtenant's anticipated use of the Premises involves the storage, use or
disposal of a Hazardous Material; (ii) if the proposed assignee or subtenant has
been required by any prior landlord, lender or governmental authority to clean
up Hazardous Materials unlawfully discharged by the proposed assignee or
subtenant; or (iii) if the proposed assignee or subtenant is subject to
investigation or enforcement order or proceeding by any governmental authority
in connection with the use, disposal or storage of a Hazardous Material. Tenant
and Tenant's successors covenant and agree to supply to Landlord, upon request,
with all necessary or relevant information which Landlord may reasonably request
respecting such proposed assignment or subletting and/or the proposed assignee
or sublessee. Landlord's review period shall not commence until Landlord has
received all information requested by Landlord.

  7.4 CONDITIONS TO LANDLORD'S CONSENT: If Landlord elects to consent, or shall
have been ordered to so consent by a court of competent jurisdiction, to such
requested assignment, subletting or encumbrance, such consent shall be expressly
conditioned upon the occurrence of each of the conditions below set forth, and
any purported assignment, subletting or encumbrance made or ordered prior to the
full and complete satisfaction of each of the following conditions shall be void
and, at the election of Landlord, which election may be exercised at any time
following such a purported assignment, subletting or encumbrance shall
constitute a material default by Tenant under this Lease giving Landlord the
absolute right to terminate this Lease. The conditions are as follows:

          A. Landlord having approved in form and substance the assignment or
sublease agreement (or the encumbrance agreement), which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.

          B. Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant (or, in the case of an encumbrance, each such encumbrancer
having similarly agreed to assume, be bound by and to perform Tenant's
obligations upon a foreclosure or transfer in lieu thereof).

          C. Tenant having fully and completely performed all of its obligations
under the terms of this Lease through and including the date of the requested
consent, as well as through and including the date such assignment or subletting
is to become effective.

          D. Tenant having reimbursed to Landlord all reasonable costs and
attorneys fees incurred by Landlord in conjunction with the processing and
documentation of any such requested subletting, assignment or encumbrance.

          E. Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement, assignment agreement or
encumbrance (as applicable) and all related agreements.

          F. Tenant having paid, or having agreed in writing to pay as to future
payments, to Landlord one hundred percent of all assignment consideration or
excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:

          (1) If Tenant assigns its interest under the Lease and if all or a
portion of the consideration for such assignment is to be paid by the assignee
at the time of the assignment, that Tenant shall have paid to Landlord and
Landlord shall have received an amount equal to one hundred percent of the
assignment consideration so paid or to be paid whichever is the greater) at the
time of the assignment by the assignee; or

          (2) If Tenant assigns its interest under this Lease and if Tenant is
to receive all or a portion of the consideration for such assignment in future
installments, that Tenant and Tenant's assignee shall have entered into a
written agreement with and for the benefit of Landlord satisfactory to Landlord
and its counsel whereby Tenant and Tenant's assignee jointly agree to pay to
Landlord an amount equal to one hundred percent of all such future assignment
consideration installments to be paid by such assignee as and when such
assignment consideration is so paid.

          (3) If Tenant subleases the Leased Premises, that Tenant and Tenant's
sublessee shall have entered into a written agreement with and for the benefit
of Landlord satisfactory to Landlord and its counsel whereby Tenant and Tenant's
sublessee jointly agree to pay to Landlord one hundred percent of all excess
rentals to be paid by such sublessee as and when such excess rentals are so
paid.

  7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED: For purposes of this
article, the term "Assignment Consideration" shall mean all consideration to be
paid by the Assignee as consideration for such assignment, and the term "Excess
Rentals" shall mean all consideration to be paid by the Sublessee in excess of
the rent to be paid by said Sublessee/Sublessor for the premises subleased for
the same period. It is specifically intended and agreed that this provision is
intended to be a one hundred percent profit sharing clause, such that neither
Tenant nor any successor to Tenant shall make any profit whatsoever as a result
of any transfer of an interest in the Lease or the Leased Premises or any other
property, as more particularly described herein.

                                      -7-
<PAGE>

Assignment Considerations and/or "Excess Rentals" shall include all payments
made or to be made by any Assignee or Sublessee relating in any way to any
transfer of an interest in the Lease or the Leased Premises including, but not
limited to, any payment made with respect to property which would or shall
become Landlord's property upon the expiration or earlier termination of the
lease, whether such property was installed or paid for by Landlord or by Tenant
or Tenant's successors. In the event Tenant or Tenant's successors sublease a
portion of the Leased Premises, "Excess Rentals" shall be calculated by
subtracting the rent payable by the Sublessor for the portion of the Leased
Premises so sublet from all consideration to be paid by such Sublessee. Rent
payable by the Sublessor for the portion of the Leased Premises so sublet shall
be calculated by multiplying the Base Monthly Rent payable by the Sublessor for
the Leased Premises leased by such Sublessor by a fraction, the numerator of
which is the area in square feet subleased and the denominator of which is the
total floor area of the Leased Premises leased by such Sublessor also in square
feet. Tenant and Tenant's Successors agree that any Assignment Consideration
and/or Excess Rentals hereunder shall be the property of Landlord and not the
property of Tenant.

  7.6 PAYMENTS: All payments required by this Article to be made to Landlord
shall be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct. Landlord may require that all payments of Excess Rentals
and/or Assignment Consideration to be made hereunder be made directly to
Landlord by such Transferee.

  7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this Covenant of Good Faith,
Landlord may immediately declare Tenant to be in default under the terms of this
Lease and terminate this Lease and/or exercise any other rights and remedies
Landlord would have under the terms of this Lease in the case of a material
default by Tenant under this Lease.

  7.8 EFFECT OF LANDLORD'S CONSENT: No subletting, assignment or encumbrance,
even with the consent of Landlord, shall relieve Tenant of its personal and
primary obligation to pay rent and to perform all of the obligations to be
performed by Tenant hereunder. Consent by Landlord to one or more assignments or
encumbrances of Tenant's interest in this Lease or to one or more sublettings of
the Leased Premises shall not be deemed to be a consent to any subsequent
assignment, encumbrance or subletting. If Landlord shall have been ordered by a
court of competent jurisdiction to consent to a requested assignment or
subletting, or such an assignment or subletting shall have been ordered over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Article 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.

                                   ARTICLE 8
                LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

  8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE: Landlord shall not be
liable to Tenant for, and Tenant hereby releases Landlord and its partners and
officers from, any and all liability, whether in contract, tort or on any other
basis, for any injury to or any damage sustained by Tenant, its agents,
employees, contractors or invitees; any damage to Tenant's property; or any loss
to Tenant's business, loss of Tenant's profits or other financial loss of Tenant
resulting from or attributable to the condition of, the management of, the
maintenance of, or the protection of the Leased Premises or the failure of any
component of the Premises, the Building, the Project or the Common Areas,
including, without limitation, any such injury, damage or loss resulting from
(i) the failure, interruption, rationing or other curtailment or cessation in
the supply of electricity, water, gas or other utility service to the Project,
the Building or the Leased Premises; (ii) the vandalism or forcible entry into
the Building or the Leased Premises; (iii) the penetration of water into or onto
any portion of the Leased Premises through roof leaks or otherwise; (iv) the
failure to provide security and/or adequate lighting in or about the Project,
the Building or the Leased Premises; (v) the existence of any design or
construction defects within the Project, the Building or the Leased Premises;
(vi) the failure of any mechanical systems to function properly (such as the
HVAC systems); or (vii) the blockage of access to any portion of the Project,
the Building or the Leased Premises.

  8.2 TENANT'S INDEMNIFICATION OF LANDLORD: Tenant shall defend Landlord, with
competent counsel reasonably satisfactory to Landlord, against any claims made
or legal actions filed or threatened by third parties against Landlord which
result from the death, bodily injury, personal injury, damage to property or
interference with contractual or other rights suffered by any third party,
(including other Tenants within the Project) which (i) occurred within the
Leased Premises or the Common Areas or (ii) resulted from Tenant's use or
occupancy of the Leased Premises or the Common Areas or (iii) resulted from
Tenant's activities in or about the Leased Premises, the Building or the
Project, and Tenant shall indemnify and hold Landlord, Landlord's principals,
employees and agents harmless from any loss (including loss of rents by reason
of vacant space which otherwise would have been leased but for such activities),
liabilities, penalties, or expense whatsoever (including all legal fees incurred
by Landlord with respect to defending such claims) resulting therefrom. The
terms of his indemnity agreement pertain to events which shall have occurred
during the term of this Lease but the indemnity shall survive the expiration or
sooner termination of this Lease.

                                   ARTICLE 9
                                   INSURANCE

  9.1 TENANT'S INSURANCE: Tenant shall maintain insurance complying with all of
the following:

     A. Tenant shall procure, pay for and keep in full force and effect, at all
times during the Lease Term, the following:

                                      -8-
<PAGE>

occupancy of the Leased Premises or the Building, Outside Areas, Property, or
Common Areas or resulting from Tenant's activities in or about the Leased
Premises. Such insurance shall be on an occurrence basis with a combined single
limit of liability of not less than the amount of Tenant's Required Liability
Coverage (as set forth in Article 1). The policy or policies shall be endorsed
to name Landlord and such others as are designated by Landlord as additional
insureds and shall contain the following additional endorsement: "The insurance
afforded to the additional insureds is primary insurance. If the additional
insureds have other insurance which is applicable to the loss on a contributing,
excess or contingent basis, the amount of this insurance company's liability
under this policy shall not be reduced by the existence of such other insurance.
Any insurance carried by the additional insureds shall be excess and non
contributing with the insurance provided by the Tenant." The policy shall not be
canceled or reduced without at least 30 days written notice to additional
insureds. If the policy insures more than one location, it shall be endorsed to
show that the limits and aggregate apply per location. Tenant's policy shall
also contain the severability of interest and cross-liability endorsement or
clauses.

          (2) Fire and property damage insurance in so-called Special Form plus
earthquake and flood insuring Tenant against loss from physical damage to
Tenant's personal property, inventory, stock, trade fixtures and improvements
within the Leased Premises with coverage for the full actual replacement cost
thereof;

          (3) Plate-glass insurance, at actual replacement cost;

          (4) Product Liability insurance (including without limitation Liquor
Liability insurance for liability arising out of the distribution, sale, or
consumption of food and/or beverages including alcoholic beverages at the Leased
Premises for not less than the Tenant's Required Liability Coverage as set forth
in Article 1;

          (5) Workers' compensation insurance and any other employee benefit
insurance sufficient to comply with all Laws which policy shall be endorsed to
provide thirty (30) days written notice of cancellation to Landlord.

          (6) Comprehensive Auto Liability insurance with a combined single
limit coverage of not less than the amount of Tenant's Required Liability
Coverage (as set forth in Article 1.1 M. Each policy of liability insurance
required to be carried by Tenant pursuant to this Article or actually carried by
Tenant with respect to the Leased Premises or the Property (i) shall be in a
form satisfactory to Landlord, (ii) Shall be provided by carriers admitted to do
business in the state of California, with a Best rating of "A/VI" or better
and/or acceptable to Landlord. Property insurance shall contain a waiver and/or
a permission to waive by the insurer any right of subrogation against Landlord,
its principals, employees, agents and contractors which might arise by reason of
any payment under such policy or by reason of any act or omission of Landlord,
its principals, employees, agents or contractors.

          (7) Business Interruption Insurance which shall adequately compensate
Tenant for any losses incurred due to Tenant's inability to use the Premises
whether caused by the act or failure to act by Landlord or any other reason
Tenant shall have been denied the full and normal use of the Premises or any
portion thereof.

     C. Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to the Landlord with respect to each policy of
insurance required to be carried by Tenant pursuant to this Article, a
certificate of the insurer certifying, in a form reasonably satisfactory to the
Landlord, that the policy has been issued and premium paid providing the
coverage required by this Article and containing the provisions herein. Attached
to such a certificate shall be endorsements naming Landlord as additional
insured, and including the wording under primary insurance above. Landlord may
at any time and from time-to-time inspect and/or copy any and all insurance
policies required to be carried by Tenant pursuant to this article. If
Landlord's lender, insurance broker or advisor or counsel reasonably determines
at any time that the form or amount of coverage set forth in Article 9.1.(A) for
any policy of insurance Tenant is required to carry pursuant to this Article is
not adequate, then Tenant shall increase the amount of coverage for such
insurance to such greater amount or change the form as Landlord's lender,
insurance broker or advisor or counsel reasonably deems adequate (provided
however such increase level of coverage may not exceed the level of coverage for
such insurance commonly carried by comparable businesses similarly situated and
operating under similar circumstances).

     D. The Commercial General Liability insurance carried by Tenant shall
specifically insure the performance by Tenant of the Indemnification provisions
set forth in Article 8.2 of this lease provided, however, nothing contained in
this Article 9 shall be construed to limit the liability of Tenant under the
Indemnification provisions set forth in said Article 8.2.

     E. Notwithstanding anything contained herein to the contrary, all insurance
policies and coverages required under the terms of this Lease shall require a
minimum notice to Landlord of Thirty (30) days prior to a cancellation, change,
or revision of such coverages or providers.

     F. In the event that Tenant shall not have acquired all of the insurance
coverages and policies as required above, by the Lease Commencement Date,
Landlord shall have the right but not the obligation to acquire such coverages
and policies on behalf of Tenant at Tenant's sole cost and expense, and Tenant
shall, upon demand by Landlord, reimburse to Landlord, all costs associated with
the premiums, acquisition, and administration of such coverages and policies,
and such costs shall be a Building Operating Expense.

  9.2 LANDLORD'S INSURANCE: With respect to insurance maintained by Landlord:

     A. Landlord shall maintain, as the minimum coverage required of it by this
Lease, property insurance insuring Landlord (and such others as Landlord may
designate) against loss from physical damage to the Building with coverage of
not less than one hundred percent of the full actual replacement cost thereof
and against loss of rents for a period of not less than twelve months. Such
property damage insurance, at Landlord's election but without any requirement on
Landlord's behalf to do so, (i) may be written in so-called Special Form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to include (or separate policies which may be
carried to cover) loss or damage caused by any additional perils against which
Landlord may elect to insure, including earthquake and/or flood; (iv) may
provide coverage for loss of rents for a period of up to twelve months; and/or
(v) may contain "deductibles" per occurrence in an amount reasonably acceptable
to Landlord. Landlord shall not be required to cause such insurance to cover any
of Tenant's personal property, inventory and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises.

     B. Landlord shall maintain Commercial General Liability insurance insuring
Landlord (and such others as are designated by Landlord) against liability for
personal injury, bodily injury, death, and damage to property occurring in, on
or about, or resulting from the use or occupancy of the Project, or any portion
thereof, with

                                      -9-
<PAGE>

combined single limit coverage of at least Two Million Dollars. Landlord may
carry such greater coverage as Landlord or Landlord's Lender, insurance broker
or advisor or counsel may from time to time determine is reasonably necessary
for the adequate protection of Landlord and the Project.

     C. Landlord may maintain any other insurance which in the opinion of its
lender, insurance broker or advisor, or legal counsel is reasonably prudent to
carry under the given circumstances.

  9.3 MUTUAL WAIVER OF SUBROGATION: Landlord hereby releases Tenant, and Tenant
hereby releases Landlord and its respective partners and officers, agents,
employees and servants, from any and all liability for loss, damage or injury to
the property of the other in or about the Leased Premises which is caused by or
results from a peril or event or happening which would be covered by insurance
required to be carried under the terms of this Lease, or is covered by insurance
actually carried and in force at the time of the loss, by the party sustaining
such loss; provided, however, that such waiver shall be effective only to the
extent permitted by the insurance covering such loss and to the extent such
insurance is not prejudiced thereby.

                                   ARTICLE 10
                           DAMAGE TO LEASED PREMISES

  10.1 LANDLORD'S DUTY TO RESTORE: If the Leased Premises are damaged by any
peril after the Effective Date of this Lease, Landlord shall restore the Leased
Premises, as and when required by this Article, unless this Lease is terminated
by Landlord pursuant to Article 10.2 or by Tenant pursuant to Article 10.3. All
insurance proceeds available from the fire and property damage insurance carried
by Landlord shall be paid to and become the property of Landlord. If this Lease
is terminated pursuant to either Article 10.2 or 10.3, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that is
Landlord's property or would become Landlord's property on termination of this
Lease shall be paid to and become the property of Landlord, and the remainder of
such proceeds shall be paid to and become the property of Tenant. If this Lease
is not terminated pursuant to either Article 10.2 or 10.3, all insurance
proceeds available from insurance carried by Tenant which cover loss to property
that is Landlord's property shall be paid to and become the property of
Landlord, and all proceeds available which cover loss to property which would
become the property of Landlord upon the termination of this Lease shall be paid
to and remain the property of Tenant provided that Tenant agrees to restore such
property. If this Lease is not so terminated, then upon receipt of the insurance
proceeds (if the loss is covered by insurance) and the issuance of all necessary
governmental permits, Landlord shall commence and diligently prosecute to
completion the restoration of the Leased Premises, to the extent then allowed by
Law, to substantially the same condition in which the Leased Premises existed as
of the Lease Commencement Date. Landlord's obligation to restore shall be
limited to the Leased Premises and interior improvements constructed by
Landlord. Landlord shall have no obligation to restore any other improvements to
the Leased Premises or any of Tenant's personal property, inventory or trade
fixtures. Upon completion of the restoration by Landlord, Tenant shall forthwith
replace or fully repair all of Tenant's personal property, inventory, trade
fixtures and other improvements constructed by Tenant to like or similar
condition as existed at the time of such damage or destruction.

  10.2 LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option may
be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:

          A. The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord, or (ii) seventy-
five percent of the then actual estimated replacement cost thereof;

          B. The Building is damaged by an uninsured peril.

          D. The Building is damaged by any peril and, because of the Laws then
in force, the Building (i) can not be restored at reasonable cost or (ii) if
restored, can not be used for the same use being made thereof before such
damage.

  10.3 TENANT'S RIGHT TO TERMINATE: If the Leased Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to this Article, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration work
required of Landlord may be complete. Tenant shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised in the case of A or B below only by delivery to Landlord of a written
notice of election to terminate within seven days after Tenant receives from
Landlord the estimate of the time needed to complete such restoration:

          A. The Leased Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration of
the Leased Premises cannot be substantially completed within nine (9) months
after the date of such notice from Landlord; or

          B. The Leased Premises are damaged by any peril within nine months of
the last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within ninety days after the date such
restoration is commenced.

  10.4 TENANT'S WAIVER: Landlord and Tenant agree that the provisions of Article
10.3 above, captioned "Tenant's Right to Terminate", are intended to supersede
and replace the provisions contained in California Civil Code, Section 1932,
Subdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant
hereby waives the provisions of said Civil Code Sections and the provisions of
any successor Code Sections or similar Laws hereinafter enacted.

  10.5 ABATEMENT OF RENT: In the event of damage to the Leased Premises which
does not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired by such damage.

                                  ARTICLE 11
                                 CONDEMNATION

                                      -10-
<PAGE>

  [11.1 is missing, off of printed page]

  11.2 TENANT'S RIGHT TO TERMINATE: Subject to Article 11.3, Tenant shall have
the option to terminate this Lease if, as a result of any taking by means of the
exercise of the power of eminent domain; thirty-three and one-third percent or
more of the Leased Premises is so taken and the part of the Leased Premises that
remains cannot, within a reasonable period of time, be made reasonably suitable
for the continued operation of the Tenant's business.

  11.3 TEMPORARY TAKING: If any portion of the Leased Premises is temporarily
taken for one year or less, this Lease shall remain in effect. If more than 33%
of the Leased Premises is temporarily taken for a period which either exceeds
one year or which extends beyond the natural expiration of the Lease Term, then
Landlord and Tenant shall each independently have the option to terminate this
Lease, effective on the date possession is taken by the condemnor.

  11.4 RESTORATION AND ABATEMENT OF RENT: If any part of the Leased Premises is
taken by condemnation and this Lease is not terminated, then Landlord shall
repair any damage occasioned thereby to the remainder of the Leased Premises to
a condition reasonably suitable for Tenant's continued operations, to the extent
practicable. As of the date possession is taken by the condemning authority, (i)
the Base Monthly Rent shall be reduced in the same proportion that the area of
that part of the Leased Premises so taken bears to the area of the Leased
Premises immediately prior to such taking, and (ii) Tenant's Proportionate Share
shall be appropriately adjusted.

  11.5 DIVISION OF CONDEMNATION AWARD: Any award made for any condemnation of
the Project, the Building, the Common Areas or the Leased Premises, or any
portion thereof, shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award.

                                   ARTICLE 12
                              DEFAULT AND REMEDIES

  12.1 EVENTS OF TENANT'S DEFAULT: The occurrence of any of the following shall
constitute a default by Tenant: (a) failure to pay rent or other charges when
due; (b) failure to perform any other provision of this Lease within the time
periods provided.

  12.2 LANDLORD'S REMEDIES: Landlord shall have the following remedies (which
are cumulative and not exclusive and are in addition to any remedies now or
later allowed by law) if Tenant is in default. Landlord may terminate Tenant's
right to possession of the Premises at any time. No act by Landlord other than
giving notice to Tenant shall terminate this Lease. Acts of maintenance, efforts
to relet the Premises, or the appointment of a receiver on Landlord's initiative
to protect Landlords interest under the terms of this Lease shall not constitute
a termination of Tenants right to possession. Upon termination of Tenant's right
to possession, Landlord has the right to recover from Tenant: (1) the worth of
the unpaid rent that had been earned at the time of termination of Tenant's
right to possession; (2) the worth of the amount of the unpaid rent that world
have been earned after the date of termination of Tenant's right to possession;
(3) any other amount, including but not limited to expenses incurred to relet
the premises, court, attorney and collection costs, necessary to compensate
Landlord for any all losses caused by Tenant's default. "The worth," as used in
this article, is to be computed by allowing interest at the maximum legal
interest rate permitted by law.

  12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES: In the event Landlord fails to
perform any of its obligations under this Lease, Landlord shall nevertheless not
be in default under the terms of this Lease until such time as Tenant shall have
first given Landlord written notice specifying the nature of such failure to
perform its obligations, and then only after Landlord shall have had a
reasonable period of time following its receipt of such notice within which to
perform such obligations. In the event of Landlord's default as above set forth,
then, and only then, Tenant may then proceed at law to compel Landlord to
perform its obligations and/or to recover damages proximately caused by such
failure to perform.

  12.4 LIMITATION ON TENANT'S RECOURSE: Tenant agrees that the obligations of
Landlord under this Lease shall not constitute personal obligations of the
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, or other principals of any business entity which holds title to
the Project. Tenant shall have recourse only to the assets of the Project (as
shown on the Site Plan) for the satisfaction of such obligations and not to the
other assets of any individual owner such officers, directors, trustees,
partners, joint venturers, members, owners, stockholders or principals.
Additionally, if Landlord is a corporation, partnership or limited liability
corporation, then Tenant covenants and agrees:

          A. No partner, stockholder, or officer of Landlord shall be sued or
named as a party in any suit or action brought by Tenant with respect to any
alleged breach of this Lease (except to the extent necessary to secure
jurisdiction over the entity and then only for that sole purpose);

          B. No service of process shall be made against any partner,
stockholder, or officer of Landlord except for the sole purpose of securing
jurisdiction over the entity; and

          C. No writ of execution shall be levied against the assets of any
partner or officer of Landlord other than to the extent of his interest in the
assets of the Project. Tenant further agrees that each of the foregoing
covenants and agreements shall be enforceable by Landlord and by any partner or
officer of Landlord and shall be applicable to any actual or alleged
misrepresentation or non-disclosure made respecting this Lease or the Leased
Premises or any actual or alleged failure, default or breach of any covenant or
agreement either expressly or implicitly contained in this Lease or imposed by
statute or at common law.

  12.5 TENANT'S WAIVER: Landlord and Tenant agree that the provisions of Article
12.3 above are intended to supersede and replace the provisions of California
Civil Code 1932(l), 1941 and 1942, and accordingly, Tenant hereby waives the
provisions of Section 1932(l), 1941 and 1942 of the California Civil Code and/or
any similar or successor Law regarding Tenant's right to terminate this Lease or
to make repairs and deduct the expenses of such

                                      -11-
<PAGE>

repairs from the rent due under this Lease. Tenant hereby waives any right of
redemption or relief from forfeiture under the Laws of the State of California,
or under any other present or future Law, in the event Tenant is evicted or
Landlord takes possession of the Leased Premises by reason of any default by
Tenant.

                                   ARTICLE 13
                               GENERAL PROVISIONS

  13.1 TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency any and
all taxes, assessments, license fees, use fees, permit fees and public charges
of whatever nature or description levied, assessed or imposed against Tenant or
Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant's estate in this Lease, Tenant's ownership of property, improvements
made by Tenant to the Leased Premises, improvements made by Landlord for
Tenant's use within the Leased Premises, Tenant's use (or estimated use) of
public facilities or services or Tenant's consumption (or estimated consumption)
of public utilities, energy, water or other resources. On demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments. If
any such taxes, assessments, fees or public charges are levied against Landlord,
Landlord's property, the Building or the Project, or if the assessed value of
the Building or the Project is increased by the inclusion therein of a value
placed upon same, then Landlord, after giving written notice to Tenant, shall
have the right, regardless of the validity thereof, to pay such taxes,
assessment, fee or public charge and bill Tenant, as Additional Rent, the amount
of such taxes, assessment, fee or public charge so paid on Tenant's behalf.
Tenant shall, within ten days from the date it receives an invoice from Landlord
setting forth the amount of such taxes, assessment, fee or public charge so
levied, pay to Landlord, as Additional Rent, the amount set forth in said
invoice. Failure by Tenant to pay the amount so invoiced within said ten day
period shall be conclusively deemed a default by Tenant under this Lease. Tenant
shall have the right, and with Landlord's full cooperation if Tenant is not then
in default under the terms of this Lease, to bring suit in any court of
competent jurisdiction to recover from the taxing authority the amount of any
such taxes, assessment, fee or public charge so paid.

  13.2 HOLDING OVER: This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article l). Any holding over after the
expiration of the Lease shall be deemed an unlawful detainer of the Leased
Premises unless Landlord has consented to same in writing. Any holding over by
Tenant with written permission of Landlord shall be construed to be a tenancy
from month to month, on the same terms and conditions herein specified insofar
as applicable, except that the Base Monthly Rent shall be increased to an amount
equal to one hundred fifty percent of the Base Monthly Rent payable during the
last full month immediately preceding such period of holding over.

  13.3 SUBORDINATION TO MORTGAGES: This Lease is subject and subordinate to all
underlying ground leases and to all mortgages and deeds of trust which affect
the Building and are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such ground lease or any Lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all documents or instruments which Landlord and such lessor or
Lender deem necessary or desirable to make this Lease prior thereto. Tenant
hereby consents to Landlord's ground leasing the land underlying the Building
and/or encumbering the Building as security for future loans on such terms as
Landlord shall desire, all of which future ground leases, mortgages or deeds of
trust shall be subject and subordinate to this Lease. However, if any lessor
under any such future ground lease or any Lender holding such future mortgage or
deed of trust shall desire or require that this Lease be made subject and
subordinate to such future ground lease, mortgage or deed of trust, then Tenant
agrees, within ten days after Landlord's written request therefore, to execute,
acknowledge and deliver to Landlord any and all documents or instruments
(including but not limited to the enclosed Exhibit D) as requested by Landlord
or such lessor or Lender as may be necessary or proper to assure the
subordination of this Lease to such future ground lease, mortgage or deed of
trust; but only if such lessor or Lender agrees to recognize Tenant's rights
under this Lease and not to disturb Tenant's quiet possession of the Leased
Premises so long as Tenant is not in default under this Lease. Tenant's failure
to execute and deliver such subordination agreement within ten days after
Landlord's request therefore shall be a material default by Tenant under this
Lease, and Landlord shall have all of the rights and remedies available to
Landlord as Landlord would otherwise have in the case of any other material
default by Tenant, including the right to terminate this Lease and sue for
damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such subordination agreement in a timely
manner could result in Landlord being unable to perform committed obligations to
other third parties which were made by Landlord in reliance upon this covenant
of Tenant. Landlord and Tenant intend that any statement delivered pursuant to
this Article may be relied upon by any Lender or purchaser or prospective Lender
or purchaser of the Building, the Project, or any interest therein.

  13.4 TENANT'S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request, attorn
(i) to any purchaser of the Building at any foreclosure sale or private sale
conducted pursuant to any security instrument encumbering the Building, (ii) to
any grantee or transferee designated in any deed given in lieu of foreclosure of
any security interest encumbering the Building, or (iii) to the lessor under any
underlying ground lease of the land underlying the Building, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.

  13.5 MORTGAGEE PROTECTION: In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such Lender
or lessor a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings if reasonably necessary to effect a cure.

  13.6 ESTOPPEL CERTIFICATES: Tenant will, following any request(s) by Landlord,
promptly execute and deliver to Landlord an estoppel certificate (i) certifying
that this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the rent
and other charges are paid in advance, if any, (iii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed, and (iv) certifying
such other information about this Lease as may be reasonably requested

                                      -12-
<PAGE>

available to Landlord as Landlord would otherwise have in the case of any other
material default by Tenant, including the right to terminate this Lease and sue
for damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to this
Article may be relied upon by any Lender or purchaser or prospective Lender or
purchaser of the Building, the Project, or any interest therein.

  13.7 TENANT'S FINANCIAL INFORMATION: Tenant shall, within ten business days
after Landlord's request therefore, deliver to Landlord a copy of a current
financial statement certified by Tenant in writing as to its accuracy) including
an income statement and balance sheet, and any such other information, including
but not limited to Tenant's tax returns, reasonably requested by Landlord
regarding Tenant's financial condition.

  13.8 FORCE MAJEURE: The obligations of each of the parties under this Lease
(other than the obligation to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligation by reason of any
strikes, lockouts or labor disputes; inability to obtain labor, materials, fuels
or reasonable substitutes therefore; governmental restrictions, regulations,
controls, action or inaction; civil commotion; inclement weather, fire or other
acts of God; or other causes (except financial inability) beyond the reasonable
control of the party obligated to perform (including acts or omissions of the
other party for a period equal to the period of any such prevention, delay or
stoppage.

  13.9 NOTICES: Any notice required or desired to be given by a party regarding
this Lease shall be in writing and shall be personally served, or in lieu of
personal service may be given by depositing such notice in the United States
mail, postage prepaid, addressed to the other party at the address specified in
Article 1.1 above. Notices may also be given by electronic facsimile
transmission or commercial carrier and shall be deemed received on the date of
confirmation documented by the transmission or carrier.

  13.10 ATTORNEYS' FEES: In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, all reasonable expenses incurred by the prevailing party. In
the event that Landlord shall be required to retain counsel to enforce any
provision of this Lease; or if Tenant defaults under this Lease and thereafter
cures (or desires to cure) such default with Landlord's consent, Tenant shall
pay to Landlord all reasonable expenses so incurred by Landlord promptly upon
demand. Landlord may enforce this provision by requiring Tenant to pay such fees
and costs as a condition to curing its default.

  13.11 DEFINITIONS: Any term that is given a special meaning by any provision
in this Lease shall, unless otherwise specifically stated, have such meaning
whenever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:

          A. REAL PROPERTY TAXES: The term "Real Property Tax" or "Real Property
Taxes" shall each mean (i) all taxes, assessments, levies and other charges of
any kind or nature whatsoever, general and special (including all installments
of principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any
change in ownership or new construction), now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed for whatever reason against the Project or any portion thereof, or
Landlord's interest therein, or the fixtures, equipment and other property of
Landlord that is an integral part of the Project and located thereon, or
Landlord's business of owning, leasing or managing the Project or the gross
receipts, income or rentals from the Project; (ii) all charges, levies or fees
imposed by any governmental authority against Landlord by reason of or based
upon the use of or number of parking spaces within the Project, the amount of
public services or public utilities used or consumed (e.g. water, gas,
electricity, sewage or surface water disposal) at the Project, the number of
persons employed by tenants of the Project, the size (whether measured in area,
volume or number of tenants) or the value of the Project, or the type of use or
uses conducted within the Project; and (iii) all costs and fees (including
reasonable attorneys' fees) incurred by Landlord in contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax. If,
at any time during the Lease Term, the taxation or assessment of the Project
prevailing as of the Effective Date of this Lease shall be altered so that in
lieu of or in addition to any Real Property Tax described above there shall be
levied, assessed or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause) an
alternate, substitute, or additional tax or charge (i) on the value, size, use
or occupancy of the Project or Landlord's interest therein or (ii) on or
measured by the gross receipts, income or rentals from the Project, or on
Landlord's business of owning, leasing or managing the Project or (iii) computed
in any manner with respect to the operation of the Project, then any such tax or
charge, however designated, shall be included within the meaning of the terms
"Real Property Taxes" for purposes of this Lease. If any Real Property Tax is
partly based upon property or rents unrelated to the Project, then only that
part of such Real Property Tax that is fairly allocable to the Project shall be
included within the meaning of the terms "Real Property Taxes". Notwithstanding
the foregoing, the term "Real Property Taxes" shall not include estate,
inheritance, transfer, gift or franchise taxes of Landlord or the federal or
state income tax imposed on Landlord's income from all sources.

          B. LANDLORD'S INSURANCE COSTS: The term "Landlord's Insurance Costs"
shall mean the costs to Landlord to carry and maintain the policies of fire and
property damage insurance, including earthquake and flood, for the Project and
Landlord's general liability insurance carried by Landlord pursuant to Article
9, together with any deductible amounts paid by Landlord upon the occurrence of
any insured casualty or loss.

          C. PROJECT MAINTENANCE COSTS: The term "Project Maintenance Costs"
shall mean all costs and expenses (except Landlord's Insurance Costs and Real
Property Taxes) paid or incurred by Landlord in protecting, operating,
maintaining, repairing and preserving the Project and all parts thereof,
including without limitation, (i) professional management fees equal to five
percent of the annualized Base Monthly Rent, (ii) the amortizing portion of any
costs incurred by Landlord in the making of any modifications, alterations or
improvements which are so amortized during the Lease Term, (iii) costs of
complying with ADA standards imposed

                                      -13-
<PAGE>

upon Landlord, governmental regulations governing Tenant's use of Hazardous
Materials, and Landlord's costs of monitoring Tenant's use of Hazardous
Materials including fees charged by Landlord's consultants to periodically
inspect the Premises and the Property, all costs associated with the maintaining
and repairing of the parts of the drainage district, and (v) such other costs as
may be paid or incurred with respect to operating, maintaining and preserving
the Project, such as repairing replacing and resurfacing the exterior surfaces
of the buildings (including roofs), repairing, replacing, and resurfacing paved
areas, repairing structural parts of the buildings, cleaning, maintaining,
repairing, or replacing the interior of the Leased Premises both during the
Lease Term and upon the termination of the Lease, and maintaining, repairing or
replacing, when necessary electrical, plumbing, sewer, drainage, heating,
ventilating and air conditioning systems serving the buildings, providing
utilities to the common areas, maintenance, repair, replacement or installation
of lighting fixtures, directional or other signs and signals, irrigation or
drainage systems, trees, shrubs, materials, maintenance of all landscaped areas,
and any rental paid for machinery and equipment (if leased).

          D. READY FOR OCCUPANCY: The term "Ready for Occupancy" shall mean the
date upon which (i) the Leased Premises are available for Tenant's occupancy in
a broom clean condition and (ii) the improvements, if any, to be made to the
Leased Premises by Landlord as a condition to Tenant's obligation to accept
possession of the Leased Premises have been substantially completed and the
building department of the City of Fremont shall have approved the construction
of the improvements as substantially complete or is willing to so approve the
construction of such improvements as substantially complete subject only to
compliance with specified conditions which are the responsibility of Tenant to
satisfy or is willing to allow Tenant to occupy subject to its receiving
assurances by either Landlord or Tenant that specified work will be completed.

          E. TENANT'S PROPORTIONATE SHARE: The term "Tenant's Proportionate
Share" or "Tenant's Share", as used with respect to an item pertaining to the
Building, shall each mean that percentage obtained by dividing the leasable
square footage contained within the Leased Premises (as set forth in Article 1)
by the total leasable square footage contained within the Building as the same
from time to time exists or, as used with respect to an item pertaining to the
Project, shall each mean that percentage obtained by dividing the leasable
square footage contained within the Leased Premises (as set forth in Article 1)
by the total leasable square footage contained within the Project as the same
from time to time exists, unless, as to any given item, such a percentage
allocation unfairly burdens or benefits a given tenant(s), in which case
Landlord shall have the exclusive right to equitably and reasonably allocate
such item so as to not unfairly burden or benefit any given tenant(s).
Landlord's reasonable determination of any such special allocation shall be
final and binding upon Tenant.

          F. BUILDING'S PROPORTIONATE SHARE: The term "Building's Proportionate
Share" or "Building's Share" shall each mean that percentage which is obtained
by dividing the leasable square footage contained in the Building by the
leasable square footage contained in all buildings located within the Project,
unless, as to any given item, such a percentage allocation unfairly burdens or
benefits a given building(s), in which case Landlord shall have the exclusive
right to reasonably and equitably allocate such item so as to not unfairly
burden or benefit any given building(s). Landlord's determination of any such
special allocation shall be final and binding upon Tenant.

          G. BUILDING OPERATING EXPENSES: The term "Building Operating Expenses"
shall mean and include the Building's Proportionate Share of all Real Property
Taxes, all Insurance Costs including Landlord's general liability costs and any
insurance costs relating to Article [9.1 F] herein contained, all Project
Maintenance Costs, and an accounting fee equal to five percent of the combined
total of all such costs.

          H. LAW: The term "Law" shall mean any judicial decision and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Project, or any of them in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).

          I. LENDER: The term "Lender" shall mean the holder of any note or
other evidence of indebtedness secured by the Project or any portion thereof.

          J. PRIVATE RESTRICTIONS: The term "Private Restrictions" shall mean
all recorded covenants, conditions and restrictions, private agreements,
easements, and any other recorded instruments affecting the use of the Project,
as they may exist from time to time.

          K. RENT: The term "rent" shall mean collectively Base Monthly Rent and
all Additional Rent, and all other amounts owed by Tenant to Landlord.

  13.12 GENERAL WAIVERS: One party's consent to or approval of any act by the
other party, requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof
shall be effective unless in writing and signed by the waiving party. The
receipt by Landlord of any rent or payment with or without knowledge of the
breach of any provision hereof shall not be deemed a waiver of any such breach.
No waiver of any provision of this Lease shall be deemed a continuing waiver
unless such waiver specifically states so in writing and is signed by both
Landlord and Tenant. No delay or omission in the exercise of any right or remedy
accruing to either party upon any breach by the other party under this Lease
shall impair such right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by either party of any breach of
any provision of this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or any other provisions herein contained.

  13.13 MISCELLANEOUS: Should any provision of this Lease prove to be invalid or
illegal, such invalidity or illegality shall in no way affect; impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair
meaning, and not strictly for or against either Landlord or Tenant. The captions
used in this Lease are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. When the context of this
Lease requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural. The terms "must",

                                      -14-
<PAGE>

specific provision is made therefore. Where Tenant is obligated not to perform
any act or is not permitted to perform any act, Tenant is also obligated to
restrain any others reasonably within its control, including agents, invitees,
contractors, subcontractors and employees, from performing said act. Landlord
shall not become or be deemed a partner or a joint venturer with Tenant by
reason of any of the provisions of this Lease.

  13.14 POSSESSION PRIOR TO COMMENCEMENT DATE: Landlord agrees to allow Tenant
to take possession of the Premises upon the full execution of this Lease by all
parties hereto without payment of rent until the Commencement Date, for purposes
of fit-up and pre-move in tenant improvement construction, so long as Tenant
does not actually move into the Premises for purposes of conducting its business
therein until the Commencement Date.

  13.15 BUILDING PORTION USE BY TENANT AND OPERATING EXPENSES IN FIRST YEAR OF
LEASE: It is hereby acknowledged by Tenant and Landlord that the business deal
herein incorporated, contemplates the use of only a portion of the Leased
Premises by Tenant during the first year of the Lease. Therefore, Tenant shall
be allowed the use of 40,000 square feet of contiguous space as mutually agreed
by Landlord and Tenant during this first year of the lease (as shown as outlined
in green on attached Exhibit C). In the event that Tenant elects to use more
than the designated 40,000 square feet of space during the first year of the
Lease, (Additional Space) Tenant shall pay to Landlord, additional Base Monthly
Rent based upon the quality of additional space taken by Tenant at the prorated
square foot price of $1.25 per square foot per month commencing on the first day
of the month following the taking of such space by Tenant.

  13.16 PAYMENT FOR EXPENSES FOR SPACE ACTUALLY USED BY TENANT: Tenant shall pay
Additional Rent as noted in Clause #3.2 only on 40,000 square feet of space
during the first year of this Lease unless Tenant shall have elected to take
Additional Space as provided in 13.15 above, in which case Tenant shall pay
Additional Rent in direct proportion to the total space taken by Tenant,
including any Additional Space taken by Tenant during the first year of the
Lease Term. Subsequent to the first year of the Lease, Tenant shall pay
Additional Rent and any other costs related to the entire Leased Premises for
the remaining term of this Lease or extension thereof.

  13.17 TERMINATION OF EXISTING LEASE OBLIGATION: It is hereby acknowledged by
Landlord and Tenant that Tenant has an existing lease obligation on a space
commonly known as Renco 60. This obligation is momorialized on that certain
Lease dated for reference as of February 8, 1998 between Tenant and PEN
ASSOCIATES NO.2 LLC, a Calif. ltd. liability company and LAKEHOUSE, LLC, a
Calif. ltd. liability company as Tenants in Common, for the premises commonly
known and referred to as 46535 and 46531 Fremont Blvd., Fremont, consisting in
total of approximately 21,195 square feet of space. Upon the Commencement Date
of this Lease, and upon the surrendering of said space to Landlord, Landlord
shall relieve Tenant of all liability regarding the above noted lease except for
Tenant's surrendering the aformentioned space under the surrender terms and in
the condition as required under the terms of its lease and for paying all of
the obligations as of the date of the surrender of that space to Landlord.

  13.17 RIGHT OF FIRST REFUSAL FOR ADJACENT SPACE: In the event that Landlord
receives or makes a proposal from or to a third party for the occupancy by the
third party of the space in the Building adjacent to the Leased Premises,
Landlord shall immediately advise Tenant of the contents of the proposal and
shall provide Tenant a period of exactly five business days from Landlord's
notice to Tenant in which Tenant may agree to enter into a lease with Landlord
for the occupancy of the space subject to the proposal. In the event that Tenant
desires to enter into a lease for the adjacent space, Tenant must notify
Landlord in writing with five business days from Landlord's notice to Tenant,
irrevocably committing to enter into a lease for the adjacent space on the same
terms and conditions as contained in the third party proposal, and Tenant shall
upon providing notice to Landlord be bound by the terms of the third party
proposal. In the event that Tenant does not notify Landlord of its binding
commitment to lease the adjacent space in accordance with the terms of this
paragraph within the time period specified in this paragraph, Tenant shall lose
its right to lease the adjacent space and Landlord shall be free to lease the
adjacent space to the third party (or any other party) on terms substantially
similar to those contained in the proposal. Once the adjacent space has been
leased to a third party, Tenant shall no longer have any right to lease the
adjacent space. In the event that Tenant commits to lease the adjacent space,
this Lease shall be amended by including the terms of the third party proposal.
This right of first refusal shall be subject and subordinate to any prior rights
of other parties.

                                   ARTICLE 14
                              CORPORATE AUTHORITY

  14.1 CORPORATE AUTHORITY: If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State of California, that Tenant has the full
right and legal authority to enter into this Lease, that he or she is duly
authorized to execute and deliver this Lease on behalf of Tenant in accordance
with the bylaws and/or a board of directors' resolution of Tenant, and that this
Lease is binding upon Tenant in accordance with its terms.

  14.2 ENTIRE AGREEMENT: This Lease, the Exhibits (as described in Article l)
and the Addenda (as described in Article 1), which Exhibits and Addenda are by
this reference incorporated herein, constitute the entire agreement between the
parties, and there are no other agreements, understandings or representations
between the parties relating to the lease by Landlord of the Leased Premises to
Tenant, except as expressed herein. No subsequent changes, modifications or
additions to this Lease shall be binding upon the parties unless in writing and
signed by both Landlord and Tenant.

  14.3 LANDLORD'S REPRESENTATIONS: Tenant acknowledges that neither Landlord nor
any of its agents made any representations or warranties respecting the Project,
the Building or the Leased Premises, upon

                                      -15-
<PAGE>

which Tenant relied in entering into this Lease, which are not expressly set
forth in this Lease. Tenant further acknowledges that neither Landlord nor any
of its agents made any representations as to (i) whether the Leased Premises may
be used for Tenant's intended use under existing Law or (ii) the suitability of
the Leased Premises for the conduct of Tenant's business of (iii) the exact
square footage of the Leased Premises, that Tenant relied solely upon its own
investigations respecting said matters and that upon its execution of this
Lease, accepts the leasable area as specified herein. Tenant expressly waives
any and all claims for damage by reason of any statement, representation,
warranty, promise or other agreement of Landlord or Landlord's agent(s), if any,
not contained in this Lease or in any Addenda hereto.

  IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease.

AS LANDLORD:                                      AS TENANT:

RENCO INVESTMENT COMPANY                     CENTILLIUM TECHNOLOGY, INC.

BY: /s/ Donald E. Vermeil                    BY: /s/ William F Mackenzie
   ----------------------------------           -------------------------------

TITLE: DONALD E. VERMEIL, TTEE               TITLE: Vice President
       REVOCABLE TRUST AGREEMENT
       DATED 11/6/78, AS AMENDED
       ------------------------------              ----------------------------

BY: /s/ Richard T. Peery                     BY: /s/ Bruce Neuschwander
   ----------------------------------           -------------------------------

TITLE: RICHARD T. PEERY, TRUSTEE, UTA        TITLE: Corporate Controller
       DATED 7/20/77 (RICHARD T. PEERY             ----------------------------
       SEPARATE PROPERTY TRUST)
      -------------------------------

DATE: 8/31/99                                DATE: 8/25/99
      --------------------------                  -----------------------------

      /s/ William N. Neidig
      William N. Neidig, President
      Riverside Interests, Inc.

                                      -16-
<PAGE>

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

This Option to Renew Lease ("Option") is entered into by and between RENCO
INVESTMENT COMPANY, A California General Partnership, ("Landlord") and
CENTILLIUM TECHNOLOGY, INC. A California Corporation ("Tenant") to be effective
as of the date the last of the designated signatories to this Option shall have
executed this Option, with respect to the following described Lease (the
"Lease") for the following described premises (the "Leased Premises"):

     "That certain Lease dated as of August 16, 1999, by and between Landlord
and Tenant for the lease of building space of approximately 57,567 total square
feet in that certain building project consisting of 93748 square feet, more or
less, the Tenant's portion of which is located at 47211 Lakeview Boulevard,
Fremont, Calif. and consists of approximately 57,567 square feet of space.

1.   For and in consideration of Tenant entering into the Lease and other
valuable consideration, Landlord hereby grants to Tenant an option to renew the
Lease for an additional term of five (5) years (the "Renewal Term") commencing
on the expiration of the Lease (the "Renewal Commencement Date") and ending five
(5) years thereafter (Renewal Expiration Date").

2.   The lease of the Leased Premises for the Renewal Term shall be on the same
terms and conditions as set forth in the Lease, except:

     A.   That the rental for the Leased Premises during the Renewal Term shall
be as set forth below in Paragraph 5, and

     B.   That the Security Deposit shall be increased to the rental amount
determined in Paragraph 5 (the "Increased Security Deposit Amount").

3.   Provided that Tenant shall not have been in default under the Lease prior
to the exercise of this Option as defaults are defined in Section 4 below,
Tenant shall notify Landlord of Tenant's exercise of its right to renew the
Lease for Renewal Term only by giving to Landlord written notice not sooner than
seven (7) months prior to the Renewal Commencement Date and not later than five
(5) months prior to the Renewal Commencement Date (time is expressly of the
essence to Landlord). Any attempted exercise of this Option made other than
within the time period stated or in the manner stated shall be void and of no
force or effect.

4.   This Option to Renew Lease is expressly conditioned upon Tenant having
performed each and every of its covenants under the Lease at all times during
the entire Lease Term in a timely fashion (time being made expressly of the
essence), with the full and complete understanding that if, at any time during
the Lease Term, Tenant shall fail to perform any of its covenants or obligations
under the Lease in a timely fashion, this Option shall terminate without notice
and be of no further effect irrespective of whether or not Tenant shall have
cured such breach. Tenant acknowledges that Tenant's promise to faithfully
perform each of its covenants and obligations under the Lease in a timely
fashion was material inducement to Landlord in granting to Tenant this Option to
Renew Lease.

     For purposes of this Option to Renew Lease, Tenant shall be deemed to have
paid the Base Monthly Rent according to the terms of the Lease if Tenant shall
have paid such monthly rental within six (6) days of being notified by Landlord
of such rental being due and unpaid.

     With respect to matters other than monies due Landlord, Tenant shall be
deemed to have performed according to the terms and conditions of the Lease if
Tenant shall have commenced a cure within ten (10) days of having been notified
of a default under such Lease and shall have completed such cure within thirty
(30) days thereafter or, in the event such a default is not curable within said
30 day period, Tenant shall have diligently pursued such cure to the reasonable
satisfaction of Landlord.

5.   If Tenant shall have properly and timely exercised its right to extend the
term of the Lease and provided that Tenant shall not have been in default under
the terms of the Lease as of the Renewal Commencement Date, the term of the
Lease shall be so extended for such Renewal Term on the same terms and
conditions contained in the Lease; provided, however, the Base Monthly Rent for
each month of the first twelve (12) months Renewal Term shall be calculated as
follows: The new Base Monthly Rent of the Renewal Term shall be the greater of:
(i),the Base Monthly Rent being paid by Tenant to Landlord during the final full
month of the initial Lease Term, or (ii) the Then Market Rental Rate for the
Lease Premises.

6.   For purposes of this Option to Renew Lease, the term "Then Monthly Market
Rental Rate" shall be determined by mutual agreement between Landlord and Tenant
or, in the event such agreement cannot be made within ten (10) days from the
date Tenant shall have exercised this Option, Landlord and Tenant shall each
appoint a real estate appraiser with at least five ( 5 ) years full-time
commercial/industrial appraisal experience in Santa Clara County to appraise and
determine the fair market monthly rental rate the Leased Premises, in their then
existing
<PAGE>

condition for the use specified in the Lease could be leased for, on the same
terms and conditions set forth in the Lease, to a qualified tenant ready,
willing and able to lease the Leased Premises for a term equal to the Renewal
Term. Notwithstanding the above, however, the appraisers shall take into
consideration the value of the Tenant in place, and the avoided costs of
retaining an existing Tenant in His/Her efforts to determine a fair and
representative "Then Monthly Market Rental Rate. If either party does not
appoint an appraiser within ten (10) days after the other party has given notice
of the name of its appraiser, the other party can then apply to the President of
the Santa Clara County Real Estate Board or the presiding Judge of the Superior
Court of that County for the selection of a second appraiser who meets the
qualifications stated above. The failing party shall bear the cost of appointing
the second appraiser and of paying the second appraiser's fee. The two
appraisers shall attempt to establish the Then Monthly Market Rental Rate for
the Leased Premises. If the two appraisers are unable to agree on the Then
Monthly Market Rental Rate for the Leased Premises within ten (10) days after
the second appraiser has been selected or appointed, then the two appraisers
shall attempt to select a third appraiser meeting the qualifications stated
above. If they fail to agree on a third appraiser, either party can follow the
above procedure for having an appraiser appointed by the Real Estate Board or a
judiciary. Each of the parties shall bear one-half (1/2) of the cost of
appointing the third appraiser and of paying the third appraiser's fee. Unless
the three appraisers are able to agree on the Then Monthly Market Rental Rate
for the Leased Premises within ten (10) days after the selection or appointment
of the third appraiser, the two appraisal amounts being calculated most closely
together, after having discarded the appraisal amount which most greatly varies
from the other two appraisal amounts, shall be added together then divided by
two (2). The resulting rental amount shall be defined as the Then Monthly Market
Rental Rate for the Leased Premises. In no event, however, shall the resulting
Then Monthly Market Rental Rate be less than the Base Monthly Rent paid during
the final full month of the initial Lease Term.

     The Base Monthly Rent shall be adjusted upward (increased) at the end of
each year of the extended lease term by the additional amount of five (5%) of
the rent calculated for the prior period. Such increased rental amount shall be
effective during each subsequent Twelve (12) month period of the extended term.

7.   This Option to Renew is subject and subordinate to all underlying ground
leases and to all mortgages and deeds of trust which affect the Building and are
of public record as of the Effective Date of this Option to Renew Lease, and to
all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such ground lease or any Lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Option to Renew Lease to be made prior and superior thereto,
then, upon written request of Landlord to Tenant, Tenant shall promptly execute,
acknowledge and deliver any and all documents or instruments which Landlord and
such lessor or Lender deem necessary or desirable to make this Option to Renew
Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the
land underlying the Building and/or encumbering the Building as security for
future loans on such terms as Landlord shall desire, all of which future ground
leases, mortgages or deeds of trust shall be subject and subordinate to this
Option to Renew Lease. However, if any lessor under any such future ground lease
or any Lender holding such future mortgage or deed of trust shall desire or
require that this Option to Renew Lease by made subject and subordinate to such
future ground lease, mortgage or deed of trust, then Tenant agrees, within ten
(10) days after Landlord's written request therefore, to execute, acknowledge
and deliver to Landlord any and all documents or instruments requested by
Landlord or such lessor or Lender as may be necessary or proper to assure the
subordination of this Option to Renew Lease to such future ground lease,
mortgage or deed of trust; but only if such lessor or Lender agrees to recognize
Tenant's rights under this Option to Renew Lease so long as Tenant is not in
default under the Lease, or this Option to Renew Lease.

IN WITNESS WHEREOF, the parties have executed this Option to Renew Lease on the
dates below set forth to be effective as of the date referenced above.

AS LANDLORD:                            AS TENANT:
RENCO INVESTMENT COMPANY                CENTILLIUM TECHNOLOGY, INC.
A California General Partnership        A California Corporation

BY: /s/ Donald E. Vermeil               BY: William F Mackenzie
    -----------------------------           ------------------------------
DONALD E. VERMEIL, TTEE
REVOCABLE TRUST AGREEMENT

DATED 11/6/78, AS AMENDED
TITLE: __________________________       TITLE: Vice President, Operations
                                               ---------------------------

BY: /s/ Richard T. Peery                BY: /s/ Bruce Neuschwander
    -----------------------------           ------------------------------
     RICHARD T. PEERY, TRUSTEE,
     UTA DATED
     7/20/77 (RICHARD T. PEERY
     SEPARATE PROPERTY TRUST)

TITLE: __________________________       TITLE: Corporate Controller
                                               ---------------------------

DATE: 8/31/99                           DATE: 8/25/99
      ---------------------------             ----------------------------

     /s/ William N. Neidig
     William N. Neidig, President
     Riverside Interests, Inc.
<PAGE>

[LOGO] CENTILLIUM TECHNOLOGY
--------------------------------------------------------------------------------
46531 Fremont Bird
Fremont
CA 94538
USA

                                  ADDENDUM 1
                                  ----------
           (REFERENCE STANDARD MULTI-TENANT LEASE FORM DATED 8/20/99
           ---------------------------------------------------------

VERIFICATION
------------

2.5  ACCEPTANCE OF POSSESSION

     Landlord agrees to bring the building up to "standard"; carpets cleaned,
     all electrical supplies in working condition, HVAC in working condition,
     window moldings/sealant, "broom clean"

2.1  LANDLORDS INSURANCE

     Flood insurance is not necessary since the property is not on a flood zone,
     however, the landlord may require flood insurance in the future
     Earthquake insurance is included

ADDITIONAL ITEMS
----------------

Landlord will allow the following additions/enhancements to be made on the
building without having to restore them to original condition at the end of the
lease

 . A creation of a laboratory, which includes but is not limited to an approx. 96
  ft wall, air conditioning unit to cool the lab (likely roof mounted), two
  doorways and anti-static flooring

 . An antenna to receive internet connections approx. the size and weight of an
  office chair

 . Two walled offices

W.F. Mackenzie    8/30/99               B. Neuschwander   30 AUG 99
-------------------------------         -------------------------------
Tenant - Centillium Technology          Tenant - Centillium Technology
William F. Mackenzie                    Bruce Neuschwander
Vice President, Operations              Corporate Controller

Renco Investment Company
------------------------
RICHARD T. PEERY, TRUSTEE, UTA DATED
7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY

TRUST
Landlord

/s/ William N. Neidig            /s/ Donald E. Vermeil
William N. Neidig, President     DONALD E. VERMEIL, TTEE
Riverside Interests, Inc.        REVOCABLE TRUST AGREEMENT
                                 DATED 11/6/78, AS AMENDED

                                                                     Page 1 of 1<PAGE>

                                                                  EXHIBIT 10.7

Logo here of Centillium Technology

46824 LAKEVIEW BLVD
FREMONT, CA 94538
TEL 510 445 1640
FAX 510 445 1639
                         COOPERATION AGREEMENT BETWEEN
                       CENTILLIUM TECHNOLOGY CORPORATION
                                      AND
                       SUNGMI TELECOM ELECTRONICS., LTD

     This Cooperation Agreement (this "Agreement") is effective as of March 2nd,
1998 (the "Effective Date") by and between Centillium Technology Corporation, a
California corporation, having its principal place of business at 46824 Lakeview
Blvd, Fremont, Ca 94538, United States of America ("Centillium"), and Sungmi
Telecom Electronics Co., Ltd. a Korean Corporation with offices at 621-3,
Bakdal-Dong, Manan-Ku, Anyang-Shi, Kyunggido, 430-030, Korea ("Sungmi").

                                - WITNESSETH -

     WHEREAS, Centillium has expertise in the area of telecommunications
integrated circuits, including those which utilize multilevel modulation
techniques to enable high speed communications over copper, also known as
Digital Subscriber Line (xDSL) Technology; and

     WHEREAS, Sungmi has expertise in the area of telecommunications systems and
associated technologies; and

     WHEREAS, the parties hereto believe that each will derive benefits from a
business relationship in which they will work cooperatively to define an
integrated circuit solution for the copper interface portion of transmission
systems (the "Interface Devices"); and

     WHEREAS, Centillium will be in a position to provide Sungmi with early
models, system support, and loop environment engineering support in exchange for
Sungmi's commitment to use Centillium as its preferred vendor of the Interface
Devices for as long as Centillium Maintains competitive pricing; and

     WHEREAS, the parties hereto wish to set forth in this Agreement the
guidelines of their cooperation.

     NOW, THEREFORE, in consideration of the covenants herein contained, the
parties hereto agree as follows:

1  Overall Objective of Cooperation

  (a) The objective of this cooperation is for both companies to work together
in developing the proper "Interface Device" technologies and systems that can
significantly develop the broadband telecommunications market.  The first phase
of this activity includes product definition and joint marketing to telco
customers.

  (b) Each of the parties hereto will act in a commercially reasonable fashion
to provide the resources necessary to accomplish the objectives set forth in
this Agreement. Each of the parties hereto acknowledge and agrees that there are
substantial technical,
<PAGE>

financial and commercial risks associated with a development activity of this
type and, therefore, that neither of the parties hereto can guarantee that any
of the development activities described in this Agreement or any subsequent
activities to be described in any future agreements will be completed
successfully.

  (c) Both parties agree that the future phases of this agreement may include
the product development phase, and production phase.  Both parties will work
together to develop a detail agreement covering the relationship agreement
between the two companies for future phases.

2.  Scope of Cooperation
The parties' cooperation will be conducted in phases:
     (a)  Phase 1. Product Definition Phase

            (i)   The parties hereto will jointly approve specifications for an
                  integrated circuit solution for the Interface Devices.
            (ii)  The parties hereto will co-market the resultant solution to
                  the end customers (e.g., telcos).

     (b)  Phase 2: Prototyping Phase

            (i)   Sungmi will evaluate Centillium's first prototype of the
                  Interface Devices. Centillium will provide evaluation boards
                  to the Sungmi for this evaluation. Sungmi will provide a
                  written report on the evaluation. Sungmi agrees to provide
                  additional evaluation reports throughout the period of this
                  Agreement as subsequent iterations of the Interface Devices
                  are prototyped and forwarded to Sungmi for evaluation.
                  Prototypes of second and/or future iterations of the Interface
                  Devices will be provided free of charge unless they are custom
                  iterations for Sungmi in which case Centillium may charge a
                  fee to be mutually agreed upon by the parties hereto.

     (c)  Phase 3: Pre-production and Production Phase

            (i)   Sungmi will supply written acknowledgment that the Interface
                  Devices meet all the specifications listed in the Product
                  Specification agreed to by the parties. Upon acceptance of the
                  Interface Devices and upon acceptance of Centillium's pricing,
                  Sungmi will provide Centillium with a requirements forecast of
                  its delivery requirements covering the next twelve month
                  period for the Interface Devices to be purchased from
                  Centillium.
            (ii)  Sungmi will also assist Centillium in establishing standards
                  utilizing its modulation schemes and will support Centillium's
                  documentation efforts for the Interface Devices. If Centillium
                  produces devices based upon such standards, Centillium will
                  provide Sungmi with access to such devices (e.g., alpha and
                  beta test site) prior to the general
<PAGE>

               commercial release of such devices.

        (iii)  Sungmi and Centillium agree that reasonable standard commercial
               terms and conditions will apply to the sale of all devices to
               Sungmi.

3. Payments

     (a)    Following the execution of this Agreement, Sungmi will pay
            Centillium a non-recurring engineering (NRE) charge of US$215,000 to
            offset costs associated with Centillium's development of the
            Interface Devices, Development of the evaluation boards for the
            Central Office (CO) and customer premise Modem. Application support
            as well as limited special loop plant modeling that may be requested
            by Sungmi. The US$215,000 payment shall be made according to the
            following schedule:

            (i)     US$115,000 upon the signing of the Agreement
            (ii)    US$100,000 upon delivery of the prototype devices and the
                    evaluation board for the CO and the customer premise modem.

     (b)       Taxes
               -----

               (i)  Taxes Generally. All taxes, charge, customs including but
                    ---------------
     not limited to duties charged in connection with concluding this agreement
     and its fulfillment on the territory of the United States of America will
     be paid by Centillium. All other taxes, charge, customs including but not
     limited to duties charged in connection with the concluding of this
     agreement and its fulfillment will be paid by Sungmi.

               (ii) Withholding Taxes. All payments by Sungmi shall be made free
                    -----------------
     and clear of, and without reduction for, any withholding taxes. Any such
     taxes which are otherwise imposed on payments to Centillium shall be the
     sole responsibility of Sungmi. Sungmi shall provide Centillium with
     official receipts issued by the appropriate taxing authority or such other
     evidence as is reasonably requested by Centillium to establish that such
     taxes have been paid.

4. Technology Ownership and Licenses

     (a) Nothing herein will be constructed as an express or implied license
(under patents or otherwise) of any kind.

     (b) Centillium will have exclusive right to design and market Devices and
any improvements of modifications thereto resulting from the activities of this
Agreement.

     (c) Any information disclosed by Sungmi to Centillium under this Agreement
with respect to direct support of the Devices (i.e., with respect to
                                               ----
characterization and performance of the Devices) may be freely used by
Centillium for the purpose of
<PAGE>

implementation of design and implementation of manufacturing and supporting
Devices sold to Centillium's customers, and other substantially similar
activities; the restrictions with regard to Confidential Information set forth
in Section 4 hereof will not apply to the specific information set forth above
but will apply to all other Sungmi information.

5.  Confidential Information and Non-Disclosure

      Any technical information and other business information disclosed
hereunder by either party hereto to the other will be held in strict confidence
by the receiving party from the date of disclosure until three years after the
date this agreement expires or terminates, using the same degree of care as the
receiving party uses for its own information of a similar kind, and will not be
transferred or divulged to any third-party or any employee who does not have the
requisite need to know. For purposes of interpreting this Agreement, employees
of Sungmi's affiliates, divisions or subsidiaries do not have the requisite need
to know to obtain access to Centillium confidential information disclosed to
Sungmi hereunder. Such confidentiality obligation will not apply to portions of
such technical information and other business information, if any, (a) which
were previously known to the other party hereto free of any confidentiality
obligation, (b) which are or become known to the public, provided that such
public knowledge is not attributable to a breach of this Agreement by the other
party hereto, (c) which the furnishing party explicitly agrees in writing need
not be kept confidential (either in this Agreement or separately), or (d) which
are received by the other party hereto rightfully from a third-party without a
restriction on disclosure. Further, Centillium agrees not to disclose to any
other party any of the specifics of Sungmi's system testing and results that
might specifically indicate a problem related to such system. However, if the
Devices are modified by Centillium to remedy a system problem, Centillium may
disclose such test imformation as may be necessary to support such modified
Devices, to the extent that such disclosure coincides with the availability of
the Modified Devices.

6.    Intellectual Property Indemnification

      (a)   Limited Indemnity.  Sungmi agrees that Centillium has the right to
            -----------------
defend, or at its option to settle, and Centillium agrees, at its own expense,
to defend or at its option to settle, any third party claim, suit or proceeding
(collectively, Action) brought against Sungmi alleging any of the Interface
Devices infringe any intellectual property rights of any third party in
existence as of the effective date of this Agreement, subject to the limitations
hereinafter set forth. Centillium shall have sole control of any such Action or
settlement negotiations, and Centillium agrees to pay, subject to the
limitations hereinafter set forth, any final judgement entered against Sungmi on
such issue in any such Action defended by Centillium. Sungmi agrees that
Centillium will be relieved of the foregoing obligations unless Sungmi notifies
Centillium in writing of such Action within five (5) days after becoming aware
of such action, gives Centillium authority to proceed as contemplated herein,
and gives Centillium proper and full information and assistance to settle and/or
defend any such Action. If it is adjudicatively determined, or if Centillium
believes, that any of the Interface Devices, or any part thereof, infringe any
<PAGE>

intellectual property rights of any third party, or if the sale of use of the
Interface Devices, or any part thereof, is, as a result, enjoined, then
Centillium may, at its election, option and expense.  (i) procure for Sungmi the
right under such intellectual property rights to sell or use, as appropriate,
the Interface Devices or such part thereof; (ii) replace the Interface Devices,
or part thereof, with other noninfringing suitable products or parts; (iii)
suitably modify the Interface Devices or part thereof; or (iv) remove the
Interface Devices, or part thereof, terminate distribution or sale thereof and
refund the payments paid by Sungmi for such Interface Devices less a reasonable
amount for use and damage. Centillium shall not be liable for any costs or
expenses incurred without its prior written authorization, or for any
installation costs of any replaced Interface Devises.

     (b)  Limitations. Notwithstanding the provisions of Section 6(a) above,
          -----------
Centillium assumes no liability for infringement claims arising from (i)
combination of the Interface Devices or portions thereof with other devices not
provided by Centillium if such infringement would not have occurred but for such
combination, or (ii) the modification of the Interface Devices or portions
thereof unless such modification was made or authorized by Centillium, when such
infringement would not have occurred but for such modification.

     (c)  Disclaimer.  Centillium's liability arising out of or relating to this
          ----------
Section 6 shall not exceed the aggregate amounts paid by Sungmi to Centillium
for the allegedly infringing Products that are the subject of the infringement
claim.  The foregoing provisions of the Section 6 state the entire liability and
obligation of Centillium and the exclusive remedy of Sungmi with respect to any
alleged infringement of any intellectual property rights by the Products or any
part thereof.

     (d)  Limitation of Liability. In no event shall Centillium's liability
          -----------------------
arising out of or relating to this Agreement exceed the aggregate amounts paid
by Sungmi to Centillium hereunder, including but not limited to liability under
Section 6. In no event shall either party be liable for lost profits, cost of
procurement of substitute goods, or any other special, reliance, incidental, or
consequential damages, however caused and under any theory of liability whether
based in contract, tort (including negligence), products liability, or
otherwise. The foregoing limitations shall apply regardless of whether such
party has been advised of the possibility of such damages and notwithstanding
the failure of essential purpose of any limited remedy stated herein.

7.   Term

        This Agreement will expire Four (4) years after the Effective Date
unless extended in writing by mutual parties.

8.   Governing Law

        The construction, interpretation and performance of this Agreement will
be governed by the laws of the State of California without reference to its
conflict of laws and principals. The United Nations Convention on Contracts for
the International Sale of
<PAGE>

Goods will not apply to the sale of Devices hereunder.

9.   Entire Agreement

        This Agreement sets forth the entire agreement and understanding between
the parties hereto with respect to its subject matter.  It merges all
discussions between them and voids and replaces each and every other agreement
or understanding which may heretofore have existed between Centillium and Sungmi
regarding such subject matter.  Notwithstanding the foregoing, the Nondisclosure
Agreement between the parties hereto, dated September 1997, as amended, will be
deemed incorporated herein by reference, provided that each party hereto will
be permitted to use any information disclosed thereunder to the extent permitted
in this Agreement.

10.  Publicity

        (a) Neither party hereto will disclose the existence or content of this
Agreement without the other's prior written consent, which will not be
unreasonably withheld. Each party will submit to the other all proposed
publicity material relating to the disclosure of this Agreement or the
relationship of the parties hereto.

        (b) This Section 10 will not prohibit disclosure by a party if such
disclosure is required by a court of competent jurisdiction, law or regulation.

        IN WITNESS WHEREOF, each of Centillium Technology Corporation and Sungmi
have executed this Agreement, in duplicate originals, by their respective
officers hereunto duly authorized, the day and year first above written.

Centillium Technology Corp.        Sungmi Telecom Electronics Co., Ltd.
--------------------------          -----------------------------------

By /s/ Faraj Aalaei                By /s/ S. S. Lee
   -----------------                  -----------------------
Name Faraj Aalaei                  Name Sung Seop Lee
     ---------------                    ---------------------
Title V.P. Marketing               Title Managing Director
      --------------                     --------------------

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