Document:

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                                                                   EXHIBIT 10.16

                         HARBOR GATEWAY BUSINESS CENTER

                     HI-TECH/RESEARCH AND DEVELOPMENT LEASE

Tenant:               EMULEX CORPORATION

Premises:             3535 Harbor Gateway Business Center
                      Costa Mesa, California 92626

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                         HARBOR GATEWAY BUSINESS CENTER
                        HI-TECH/RESEARCH AND DEVELOPMENT
                                 BUILDING LEASE

               Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord the following described premises (the "Premises") located in the
following described building (the "Building"), upon the following terms and
conditions. The following Basic Lease Provisions are an integral part of this
Lease and each reference in this Lease to any Basic Lease Provision incorporates
all of the terms provided under such Basic Lease Provision. In the event of any
conflict between any Basic Lease Provision and the balance of this Lease, the
latter shall control. References to specific Articles are for convenience only
and designate some of the Articles where references to the particular Basic
Lease Provisions appear.

                             BASIC LEASE PROVISIONS

Date of Lease:        June 30, 1999

<TABLE>
<S>     <C>                                                                             <C>
1.      Landlord:      C.J. SEGERSTROM & SONS, a California general partnership

2.      Tenant:        EMULEX CORPORATION, a California corporation

3.      Tenant's Trade Name:         EMULEX

4.      Building Address:     3535 Harbor Boulevard
                              Costa Mesa, California 92626

5.      Target Commencement Date:           November 1, 1999                             (2.1)

        Expiration Date:      August 31, 2001

6.      Basic Annual Rent (triple net):

        Annual Rent: $540,314.40 per square foot of Rental Area ($9.84); triple net      (3.1)

        Monthly Rent: $45,026.20 per square foot of Rental Area ($0.82); triple net

7.      Operating Expenses:  Not Applicable

8.      Rentable Area of Premises:   54,910 square feet                                 (47.5)

9.      Tenant's Allocated Parking Spaces:  210 spaces                                    (44)
                                            (Approximately four per 1,000 square feet)

10.     Security Deposit:  None                                                            (5)

11.     Use of Premises:      General office, service, manufacturing, corporate           (10)
                              headquarters and similar uses.

12.     Alterations:   Tenant shall not make any alterations of or to the Premises         (9)
                       without the prior written consent of Landlord.  See Addendum

13.     Brokers:       Julien J. Studley, Inc.  See Addendum                              (38)

14.     Addresses for payments and notices:                                               (35)

        To Landlord:                        To Tenant

        C.J. Segerstrom & Sons              Emulex Corporation
        3315 Fairview Road                  3535 Harbor Boulevard
        Costa Mesa, California 92626        Costa Mesa, California 92626
        Attn:  Chief Financial Officer      Attn:  Director, Treasury & Contracts
</TABLE>

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               IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease,
consisting of the foregoing provisions and Articles 1 through 48 which follow,
together with Exhibits "A" through "C" and "E" through "G" incorporated herein
by this reference, as of the date first above written.

 C.J. SEGERSTROM & SONS,                  EMULEX CORPORATION,
 a general partnership                    a California corporation

 By  /s/ Henry Segerstrom                 By  /s/ Michael J. Rockenbach
     --------------------------------         ----------------------------------
          Manager
                                          Title: VP Finance & CFO
 By  /s/ Jeanette E. Segerstrom                  ------------------
     --------------------------------
          Manager
                                          By  /s/ Paul F. Folino
                   "Landlord"                 ----------------------------------
                                          Title: President and CEO
                                                 -----------------

                                                             "Tenant"

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Article                                                                                   PAGE
-------                                                                                   ----

<S>     <C>                                                                               <C>
1.      PREMISES  See Section 48.1...........................................................1
2.      TERM   See Sections 48.2, 48.3 and 48.4  [Intentionally Deleted].....................1
3.      RENT   See Section 48.5..............................................................1
4.      COMMON FACILITIES EXPENSES  [Intentionally Deleted]..................................1
5.      SECURITY DEPOSIT  [Intentionally Deleted]............................................1
6.      UTILITIES  See Section 48.6..........................................................1
7.      PAYMENT OF TAXES  See Section 48.7...................................................2
8.      MAINTENANCE AND REPAIR  See Section 48.8.............................................3
9.      ALTERATIONS AND FIXTURES  See Section 48.9...........................................3
10.     USE OF PREMISES; HAZARDOUS MATERIALS  See Section 48.10..............................4
11.     ACCEPTANCE OF PREMISES  See Section 48.11............................................7
12.     LIENS................................................................................7
13.     ENTRY AND INSPECTION  See Section 48.12..............................................7
14.     ASSIGNMENT AND SUBLETTING  See Section 48.13.........................................8
15.     INSURANCE PROVISIONS  See Section 48.14..............................................9
16.     TRANSFER OF LANDLORD'S INTEREST.....................................................12
17.     DAMAGE OR DESTRUCTION  See Section 48.15............................................12
18.     EMINENT DOMAIN......................................................................13
19.     DEFAULTS  See Section 48.16.........................................................13
20.     REMEDIES............................................................................14
21.     DEFAULT BY LANDLORD.................................................................15
22.     SURRENDER OF PREMISES; REMOVAL OF PROPERTY..........................................15
23.     COSTS OF SUIT.......................................................................16
24.     WAIVER..............................................................................16
25.     HOLDING OVER  See Section 48.17.....................................................17
26.     SUBORDINATION  See Section 48.18....................................................17
27.     RULES AND REGULATIONS...............................................................17
28.     DEFINED TERMS.......................................................................17
29.     SUCCESSORS AND ASSIGNS..............................................................18
30.     TIME OF ESSENCE.....................................................................18
31.     ENTIRE AGREEMENT....................................................................18
32.     WORK LETTER  See Section 48.19......................................................18
33.     RIGHT OF LANDLORD TO PERFORM........................................................18
34.     LATE CHARGE AND INTEREST ON TENANT'S OBLIGATIONS ...................................18
        See Section 48.20
35.     PAYMENTS AND NOTICES  See Section 48.21.............................................19
36.     ESTOPPEL CERTIFICATES...............................................................19
37.     CENTER NAME AND ADDRESS.............................................................19
38.     BROKERS  See Section 48.22..........................................................19
39.     NON-DISCLOSURE OF LEASE TERMS.......................................................20
40.     TENANT'S AUTHORITY..................................................................20
41.     NO OFFER; APPROVAL BY LENDER  See Section 48.23.....................................20
42.     INABILITY TO PERFORM  See Section 48.24.............................................20
43.     COMMON FACILITIES  See Section 48.25................................................20
44.     PARKING FACILITIES    [Intentionally Deleted]  See Section 48.26....................21
45.     TRAFFIC AND ENERGY MANAGEMENT.......................................................21
46.     SIGNS  See Section 48.27............................................................22
47.     MISCELLANEOUS.......................................................................22
48.     ADDENDUM............................................................................23
        48.1   The Premises.................................................................23
        48.2   Term.........................................................................26
        48.3   Prior Documents..............................................................26
        48.4   Tenant's Options.............................................................27
        48.5   Rent.........................................................................31
        48.6   Utilities....................................................................32
        48.7   Property Taxes...............................................................32
        48.8   Maintenance and Repairs......................................................32
</TABLE>

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<TABLE>
<S>     <C>                                                                                 <C>
        48.9   Alterations and Additions....................................................33
        48.10  Use of Premises; Hazardous Materials.........................................34
        48.11  Acceptance of Premises.......................................................34
        48.12  Entry and Inspection.........................................................34
        48.13  Assignment and Subletting....................................................34
        48.14  Insurance Provisions.........................................................34
        48.15  Damage or Destruction........................................................35
        48.16  Defaults and Remedies........................................................35
        48.17  Holding Over.................................................................35
        48.18  Subordination................................................................36
        48.19  Work Letter..................................................................36
        48.20  Late Charge and Interest on Tenant's Obligations.............................36
        48.21  Payments and Notices.........................................................36
        48.22  Brokers......................................................................37
        48.23  No Offer; Approval by Lender.................................................37
        48.24  Inability to Perform.........................................................37
        48.25  Common Facilities............................................................37
        48.26  Parking Facilities...........................................................38
        48.27  Signs........................................................................39
        48.28  Quiet Possession.............................................................39
        48.29  Security Measures............................................................39
        48.30  Rules and Regulations........................................................39
</TABLE>

                                TABLE OF EXHIBITS

EXHIBIT "A"           DEPICTION OF BUILDING A AND BUILDING A AREA
EXHIBIT "A-1"         DEPICTION OF CENTER
EXHIBIT "B"           COMMON FACILITIES DEFINED
EXHIBIT "C"           RULES AND REGULATIONS
EXHIBIT "D"           [Intentionally Deleted]
EXHIBIT "E"           TENANT SIGN PROGRAM -- CRITERIA RESEARCH AND DEVELOPMENT
                      BUILDINGS
EXHIBIT "F"           OTHER DOCUMENTS
EXHIBIT "G"           SHARED RIGHTS PARKING AGREEMENT

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                         HARBOR GATEWAY BUSINESS CENTER
                             HI-TECH BUILDING LEASE

Article 1 See Section 48.1         PREMISES

               1.1 Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord that certain building (the "Building") or the portion thereof
identified in the applicable Basic Lease Provision and depicted on the plan
attached hereto as Exhibit "A." The Building, or the portion thereof leased to
Tenant, shall sometimes be referred to herein as the "Premises." The Premises
are located in the Harbor Gateway Business Center depicted on Exhibit "A-1"
attached hereto (the "Center").

               1.2 Tenant is obtaining a right of exclusive use only of the
Premises. Landlord reserves to itself, its successors and assigns, together with
the right to grant and transfer all or a portion of the same, the non-exclusive
right of use of all portions of the Center other than that occupied by the
Premises for all purposes not inconsistent with Tenant's use of the Premises.

Article 2 See Sections 48.2, 48.3 and 48.4   TERM

               2.1    [Intentionally Deleted]

               2.2    [Intentionally Deleted]

               2.3    [Intentionally Deleted]

Article 3 See Section 48.5           RENT

               3.1 Tenant shall pay, for each lease year, a basic annual rent in
the amount shown in the applicable Basic Lease Provision, in equal monthly
installments payable, without prior notice or demand, on the first day of each
month in advance. If the Commencement Date occurs on other than the first day of
a month, the basic rent for the fraction of the month starting with the
Commencement Date shall be prorated and paid on said Commencement Date. If the
term hereof ends on a day other than the last day of a month, the basic rent for
the month during which said expiration occurs shall be prorated on the basis of
the actual number of days in said month.

               3.2 As used herein, a "lease year" is a period of twelve (12)
consecutive full calendar months commencing on January 1 and ending on December
31, except that if the Commencement Date occurs on a date other than January 1
there shall be a partial lease year for the period from the Commencement Date to
the next following December 31, both dates inclusive, and the last lease year,
if this Lease expires or is terminated on a date other than December 31, shall
be a partial lease year for the period beginning on January 1 following the last
preceding lease year and ending on the expiration or termination date.

               3.3 [Intentionally Deleted]

               3.4 [Intentionally Deleted]

Article 4                COMMON FACILITIES EXPENSES

               [Intentionally Deleted]

Article 5 [Intentionally Deleted]    SECURITY DEPOSIT

Article 6 See Section 48.6              UTILITIES

               6.1 Tenant shall pay all charges for utility services furnished
to the Premises during the term, together with all taxes thereon as set forth on
the purveyors' bills and shall indemnify Landlord and the Center from and
against any such charges or liens arising therefrom.

               6.2 Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the proper functioning and protection of
the air conditioning, electrical,

<PAGE>

heating and plumbing systems. Tenant shall not overload any of the mechanical,
electrical, plumbing, sewer or other utility equipment. Landlord shall not be
liable in damages or otherwise for any failure or interruption of any utility
service being furnished to the Premises and no such failure or interruption
shall entitle Tenant to terminate this Lease or to an abatement of any rent due
hereunder.

Article 7 See Section 48.7     PAYMENT OF TAXES

               7.1 Tenant shall pay, not later than ten (10) days prior to
delinquency, all real property taxes levied or assessed by any taxing or
assessing authority upon, against or with respect to the Premises. The term
"real property taxes" shall include (i) all taxes, assessments and governmental
charges and surcharges (including, without limitation, assessments for public
improvements or benefits whether or not commenced or completed during the term
of this Lease, or for water, sewer, or storm drains, and other rents, rates,
charges, excises, levies, license fees, service fees, use fees, permit fees and
other authorization fees) and all other charges (in each case, whether general
or special, ordinary or extraordinary, foreseen or unforeseen) of every kind and
character (including all penalties and interest thereon), levied upon or with
respect to the Premises, (ii) any tax or excise on or measured by rents, and
(iii) any other tax, however described, levied against Landlord or Tenant on
account of the rent reserved hereunder or on the business of renting the
Premises. Without limiting the generality of the foregoing, real property taxes
shall include any assessment by any governmental authority pursuant to any
enabling statute (such as, for example an "SB 55 Assessment") or payment to
retire bonds or other indebtedness created by a special assessment district, an
improvement district or other governmental authority (such as, for example, 1911
Act and 1915 Act Bonds). Notwithstanding anything to the contrary in the
foregoing, "real property taxes" shall not include franchise, estate,
inheritance, succession, capital levy, net income or excise profits taxes
imposed upon Landlord, except that if real property taxes are withdrawn in whole
or in part and any substitute tax is made therefor, such tax shall for the
purpose of this Lease be considered a real property tax, regardless of how
denominated or the source from which collected. Tenant shall, not later than the
delinquency date for any real property tax, furnish to Landlord a copy of the
receipted tax bill or other documentary proof of said payment. Tenant appoints
Landlord as its attorney-in-fact for the purpose of performing, at Tenant's sole
cost, all acts necessary to cause the Premises to be separately assessed, and
Tenant agrees to pay to Landlord, within ten (10) days after the date of
billing, all costs reasonably incurred by Landlord in performing such acts.

               7.2 Tenant shall be responsible for and shall pay not later than
ten (10) days prior to delinquency all municipal, county and state taxes, levies
and fees of every kind and nature, including but not limited to, general or
special assessments, assessed during the term of this Lease against any
leasehold interest, leasehold improvement and all furniture, fixtures, equipment
and other personal property of any kind placed, installed or located within,
upon or about the Premises. Tenant shall cause all taxes imposed upon any
personal property situated in the Premises to be levied or assessed separately
from the Premises and not as a lien thereon. Upon request of Landlord, Tenant
shall, not later than the delinquency date for any such tax, furnish to Landlord
documentary proof of payment of said tax.

               7.3 If at any time during the term any of the above-described
taxes are not levied and assessed separately to Tenant, Tenant shall pay to
Landlord (a) that portion of such taxes assessed against the land underlying the
tax parcel which the gross area of the land underlying the Premises bears to the
gross area of the entire tax parcel; plus (b) that portion of such taxes
assessed against the improvements included within the tax parcel which the
valuation assigned by the taxing authorities to the Premises bears to the
valuation so assigned to all improvements included within such tax parcel; plus
(c) with respect to the other types of taxes, a reasonable proportion thereof as
determined by Landlord. If separate valuations as to the Premises, the
improvements thereto and Tenant's personal property in the Premises are not
reasonably available to Landlord, then the reasonable determination by Landlord
in good faith, from the best information reasonably available to it, of the
portion of such taxes assessed against the Premises, the improvements thereto
and Tenant's personal property in the Premises shall be conclusive. If the
Premises, the improvements thereto and Tenant's personal property in the
Premises are not separately assessed and taxed, then such taxes shall be paid to
Landlord within ten (10) days after Tenant's receipt of Landlord's invoice
therefor.

                                       2
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               7.4 Provided that the Premises are separately assessed and taxed,
Tenant may, at Tenant's sole risk and cost, contest the amount and/or validity
of applicable taxes by appropriate legal proceedings; provided, however, that
said right shall be availed of only upon condition that Tenant shall indemnify
and hold Landlord and the Center harmless from all losses, costs and expenses,
including but not limited to, Landlord's reasonable attorneys' fees and court
costs, which in any manner arise from or with respect to such contest and upon
further condition that Tenant shall take all actions required to prevent the
loss or forfeiture of the Center or any part thereof. The foregoing shall not,
however, relieve, modify, or extend Tenant's covenant to pay any such taxes at
the time and in the manner provided in this Article unless such proceedings
operate to prevent the sale of the Center or any part thereof or the placing of
any lien thereon to satisfy such taxes prior to the final determination of such
proceedings. Upon termination of such proceedings, Tenant shall promptly pay all
taxes then payable and the interest and penalties in connection therewith, and
the charges accruing in such proceedings.

               7.5 All taxes for the first and last lease year of this Lease
shall be prorated between Landlord and Tenant on the basis of the fiscal year of
the appropriate governmental authority. Taxes which are levied on a fiscal year
basis shall be deemed to apply one-twelfth (1/12) to each calendar month in such
fiscal year.

Article 8 See Section 48.8   MAINTENANCE AND REPAIR

               8.1 Except as provided in Sections 8.2 and 8.3 and Articles 17
and 18, Tenant at its expense shall keep in good order, condition, and repair
(including replacement of parts and equipment, if necessary) the Premises and
every part thereof and all equipment, (including all heating, ventilating and
air conditioning equipment unless the first paragraph of Section 8.03 applies)
trade fixtures, furnishings and other personal property in the Premises or
serving the Premises, and shall furnish and repair all expendables (soap,
towels, etc.). Tenant shall promptly at Tenant's cost make all repairs necessary
to maintain the Premises in good condition. Tenant shall provide whatever
treatment may be necessary, as often as may be required, to keep the Premises
neat and attractive.

               On the last day of the term hereof, or on any sooner termination
of this Lease, Tenant shall, subject to the provisions of Articles 17 and 18,
surrender the Premises to Landlord in good condition, ordinary wear and tear to
the wall covering, carpet and other floor covering in the Premises excepted.

               8.2 [Intentionally Deleted]

               8.3 [Intentionally Deleted]

               8.4 Tenant shall also be responsible to insure that all truck
loading areas and loading doors which constitute a part of the Premises, if any,
are not unreasonably damaged and do not accumulate litter or debris as a result
of deliveries to and pickups from Tenant. Any unreasonable costs borne by
Landlord (i.e., any costs of work performed by Landlord over and above
Landlord's standard work with respect to the Common Facilities) to keep such
areas clean and in working order shall be billed by Landlord to Tenant and
Tenant shall pay the same within ten (10) days after receipt of an invoice from
Landlord.

Article 9 See Section 48.9   ALTERATIONS AND FIXTURES

               9.1 Tenant shall not make any alterations, additions or
improvements (including maintenance and repairs) ("alterations") of or to the
Premises without the prior written consent of Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed. Without limiting the
generality of the foregoing, Tenant shall not make any alterations to the
exterior of the Premises, to any structural component of the Premises or to the
electrical, mechanical, plumbing or heating, ventilating and air conditioning
systems servicing the Premises without the prior written consent of Landlord.
All alterations to the roof top elements of the Premises must comply with
Landlord's standard plans and specifications for such elements on the Building,
which plans are available from Landlord on request. Tenant expressly agrees that
Landlord may disapprove any alterations of roof top elements that do not comply
with Landlord's standard plans. Landlord may impose such additional condition(s)
to its consent to any alteration as Landlord deems reasonable, including, but
not limited to, a requirement that all work be

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covered by a lien and completion bond in an amount equal to one and one-half
times the estimated cost of the work. Any request for consent shall be made in
writing and shall contain architectural plans describing such work in reasonable
detail satisfactory to Landlord. Failure of Landlord to respond to such request
within sixty (60) days after receipt of a complete set of such architectural
plans shall be deemed approval of such request. Tenant, at Tenant's cost, shall
prepare or cause to be prepared and shall deliver to Landlord within thirty (30)
days after completion of such work a detailed set of "as-built" plans and
specifications reflecting the alterations to the Premises constructed by Tenant.

               All alterations of or to the Premises shall be scheduled through
the office of the Center and shall otherwise be completed in accordance with the
applicable provisions of Exhibit "D" attached hereto. All alterations of or to
the Premises shall become the property of Landlord and shall be surrendered with
the Premises at the end of the term. Landlord may, however, by written notice to
Tenant given at least thirty (30) days prior to the end of the term, require
Tenant to remove all alterations installed or constructed by Tenant and to
repair any damage to the Premises resulting from such removal, all at Tenant's
sole cost and expense.

               All alterations to the Premises shall be at least equal to the
original work in quality. The adequacy of such work shall be determined by
Landlord as measured by the same standards used for original construction.
Tenant shall be responsible for determining that the Premises comply with the
provisions of this Lease, all matters of record affecting the Premises, all
applicable governmental requirements, and all exterior architectural design,
location and color criteria as approved by Landlord. All work shall be performed
only by a licensed, bonded contractor approved in advance by Landlord, and shall
be made only at such time or times as shall be approved by Landlord. Tenant
shall indemnify and save harmless Landlord against all actions, claims, and
damages by reason of Tenant's failure to comply with any of the foregoing
provisions.

               The approval by Landlord of any specifications, working drawings
or other plans for alterations to be made by Tenant of or to the Premises,
whether upon commencement of possession by Tenant of the Premises or at any
other time during the term of this Lease, shall not be deemed to be a
representation or warranty by Landlord as to the adequacy or sufficiency of such
specifications, working drawings or other plans or of the improvements or
construction contemplated thereby for any use or purpose. By its approval
thereof, Landlord assumes no liability or responsibility therefor, or for any
defect in any improvements or construction made pursuant thereto.

               Before commencement of any work of improvement in the Premises,
Tenant shall give Landlord thirty (30) days written notice thereof, specifying
precisely the expected date of commencement. Landlord may maintain in the
Premises such notices of non-responsibility or other notices as may be necessary
to protect Landlord against liability for liens and claims.

               9.2 All articles of personal property and all business and trade
fixtures, machinery and equipment, furniture and movable partitions installed by
Tenant at its expense shall be the property of Tenant and may be removed by
Tenant at any time during the last thirty (30) days of the term if Tenant is not
in default hereunder, provided that Tenant repairs any damage to the Premises
caused by such removal. On the expiration of the term, or on any earlier
termination of this Lease, Tenant shall remove all such personal property, etc.,
in accordance with the provisions of Article 22.

Article 10              USE OF PREMISES; HAZARDOUS MATERIALS
See Section 48.10

               10.1 Tenant shall use the Premises only for the purpose specified
in the applicable Basic Lease Provision and for no other purpose without the
prior written consent of Landlord. Tenant shall not use the Premises in
violation of any applicable law, ordinance or governmental regulation or of the
certificate of occupancy issued for the Premises, and shall, upon five (5) days'
written notice from Landlord, discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
any applicable law, ordinance or governmental regulation or of said certificate
of occupancy. Tenant shall promptly comply with all protective covenants and
architectural standards applicable to the Premises and all present and future
laws, ordinances, orders, rules, regulations and requirements

                                       4
<PAGE>

of all governmental authorities having jurisdiction over the Premises, or any
applicable insurance underwriters.

               Tenant shall not do or permit anything to be done in or about the
Premises which will interfere with the rights of other occupants of the Center,
or injure or annoy them, or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance or commit any waste in, on or about the Premises. Tenant
shall not (a) place a load upon any floor of the Premises which exceeds the
floor load per square foot which such floor was designed to carry, (b) attach or
hang any object or item from the ceiling or roof of the Premises or any
structural component of the Premises without Landlord's prior written consent
thereto, (c) use an electric cart or any other vehicle, excluding automobiles,
in the Center except as previously approved by Landlord in writing, or (d)
violate any mandatory restrictions imposed by any governmental authority with
respect to conservation of energy, water, gas or electricity or reduction of
automobile or other emissions or any rules of Landlord adopted in compliance
therewith. Tenant shall not do or permit to be done anything which will injure
the Premises or invalidate or increase the cost of any insurance policy(ies)
covering the Premises, the Center and/or property located therein. Tenant shall
maintain no outside storage. Tenant shall promptly upon demand reimburse
Landlord for any additional premium charged for any such policy maintained by
Landlord by reason of Tenant's failure to comply with the provisions of this
Article.

               10.2 Notwithstanding the foregoing, Tenant may contest any
governmental requirement or alleged violation thereof, so long as Landlord's
interest in the Premises and the Center are not thereby adversely affected, and
Landlord shall, at Tenant's request, join in such contest if its participation
is necessary, but at no expense to Landlord. If any security must be posted, or
any order must be obtained to forestall compliance with such requirement pending
the determination of such contest, Tenant shall post such security or shall
obtain such order prior to commencing such contest and such action shall be a
condition to Tenant's right to contest. If such contest is finally determined
adversely to Tenant, Tenant shall promptly comply with the requirement(s)
determined to be applicable to the Premises and shall indemnify and hold
Landlord harmless from all liabilities, damages, costs (including costs and
attorneys' fees incurred or awarded in such contest) and expenses occasioned by
any non-compliance by Tenant and any delay in effecting compliance, including
any delay occasioned by a contest determined adversely to Tenant.

               10.3 Without limiting the generality of Section 10.01, Tenant
covenants and agrees that Tenant, its employees, agents and other third parties
entering upon the Center at the request or invitation of Tenant shall not bring
into, maintain upon or release or discharge in or about the Center any hazardous
or toxic substances or hazardous waste (collectively, "hazardous materials").
The foregoing covenant shall not extend to substances typically found or used in
general office and administrative environments so long as (a) such substances
are maintained only in such quantities as are reasonably necessary for Tenant's
operations in the Premises, (b) such substances and any equipment which
generates such substances are used and stored strictly in accordance with all
applicable laws and regulations, the highest standards prevailing in the
industry for such substances and the manufacturers' instructions therefor, (c)
such substances are not disposed of in or about the Center in a manner which
would constitute a release or discharge thereof and (d) all such substances and
any equipment which generates such substances are removed from the Center by
Tenant upon the expiration or earlier termination of this Lease.

               In the event that Tenant proposes to conduct any use or to
operate any equipment which will or may utilize or generate a hazardous material
other than as specified in the first paragraph of this Section, Tenant shall
first in writing submit such use or equipment to Landlord for approval. No
approval by Landlord shall relieve Tenant of any obligation of Tenant pursuant
to this Section, including the removal, clean-up and indemnification obligations
imposed upon Tenant by this Section. Tenant shall, within five (5) days after
receipt thereof, furnish to Landlord copies of all notices and other
communications received by Tenant with respect to any actual or alleged release
or discharge of any hazardous material in or about the Premises or the Center
and shall, whether or not Tenant receives any such notice or communication,
notify Landlord in writing of any discharge or release of hazardous material by
Tenant or anyone for whom Tenant is responsible in or about the Premises or the
Center.

                                       5
<PAGE>

               In the event that Tenant is required to maintain any hazardous
materials license or permit in connection with any use conducted by Tenant or
any equipment operated by Tenant in the Premises, copies of each such license or
permit, each renewal thereof and any communication relating to suspension,
renewal or revocation thereof shall be furnished to Landlord within five (5)
days after receipt thereof by Tenant. Compliance by Tenant with the two
immediately preceding sentences shall not relieve Tenant of any obligation of
Tenant pursuant to this Section.

               Upon any violation of the foregoing covenants, Tenant shall be
obligated, at Tenant's sole cost, to clean-up and remove from the Center all
hazardous materials introduced into the Center by Tenant or any third party for
whom Tenant is responsible. Such clean-up and removal shall include all testing
and investigation required by any lender, owner or governmental authorities
having jurisdiction, and preparation and implementation of any remedial action
plan required by any governmental authorities having jurisdiction. All such
clean-up and removal activities of Tenant shall, in each instance, be conducted
to the satisfaction of Landlord and all governmental authorities having
jurisdiction. Landlord's right of entry pursuant to Article 13 shall include the
right to enter, inspect and test the Premises for violations of Tenant's
covenants herein. If any governmental authority or lender shall require testing
for hazardous materials in the Premises, then Tenant shall reimburse Landlord
for all costs of such testing upon demand as additional rent due hereunder.

               Tenant shall indemnify, defend and hold harmless Landlord, its
partners, and its and their successors, assigns, partners, directors, officers,
employees, agents, lenders and attorneys from and against any and all claims,
liabilities, losses, actions, costs and expenses (including reasonable
attorneys' fees and costs of defense) incurred by such indemnified persons, or
any of them, as the result of (i) the introduction into or about the Center by
Tenant or anyone for whom Tenant is responsible of any hazardous materials, (ii)
the usage, storage, maintenance, generation, production, disposal, release or
discharge by Tenant or anyone for whom Tenant is responsible of hazardous
materials in or about the Center, (iii) the discharge or release in or about the
Center by Tenant or anyone for whom Tenant is responsible of any hazardous
materials, (iv) any injury to or death of persons or damage to or destruction of
property resulting from the use, introduction, production, storage, generation,
disposal, disposition, release or discharge by Tenant or anyone for whom Tenant
is responsible of hazardous materials in or about the Center, and (v) any
failure of Tenant or anyone for whom Tenant is responsible to observe the
foregoing covenants of this Section. Payment shall not be a condition precedent
to enforcement of the foregoing indemnification provision.

               Upon any violation of the foregoing covenants Landlord shall be
entitled to exercise all remedies available to a landlord against a defaulting
tenant, including but not limited to those set forth in Article 20. Without
limiting the generality of the foregoing, Tenant expressly agrees that upon any
such violation Landlord may, at its option, (A) immediately terminate this Lease
or (B) continue this Lease in effect until compliance by Tenant with its
clean-up and removal covenant notwithstanding any earlier expiration date of the
term of this Lease. No action by Landlord hereunder shall impair the obligations
of Tenant pursuant to this Section.

               As used in this Section, "hazardous materials" shall include
asbestos, all petroleum products and all hazardous materials, hazardous wastes
and hazardous or toxic substances as defined or designated in or pursuant to the
comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601, et seq.) (including specifically any element,
compound, mixture or solution), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), and California Health and Safety
Code Section 25316, including such hazardous or toxic substances or wastes as
are identified, defined or listed elsewhere where such identifications,
definitions or lists are incorporated into such acts or code section by
reference, as well as all products containing such hazardous substances. In
addition, "hazardous materials" shall include any substance designated pursuant
to the Clean Water Act (33 U.S.C. Sections 1321 et seq.), any hazardous waste
having the characteristics identified under or listed pursuant to the Solid
Waste Disposal Act, (42 U.S.C. Sections 1317(a), et seq.), any hazardous air
pollutant listed under Section 112 of the Clean Air Act (42 U.S.C. Sections
7412, et seq.) and any imminently hazardous chemical substance or mixture with
respect to which the Administrator of the Environmental Protection Agency has
taken action pursuant to Section 7 of the Toxic

                                       6
<PAGE>

Substances Control Act (15 U.S.C. Sections 2606, et seq.). The term also
includes, but is not limited to, polychlorinated biphenyls, urea formaldehyde or
related substances. By its signature to this Lease, Tenant confirms that it has
conducted its own examination of the Premises with respect to hazardous
materials and accepts the same "AS IS" and with no hazardous materials present
thereon.

               Within 180 days prior to the expiration of this Lease (or within
thirty (30) days after any earlier expiration), Landlord may at its election
retain a hazardous materials consultant to conduct a survey or audit of the
Premises to determine whether or not hazardous materials introduced by Tenant or
its agents, employees or contractors are present in or about the Premises.
Tenant shall cooperate fully with Landlord and such consultant in the conduct of
any such survey or audit and shall reimburse Landlord, as additional rent, for
the reasonable costs and fees of such consultant within ten (10) days after
receipt of Landlord's invoice therefor. If the audit or survey discloses the
presence of hazardous materials introduced by Tenant or its agents, employees or
contractors, the fourth, fifth and sixth paragraphs of this Section 10.3 shall
apply to such hazardous materials and Tenant's obligations with respect thereto.

               The covenants contained in this Section 10.3 shall survive the
expiration or any earlier termination of this Lease.

Article 11 See Section 48.11    ACCEPTANCE OF PREMISES

               Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises or
the suitability or fitness of the Premises for the conduct of Tenant's business
or for any other purpose. Taking of possession of the Premises by Tenant shall
conclusively establish that the Premises were at such time in satisfactory
condition and in conformity with the provisions of this Lease in all respects,
except as to any items as to which Tenant shall give Landlord a written
punchlist in reasonable detail within fifteen (15) days after Tenant takes
possession. Landlord shall promptly correct any actual defects of which it is so
notified. Nothing contained in this Article shall affect the commencement of the
term or the obligation of Tenant to pay rent hereunder.

Article 12                         LIENS

               Tenant shall keep the Premises free from any mechanic's liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, and agrees to defend, indemnify and hold harmless Landlord from and
against any such lien or claim or action thereon, together with costs of suit
and reasonable attorney's fees incurred by Landlord in connection therewith. If
any such lien shall be filed against the Premises, Tenant shall notify Landlord
promptly and shall either cause the same to be discharged of record within
twenty (20) days after the date of filing of the same or, if Tenant in good
faith determines to contest such lien, Tenant shall furnish such security as may
be necessary to (a) prevent any foreclosure proceedings against the Premises
during the pendency of such contest, and (b) cause Chicago Title Insurance
Company to remove such lien as a matter affecting title to the Premises on a
preliminary title report with respect thereto.

Article 13 See Section 48.12    ENTRY AND INSPECTION

               Landlord and its agents may at all reasonable times during normal
business hours and at any time in case of emergency, enter upon the Premises for
the purposes of (a) inspecting the same, and protecting the interest therein of
Landlord, and (b) taking all required materials and equipment into the Premises,
and performing all work therein which Landlord is required or permitted to
perform hereunder, (c) maintaining any service provided by Landlord to Tenant
hereunder and (d) posting notices of nonresponsibility, all without rebate of
rent to Tenant for any loss of occupancy or quiet enjoyment of the Premises, or
damage, injury or inconvenience thereby occasioned. Landlord and its agents may
also enter and/or pass through the Premises, at reasonable times during normal
business hours, to show the Premises to holders of encumbrances on the interest
of Landlord, to prospective purchasers, mortgagees or lessees of the Building.
During the six (6) months prior to the expiration date of this Lease, Landlord
may exhibit the Premises to prospective tenants. Landlord may also enter on
and/or pass through the Premises at such times as shall be required by
circumstances of emergency. If during the last month of the term hereof Tenant
has removed substantially all property and personnel from the Premises,

                                       7
<PAGE>

Landlord may enter the Premises and repair, alter and redecorate the same,
without abatement of rent and without liability to Tenant.

               Nothing contained herein shall constitute an actual or
constructive eviction or relieve Tenant of any obligation with respect to making
any repair, replacement or improvement or complying with any law, order or
requirement of any government or other authority. Nothing contained herein shall
impose upon Landlord any obligation to Tenant except as specifically provided in
this Lease.

Article 14 See Section 48.13    ASSIGNMENT AND SUBLETTING

               14.1 Tenant shall not, either voluntarily or by operation of law,
assign, sell, encumber, pledge or otherwise transfer all or any part of Tenant's
leasehold estate, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees, or sublet the Premises or any portion thereof,
without Landlord's prior written consent in each instance. Consent by Landlord
to one or more assignments or to one or more sublettings shall not operate to
exhaust Landlord's rights under this Section. The voluntary or other surrender
of this Lease by Tenant or a mutual cancellation hereof shall not work a merger,
and shall, at the option of Landlord, terminate all or any subleases or
subtenancies or shall operate as an assignment to Landlord of such subleases or
subtenancies. If Tenant is a corporation which, under then current guidelines
published by the Commissioner of Corporations, is not deemed a public
corporation, or is an unincorporated association or partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of twenty-five percent
(25%) shall be deemed an assignment under this Article. Tenant agrees to
reimburse Landlord, as additional rent, for Landlord's reasonable costs and
attorneys' fees incurred in connection with processing and documentation of any
requested assignment, subletting, transfer, change of ownership or hypothecation
of this Lease or Tenant's interest in the Premises.

               14.2 If Tenant desires to assign this Lease or to sublet the
Premises or any portion thereof, it shall first notify Landlord of its desire to
do so and shall submit in writing to Landlord (i) the name of the proposed
subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's
business to be carried on in the Premises; (iii) the terms and provisions of the
proposed sublease or assignment; and (iv) such reasonable financial information
as Landlord may request concerning the proposed subtenant or assignee, including
but not limited to a balance sheet of the proposed subtenant or assignee as of a
date within 90 days prior to such submission to Landlord.

               14.3 Within thirty (30) days after Landlord's receipt of the last
of the information specified in Section 14.2, Landlord may by written notice to
Tenant elect to (i) consent to the subletting or assignment upon the terms and
to the subtenant or assignee proposed; (ii) refuse to give its consent; or (iii)
terminate this Lease as to the portion (including all) of the Premises so
proposed to be subleased or assigned with a proportionate reduction in the rent
payable hereunder. If Landlord elects to proceed under clause (iii), Tenant
shall be relieved of its obligations under this Lease to the extent of the area
deleted from the Premises. In the event that Landlord does not elect to proceed
under clause (iii), Landlord shall not unreasonably withhold its consent
provided that the financial condition and quality of use of the proposed
subtenant or assignee are reasonably acceptable to Landlord. Landlord may also
consent to a proposed subletting or assignment subject to such conditions as
Landlord reasonably deems appropriate. No assignment or subletting consented to
by Landlord shall impair or diminish any covenant, condition or obligation
imposed upon Tenant by this Lease or any right, remedy or benefit afforded
Landlord. If Landlord consents or does not exercise any option set forth herein
within said thirty (30) day period, Tenant may within sixty (60) days after the
expiration of said thirty (30) day period enter into a valid assignment or
sublease of the Premises or portion thereof, upon the terms and conditions
described in the information required to be furnished by Tenant to Landlord, or
upon other terms not less favorable to Tenant; provided, however, that any
material change in such terms shall be subject to Landlord's consent as provided
herein, and provided further that any amount to be paid to Landlord by Tenant
pursuant to Section 14.4 shall be paid to Landlord upon the consummation of such
transaction.

                                       8
<PAGE>

               14.4 In connection with any assignment or subletting, Landlord
shall be entitled to receive, in the case of a subletting, all rent (however
denominated and paid) payable by the subtenant to Tenant in excess of that
payable by Tenant to Landlord pursuant to the other provisions of this Lease
and, in the case of an assignment, all consideration given, directly or
indirectly, by the assignee to Tenant in connection with such assignment. For
the purposes of this clause, "rent" shall mean all consideration paid or given,
directly or indirectly, for the use of the Premises or any portion thereof.
"Consideration" shall include money, services, property or any other thing of
value such as payment of costs, cancellation of indebtedness, discounts, rebates
and the like. "Sublet" and "sublease" shall include a sublease as to which
Tenant is sublessor and any sub-sublease or other subtenancy, irrespective of
the number of tenancies and tenancy levels between the ultimate occupant and
Landlord, and as to which Tenant receives any consideration, as defined in this
Section, and Tenant shall require in any sublease which it executes that Tenant
receive the profit from all sub-subtenancies, irrespective of the number of
levels thereof. The rent or other consideration to be passed through to Landlord
pursuant to this clause shall be paid to Landlord promptly upon receipt by
Tenant and shall be paid in cash, irrespective of the form in which received by
Tenant. If any rent or other consideration received by Tenant from a subtenant
or assignee is in a form other than cash, Tenant shall pay to Landlord in cash
the fair value of such consideration. Landlord and Tenant agree that the payment
required by this Section represents payment for Landlord's property rights in
and to the leasehold estate hereby created. Moreover, nothing contained in this
Section 14.4 shall be deemed or construed to permit any sub-subletting of all or
any portion of the Premises. Any such sub-subletting shall be only with the
prior written consent of Landlord, and it is Landlord's policy not to permit any
sub-subletting.

               14.5 [Intentionally Deleted]

               14.6 No subletting or assignment, even with the consent of
Landlord, shall relieve Tenant of its obligation to pay the rent and to perform
all other obligations to be performed by Tenant. The acceptance of any payment
due hereunder by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to any
assignment or subletting.

Article 15 See Section 48.14    INSURANCE PROVISIONS

               15.1 Tenant shall at all times during the term and at its cost,
maintain in full force and effect a policy or policies of insurance which afford
the following coverages:

                      (a) Worker's Compensation in the statutorily required
amount, including employer's liability with a liability amount not less than
$1,000,000 per occurrence.

                      (b) Comprehensive General Liability Insurance with a
liability amount not less than $3,000,000 combined single limit for both bodily
injury and property damage, including blanket contractual liability, broad form
property damage, personal injury, completed operations, products liability, host
liquor liability (or liquor liability, if applicable) and owned and non-owned
automobile coverage.

               The minimum limit on the coverage provided pursuant to paragraph
(b) above shall be adjusted upward or downward at the expiration of each third
lease year as follows: Not less than sixty (60) days prior to the relevant
adjustment date, Landlord shall request such insurance brokerage firm as is then
placing insurance for Landlord (the "Reviewing Broker") to review Tenant's then
existing liability insurance coverage, to review the then use of the Premises
and the claims history with respect thereto and to recommend, in writing, the
amount of coverage to be carried by Tenant. Such recommendation shall be based
upon the then use of the Premises and the liability claims history with respect
to the Premises and shall be certified to be consistent with amounts of coverage
generally recommended by such Reviewing Broker for similar types of users of
property with uses similar to that of the Premises in the geographical area
which includes the Premises. If the Reviewing Broker shall recommend an
increase(s) or decrease(s) in the amount of coverage then provided by Tenant,
Tenant shall promptly increase or decrease its coverage to the recommended
amount(s). In no event shall there be any reduction in the amounts of coverage
provided by Tenant under paragraph (b) below the initial amounts set forth
herein, notwithstanding any recommendation by the Reviewing Broker.

                                       9
<PAGE>

               Landlord, and any other persons designated by Landlord, shall be
added as additional insureds pursuant to such policies (although they shall not
have any obligations as "named" insureds therein). The insurance required by
this Article shall be the primary insurance as respects Landlord (and any other
additional insureds designated by Landlord) and not contributory. Each policy
providing coverage required by paragraph (b) shall contain an endorsement
providing, in substance, that "such insurance as is afforded hereby for the
benefit of [Landlord] shall be primary and any insurance carried by [Landlord]
shall be excess and not contributory." In no event shall the limits of any
coverage maintained by Tenant be considered as limiting the liability of Tenant
pursuant to this Lease.

               15.2 Tenant shall at all times during the term and at its cost,
maintain in effect policies of insurance covering (a) the Premises, providing
protection against any risk included within the classification "All Risk,"
including but not limited to insurance against sprinkler leakage, vandalism,
malicious mischief and flood (in the event the same is required by a lender
having a lien on the Premises), such insurance to be in an amount not less than
the full replacement value thereof, which shall be determined at the time the
policy is initially obtained, and not less frequently than once every three (3)
years thereafter; and (b) all tenant improvements on or in the Premises,
providing protection against any risk included within the classification "All
Risk," including but not limited to insurance against sprinkler leakage,
vandalism and malicious mischief, such insurance to be in an amount not less
than the full replacement value of such improvements, which shall be determined
at the time the policy is initially obtained, and not less frequently than once
every three (3) years thereafter; (c) all personal property of Tenant located in
or at the Premises, including but not limited to fixtures, furnishings,
equipment and furniture, in an amount not less than their full replacement
value, providing protection against any peril included within the classification
"All Risk," including but not limited to insurance against sprinkler leakage,
vandalism and malicious mischief; and (d) business interruption insurance
assuring that all rent payable hereunder will be paid for a period of twelve
(12) months if the Premises are destroyed or rendered inaccessible by a risk
insured against by an All Risk policy, with any endorsements required by this
Section.

               The proceeds of such insurance, so long as this Lease remains in
effect, shall be used to repair or replace the Premises, tenant improvements and
personal property so insured. Upon any termination of this Lease pursuant to
Article 17, the proceeds, if any, of the insurance provided for in clauses (a),
(b) and (d) of this Section shall be retained by Landlord and the proceeds, if
any, of the insurance provided for in clause (c) shall be retained by Tenant.

               15.3 All insurance required to be carried by Tenant shall be with
companies rated A:VIII, or better, in the then most recent version of Best's Key
Rating Guide. Tenant shall deliver to Landlord at least fifteen (15) days prior
to the time when such insurance is required, and thereafter at least thirty (30)
days prior to the expiration or renewal date of any policy maintained by Tenant,
copies of the policies or certificates evidencing such insurance. All policies
and certificates delivered pursuant to this Article shall contain liability
limits not less than those set forth herein, shall list the additional insureds
and shall specify all endorsements and special coverages required. Each policy
shall contain a provision requiring not less than thirty (30) days written
notice to Landlord prior to any cancellation, non-renewal or material amendment
thereof. For the purposes of this Article, "term" and "term of this Lease" shall
mean the period from the Commencement Date through the later of the expiration
or termination of the Lease term or the date Tenant surrenders possession of the
Premises to Landlord.

               15.4 Landlord shall at all times during the term maintain in full
force and effect a policy or policies of comprehensive liability insurance
insuring against loss, damage or liability for injury to or death of any person
or loss or damage to property occurring in the Common Facilities (as defined in
Exhibit "B" hereto) or in the public areas of the Building, with not less than
$2,000,000.00 combined single limit. Landlord or any first mortgagee with an
interest in the Center may from time to time require that such insurance limits
be increased to a level which Landlord or any such first mortgagee reasonably
deems necessary for full and adequate protection. Landlord shall also at all
times during the term maintain in full force and effect a policy or policies of
fire insurance with an extended coverage endorsement, and Landlord may maintain
such other coverage and endorsements, including, but not limited to, "All Risk,"
vandalism, malicious mischief and earthquake insurance, as Landlord deems
necessary or desirable (but exclusive of coverages required to be maintained by
Tenant under Section 15.2

                                       10
<PAGE>

above), in an amount equal to not less than ninety percent (90%) of the
replacement cost of the Premises and the Building, all improvements constructed
thereon and any additions thereto or replacements thereof, exclusive of
foundation and excavation costs, together with loss of rent insurance covering
losses by perils covered by the aforementioned insurance in amounts not less
than one year's full rent, the proceeds of which shall be payable to Landlord
and any first mortgagee, as their interests may appear. Said property insurance
shall not contain a coinsurance or contribution provision, but will contain
replacement cost endorsements and deductibles. The cost of all insurance
obtained by Landlord hereunder shall be included in Total Operating Expenses (as
defined in Exhibit "B" hereto).

               15.5 Landlord and Tenant each hereby waives all rights of
recovery against the other and against any other occupant of the Center and
against the officers, employees, agents, representatives and business visitors
of such other party and of such other occupant, for loss of or damage to such
waiving party or to its property or the property of others under its control,
arising from any cause insured against under any policy of insurance required to
be carried by such waiving party pursuant to this Lease (or any other policy of
insurance carried by such waiving party in lieu thereof) or actually carried by
such waiving party at the time of such loss or damage. The foregoing waiver
shall be effective whether or not a waiving party actually obtains and maintains
the insurance which such waiving party is required to obtain and maintain
pursuant to this Lease (or any substitute therefor). Landlord and Tenant shall,
upon obtaining the policies of insurance which they are required hereunder to
maintain or otherwise maintain, give notice to their respective insurance
carriers that the foregoing mutual waiver of subrogation is contained in this
Lease.

               15.6 To the fullest extent permitted by law, Tenant shall
indemnify and hold harmless Landlord, its agents and employees and all partners,
owners and affiliates of Landlord and the owner of the Center from and against
all liabilities for any damage or injury (including, without limitation, loss of
life) to any person or property in or about the Center arising from the use of
the Premises or the Center by Tenant, its subtenants, assignees or licensees or
the respective agents, employees or invitees of any of the foregoing persons, or
any other persons permitted in the Premises or elsewhere in the Center by
Tenant, or any of them. Such indemnification shall extend to liabilities arising
from any activity, work, or thing done, permitted or suffered by Tenant or any
such person in or about the Center and shall further extend to any liabilities
arising from any default in the performance of any obligation on Tenant's part
hereunder. "Liabilities" shall include all suits, actions, claims and demands
and all expenses (including attorneys' fees and costs of defense) incurred in or
about any such liability and any action or proceeding brought thereon. If any
claim shall be made or any action or proceeding brought against Landlord on the
basis of any liability described in this Section, Tenant shall, upon notice from
Landlord, defend the same at Tenant's expense by counsel reasonably satisfactory
to Landlord. Provided, however, that nothing contained herein shall operate to
relieve Landlord from any loss, damage, injury, liability, claim, cost or
expense which it is determined by a court of competent jurisdiction was
proximately caused by the sole negligence or willful misconduct of Landlord or
its agents or employees.

               15.7 Neither Landlord nor its agents or employees shall be liable
for any damage to property entrusted to Landlord's agents or employees in the
Center, nor for loss of any property by theft. Neither Landlord nor its agents
or employees shall be liable for any injury, death or damage which may be
sustained by the person, goods, wares or property of Tenant, its employees,
invitees or visitors or any other person in or about the Premises, or for loss
or interruption of business, caused by or resulting from any peril which may
affect the Premises, whether such damage or injury results from conditions
arising in the Premises or in other portions of the Center or from other
sources, unless solely and proximately caused by the negligence of Landlord, its
agents or employees, as determined by a court of competent jurisdiction. Tenant,
as a material consideration to Landlord, assumes all risk of damage to property
and injury to or death of persons in or about the Center from any cause other
than Landlord's sole negligence as determined by a court of competent
jurisdiction and for damage to the Premises resulting from any act or negligence
of any employee, agent, visitor or licensee of Tenant.

               15.8 Tenant acknowledges that it is aware that the Center is in
an area designated as a "flood hazard area" by the Department of Housing and
Urban Development.

                                       11
<PAGE>

Tenant may, but is not required to, obtain and maintain at Tenant's cost
National Flood Insurance business and personal property coverage, available from
private insurance companies to tenants in nonresidential buildings located in
flood hazard areas. Such insurance may be required if Tenant obtains financing
in connection with its business in the Premises from federally supervised,
regulated or insured lenders. When seeking information on such insurance, Tenant
should inform its insurance broker that (a) the Center is located in a
designated "flood hazard area," (b) the Premises were constructed after 1974 in
full compliance with the City of Costa Mesa's finish grading plans and
"flood-proofing" criteria adopted to reduce damage from flooding buildings and
their contents and (c) the actual finish floor elevation of the Premises is
higher than the water surface elevation on the City of Costa Mesa flood plain
maps covering the Center. Flood insurance maintained by Landlord with respect to
the Premises, if any, shall not cover improvements made by Tenant or any
property placed by Tenant in the Premises.

               15.9 Tenant shall give prompt notice to Landlord in case of fire
or accidents in the Premises or in the Building and of defects therein or in the
fixtures or equipment therein.

Article 16              TRANSFER OF LANDLORD'S INTEREST

               Upon any transfer or transfers of Landlord's interest in the
Premises, other than a transfer for security purposes only, the transferor shall
be automatically relieved of all obligations on the part of Landlord accruing
after the date of such transfer, including the obligation of Landlord under
Article 5 to return the security deposit as provided therein, provided such
obligations are assumed in writing by the transferee. No holder of a mortgage or
deed of trust to which this Lease is or may be subordinate, and no landlord
under a so-called sale leaseback, shall be responsible in connection with the
security deposited, or in connection with any other funds paid by Tenant
hereunder, unless such mortgagee, holder of a deed of trust or landlord shall
actually receive such funds. The covenants contained in this Lease on the part
of Landlord shall, subject to the foregoing, be binding on Landlord, its
successors and assigns, only during and in respect of their respective periods
of ownership of the landlord's interest in this Lease.

Article 17 See Section 48.15    DAMAGE OR DESTRUCTION

               17.1 If (a) the Building is damaged or destroyed to at least
thirty-three and one-third percent (33-1/3%) of its then replacement value, or
(b) the Building is partially damaged or destroyed during the last year of the
term, or (c) the Building is damaged and such damage is caused by a casualty not
insured against by Landlord, then, in any such event, Landlord may elect to
terminate this Lease effective as of the occurrence of the damage or
destruction, by written notice within sixty (60) days after the occurrence. A
total destruction of the Building shall terminate this Lease.

               17.2 Upon a partial destruction which does not result in a
termination of this Lease pursuant to Section 17.1, Landlord shall repair the
same to the extent of available insurance proceeds, provided such repairs can be
made, in Landlord's opinion, within six (6) months after notice to Landlord of
the occurrence of such damage, without the payment of overtime or other
premiums, in conformity with all then applicable laws and regulations, and such
partial destruction shall not void this Lease. If such repairs cannot, in
Landlord's opinion, be made within such six (6) month period or if available
insurance proceeds shall be insufficient to cover the cost of the repairs,
Landlord may elect to make such repairs within a reasonable time and pay any
cost in excess of available insurance proceeds with this Lease continuing in
effect, or to not make such repairs. Landlord's election to make such repairs
must be evidenced by written notice to Tenant within sixty (60) days after the
occurrence of the damage. If Landlord does not so elect to make such repairs,
this Lease may be terminated by either party by written notice to the other
party given within fifteen (15) days after the expiration of the period for
Landlord's election, with such termination to be effective as of the date of
occurrence of the damage. During any repair by Landlord pursuant to this
Section, Tenant shall be entitled to a proportionate reduction of rent while
such repairs are being made, such proportionate reduction to be based upon the
extent to which the Premises, or part thereof, may be untenantable.

               17.3 No damages, compensation or claim shall be payable by
Landlord for inconvenience, loss of business or annoyance arising from any
repair or restoration of the Premises. Landlord shall use its best efforts to
effect such repairs or restoration promptly and in such manner as not
unreasonably to interfere with Tenant's use and occupancy. All proceeds of

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the insurance maintained pursuant to Sections 15.2 and 15.4 upon the Premises
(but not Tenant's personal property therein) shall be the property of Landlord,
whether or not Landlord is obligated to or elects to make any repairs hereunder.
The restoration obligations of Landlord hereunder shall not include repair,
restoration or replacement of Tenant's equipment or personal property or of any
improvements installed by Tenant.

               17.4 Tenant waives the provisions of Section 1932, subdivision 2,
and Section 1933, subdivision 4, of the California Civil Code and all comparable
statutes or rules of law now or hereafter in effect with respect to any partial
destruction which Landlord must or may elect to repair under this Article. The
provisions of this Article constitute an agreed alternative method of dealing
with damage or destruction of the Premises and are in lieu of the less
comprehensive provisions contained in such statutory sections.

Article 18                       EMINENT DOMAIN

               18.1 If the entire Premises or greater than twenty-five percent
(25%) of the Rentable Area of the Premises shall be taken under power of eminent
domain, this Lease shall terminate as of the date of such condemnation, or as of
the date possession is taken by the condemning authority, whichever is earlier.
No award for any taking shall be apportioned, and Tenant hereby assigns to
Landlord any award made in such taking or condemnation together with all rights
of Tenant in or to the same or any part thereof. However, nothing contained
herein shall give Landlord any interest in or require Tenant to assign to
Landlord any award made to Tenant for the taking of personal property and
fixtures of Tenant and/or for interruption of or damage to Tenant's business,
provided that such award does not diminish the award to Landlord.

               18.2 If less than twenty-five percent (25%) of the Rentable Area
of the Premises is so taken, rent shall be abated in proportion to the part of
the Premises so taken, effective the date on which the condemning authority
requires possession. Landlord shall restore the portion of the Premises
remaining usable to as near its former condition as reasonably possible and this
Lease shall continue in effect.

               18.3 Notwithstanding anything to the contrary in the foregoing,
no temporary taking of the Premises or any part thereof, and/or of Tenant's
rights therein shall terminate this Lease or give Tenant any right to any
abatement of rent; any award to Tenant by reason of such temporary taking shall
belong entirely to Tenant.

               18.4 A sale by Landlord to any authority having the power of
eminent domain, either under threat of condemnation or while condemnation
proceedings are pending, shall be deemed a taking by eminent domain for all
purposes under this Article.

Article 19 See Section 48.16    DEFAULTS

               Each of the following shall constitute a default hereunder by
Tenant:

                      (a) Abandonment of the Premises. Abandonment includes, but
is not limited to, any absence by Tenant from the Premises for ten (10) days or
longer.

                      (b) Failure by Tenant to make any payment required to be
made by Tenant hereunder, as and when due. Landlord shall give Tenant three (3)
business days' written notice of such default; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
Section 1161, et. seq., of the California Code of Civil Procedure, as amended.

                      (c) Use by Tenant and/or Tenant's agents, employees,
customers and invitees of parking spaces in the Common Facilities in excess of
that number of Allocated Parking Spaces set forth in the applicable Basic Lease
Provision, where such use continues for an aggregate of three (3) business days
after written notice thereof from Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under Section 1161, et seq., of the California Code of Civil Procedure, as
amended. Use of a parking space for any portion of a day shall be deemed use of
the space for a full day for purposes of this subsection (c).

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<PAGE>

                      (d) Failure by Tenant to observe or perform any express or
implied covenant or provision of this Lease to be observed or performed by
Tenant, other than as specified in (a), (b) or (c) above, where such failure
continues for an aggregate of five (5) business days after written notice
thereof from Landlord to Tenant; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under Section 1161,
et seq., of the California Code of Civil Procedure, as amended; provided,
further, that if the nature of such failure is such that more than five (5)
business days are reasonably required for its cure, then Tenant shall not be in
default if Tenant commences such cure within said five (5) business day period,
and thereafter diligently prosecutes such cure to completion within fifteen (15)
days after said notice.

                      (e) (i) The making by Tenant of any general assignment for
the benefit of creditors; (ii) the filing by or against Tenant of a petition to
have Tenant adjudged a "debtor" under 11 U.S.C. Sec. 101 or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within thirty
(30) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) Tenant's convening of a meeting of its creditors or any class
thereof for the purpose of effecting a moratorium upon or composition of its
debts.

Article 20                          REMEDIES

               20.1 Upon any default by Tenant, Landlord, in addition to any
other remedies available to Landlord, may exercise the following remedies:

                      (a) Terminate Tenant's right to possession of the Premises
by any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant:

                              (i) All damages permitted by California Civil Code
Sec. 1951.2(a), including the worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided and the cost of recovering possession of the Premises, expenses of
reletting, including necessary repair, renovation and alteration of the
Premises, brokers' fees incurred, reasonable attorneys' fees, and any other
reasonable costs; and

                              (ii) At Landlord's election, such other sums in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law. As used herein "rent" includes the basic annual rent and all
other sums required to be paid by Tenant pursuant to this Lease. The "worth at
the time of award" of the amounts due prior to the date of award shall be
computed by allowing interest at the rate per annum determined pursuant to
Article 34 from the date such amounts accrued to Landlord. The worth at the time
of award of amounts due after the date of award shall be computed by discounting
such amounts at one (1) percentage point above the discount rate of the Federal
Reserve Bank of San Francisco at the time of award.

                      (b) Without terminating or effecting a forfeiture of this
Lease or otherwise relieving Tenant of any obligation hereunder in the absence
of express written notice of Landlord's election to do so, Landlord may enter
and relet the Premises or any portion thereof at any time or from time to time
and for such term(s) and upon such condition(s) and at such rental as Landlord
deems proper. Whether or not the Premises are relet, Tenant shall pay to
Landlord all amounts required hereunder up to the date that Landlord terminates
Tenant's right to possession, and thereafter Tenant shall pay to Landlord, until
the end of the term hereof, all rent and additional rent required hereunder.
Payments by Tenant shall be due at the times provided in this Lease, and
Landlord need not wait until the termination of this Lease to recover them in
any manner. Reletting of the Premises or any portion thereof shall not relieve
Tenant of any obligation hereunder. Proceeds received by Landlord from such
reletting shall be applied: first, to any indebtedness other than rent due from
Tenant; second, to costs of reletting; third, to the cost of any alterations and
repairs to the Premises; fourth, to rent due and unpaid hereunder. Any

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<PAGE>

residue shall be held by Landlord and applied in payment of future rent as the
same becomes due hereunder. Should that portion of the proceeds received by
Landlord from reletting applied to payment of rent hereunder be less than the
rent payable by Tenant hereunder during any month, Tenant shall pay such
deficiency to Landlord immediately upon demand. Landlord may execute any lease
hereunder in its own name, and the lessee thereunder shall have no obligation to
see to application by Landlord of proceeds received by Landlord, nor shall
Tenant have any right to collect such proceeds. Landlord shall not by any
re-entry or other act be deemed to accept any surrender by Tenant of the
Premises or be deemed to terminate this Lease or to relieve Tenant of any
obligation hereunder, unless Landlord gives Tenant express written notice of
Landlord's election to do so.

                      (c) Landlord may, at any time, terminate this Lease by
express written notice to Tenant of its election to do so. Such termination
shall terminate Tenant's right to possession but shall not relieve Tenant of any
obligation hereunder accrued prior to the date of termination. Upon such
termination, Landlord may recover from Tenant the amounts determined pursuant to
subsection (a) above.

               20.2 Any legal action by Landlord to enforce any obligation of
Tenant or in pursuit of any remedy hereunder shall be timely filed if commenced
prior to one (1) year after expiration of the term or prior to four (4) years
after the cause of action accrues, whichever period expires later.

               20.3 In any action for unlawful detainer, the reasonable rental
value of the Premises for the period of the unlawful detainer shall be the rent
and additional rent reserved in this Lease for such period, unless Landlord or
Tenant proves to the contrary by competent evidence.

               20.4 The rights and remedies reserved to Landlord herein,
including those not specifically described, shall be cumulative, and, except as
otherwise provided by California statutory law in effect at the time, Landlord
may pursue any or all or such rights and remedies, at the same time or
otherwise.

               20.5 No delay or omission of Landlord to exercise any right or
remedy shall be a waiver of such right or remedy or of any default by Tenant
hereunder. Acceptance by Landlord of rent or additional rent hereunder shall not
be a waiver of any preceding breach or default by Tenant, other than the failure
of Tenant to pay the particular rent or additional rent accepted, regardless of
Landlord's knowledge of such preceding breach or default at the time of
acceptance, or a waiver of Landlord's right to exercise any remedy available to
Landlord by virtue of such breach or default. Acceptance of any payment from a
debtor in possession, a trustee, a receiver or any other person acting on behalf
of Tenant or Tenant's estate shall not waive or cure a default under Article
19(d).

Article 21                     DEFAULT BY LANDLORD

               Landlord shall not be in default in performance of any obligation
required of it hereunder unless and until it has failed to perform such
obligation within thirty (30) days after written notice by Tenant to Landlord
specifying wherein Landlord has failed to perform; provided, however, that if
the nature of Landlord's obligation is such that more than thirty (30) days are
required for its performance then Landlord shall not be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecute the same to completion.

Article 22          SURRENDER OF PREMISES; REMOVAL OF PROPERTY

               22.1 Upon expiration of the term or any earlier termination of
this Lease, Tenant shall surrender possession of the Premises to Landlord in
good condition, at Tenant's sole cost and expense, repairs which are Landlord's
obligation excepted and ordinary wear and tear to wall covering, carpeting and
other floor covering excepted. Without limiting the generality of the foregoing,
upon expiration or earlier termination of this Lease, Tenant shall cause the
ceiling and walls in the Premises to be in good condition and the wall covering,
carpeting and floor covering in the Premises to be in good condition ordinary
wear and tear excepted. Tenant shall also, without expense to Landlord, remove
from the Premises all debris, all furniture, equipment,

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<PAGE>

machinery, business and trade fixtures, moveable partitioning and other articles
of personal property owned or installed by Tenant at its expense in the Premises
(exclusive of any items described in Section 22.3) and all similar articles of
any persons claiming under Tenant unless Landlord exercises its option to have
any subleases or subtenancies assigned to it. Tenant shall repair all damages to
the Premises resulting from such removal. If requested by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord one or more instruments releasing
to Landlord all right, title and interest of Tenant in and to the Premises.

               22.2 Whenever Landlord shall re-enter the Premises as provided in
Article 20, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the term (or within forty-eight (48)
hours after a termination by reason of Tenant's default) shall be considered
abandoned and Landlord may remove any or all of such items and dispose of the
same as provided in California Civil Code Sec. 1980 et seq. or as otherwise
provided by law. Tenant waives all claims for damages caused by Landlord's
re-entering and taking possession of the Premises or removing and storing the
property of Tenant as provided herein, and no such entry shall be considered a
forcible entry.

               22.3 All fixtures, equipment, alterations or additions attached
to or built into the Premises prior to or during the term shall be and remain
part of the Premises and shall not be removed by Tenant at the end of the term
unless otherwise expressly provided for in this Lease or unless such removal is
required by Landlord pursuant to Article 9. Such fixtures, equipment,
alterations and additions shall include but not be limited to: all floor
coverings, drapes, paneling, molding, doors, built-in cabinets, vaults, plumbing
systems, lighting systems, silencing equipment, communication systems, all
fixtures and outlets for the systems mentioned above and for all telephone,
radio, and telegraph purposes, and any special flooring or ceiling
installations.

Article 23                       COSTS OF SUIT

               23.1 If either party incurs any expense, including reasonable
attorneys' fees, in connection with any action or proceeding instituted by
either party by reason of any alleged default of the other party hereunder or
for a declaration of the rights and obligations of the parties hereunder, or if
Landlord incurs such expense in connection with collecting any amount due
hereunder or enforcing any obligation of Tenant hereunder, the party prevailing,
in the case of an action or proceeding, and Landlord in the case of such
collection or enforcement, shall be entitled to recover such reasonable expenses
from the other party. For purposes of this provision, in any action or
proceeding instituted by Landlord based upon any default or alleged default by
Tenant hereunder, Landlord shall be the prevailing party if (a) judgment is
entered in favor of Landlord or (b) prior to judgment Tenant shall pay or agree
to pay all or any portion of the rent and charges claimed by Landlord, eliminate
the condition(s), cease the act(s) or otherwise cure the omission(s) claimed by
Landlord to constitute a default by Tenant hereunder.

               23.2 Should either party ("First Party ") without fault on the
part of First Party, be made a party to any litigation instituted by the other
party ("Second Party") or by any third party against Second Party or by or
against any person holding under or using the Premises under license from Second
Party, or for the foreclosure of any lien for labor or material furnished to or
for Second Party or any such other person or arising out of any act or
transaction of Second Party or of any such other person, Second Party shall save
and hold First Party harmless from any judgment rendered against First Party or
the Premises, and all costs and expenses, including reasonable attorney's fees,
incurred by First Party in or in connection with such litigation.

Article 24                           WAIVER

               Waiver by Landlord or Tenant of any breach of any provision
hereof shall not be a waiver of such provision as to any subsequent breach of
the same or any other provision hereof. Consent to or approval of any act by one
of the parties shall not render unnecessary the obtaining of such party's
consent to or approval of any subsequent act. No act or thing done by Landlord
or Landlord's agents during the term of this Lease shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept such a surrender
shall be valid unless in writing and signed by Landlord. No employee of Landlord
or of Landlord's agents shall have any power to accept the keys to the Premises
prior to the expiration of this Lease, and delivery of the keys to any such
employee shall not operate as a termination of this Lease or a surrender of the
Premises.

                                       16
<PAGE>

Article 25 See Section 48.17    HOLDING OVER

               This Lease shall terminate without further notice upon expiration
of the term. Any holding over by Tenant after such expiration shall not
constitute a renewal or give Tenant any rights hereunder or in or to the
Premises, except as otherwise herein provided. This Lease cannot be extended
except by a writing signed by both parties. If Tenant holds over after
expiration of the term, Landlord may, at its option, exercised by written notice
to Tenant, treat Tenant as a tenant from month-to-month commencing on the first
day following the expiration of this Lease and subject to the terms and
conditions herein contained except that the basic monthly rental, which shall be
payable in advance, shall be two hundred percent (200%) of the basic monthly
rental in effect hereunder at the expiration date. All additional rent provided
herein shall also be payable with respect to such month-to-month tenancy. Any
such month-to-month tenancy shall be terminable at the end of any calendar month
by either party by written notice to the other given not less than ten (10) days
prior to the end of such month. If Tenant fails to surrender the Premises upon
expiration of this Lease despite demand to do so by Landlord, Tenant shall
indemnify and hold Landlord harmless from all loss or liability, including
without limitation any claims made by any succeeding lessee, or resulting from
such failure to surrender, and Landlord shall be entitled to the benefit of all
provisions of law respecting summary recovery of possession to the same extent
as if statutory or other notice had been given, without requirement of giving
such statutory or other notice.

Article 26 See Section 48.18    SUBORDINATION

               At the option of Landlord, this Lease shall be either superior or
subordinate to all ground or underlying leases, any first mortgage or first deed
of trust which now or hereafter affects the Premises, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Tenant
shall, upon written request of Landlord, execute and deliver such instruments as
may be required to subordinate the rights of Tenant under this Lease to such
ground or underlying leases or to the lien of any such first mortgage or first
deed of trust, or, if requested by Landlord, to subordinate any ground or
underlying lease or the lien of any such first mortgage or first deed of trust
to this Lease. Tenant appoints Landlord as its attorney-in-fact for the term of
this Lease to execute on behalf of Tenant any such instruments. Notwithstanding
any subordination, so long as Tenant is not in default hereunder, this Lease
shall not be terminated nor shall Tenant's quiet enjoyment of the Premises be
disturbed in the event of termination of any such ground or underlying lease or
the foreclosure of any such first mortgage or first deed of trust. In the event
of such termination or foreclosure, Tenant shall become a tenant of and attorn
to the successor-in-interest to Landlord upon the same terms and conditions
contained in this Lease, and shall execute any instrument reasonably required by
such successor for such purpose.

               If in connection with any attempt by Landlord to obtain financing
to construct the Premises, or permanent financing upon completion of
construction, the prospective lender shall request modifications to this Lease
as a condition to such financing, Tenant shall not unreasonably withhold or
delay its consent thereto, provided that such modifications do not materially
increase the obligations of Tenant hereunder or materially and adversely affect
the leasehold interest hereby created.

Article 27                 RULES AND REGULATIONS

               The Rules and Regulations attached hereto as Exhibit "C" by this
reference are hereby incorporated herein and made a part hereof. Tenant agrees
to abide by said Rules and Regulations and any reasonable and non-discriminatory
amendments and/or additions thereto as may be adopted and published by written
notice to tenants by Landlord. Landlord shall not be liable to Tenant for any
violation of such rules and regulations by any other tenant. Any amendment to
the Rules and Regulations shall be effective upon delivery of a copy thereof to
Tenant. Tenant shall be responsible for compliance with such rules and
regulations by its employees, agents and business visitors.

Article 28                     DEFINED TERMS

               "Landlord" and "Tenant" include the plural as well as the
singular. Words used in the neuter gender include the masculine and feminine and
words in the masculine or feminine gender include the neuter. If there be more
than one Tenant, the obligations imposed upon

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<PAGE>

Tenant shall be joint and several. Headings or titles to the articles of this
Lease shall have no effect upon interpretation of any part hereof.

Article 29                SUCCESSORS AND ASSIGNS

               Subject to Article 14, this Lease shall bind the heirs,
executors, administrators, personal representatives, successors and assigns of
all parties. Nothing contained herein, however, shall be construed to confer
upon any person other than Landlord and Tenant any rights or remedies under this
Lease.

Article 30                   TIME OF ESSENCE

               Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.

Article 31                  ENTIRE AGREEMENT

               This Lease and the exhibits hereto cover in full all agreements
whatsoever between the parties hereto concerning the Premises, the Building and
the Center, and all preliminary negotiations and agreements with respect to the
Premises, the Building and the Center, except those contained herein or therein,
are superseded and of no further force or effect. No person, firm or corporation
has had any authority from Landlord to make any representations or promises on
behalf of Landlord, and Tenant agrees that if any such representations or
promises have been made, Tenant waives all right to rely thereon. No verbal
agreement or implied covenant shall be held to vary the provisions hereof, any
statute, law, or custom to the contrary notwithstanding. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest. No employee or agent
of Landlord shall have authority, by letter, memorandum or other written
communication, to amend, vary or delete any provision of this Lease.

Article 32                      WORK LETTER
See Section 48.19

               Landlord shall cause the interior of the Premises to be completed
in accordance with the plans and specifications to be approved by both parties
and upon the terms and conditions set forth in the Work Letter attached hereto
as Exhibit "D" and Tenant agrees to perform all of its obligations therein at
the times and in the manner therein provided.

Article 33            RIGHT OF LANDLORD TO PERFORM

               All covenants and agreements to be performed by Tenant under the
terms of this Lease shall be performed at Tenant's sole cost and without any
abatement of rent. If Tenant shall fail to pay any sum of money, other than
rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, and such failure shall continue beyond
any applicable grace period set forth in Article 19, Landlord may, but shall not
be obligated so to do, make any such payment or perform any such other act on
Tenant's part. Landlord's election to make such payment or perform such act on
Tenant's part shall not give rise to any responsibility of Landlord to continue
making the same or similar payments or performing the same or similar acts. All
sums so paid by Landlord and all necessary incidental costs, together with
interest thereon at the rate per annum determined pursuant to Article 34 from
the date of such payment by Landlord, shall be payable by Tenant to Landlord on
demand as additional rent.

Article 34              LATE CHARGE AND INTEREST
See Section 48.20       ON TENANT'S OBLIGATIONS

               Landlord and Tenant acknowledge that failure by Tenant to pay
amounts due hereunder when due shall cause Landlord to incur costs not otherwise
provided for herein. Accordingly, Tenant shall pay to Landlord a late charge
equal to the greater of 15% of the amount due and unpaid or $50.00 with respect
to any payment due from Tenant hereunder not paid within ten (10) days after the
date due. Any amount due from Tenant to Landlord hereunder which is not paid
when due shall bear interest from the due date until paid, at a rate equal to
five points in excess of the discount rate of the Federal Reserve Bank of San
Francisco to member

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<PAGE>

banks as in effect at the date such obligation is due. Payment of such late
charge and such interest shall not excuse or cure any default by Tenant under
this Lease.

Article 35 See Section 48.21    PAYMENTS AND NOTICES

               All amounts payable by either party hereunder to the other shall
be paid in lawful money of the United States to the party entitled to receive
the same at its address set forth in the applicable Basic Lease Provision or at
such other address as a party may designate by notice to the other pursuant to
this Article. All amounts to be paid by Tenant shall be paid without deduction
or offset. All notices which Landlord or Tenant may be required to serve on the
other may be served, as an alternative to personal service, by mailing the same
by registered or certified mail, postage prepaid and return receipt requested,
addressed as set forth in the applicable Basic Lease Provision, or, after the
Commencement Date, to Tenant at the Premises whether or not Tenant has departed
from the Premises, or addressed to such other addresses as either party may from
time to time designate to the other in writing. Service of any written notice
hereunder shall be complete upon personal delivery or if deposited in the United
States properly addressed and postage prepaid, on the date of receipt or refusal
indicated on the return receipt. If more than one tenant is named in this Lease,
service of any notice upon any one of said tenants shall be service upon all
tenants. Notices may also be sent by reputable overnight courier and shall be
effective on the date indicated on such courier's delivery receipt.

Article 36                ESTOPPEL CERTIFICATES

               36.1 Tenant agrees, from time to time upon not less than twenty
(20) days' prior notice by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, certifying that the
same is in full force and effect as modified and stating the modifications), the
dates to which the basic rent and additional rent have been paid in advance, if
any, stating whether or not Landlord is in default in performance of any
covenant or agreement contained in this Lease and, if so, specifying each such
default of which the signer has knowledge and the accuracy of any other
statements as to Tenant or this Lease included in such statement or certificate.
Any such statement delivered may be relied upon by any prospective purchaser of
Landlord's interest in the Premises or any mortgagee thereof or any assignee of
any mortgagee upon Landlord's interest in the Premises.

               36.2 Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant that (a) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) there are no
uncured defaults in Landlord's performance, (c) not more than one month's rental
has been paid in advance and (d) the other statements therein as to Tenant or
this Lease are accurate.

Article 37              CENTER NAME AND ADDRESS

               Landlord may adopt any name it may select for the Center, and
Landlord reserves the right at any time and from time to time to change the name
and/or address of the Center and/or the Building. Tenant may use the name of the
Center and/or Building as its advertised business address for its business in
the Premises, but shall not use any such name for any other purpose. Tenant
shall not acquire any property right in or to any such name or to any word
combination which contains all or a part of such name as the result of such
permitted use. Tenant shall not use the name of the Center and/or the Building,
or any part thereof, at any other location (other than in an advertisement which
lists Tenant's business conducted at the Premises) or after the termination or
expiration of this Lease.

Article 38 See Section 48.22    BROKERS

               Landlord shall be responsible for a broker's commission to the
broker(s), if any, identified in the applicable Basic Lease Provision, payable
only at such time, in such amount and upon such terms as Landlord and such
broker may agree in writing. Except as to such broker's commission, each party
represents and warrants to the other that no broker's fee, finder's fee or other
compensation of any kind is due to any person or entity in connection with this
Lease. Each party shall defend, indemnify and hold the other harmless from and
against all claims, causes of action and proceedings, and against all
liabilities, costs (including attorneys' fees and

                                       19
<PAGE>

costs of defense), expenses and damages incurred or awarded therein, which may
be instituted by any broker, agent or finder, claiming through, under or by
reason of the conduct of the indemnifying party in connection with this Lease.

Article 39                NON-DISCLOSURE OF LEASE TERMS

               The terms of this Lease are confidential and constitute
proprietary information of Landlord and Tenant. Disclosure of the terms hereof
could adversely affect the ability of Landlord to negotiate other leases with
respect to the Center, and impair Landlord's relationship with other Center
tenants. Each of Landlord and Tenant agree that they, and their respective
partners, officers, directors, employees and attorneys shall not disclose the
terms of this Lease to any other person except as required by law or the
operations of their respective businesses (such as to their lenders and
accountants). Damages would be an inadequate remedy for the breach of this
provision by either party, and each shall have the right to specific performance
of this provision and to injunctive relief to prevent its breach or continued
breach.

Article 40                    TENANT'S AUTHORITY

               Each individual executing this Lease on behalf of Tenant
represents that the execution and delivery of this Lease on behalf of Tenant is
duly authorized, in accordance with (if Tenant is a corporation) a duly adopted
resolution of its Board of Directors or its By-laws, and that this Lease is
binding upon Tenant in accordance with its terms. Tenant shall, if Tenant is a
corporation, at execution of this Lease deliver to Landlord a certified copy of
a resolution of its Board of Directors or Executive Committee authorizing or
ratifying such execution.

Article 41 See Section 48.23    NO OFFER; APPROVAL BY LENDER

               41.1 Neither the submission of this Lease to Tenant, nor
execution and return to Landlord, shall create any interest of Tenant in the
Premises or bind Landlord until Landlord executes and delivers this Lease to
Tenant.

               41.2 [Intentionally Deleted]

Article 42 See Section 48.24    INABILITY TO PERFORM

               This Lease and the obligations of Tenant hereunder shall not be
affected, impaired or excused because Landlord is unable to fulfill any
obligation hereunder or is delayed in doing so by reason of any cause beyond the
reasonable control of Landlord. Nothing contained in this Lease shall be
construed as abridging Landlord's right to obtain specific performance of any
covenant of Tenant contained herein.

Article 43 See Section 48.25    COMMON FACILITIES

               43.1 Landlord shall, at Landlord's cost, construct the Common
Facilities (as defined in Exhibit "B") of the Center. Landlord may construct the
Center and the Common Facilities in phases or stages and not all Common
Facilities of the Center may be constructed by the Commencement Date.
Notwithstanding the foregoing, however, Landlord has constructed or shall
construct prior to the Commencement Date such portions of the Common Facilities
as shall be reasonably required (a) to provide ingress and egress to the
Premises and the parking associated therewith from one or more public streets
adjacent to the Center and (b) to provide to the Premises its Allocated Parking
Spaces located within the Common Facilities. Except as otherwise specifically
provided herein, Landlord shall cause all "Common Facilities" to be constructed,
operated, maintained, repaired, lighted, cleaned and equipped during the term of
this Lease in such manner and at such times as Landlord determines to be
appropriate.

               43.2 Landlord may make changes from time to time in the size,
shape, location, and extent of the Common Facilities, which in Landlord's sole
discretion are desirable (including, but not limited to, the addition,
elimination, location, or relocation of surface, underground, or multiple-deck
parking areas, driveways, entrances, exits, landscaped, or prohibited areas, and
the determination of direction and flow of traffic). No such change shall
entitle Tenant to any abatement of rent except as provided below; provided,
however, that Landlord shall make no changes in a manner that will unreasonably
interfere with Tenant's use of

                                       20
<PAGE>

the Premises as permitted hereunder. Except as expressly provided in this
Section, Landlord shall not be obligated to design, construct, install, or pay
for any other improvements or assessments of any type or extent whatsoever. In
the event of Landlord's failure or inability to design, construct, and install
such improvements in a timely manner, Tenant's exclusive remedy shall be to
abate payment of rent for a period of time commencing on the date by which
Allocated Parking Spaces are required to be completed and continuing until that
date on which the same are finally completed, but only if Tenant gives Landlord
timely written notice setting forth the facts reasonably giving rise to such
rent abatement. No such delay in completion of such improvements shall entitle
Tenant to terminate this Lease.

               43.3 Use by Tenant of the Premises shall include the use of the
Common Facilities in common with Landlord and with all others for whose use the
same have been or hereafter may be provided by Landlord. Landlord may
temporarily close any Common Facility for repairs or alterations, to prevent a
public dedication thereof or the accrual of prescriptive rights therein, or for
any other reason deemed sufficient by Landlord. Landlord shall have exclusive
control of all Common Facilities and may at any time restrain any use thereof
except as authorized by rules and regulations for the use of such areas
established or amended by Landlord from time to time. Tenant shall keep all
Common Facilities free and clear of any obstructions created or permitted by or
resulting from Tenant's operations. If in the opinion of Landlord unauthorized
persons are improperly using any Common Facilities by reason of the presence of
Tenant in the Center, then Tenant, upon demand, shall restrain such persons from
such unauthorized use by taking all appropriate actions. Nothing herein shall
affect the right of Landlord to remove any unauthorized person from the Common
Facilities nor to prohibit the use of any Common Facilities by unauthorized
persons.

               43.4 Tenant understands that Landlord, in its sole discretion,
may:

                      (a) Sell or otherwise transfer its interest in the Center,
or any portion thereof, including without limitation, the Premises and the
Common Facilities, to any entity which will assume Landlord's obligations
regarding the same under this Lease; or

                      (b) [Intentionally Deleted]

               43.5 Tenant acknowledges that the Center is subject to the
provisions of a certain Declaration as to Easements, Restrictions and Common
Facility Provisions for Harbor Gateway Center dated July 31, 1981, executed by
C. J. Segerstrom & Sons, a partnership, and recorded in the Office of the County
Recorder of Orange County, California (the "Declaration"). This Lease and the
rights and obligations of the parties with respect to the Common Facilities are
subject to the provisions of the Declaration.

Article 44 See Section 48.26    PARKING FACILITIES

               [Intentionally Deleted]

Article 45            TRAFFIC AND ENERGY MANAGEMENT

               45.1 Landlord and Tenant agree to cooperate and use their best
efforts to participate in governmentally mandated and voluntary traffic
management programs generally applicable to businesses located in Costa Mesa,
California or to the Center and, initially, shall encourage and support van and
car pooling by employees and shall encourage and support staggered and flexible
working hours for employees to the fullest extent permitted by the requirements
of Tenant's business. Neither this subsection nor any other provision of this
Lease, however, is intended to or shall create any rights or benefits in any
other person, firm, company, governmental entity or the public.

               45.2 Landlord and tenant agree to cooperate and use their best
efforts to comply with any and all guidelines or controls imposed upon either
Landlord or Tenant by federal or state governmental organizations or by any
energy conservation association to which Landlord is a party concerning energy
management.

               45.3 [Intentionally Deleted]

                                       21
<PAGE>

Article 46 See Section 48.27    SIGNS

               Tenant shall erect, install and maintain only such signs as
comply with and are approved by Landlord pursuant to Landlord's sign program, a
copy of which is attached to this Lease as Exhibit "E."

Article 47                   MISCELLANEOUS

               47.1 No payment by Tenant of a lesser amount than the aggregate
amount due at the date of such payment shall be other than on account of the
oldest outstanding amount due, nor shall any endorsement or statement on any
check or any letter accompanying any payment be deemed an accord and
satisfaction. Landlord may accept such payment without prejudice to Landlord's
right to recover the balance due from Tenant or to pursue any other remedy
available to Landlord.

               47.2 Each and every indemnification and hold harmless provision
contained in this Lease shall survive the expiration or earlier termination of
this Lease to and until the last to occur of (a) the last date permitted by law
for the bringing of any claim or action with respect to which indemnification
may be claimed under such provision or (b) the date on which any claim or action
for which indemnification may be claimed under such provision is fully and
finally resolved and, if applicable, paid in full. Payment shall not be a
condition precedent to indemnification under any indemnification provision
contained in this Lease.

               47.3 This Lease may be executed in two or more counterparts, each
of which shall constitute an original, but all of which shall constitute one and
the same instrument.

               47.4 Within ten (10) days after the last execution of this Lease
Tenant shall by written notice to Landlord designate one individual employee or
agent who shall be authorized to act on behalf of Tenant with respect to all
matters pertaining to this Lease, including all matters provided for in the Work
Letter. Landlord may treat any approval or consent given by such person as the
approval or consent of Tenant. Tenant may, by written notice to Landlord, change
its designated representative with respect to matters arising after the date of
Landlord's receipt of such notice.

               47.5 "Rentable Area" means:

                      (a) With respect to Premises which constitute an entire
building, the entire area bounded by the outside surfaces of the exterior walls
of such building plus the entire area of any truck well(s) servicing the
building.

                      (b) With respect to Premises constituting less than an
entire building, (i) the area included within the Premises, being the area
bounded by the outside surfaces of exterior building walls, the exterior of all
walls separating the Premises from any public corridors or other public areas
and the centerline of all walls separating the Premises from other areas leased
or to be leased to other tenants of such building and (ii) a pro rata portion of
all areas of such building used for public areas or otherwise not leased or to
be leased to tenants of such building, including a pro rata portion of the
electrical room for the building and the truck well(s) servicing the building.

                      (c) In calculating Rentable Area for any Premises and any
building, there shall be no deductions for columns, structural portions of such
building, vertical penetrations, lobbies, corridors, restrooms, mechanical
rooms, electrical rooms, telephone closets or other features of such building
required for the occupancy thereof. However, the Rentable Area of the electrical
room for the building, although located in one suite, and the truck well(s)
servicing the building shall be allocated, pro rata, to each suite based upon
the respective Rentable Areas of the suites before giving effect to such
prorations.

                      (d) The Rentable Area contained within the Premises shall,
subject to the provisions of Section 2.3, be the number of square feet set forth
in the applicable item of the Basic Lease Provisions.

                                       22
<PAGE>

               47.6 All references to the terms "mortgage," "trust deed" and
"mortgagee" appearing in this Lease shall be deemed to mean "first mortgage,"
first trust deed" and "first mortgagee," wherever in this Lease or the Exhibits
hereto such terms appear.

               47.7 Neither Tenant nor any other person or entity having any
interest in the possession, use, occupancy or utilization of the Premises shall
enter into any sublease, license, concession or other agreement for the use,
occupancy or utilization of space in the Premises by any person or entity
("Subtenant") which provides for rental or any other payment for such use,
occupancy or utilization based in whole or in part on the net income or profits
derived by Subtenant from the portion of the Premises leased, used, occupied or
utilized (other than an amount based upon a fixed percentage or percentages of
receipts or sales). Any lease, sublease, license, concession or other agreement
in violation of the foregoing covenant shall be absolutely void and ineffective
as a conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises. Tenant further covenants to use
reasonable efforts to prevent any Subtenant from entering into an agreement of
the type described in this Section with respect to the Premises or any part
thereof.

               47.8 This lease and the exhibits hereto cover in full each and
every agreement of every kind or nature whatsoever between the parties hereto
concerning the Premises, the Building and the Center, and all preliminary
negotiations and agreements of whatsoever kind with respect to the Premises, the
Building or the Center, except as contained herein, are superseded and of no
further force or effect. No verbal agreement or implied covenant shall be held
to vary the provisions of this Lease, any statute or law or custom to the
contrary notwithstanding. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. No employee or agent of Landlord shall have
authority, by letter, memorandum or other written communication, to amend, vary
or delete any provision of this Lease unless such written instrument bears the
signature of two managing partners of Landlord.

               47.9 [Intentionally Deleted]

Article 48                     ADDENDUM

               The following provisions of this Article 48 shall be included in
and form a part of this Lease and shall supersede and override any other
provision in this Lease to the extent the same are inconsistent:

               48.1 The Premises.

                      (a) The Premises consist of (i) that certain building
commonly known as 3535 Harbor Gateway Business Center, Costa Mesa, California
and consisting of 54,910 square feet of Rentable Area ("Building A") and (ii)
that area located around Building A and outlined on Exhibit "A" with a solid
black line and containing parking and related facilities (the "Building A
Area"). The Building and the Building A Area are each as depicted on Exhibit "A"
attached hereto. Tenant's rights and obligations with respect to the Building A
Area shall be as set forth in this Section 48.1.

                      (b) Tenant's rights and obligations with respect to the
Building A Area are as follows:

                              (i) Subject to Section 48.3(c), Tenant shall be
entitled to the exclusive use of the Building A Area, and all exclusive parking
rights of Tenant pursuant to subsection (c) below shall be as to the spaces
located in the Building A Area.

                              (ii) Tenant shall be solely responsible with
respect to maintenance of and payment of the costs of the Building A Area.
Without limiting the generality of the foregoing:

                                    (1) All utilities used in or on the Building
A Area are and shall be separately metered to and billed to Tenant, and the
Building A Area is separately assessed and billed for real property tax
purposes. Tenant shall be solely responsible for all such separately billed
utilities and real property taxes.

                                       23
<PAGE>

                                    (2) Tenant shall be solely responsible to
maintain all improvements and landscaping located in the Building A Area and to
pay the costs thereof. Tenant shall select the persons to perform such
maintenance and shall be solely responsible for the times when and the manner in
which such maintenance is performed. However, the standard of maintenance by
Tenant of the Building A Area shall be consistent, as to quality, with the
standard of maintenance provided by Landlord in the balance of the Center.
Landlord's right to perform Tenant's obligations upon Tenant's failure to do so
shall extend to Tenant's obligations pursuant to this clause (2).

                                    (3) Subject to Section 48.3(c), Tenant may
restrict access to and across that portion of the Building A Area located to the
west of Building A. The methods used by Tenant to impose such restriction shall
be subject to the prior written approval of Landlord, which approval shall not
be unreasonably withheld, and shall be subject to compliance by Tenant with all
applicable governmental requirements.

                      (c) Landlord has provided to Tenant 210 parking spaces for
Building A. Except as provided in subsection (g) below, all of such spaces are
located in the Building A Area. Such spaces are allocated to Building A and are
subject to the provisions of subsection (b) above and this subsection (c):

                              (i) Subject to Section 48.3(c), all such allocated
parking spaces are for the exclusive use of Building A and Tenant, its employees
and business visitors. Tenant may, at Tenant's cost, make or erect signs with
respect to Tenant's exclusive parking spaces designating such spaces as for the
exclusive use of employees and business visitors of Tenant. Any markings or
signs shall be compatible with markings or signs used by Landlord in the balance
of the Center and shall be subject to the prior written approval of Landlord and
any governmental authorities having jurisdiction. All such markings and signs in
place at the date of this Lease are approved by Landlord. Maintenance and
replacement of such signs and markings shall be the sole responsibility, both as
to payment of costs and performance, of Tenant.

                              (ii) Tenant shall be solely responsible to monitor
the use of its exclusive parking spaces, through the use of decals or otherwise.
Upon request of Tenant, Landlord will tow away unauthorized vehicles in such
exclusive parking spaces. If Landlord shall not promptly respond to any request
by Tenant to tow away vehicles, Tenant may, at Tenant's cost, proceed to tow
such vehicles away from Tenant's exclusive parking spaces. All costs of towing
not paid for by the owners of vehicles towed shall be borne by Tenant, which
shall promptly pay the same to Landlord upon demand. Tenant shall indemnify,
defend and hold harmless Landlord from and against all losses, liabilities,
claims, damages and expenses, including attorneys' fees and costs of defense,
suffered by Landlord and arising out of any vehicle towing conducted by Landlord
at Tenant's expense or by Tenant, except only such losses, liabilities, etc. as
are solely and proximately caused by the negligence of Landlord or its agents or
employees.

                      (d) Landlord and Tenant acknowledge that Tenant is
currently in possession of the entire Premises, and nothing is required of
Landlord to place Tenant in possession of the Premises or any portion thereof.

                      (e) Landlord reserves to itself the right, from time to
time, to grant such easements, rights and dedications as Landlord deems
necessary or desirable, and to cause the recordation of Parcel Maps and
restrictions, so long as such easements, rights, dedications, Parcel Maps and
restrictions do not unreasonably interfere with the use of the Premises by
Tenant or any other rights granted to Tenant pursuant to this Lease. Tenant
shall sign any of the aforementioned documents upon request by Landlord, and
failure to do so shall constitute a material breach of this Lease.

                      (f) Tenant agrees that Tenant is obtaining a right of
exclusive use only of the Premises, including the Building A Area. Landlord
reserves to itself, its successors and assigns, the non-exclusive right of use
of all portions of the Center other than the Premises for all purposes not
inconsistent with Tenant's use thereof, including use for parking and pedestrian
purposes, vehicular ingress and egress, for the installation and maintenance of
utilities and of landscaping on, over, under or across portions of the Center
other than the Premises up to the exterior lines thereof, together with the
right to enter upon the Premises upon 24 hours prior

                                       24
<PAGE>

notice except in an emergency (without unreasonably interfering with Tenant's
reasonable use and enjoyment) in order to service, maintain, repair,
reconstruct, relocate or replace any of such utilities and landscaping.

                      (g) Landlord and Tenant acknowledge that Tenant currently
maintains FCC mobile testing trailers (the "Trailers") in approximately the area
depicted on Exhibit "A." In connection with the Trailers, Landlord and Tenant
agree as follows:

                              (i) Tenant may continue to locate and operate the
Trailers as currently located and operated during the term of this Lease.

                              (ii) The Trailers occupy all or portions of 17
parking spaces. Such 17 parking spaces shall be deducted from the 210 parking
spaces allocated for Tenant's exclusive use pursuant to subsection (c) above.

                              (iii) All obligations of Tenant pursuant to this
Lease with respect to Building A shall apply with respect to the Trailers.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible to maintain, repair and replace the Trailers, to insure the Trailers
and to pay all real or personal property taxes assessed against the Trailers.
Moreover, Tenant's use of the Trailers shall comply with all applicable
requirements of all governmental authorities having jurisdiction of the
Trailers. Tenant shall pay all charges for all utilities used by Tenant in or at
the Trailers, directly to the purveyors thereof.

                              (iv) Any changes in the location of the Trailers,
Tenant's usage thereof and/or the chain link fencing erected by Tenant with
respect to the Trailers shall be subject to the prior written consent of
Landlord, not to be unreasonably withheld, delayed or conditioned.

                              (v) Within ten (10) days after the expiration or
any earlier termination of this Lease, Tenant shall, at Tenant's cost, remove
the Trailers, the chain-link fencing erected by Tenant with respect thereto and
all other personal property and improvements placed or erected by Tenant in the
area occupied by the Trailers. Tenant shall concurrently repair all damage
caused by the Trailers, such fencing and such other improvements (such as post
holes, broken pavement and dead grass) and restore the area to its condition
prior to placement of such Trailers by Tenant.

                      (h) Landlord and Tenant acknowledge that the entire area
located to the west of Building A and adjacent Building B (as depicted on
Exhibit "A") is operated as a single gated parking area for Tenant and Q-Logic,
the tenant of Building B pursuant to the Shared Agreement, as defined in Section
48.3(c). In the event that Q-Logic ceases to be the tenant of Building B and
another tenant enters into the occupancy thereof, then:

                              (i) Tenant shall remove entirely or relocate to
the south entirely on to Building Area A all security devices with respect to
such parking (i.e., pass gates, fences, tire spikes, etc.). All such devices
shall enclose only parking located on Building Area A. All such removals and
relocations shall be at Tenant's sole cost.

                              (ii) The total parking spaces on Building Area A
(whether secured or unsecured) shall not exceed 193 spaces.

                              (iii) Tenant's required removals or relocations
pursuant to clause (i) above shall be accomplished by the date that another
tenant commences to occupy Building B. For this purpose, Landlord shall give to
Tenant not less than 60 days prior written notice of the proposed occupancy date
of Building B by such other tenant. If Tenant fails to remove or relocate such
security devices, or any of them, within the time required by this clause (iii),
Landlord may remove and discard the same, and the cost of such removal shall be
additional rent payable by Tenant pursuant to this Lease and shall be paid to
Landlord within twenty (20) days after Tenant's receipt of Landlord's invoice
therefor.

                              (iv) If, after removal or relocation of such
security devices, Tenant experiences substantial difficulty in maintaining the
exclusivity of the parking spaces on Building Area A, Landlord and Tenant shall
review and consider alternate security measures to

                                       25
<PAGE>

protect the exclusivity of such spaces. Any such measures shall be proposed by
Tenant, but shall be subject to the approval of Landlord, not to be unreasonably
withheld provided that such security devices are compatible with the quality of
the Center.

               48.2 Term. Notwithstanding anything to the contrary contained
in this Lease, the Commencement Date of the Term shall be November 1, 1999 and
the expiration date of the term shall be August 31, 2001, subject to any earlier
termination pursuant to any of the provisions of this Lease.

               48.3 Prior Documents.

                      (a) Landlord and Tenant acknowledge and agree that Tenant
currently holds and occupies the Premises pursuant to a certain Standard
Industrial Lease - Net dated April 6, 1982 (the "Original Lease"), as amended by
each of the following:

                              (i) A certain letter agreement dated December 8,
1982 (the "1982 Letter");

                              (ii) A certain Amendment No. 3 to Lease dated
September 20, 1983 ("Amendment No. 3");

                              (iii) A certain Reciprocal Parking Agreement,
Amendment No. 8 to Lease with Emulex Corporation and Notice of Deletion of
Territory as to Declaration as to Easements, Restrictions and Common Facilities
Provisions for Harbor Gateway Center dated May 25, 1984 and recorded on June 27,
1984 as Instrument No. 84-265616 in the Office of the County Recorder of Orange
County, California (the "Recorder") (the "Parking Agreement");

                              (iv) A certain Letter of Clarification of Master
Lease dated May 25, 1984 (the "Clarification Letter");

                              (v) A certain letter agreement dated October 26,
1988 (the "1988 Letter");

                              (vi) A certain Amendment to Reciprocal Parking
Agreement dated July 15, 1986 and recorded as Instrument No. 86-334897 in the
Office of the Recorder (the "Parking Agreement Amendment");

                              (vii) A certain Building Termination Agreement
dated October 23, 1992 (the "Termination Agreement"); and

                              (viii) A certain 1993 Amendment to Lease dated
April 29, 1993 (the "1993 Amendment").

Effective as of October 31, 1999 (the "Expiration Date"), the Original Lease,
1982 Letter, Amendment No. 3, the Clarification Letter, the 1988 Letter, the
Termination Agreement and the 1993 Amendment (collectively, the "Old Lease")
shall expire and terminate. Notwithstanding such expiration and termination of
the Old Lease, the following obligations of the parties thereunder shall
survive:

                                    (A) Landlord agrees to indemnify, defend and
hold harmless Tenant from and against any and all claims, costs, expenses,
losses, damages, actions and causes of action for which Landlord is responsible
under the Old Lease and which accrue on or before the Expiration Date.

                                    (B) Tenant agrees to defend, indemnify and
hold harmless Landlord from and against any and all claims, costs, losses,
expenses, damages, actions and causes of action for which Tenant is responsible
under the Old Lease and which accrue on or before the Expiration Date.

                                    (C) Tenant shall remain liable for all
amounts payable by Tenant pursuant to the Old Lease and accruing prior to the
Expiration Date to and until

                                       26
<PAGE>

payment of such amounts in full. Such amounts shall include but not be limited
to (1) rent payable by Tenant to Landlord pursuant to the Old Lease, (2) the
costs of all utilities used in or at the Premises through the Expiration Date
and (3) real and personal property taxes assessed against the Premises and the
personal property located therein or thereon with a lien date prior to the
Expiration Date.

                      (b) By their signatures hereto, Landlord and Tenant
acknowledge and confirm that the Parking Agreement and Parking Agreement
Amendment shall survive the Expiration Date and continue in effect during the
term of this Lease and shall, in part, govern Tenant's use of the Building A
Area.

                      (c) Landlord and Tenant are also parties to a Certain
Amendment No. 12 to Lease dated as of May 15, 1985 (the "Other Lease"), which
Other Lease is the subject of a certain Assignment Assumption and Consent Re:
Lease dated January 14, 1994 between Tenant and Q-Logic Corporation (the
"Assignment"). In connection with the Other Lease and the Assignment, Tenant and
Q-Logic Corporation executed a certain Shared Parking Rights Agreement dated
January 14, 1994 (the "Shared Agreement"). Nothing contained in this Lease shall
be deemed or construed to terminate or otherwise affect the Other Lease, the
Assignment or the Shared Agreement. All of such instruments shall survive the
Expiration Date to and until the expiration or earlier termination of the Other
Lease. For the purposes of the foregoing:

                              (i) The Other Lease and the Assignment shall
continue in effect beyond the expiration date of the Old Lease to and until the
expiration or earlier termination of the Other Lease. However, Tenant's
obligations pursuant to the Other Lease shall expire and terminate as of the
last execution and delivery of this Lease.

                              (ii) The Shared Agreement, and Tenant's
obligations thereunder, shall continue to and until Q-Logic ceases to occupy
Building B, at which time the Shared Agreement shall expire or terminate. A copy
of the Shared Agreement is attached hereto as Exhibit "G" and incorporated
herein by this reference.

                      (d) During the term of the Old Lease, Landlord and Tenant
have been parties to a number of other leases and related instruments
(collectively, the "Other Documents"). The Other Documents are listed on Exhibit
"F" attached hereto. By their signatures hereto, Landlord and Tenant acknowledge
and confirm that all of the Other Documents have expired and are of no further
force or effect.

               48.4 Tenant's Options.

                      (a) Provided that (1) Tenant is not in default under this
Lease beyond any applicable notice and cure period either at the date of
exercise or the date when the New Term would otherwise commerce and (2) Tenant
or an assignee permitted without the consent of Landlord is the Tenant pursuant
to this Lease as of the commencement of the New Term, Tenant shall have the
option to (A) expand the Premises by adding an additional 10,000 to 20,000
square feet of Rentable Area in the Center (the "Additional Space") and (B)
obtain a new term (the "New Term") of not less than thirty-six (36) months
covering both the Premises and the Additional Space. Such option shall be
exercised, if at all, by written notice to Landlord given during October, 2000,
which notice shall specify, within the limits set forth above, the approximate
size of the Additional Space and the length of the New Term. The length of the
New Term shall be subject to the mutual agreement of Landlord and Tenant, not to
be unreasonably withheld and not to be less than 36 full calendar months. If
Tenant is not entitled to exercise such option, or if Tenant is entitled to
exercise such option but fails to do so in the manner and during the period
herein specified, such option shall lapse and thereafter not be exercisable by
Tenant. The lapse of such option shall not affect the option set forth in
subsection (b) below.

                      If Tenant is entitled to exercise such option and timely
and properly does so, then the following shall pertain:

                              (i) Such option shall be subject to the
availability in the Center, as of the commencement date of the New Term, of an
Additional Space of the approximate size specified in Tenant's notice of
exercise. For this purpose, the commencement date of the New Term shall be March
1, 2001, and space availability in the Center shall take into account any other
pre-existing space rights held by other tenants in the Center.

                                       27
<PAGE>

                              (ii) Within fifteen (15) days after Landlord's
receipt of Tenant's notice of exercise, Landlord shall notify Tenant in writing
whether there is, as of the commencement date of the New Term, an available
Additional Space in the Center of the approximate size specified by Tenant and,
if so, shall identify the available Additional Space and the Rentable Area
thereof. For the purposes of this subsection, "approximate" shall mean within
1,000 square feet of the Rentable Area specified by Tenant in its notice of
exercise. If there is no such available Additional Space of the approximate size
specified by Tenant in the Center at March 1, 2001, the option contained in this
subsection shall lapse.

                              (iii) If there is an available Additional Space of
the approximate size specified by Tenant in the Center as of March 1, 2001, then
the following shall pertain:

                                    (A) This Lease shall be extended for a New
Term of the duration agreed upon pursuant to subsection (a) above commencing as
of March 1, 2001 and for such New Term shall cover both the Premises and the
Additional Space.

                                    (B) The New Term shall be upon all of the
terms and conditions of this Lease except as specified in the following clauses.

                                    (C) There shall be no further options to
extend the term of this Lease. Without limiting the generality of the foregoing,
the option set forth in subsection (b) shall be of no further force or effect.

                                    (D) Section 2.1, Articles 32 and 41 and
Sections 48.2, 48.3, 48.19(a) and 48.23 shall have no application with respect
to the New Term.

                                    (E) Landlord shall deliver possession of the
Additional Space to Tenant on March 1, 2001. Such Additional Space shall, as to
physical condition, be delivered in accordance with fair market rental, as
defined in clause (F) below, including tenant improvements, if any, then being
provided for similar spaces for similar lease renewal transactions. For the
purposes of determining tenant improvements in comparable lease renewal
transactions, the parties shall take into account transactions such as the
option for renewal provided for in this subsection, the size of the Additional
Space and the duration of the New Term. In no event, however, shall Landlord be
required to spend or provide more than $100,000 pursuant to this clause (E).

                                    (F) Monthly Basic Annual Rent during the New
Term for the Premises and the Additional Space (collectively, the "Expanded
Premises") shall be an amount equal to the then prevailing fair market rental
for similar premises in the general market area in which the Center is located.
For this purpose, the Basic Annual Rent for the Premises and the Additional
Space may not be the same. For the purposes of determining monthly Basic Annual
Rent for the Expanded Premises for the New Term, the following shall pertain:

                                            (1) The "general market area" shall
mean the Costa Mesa-Newport Beach-Irvine area, but shall not include Newport
Center.

                                            (2) The term "similar premises"
shall mean premises similar in size to the Premises and the Additional Space and
in commercial and industrial centers of similar size, age and quality and with
similar access and other amenities as the Center.

                                            (3) The term "fair market rental"
shall mean the effective amount per month that a willing tenant comparable to
Tenant would pay and a willing landlord comparable to Landlord would accept in
an arm's-length leasing transaction, for similar premises which are
non-sublease, non-encumbered and non-expansion space. Fair market rental shall
be determined as a rate per month per square foot of Rentable Area of the
Expanded Premises, and the monthly Basic Annual Rent for the New Term shall be
determined by multiplying such rate by the Rentable Area of the Expanded
Premises. If the rates for the Premises and the Additional Space are different,
then monthly Basic Annual Rent shall be separately determined for the two
portions of the Expanded Premises.

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<PAGE>

                                            (4) Promptly following the exercise
of an option by Tenant pursuant to this subsection, Landlord and Tenant shall
attempt in good faith for a period of thirty (30) days to agree upon fair market
rental for the New Term, taking into account the matters set forth above in this
clause (F). If Landlord and Tenant agree upon such fair market rental, monthly
Basic Annual Rent for the Premises for such New Term shall be the fair market
rental so determined. In addition, during the New Term Tenant shall pay all
additional rent provided for in this Lease. Upon reaching agreement pursuant to
this clause (4), Landlord shall prepare and Landlord and Tenant shall promptly
execute and deliver a mutually acceptable amendment to this Lease setting forth
the agreed Basic Annual Rent for the Expanded Premises for the New Term.

                                            (5) If Landlord and Tenant are not
able to reach agreement as to the fair market rental for the New Term within
thirty (30) days after Tenant's exercise of the option pursuant to this
subsection, then fair market rental shall be determined by arbitration. In
connection with any such arbitration, the following pertain:

                                                   (AA) The arbitration shall be
conducted in Orange County, California in accordance with the provisions of this
clause (5).

                                                   (BB) Within fifteen (15) days
after the expiration of the foregoing thirty (30) day period, each party shall,
by written notice to the other, select an arbitrator with the qualifications set
forth below. If either party shall fail to select an arbitrator in the manner
and within the time specified in this clause (BB), then the arbitrator timely
and properly selected by the other party shall be the sole arbitrator. If
neither party shall timely and properly select an arbitrator pursuant to this
clause (BB), then a single arbitrator shall be selected by the Presiding Judge
of the Orange County Superior Court or his or her designee upon application of
either party.

                                                   (CC) If a single arbitrator
is selected or appointed pursuant to clause (BB), such sole arbitrator shall,
within fifteen (15) days after his or her appointment, schedule a meeting with
the parties at which such arbitrator shall receive such oral or written evidence
as he or she determines. The arbitrator need not follow the rules of evidence
and may set such time limits as he or she deems appropriate. Within thirty (30)
days after being appointed, the arbitrator shall in writing notify the parties
of his or her decision as to fair market rental, determined in accordance with
this clause (5). The fair market rental determined by such single arbitrator
shall be conclusive upon the parties.

                                                   (DD) If two (2) arbitrators
are selected pursuant to clause (BB), the same procedure set forth in clause
(CC) above shall be used, except that each arbitrator shall in writing notify
the parties and the other arbitrator of his or her decision as to fair market
rental, determined in accordance with this clause (5). The notices provided for
in clause (CC) and this clause (DD) may be in letter form, need not be
accompanied by any survey, report or other supporting document and may but need
not set forth the reason(s) for the decision.

                                                   (EE) If two (2) arbitrators
are used, and if the fair market rentals as determined by them are not the same
but the larger fair market rental so determined does not exceed one hundred ten
percent (110%) of the lesser fair market rental so determined, then fair market
rental shall be the average of the fair market rentals determined by the two (2)
arbitrators.

                                                   (FF) If two (2) arbitrators
are used, and if the two (2) arbitrators determine different fair market rentals
and if fair market rental is not determined pursuant to clause (EE), then within
fifteen (15) days after the last determination of the two (2) arbitrators (i.e.,
the last notice to the parties), the two (2) arbitrators shall select a third
arbitrator. If the two (2) arbitrators are unable to select a third arbitrator
within such fifteen (15) day period, the third arbitrator shall be appointed in
the manner provided in the last sentence of clause (BB).

                                                   (GG) Any third arbitrator
selected pursuant to clause (FF) shall, within fifteen (15) days after his or
her selection, notify the parties and the other arbitrators in writing of her or
her determination of fair market rental, determined in

                                       29
<PAGE>

accordance with this clause (5). Such determination and notice shall be in
accordance with the last sentence of clause (DD), and in no event shall such
determination be greater than the higher of the fair market rentals determined
by the original two (2) arbitrators or lesser than the lower of the fair market
rentals determined by the original two (2) arbitrators. The fair market rental
determined by such third arbitrator shall be conclusive upon the parties.

                                                   (HH) Each arbitrator selected
or appointed pursuant to the foregoing clauses shall be a licensed real estate
broker or salesperson with not less than five (5) years of leasing experience
with respect to premises similar to the Expanded Premises and centers similar to
the Center in the general market area who is independent of each party. For this
purpose, independent shall mean that such person is not employed by a party and
has not been an employee of, or compensated by, a party for two (2) years prior
to his or her selection or appointment.

                                                   (II) Each party shall bear
the costs and fees of each arbitrator selected by it and one-half (1/2) of the
costs and fees of any third or sole arbitrator. Each party shall also bear all
costs and fees of any attorney or other professional employed or retained by
such party in connection with such arbitration process.

                                                   (JJ) All determinations as to
fair market rental shall be expressed as a rate per square foot of Rentable Area
per month. As provided in clause (F) above, fair market rental may not be the
same rate for the Premises and the Additional Space.

                                    (G) If the new Basic Annual Rent for the
Expanded Premises for the New Term shall not have been determined as of the
commencement date of the New Term, Tenant shall pay Basic Annual Rent for the
entire Expanded Premises at the original rate set forth in this Lease to and
until such determination is made. If the new Basic Annual Rent is greater than
the original rate set forth in this Lease, within twenty (20) days after the
determination of the new Basic Annual Rent Tenant shall pay to Landlord an
amount equal to the new monthly Basic Annual Rate times the number of months
from the commencement of the New Term through the month in which such
determination is made less the aggregate payments on account of monthly Basic
Annual Rent for such period previously made by Tenant. If the new monthly Basic
Annual Rent is less than the original rate set forth in this Lease, Landlord
shall credit against the next monthly installments of Basic Annual Rent coming
due hereunder an amount equal to the aggregate monthly payments on account of
Basic Annual Rent by Tenant for the period from the commencement date of the New
Term through the month in which the new Basic Annual Rent is determined less the
actual aggregate Basic Annual Rent due for such period. Thereafter, Tenant shall
pay monthly Basic Annual Rent at the rate(s) determined pursuant to this
subsection. Upon determination of Basic Annual Rent pursuant to this clause (5),
Landlord shall prepare and Landlord and Tenant shall promptly execute and
deliver an amendment to this Lease setting forth the agreed Basic Annual Rent
for the Expanded Premises for the New Term.

                      (b) Provided that (1) Tenant is not in default under this
Lease beyond any applicable notice and cure period either at the date of
exercise or the date when the Additional Term would otherwise commence, (2)
Tenant or an assignee permitted without the consent of Landlord is the tenant
pursuant to this Lease as of the commencement of the Additional Term and (3)
there shall have been no New Term pursuant to subsection (a) above, Tenant shall
have the option to extend the term of this Lease for an additional thirty (30)
months (the "Additional Term"). Such option shall be exercised, if at all, by
written notice from Tenant to Landlord given not less than six (6) months prior
to the expiration of the original term (i.e., by February 28, 2001). If Tenant
is not entitled to exercise such option, or if Tenant is entitled to exercise
such option but fails to do so in the manner and within the time specified in
this subsection, such option shall lapse and thereafter not be exercisable by
Tenant.

                              If Tenant is entitled to exercise and timely and
properly exercises such option, then the Additional Term shall be upon all of
the terms and provisions of this Lease, except that:

                              (i) The Additional Term shall commence immediately
following the expiration of the initial Lease term (i.e., on September 1, 2001).

                                       30
<PAGE>

                              (ii) There shall be no further options to extend
the term of this Lease.

                              (iii) Section 2.1, Articles 32 and 41 and Sections
48.2, 48.3, 48.19(a) and 48.23 shall have no application with respect to the
Additional Term.

                              (iv) Landlord shall have no obligation to remodel
or renovate the Premises for Tenant's use.

                              (v) The Basic Annual Rent for the Additional term
shall be the Basic Annual Rent for the initial lease term adjusted pursuant to
this clause (v). For this purpose, monthly Basic Annual Rent shall be adjusted
as of the expiration of the initial lease term to reflect any change in the cost
of living. The adjustment shall be calculated upon the basis of the United
States Department of Labor, Bureau of Labor Statistics, Consumer Price Index of
Urban Wage Earners and Clerical Workers (Revised Series), Subgroup "all items,"
entitled "Consumer Price Index of Urban Wage Earners and Clerical Workers
(Revised Series), Los Angeles-Anaheim-Riverside Average, (1982-1984 = 100)." The
Index for said subgroup published for the month prior to the Commencement Date
shall be considered the "base" and the adjustment shall be based upon the
percentage increase, if any, in the Index published for the last month of the
initial Lease term over the base; provided, however, that (A) in no event shall
the monthly Basic Annual Rent for the Additional Term be less than the monthly
Basic Annual Rent for the initial Lease term notwithstanding any decrease in the
Index and (B) the maximum increase in the monthly Basic Annual Rent shall be
determined pursuant to the provisions of the next succeeding paragraph. When the
new monthly Basic Annual Rent shall be determined, Landlord shall give Tenant
written notice to that effect indicating how the new monthly Basic Annual Rent
was determined.

                              In no event shall adjusted monthly Basic Annual
Rent for the Additional Term exceed the monthly Basic Annual Rent for the
initial Lease term plus (x) an amount equal to the lesser of eight percent (8%)
thereof or the percentage change in the index for the initial twelve (12) month
period following the Commencement Date and (y) an amount equal to the lesser of
6.67% thereof or the percentage change in the index for the last ten (10) months
of the initial Lease term.

                              If at the rental adjustment date there shall not
exist the Consumer Price Index of Urban Wage Earners and Clerical Workers
(Revised Series) in the same format as recited in this subsection, Landlord
shall substitute any official index published by the Bureau of Labor Statistics,
or successor or similar governmental agency, as may then be in existence and
shall be most nearly equivalent thereto.

                              If the adjustment provided for herein shall not
have been made as of the commencement of the Additional Term, Tenant shall
continue to pay monthly Basic Annual Rent at the last rate applicable until
Tenant receives Landlord's written notice as to such adjustment. Within ten (10)
days after Tenant's receipt of Landlord's notice, Tenant shall pay to Landlord
an amount equal to the new monthly Basic Annual Rent times the number of months
from the commencement of the Additional Term to the date of receipt of
Landlord's notice, less the aggregate amount paid by Tenant on account of
monthly Basic Annual Rent for the same period. Thereafter, Tenant shall pay
monthly Basic Annual Rent at the new rate set forth in Landlord's notice.

                      (c) As used in this Lease, the terms "term" and "term of
this Lease" shall include the initial term provided for in Section 2.01 of the
Lease form together with any additional term resulting from the exercise of an
option pursuant to this Section.

               48.5 Rent. Notwithstanding the provisions of Section 3.1, Tenant
shall not be required to deposit the first month's Basic Annual Rent upon
execution of this Lease.

               48.6 Utilities.

                      (a) Landlord and Tenant acknowledge and agree that all
utilities provided to the Premises are currently separately metered and are
billed directly to Tenant. Such separate metering and billing shall continue
throughout the term of this Lease.

                                       31
<PAGE>

                      (b) Landlord shall not be liable in damages or otherwise
for any failure or interruption of any public utility service being furnished to
the Premises and no such failure or interruption shall entitle Tenant to
terminate this Lease or to any abatement hereunder.

                      (c) Notwithstanding the last sentence of Section 6.2 of
this Lease, in the event of any interruption to any utility service to the
Premises which is caused by the negligence or intentional action of Landlord or
any agent, employee or contractor of Landlord, Basic Annual Rent shall be abated
for the period of the interruption in proportion to the degree of interference
with Tenant's operations in the Premises, including totally if applicable.
Degree of interference shall be determined by reference to the portion of the
Premises (including all, if applicable) which is rendered unusable by Tenant as
the result of such interruption. The remedy set forth in this subsection shall
be Tenant's sole remedy in the event of such interruption. In addition, Landlord
shall use commercially reasonable efforts to cause the restoration of the
service so interrupted as promptly as practicable.

               48.7 Property Taxes.

                      (a) Landlord and Tenant acknowledge and agree that real
property taxes are currently separately levied and assessed with respect to the
Premises. For so long as such separate assessment continues, Tenant shall pay
such taxes directly to the Orange County Tax Collector pursuant to Section 7.1
of this Lease.

                      (b) Since Tenant pays real property taxes under the Old
Lease as well as this Lease, there shall be no proration of real property taxes
with respect to the first lease year of the term of this Lease (i.e., Tenant
shall pay all real property taxes applicable to the Premises for the tax fiscal
year which includes the Commencement Date of this Lease).

               48.8 Maintenance and Repairs.

                      (a) Tenant shall keep in good order, condition and repair
all portions of the Premises that require such care as a result of Tenant's use
and normal wear and tear. Tenant's maintenance and repair obligations shall
include but not be limited to plumbing, heating, electrical, lighting facilities
and equipment within the Premises, fixtures, walls, foundations, ceilings,
roofs, floors, windows, doors, plate glass and skylights located in or on any
structures and all landscaping, driveways, parking lots, fences, signs,
sidewalks and parkways on the Premises. All repairs and maintenance by Tenant
shall be made only by a licensed, bonded contractor. Landlord may impose
reasonable restrictions and requirements with respect to such repairs, and the
provisions of Article 9 and Section 48.9 shall apply to all such repairs. Tenant
shall indemnify, defend and hold Landlord harmless from and against all actions,
claims, and damages by reason of Tenant's failure to comply with the foregoing
provisions. Except as expressly provided herein to the contrary, Landlord shall
have no maintenance and repair obligations with respect to the Premises.

                      (b) Without limiting the generality of subsection (a)
above, Tenant shall maintain, repair and replace the heating, ventilating and
air conditioning system in the Building at Tenant's cost using a licensed air
conditioning firm. Tenant shall contract with such firm to perform periodic
inspections, and any maintenance, repair and replacement recommended as the
result of such inspections, on a periodic basis as recommended by manufacturer's
manuals.

                      (c) For the purposes of Tenant's covenants set forth in
Article 9 and this Section 48.8, it is understood and agreed that:

                              (i) At the expiration of the Lease term, the
heating, ventilating and air conditioning ("HVAC") system servicing Building A
shall be in good working condition. Good working condition shall take into
account the age of the system as of the date hereof and as of the expiration of
the Lease term. Tenant shall not, however, be required to make additions to the
HVAC system to extend the useful life of the HVAC system to any particular term.

                              (ii) The periodic inspections and maintenance
required by subsection (b) above shall be at least once per calendar quarter and
shall be performed by a licensed HVAC maintenance firm approved by Landlord.
Such inspection and maintenance shall include replacement of parts as necessary
to keep the system in good working order.

                                       32
<PAGE>

                              (iii) Landlord shall be responsible for any
required replacement of electrical and mechanical equipment in the Premises to
the extent that such replacement is the result of the negligence or intentional
act of Landlord, its agents, employees or contractors.

                              (iv) In no event shall Tenant be responsible to
maintain Building A or the Premises to a condition other than that which would
result from normal wear and tear for a building of the age and quality of the
Building and with a tenancy of the duration of Tenant's occupancy of Building A.

               48.9 Alterations and Additions. Notwithstanding anything to the
contrary contained in Article 9 of this Lease:

                      (a) Tenant may make nonstructural alterations to the
Premises not exceeding $54,910 in cumulative cost over the term of the Old Lease
and this Lease without obtaining the prior written approval of Landlord.

                      (b) As to all alterations and additions requiring the
prior written approval of Landlord, such approval shall not be unreasonably
withheld, conditioned or delayed.

                      (c) All exterior painting, all alterations affecting the
structural components of the Premises (including roof penetrations for Tenant's
equipment or vents), and all alterations to or affecting any mechanical,
electrical, air conditioning and plumbing work performed by Tenant must be
approved in advance by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed.

                      (d) Tenant shall promptly in writing notify Landlord of
the filing of any mechanics' lien against the Premises or the Center arising out
of work performed by or for Tenant.

                      (e) Landlord acknowledges that Tenant may from time to
time install personal property in or on the Premises and that, with respect to
such personal property, Tenant may choose or be required to obtain and file a
waiver by Landlord of claims to such personal property. Landlord agrees not to
unreasonably withheld or delay approval of any waiver requested by Tenant and
presented by Tenant to Landlord for execution, provided that any such waiver
requires, in substance, that (i) any person removing such personal property from
the Premises repair any damage to the Premises caused by such removal and (ii)
Landlord has no obligation thereunder to assist any person in the removal of
such personal property from the Premises. Landlord shall promptly execute and
deliver to Tenant any such waiver approved by Landlord. If Landlord shall
neither execute a waiver presented by Tenant nor in a writing to Tenant
disapprove such waiver upon bona fide reasons stated therein within thirty (30)
days after Tenant's delivery of such waiver to Landlord for approval and
execution, Tenant may, after the expiration of such 30-day period, execute and
file such waiver as attorney-in-fact for Landlord. Landlord hereby appoints
Tenant as its attorney-in-fact for this purpose. A desire by Landlord to avoid
the filing of Landlord's waivers shall not be a valid reason for disapproval of
a landlord's waiver requested by Tenant.

                      (f) Landlord shall not have the right to require Tenant to
restore Building A to the condition in which originally delivered to Tenant
(i.e., to require Tenant to remove alterations and improvements installed by
Tenant prior to the date hereof). In other words, Landlord accepts all such
alterations and improvements to Building A in place as of the date hereof.
Landlord may, however, require restoration of Building A as to future
improvements and alterations by Tenant (i.e., alterations and improvements by
Tenant after the date hereof), but only as to such future alterations and
improvements (i) as to which Landlord gives written notice as to the requirement
of such removal at the time of Landlord's approval of such alterations or
improvements or (ii) which are installed without the prior written approval of
Landlord.

                      (g) Tenant shall, upon the expiration or any earlier
termination of this Lease:

                              (i) Remove from the Premises the racking system
located within and outside of Building A;

                                       33
<PAGE>

                              (ii) Remove the generator installed by Tenant in
Building A; and

                              (iii) Concurrent with such removals, repair any
damage occasioned by such removals. For this purpose, repair shall include
clipping any exposed bolts resulting from such removals to the surface of the
material in which located.

               48.10 Use of Premises; Hazardous Materials.

                      (a) Without limiting the generality of Section 10.1,
Tenant shall not permit any objectionable sounds or odors to carry outside of
Building A.

                      (b) Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises without first
having obtained Landlord's prior written consent. Notwithstanding anything to
the contrary in this Lease, Landlord shall not be obligated to exercise any
standard of reasonableness in determining whether to grant such consent.

                      (c) Notwithstanding anything to the contrary contained in
Section 10.3, in no event shall Tenant be responsible to remove, remediate or
otherwise clean-up any hazardous materials not introduced to Building A or the
Building A Area by Tenant, its agents, employees or contractors.

               48.11 Acceptance of Premises. Prior to or concurrently with the
execution of this Lease, Landlord and Tenant shall conduct a joint inspection of
Building A. The purpose of such inspection shall be to establish the current
condition of Building A.

               48.12 Entry and Inspection. For the purposes of Article 13 of
this Lease:

                      (a) Except in an emergency, any entry by Landlord into
Building A shall be upon 24 hours prior oral or written notice to Tenant. In an
emergency, Landlord shall be required to give only such notice, if any, or shall
be reasonable under the circumstances. For this purpose, an emergency shall be a
condition or set of facts posing imminent danger of harm to persons or property.

                      (b) If and to the extent that Landlord or its agents or
employees obtain any information which is confidential or proprietary to Tenant
as the result of any entry into Building A pursuant to Article 13, such
information shall be subject to the provisions of Article 39, shall be
maintained as confidential as provided in such Article and shall be disclosed to
third parties only in accordance with the provisions of such Article.

               48.13 Assignment and Subletting. Notwithstanding the provisions
of Article 14:

                      (a) Tenant may assign or sublet the Premises, or any
portion thereof, without Landlord's consent, to any corporation which it
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from a merger or consolidation with Tenant, or to any
person or entity which acquires all the assets of Tenant as a going concern of
the business that is being conducted on the Premises, provided that such
assignee assumes, in full, the obligations of Tenant under this Lease. Any such
assignment shall not, in any way, affect or limit the liability of Tenant under
the terms of this Lease even if after such assignment or subletting the terms of
this Lease are materially changed or altered without the consent of Tenant, the
consent of whom shall not be necessary.

                      (b) The references to "thirty (30)" appearing in Section
14.3 shall both be amended to read "fifteen (15)."

                      (c) The consent of Landlord to any proposed assignment or
sublease requiring the consent of Landlord shall not be unreasonably withheld,
conditioned or delayed.

                      (d) The rent or consideration to be passed through to
Landlord pursuant to Section 14.4 shall be one-half (1/2) of the excess rent or
other consideration described in such Section.

                                       34
<PAGE>

               48.14 Insurance Provisions. The last sentence of Section 15.7 of
this Lease shall be amended to read, in its entirety, as follows:

               "Tenant, as a material consideration to Landlord, assumes (a) all
               risk of damage to its property and injury to or death of its
               employees in or about the Center and (b) all risk of damage to
               property and injury to or death of persons in or about the
               Premises, in each case from any cause other than the sole
               negligence of landlord, its agents, employees or contractors as
               determined by a court of competent jurisdiction. Tenant also
               assumes all risk of damage to the Premises resulting from any act
               or negligence of any employee, agent, visitor or licensee of
               Tenant."

               48.15 Damage or Destruction. For the purposes of Articles 15 and
17 of this Lease:

                      (a) All proceeds of any insurance maintained pursuant to
Section 15.2 other than proceeds applicable to fixtures, equipment and other
personal property which Tenant may remove from the Premises, shall be the
property of Landlord, whether or not Landlord is obligated to repair under
Article 17.

                      (b) Not less frequently than at each anniversary of the
Commencement Date, Lessee shall cause the broker placing the insurance pursuant
to Section 15.2 to increase or decrease the amount of the coverage as mutually
agreed by Landlord and Tenant to the then full replacement cost of the property
covered.

               48.16 Defaults and Remedies.

                      (a) The term "five (5)" appearing in Article 19(d) shall
be amended to read "thirty (30)" in each place where such term appears. The term
"fifteen (15)" appearing in such Article shall be amended to read "forty-five
(45)."

                      (b) The term "thirty (30) days" appearing in clause (ii)
of Article 19(e) shall be amended to read "sixty (60)."

                      (c) The term "rent" as used in Articles 19 and 20 hereof
shall include the Basic Annual Rent and all other sums required to be paid by
Tenant pursuant to this Lease.

               48.17 Holding Over. Notwithstanding the provisions of Article 25,
if Tenant holds over after the expiration or termination of this Lease, the
monthly Basic Annual Rent, which shall be payable in advance, shall be one
hundred percent (100%) of the market rental of the Premises at the expiration or
termination date, as determined by Landlord evidenced by a written notice to
Tenant, for the first ninety (90) days of the holdover period and thereafter
shall be one hundred fifty percent (150%) of the market rental of the Premises
at the expiration or termination date. All additional rent provided herein shall
also be payable with respect to the period of such month-to-month tenancy.

               48.18 Subordination. Notwithstanding anything to the contrary
contained in Article 26, Landlord agrees that, if Landlord shall engage in any
transaction of the types described in such Section or shall sell or transfer its
interest in the Premises, or any portion thereof, Landlord shall:

                      (a) Arrange or structure any such transaction or sale so
that, so long as Tenant performs its obligations under this Lease, Tenant's
rights of occupancy and other rights under this Lease shall not be disturbed;
and

                      (b) Obtain from such lender, ground lessor, ground lessee
or other transferee an agreement, in recordable form and in form and substance
satisfactory to Tenant, providing that Tenant's rights of occupancy and other
rights under this Lease shall not be disturbed so long as Tenant performs its
obligations hereunder.

               48.19 Work Letter. Notwithstanding anything to the contrary
contained in Article 32, Landlord and Tenant agree that:

                                       35
<PAGE>

                      (a) Landlord shall, at Landlord's sole cost and expense,
purchase and install a new twenty (20) ton heating, ventilating and air
conditioning unit to serve Building A. Such unit shall be located on the roof of
Building A at a location designated by Tenant's heating, ventilating and air
conditioning contractor. Such unit shall be delivered and installed within 60
days (unless not reasonably possible to do so) after the last execution and
delivery of this Lease. Landlord shall, as a part of such installation, connect
such unit to the existing ducting in Building A and install all electrical
connections and controls necessary for Tenant to operate such unit. Any
additional work desired by Tenant in connection with such installation and
connection shall be the responsibility of Tenant, both as to performance and
payment of the costs thereof. Tenant shall also be required to operate and
maintain such unit in accordance with the provisions of Article 9 and Section
48.8. In order to permit Tenant to perform its maintenance and repair
obligations with respect to such unit, Landlord shall supply to Tenant
reasonable documentary evidence as to the installations and connections effected
by Landlord pursuant to this subsection.

                      (b) Except as provided in subsection (a), Tenant accepts
the Premises "AS IS," and Landlord shall have no obligation to remodel or
renovate the Premises for Tenant's use.

                      (c) By its signature hereto, Tenant acknowledges that the
Capital Improvement Allowance provided for in the 1993 Amendment has been fully
disbursed.

               48.20 Late Charge and Interest on Tenant's Obligations. In no
event shall the interest rate charged by Landlord to Tenant pursuant to Article
34 exceed fifteen percent (15%) per annum simple interest.

               48.21 Payments and Notices. If at any time a dispute shall arise
as to any amount or sum of money to be paid by one party to the other under the
provisions of this Lease, the party against whom the obligation to pay the money
is asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment, and there shall survive
the right on the part of such paying party to institute suit for recovery of
such sum. If it shall be adjudicated that there was no legal obligation on the
part of the paying party to pay such sum or any part thereof, such party
shall be entitled to recover such sum or so much thereof as it
was not legally required to pay under the provisions of this Lease plus interest
from the date of payment under protest to date of repayment at the rate
determined pursuant to Article 34.

               48.22 Brokers. Notwithstanding anything to the contrary contained
in Article 38, Landlord and Tenant agree that the broker identified in the Basic
Lease Provisions has been retained by Tenant and that payment of any commission
or fee due such broker in connection with this Lease shall be the sole
obligation of Tenant. The indemnification provision in the last sentence of
Article 38 shall apply with respect to the fee or commission due from Tenant to
such broker. Payment shall not be a condition precedent to recovery upon the
indemnification provision in Article 38. Such indemnification provision shall
include a covenant by each indemnifying party to defend the indemnified party
against all claims for which indemnification is available with legal counsel
selected by the liability insurance carrier for the indemnifying party or
otherwise reasonably satisfactory to the indemnified party.

               48.23 No Offer; Approval by Lender. Promptly following the last
execution and delivery of this Lease, Landlord shall deliver a copy hereof to
Landlord's lender, Teachers Insurance and Annuity Association of America, with a
request that such lender approve this Lease. Thereafter, Landlord shall use
commercially reasonable efforts to obtain the approval of such lender to this
Lease in written form. Promptly upon obtaining such written approval of such
lender, Landlord shall furnish a copy of such written approval to Tenant. In the
event that Landlord is unable to obtain and deliver such written approval to
Tenant on or before July 31, 1999 (the "Adios Date"), Tenant shall have the
option to terminate this Lease. Such option shall be exercised, if at all, by
written notice of termination from Tenant to Landlord given at any time after
the Adios Date and prior to receipt of such written approval. If Tenant is
entitled to terminate this Lease pursuant to this Section and timely and
properly does so, then (a) this Lease shall terminate upon Landlord's receipt of
such notice of termination, (b) each party shall bear its respective fees and
costs incurred in the preparation and negotiation of this Lease and in
performing its respective obligations hereunder through the date of termination,
(c) neither party

                                       36
<PAGE>

shall have any further rights or obligations pursuant to this Lease and (d) the
expiration date of the Old Lease shall be extended to that date which is six (6)
months after the termination date of this Lease, but not later than March 31,
2000. Any extension period of the Old Lease pursuant to clause (d) of this
Section shall be upon the existing terms and conditions of the Old Lease,
including those pertaining to the payment of rent. Pending any termination of
this Lease pursuant to this Section, each party shall diligently perform its
respective obligations hereunder.

               48.24 Inability to Perform. Each party hereto shall be excused
from performing its respective obligations under this Lease, excepting its
obligations to pay money, if and for so long as the performance of such
obligation is prevented or delayed by any cause beyond the reasonable control of
such party.

               48.25 Common Facilities. For the purposes of Article 43 of this
Lease:

                      (a) "Common Facilities" shall mean all portions of the
Center other than (i) the Building A Area and (ii) any other building or other
portion of the Center designated for the exclusive use of a tenant of the
Center.

                      (b) Tenant's sole rights in and to the Common Facilities
shall be the non-exclusive right to the use thereof, in common with Landlord and
any other person to whom Landlord may grant rights in the Common Facilities, for
ingress and egress to and from the Building A Area.

                      (c) Subject to Tenant's rights described in subsection
(b), Landlord shall have exclusive control of the Common Facilities and
exclusive discretion as to all decisions affecting the Common Facilities,
including but not limited to (i) construction of the Common Facilities, (ii)
maintenance, repair and operation of the Common Facilities and (iii)
modifications or changes to the Common Facilities. No such decisions or actions
by Landlord shall adversely affect Tenant's use and enjoyment of the Building A
Area.

               48.26 Parking Facilities. As used herein, all parking areas
located in the Center, other than those from time to time established for the
exclusive use of Tenant, are herein referred to as the "Parking Area." All areas
of the Parking Area shall be subject to the following:

                      (a) Landlord reserves the right, from time to time, to
change its designation of the exclusive parking spaces, to determine whether
they shall be surface, underground or other structure and to make other changes
which are, in Landlord's opinion, desirable for the Center. No such change shall
reduce the number of spaces assigned to Tenant in the Building A Area and all
such assigned parking spaces shall be reasonably convenient to the Premises. Any
such change shall be upon reasonable advance written notice to Tenant. Upon any
change in such designation, Tenant shall promptly advise its employees of such
change.

                      (b) Landlord shall also have the right to establish, to
change, and to enforce against all users of the Parking Area such reasonable
rules and regulations as may be deemed necessary and advisable for the proper
and efficient operation and maintenance of the Parking Area. Nothing contained
herein shall create liability upon Landlord for any damage to motor vehicles of
customers or employees of Tenant or for loss of property from within such motor
vehicles parked in the Parking Area.

                      (c) All parking spaces which are located in the Center,
other than parking spaces designated by Landlord for Tenant's exclusive use,
shall be used by Tenant in common with other tenants of the Center and other
persons to whom Landlord may grant a right of use. Except for Tenant's rights to
its exclusive spaces, Landlord shall have exclusive control of the Parking Area,
and may exclude and restrain any person form use or occupancy thereof,
excepting, however, bona fide customers, patrons, and service-suppliers of
Tenant and other tenants of the Center who make use of said area in accordance
with any rules and regulations established by Landlord with respect thereto.
Except for Tenant's exclusive parking spaces, the rights of Tenant in the
Parking Area shall be subject to the rights of Landlord and other tenants of the
Center to use the same in common with Landlord, and Tenant shall keep all of
said area free and clear of any obstructions created or permitted by Tenant or
resulting from Tenant's operations.

                                       37
<PAGE>

                      (d) Landlord may designate portions of the Parking Area,
other than Tenant's exclusive spaces, for "Visitor Only" parking or exclusive
parking for other tenants of the Center and Tenant and its employees shall not
park in any area so designated. Landlord may from time to time in its sole
discretion change such designated areas. Upon request, Tenant shall furnish
Landlord with a list of its employees' vehicle license numbers and shall
thereafter notify Landlord of any change in such list within five (5) days after
such change occurs. If Tenant's employees park in areas designated pursuant to
this subparagraph, Landlord may tow away any vehicle belonging to Tenant or
Tenant's employees parked in violation of these provisions, and/or attach
violation stickers or notices to such vehicle.

                      (e) Landlord may authorize persons other than tenants of
the Center to utilize the Parking Area. However, in no event shall Landlord
authorize any such use of spaces designated by Landlord for the exclusive use of
Tenant nor shall the number of spaces available for Tenant and its employees and
business visitors in the Building A Area be less than those identified in the
applicable Basic Lease Provision.

                      (f) Tenant agrees that the parking and other rights
granted to Tenant pursuant to Section 48.1 and this Section 48.26 are in lieu of
rights in common with other tenants of the Center to park throughout the Parking
Area. Tenant is not being charged for any costs of maintaining the Common
Facilities of the Center, including the Parking Area, based upon the
understanding that its parking, and the parking of its employees, business
visitors and suppliers, will be limited to the exclusive parking spaces
established for Tenant. If Landlord determines that such persons are parking in
areas other than or in addition to the exclusive parking spaces established for
Tenant, Landlord may require Tenant to immediately cease such practice and
Tenant shall promptly cease such practice upon receipt of a written request to
do so from Landlord.

               48.27 Signs. By its signature hereto, Landlord approves all of
Tenant's exterior signs on the Premises in place as of the date of this Lease.

               48.28 Quiet Possession. Upon Tenant paying the rent for the
Premises and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed or performed hereunder, Tenant shall
have quiet possession of the Premises for the entire term hereof. The
individuals executing this Lease on behalf of Landlord represent and warrant to
Tenant that they are fully authorized and legally capable of executing this
Lease on behalf of Landlord and that such execution is binding upon all parties
holding an ownership interest in the Premises.

               48.29 Security Measures. Tenant hereby acknowledges that the
rental payable to Tenant hereunder does not include the cost of guard service or
other security measures, and that Landlord shall have no obligation whatsoever
to provide the same. Tenant assumes all responsibility for the protection of
Tenant, its employees, agents and invitees from acts of third parties.

               48.30 Rules and Regulations. For the purposes of Exhibit "C"
hereof:

                      (a) The second sentence of clause (a) of paragraph 1 shall
be limited to property other than vehicles and shall be construed to permit
storage of property outside of Building A so long as such property is located
within the loading/trash area of Building A and is screened from view of persons
within the Center.

                      (b) For the purpose of paragraph 10, Landlord's consent
shall not be unreasonably withheld, delayed or conditioned.

                                       38
<PAGE>

EXHIBIT "A"        DEPICTION OF BUILDING A AND BUILDING A AREA

                                   EXHIBIT "A"
<PAGE>

EXHIBIT "A-1"  DEPICTION OF CENTER

                                  EXHIBIT "A-1"
<PAGE>

                                COMMON FACILITIES

               "Common Facilities" means all areas (and all improvements
thereon) within the exterior boundaries of the Center which (i) are not now or
hereafter held for exclusive use by Tenant, or any other tenant of the Center
and (ii) are made available for the common use of Landlord, Tenant and other
occupants and their respective employees and invitees in or around the Center.
Common Facilities shall include, without limiting the generality of the
foregoing, all parking areas, entrances, exits, landscaped and planted areas,
retaining walls, irrigation systems and controllers, drains, sewers, lighting
fixtures, wiring, electrical panels and automatic control systems, driveways,
delivery passages, loading docks, sidewalks, stairways, ramps, open and enclosed
courts and malls, central identification signs and structures designed for the
use of all owners, occupants, employees and invitees and shall include any
"greenbelt" or set back areas maintained by Landlord on any parcel leased for
the exclusive use of a tenant. Common Facilities shall not include lobbies or
other common areas within any building which is leased to one or more tenants
but shall include any legal parcel which constitutes a portion of the Center and
on which no buildings have been or may be constructed for occupancy.

                                   EXHIBIT "B"
<PAGE>

                              HARBOR GATEWAY CENTER

                              RULES AND REGULATIONS

               The Premises are located within and constitute a part of an
integrated, multi-use planned development being developed by Landlord as a
high-quality business center. Consistent with such development, Landlord has
adopted the following Rules and Regulations to preserve the high quality of the
development and retains certain rights of approval, in its sole discretion, to
preserve the aesthetic appearance, quality and value of the Center as a whole.

               1. Each tenant shall take all actions necessary to preserve the
external appearance of his premises in a neat, clean and orderly condition and
to prevent his operations from interfering with the use by other Center
occupants of their respective premises. By way of illustration but not
limitation of the foregoing:

                      (a) Sidewalks, passages, paths, courts, and stairways
exterior to any Premises shall not be obstructed or used other than for ingress
and egress. All tenant vehicles and property shall be located within a building
or within an approved exterior structure. No unauthorized tenant and no
employees, agents or invitees of any tenant shall go upon the roof of any
building without approval.

                      (b) No trash shall be allowed to accumulate outside of a
building, except in approved receptacles or screened enclosures.

                      (c) No awnings or other projections shall be attached to
the outside walls of any building without approval and no curtains, blinds,
shades or screens shall be attached to or hung in any window or door of any
premises without approval. All electrical ceiling fixtures hung along any
perimeter of any premises bordered by windows must be fluorescent and of an
approved quality, type, design and bulb color.

                      (d) No sign, advertisement or notice shall be exhibited,
painted or affixed on any part of, or so as to be seen from the outside of, any
premises without approval.

                      (e) Premises features which reflect or admit light and air
shall not be covered or obstructed in any way.

                      (f) No tenant shall mark, paint, drill into, or in any way
deface any exterior part of any building.

                      (g) No bicycles, motorbikes, mopeds, motor scooters, or
motorcycles shall be stored outside of any building except in approved racks or
other facilities.

                      (h) No tenant shall permit any unusual or objectionable
odor to permeate from any building or permit any noises which disturb or
interfere with occupants of neighboring buildings or those having business with
them whether from machinery, musical instruments, radios, photographs or other
sources. No tenant shall throw anything out of doors, windows or skylights. No
tenant shall perform any work activity out of doors. No tenant shall cook or
otherwise prepare food out of doors.

                      (i) All machinery which generates noise and/or vibrations
shall be placed in approved settings to avoid damage to premises and creation of
noise and vibrations in areas outside of premises.

                      (j) All electric carts and other vehicles used on the
Premises or in the Common Areas which are not designed for ordinary use on
public streets and highways must be approved by Landlord. Landlord may condition
its approval as it deems appropriate, and may in any case require that such
vehicles be white and that they be supplied by Taylor-Dunn Manufacturing
Company. Such vehicles are subject to all rules pertaining to auto safety
contained herein or in any deed restrictions or easement agreements applicable
to the Premises or pursuant to governmental regulation. All approvals required
shall be by Landlord, must be in advance in writing and shall include
appearance, location, quality, style and such other factors as

                                  EXHIBIT "C"
<PAGE>

Landlord deems relevant. No requirement of Landlord shall be held to be
unreasonable or unenforceable because materials, methods of application or other
requirements selected by Landlord may be more expensive or more onerous than
alternative materials or methods of application which may be available to
achieve the same objectives. Upon any violation of the foregoing provisions,
Landlord may, if Tenant shall fail to do so within three (3) days after written
notice from Landlord, remove any offending item without any liability, and may
charge the expense incurred in removal (including the repair of any damage to
any Premises caused thereby) to the tenant violating this rule.

               2. No flammable, combustible, explosive, caustic or poisonous
fluids, chemicals or other substances shall be discarded in Center trash
receptacles or enclosures or dumped into Center sewer or drain systems. All
operations which emit gases, dust, smoke, particulates and other noxious
substances shall be hooded, ventilated or otherwise conducted to prevent the
escape of such substances from the building. Washing, draining, spraying and
other operations involving use of any liquid shall be conducted to prevent
runoff outside of any building and oozing or seepage into other portions of the
Center.

               3. Each tenant shall obtain at its own expense and keep in its
premises in a reasonably accessible place at least one ABC-type fire
extinguisher in working condition.

               4. Landlord reserves the right to prohibit or impose conditions
upon the installation in any premises of heavy objects which might overload the
premises floors.

               5. Except as provided in this paragraph, canvassing, soliciting,
peddling or selling products or services to tenants, their employees or visitors
are expressly prohibited and each tenant shall cooperate with Landlord to
prevent such practices. Tenants shall purchase spring water, ice, soft drinks,
catering services, foodstuffs, janitorial services or maintenance services and
other like products or services only from company(ies) or person(s) that comply
with rules and regulations imposed by Landlord, including insurance
requirements, reasonable fees, solicitation prohibitions, time, location and
frequency limitations and equipment restrictions. Within ten (10) days after
written request by Landlord, each tenant shall notify Landlord in writing of the
names of those vendors providing goods and services to such tenant at its
premises. Landlord shall not have a right of approval of such vendors but may
exclude a particular company or person entirely and may exclude any person who
appears to be intoxicated, under the influence of drugs or liquor or who
violates these Rules.

               6. Landlord may prohibit advertising by any tenant which, in
Landlord's opinion, impairs the reputation of the Center, and upon written
notice from Landlord any tenant shall discontinue such advertising.

               7. Employees of Landlord shall not perform any work outside of
their regular duties except under special instructions from Landlord. Landlord
will under no circumstances open any building for any tenant or its employees.

               8. Water and wash closets, plumbing fixtures, mirrors and
partitions shall not be used for any purpose other than those for which
constructed. No sweepings, rubbish, rags or other substances shall be thrown
therein. All expenses of repair or replacement resulting from misuse shall be
borne by the tenant who causes the same.

               9. No boring, cutting, stringing of wires, laying of linoleum or
other similar floor coverings, or hanging of any objects or items from the
ceiling or roof shall be permitted, except with the prior written consent of
Landlord, and then only as Landlord may direct. The location of exterior
telephone boxes, call boxes and other equipment affixed to any premises shall be
subject to Landlord's approval. Landlord will direct electricians as to where
and how telephone or telegraph wires are to be introduced into any premises.

               10. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the prior written consent of Landlord
and all installations shall be as directed by Landlord.

               11. In the event that any tenant shall change any lock or install
any new lock on any exterior or interior door to or within his premises, such
tenant shall immediately deliver a

                                   EXHIBIT "C"
<PAGE>

key to each such lock to Landlord. Landlord shall use such keys only for
emergency entries and for such other purposes as are permitted by these Rules
and Regulations and such tenant's lease.

               12. A copy of these Rules and Regulations shall be attached to
and form a part of each tenant lease in the Center. Landlord is not responsible
to any person for non-observance or violation of these Rules by any tenant or
other person. Each tenant is responsible for any loss or damage occasioned by
any violation of these Rules by such tenant or by any employee, agent, visitor
or invitee of such tenant.

               13. No waiver of any Rule by Landlord shall be effective unless
in a writing signed by Landlord. Landlord may amend these Rules from time to
time when desirable in Landlord's judgment to preserve good order in the Center,
for the convenience of tenants or visitors of the Center or to comply with any
law or regulation now or hereafter in effect. Any amendment to these Rules shall
be effective and binding upon each tenant upon delivery to such tenant of a copy
thereof.

                                   EXHIBIT "C"
<PAGE>

                         TENANT SIGN PROGRAM -- CRITERIA
                       RESEARCH AND DEVELOPMENT BUILDINGS

(i)     Purpose

        The purpose of this Criteria is to insure a continuity in Signage
        throughout Harbor Gateway Business Center.

        It is the intent of this Criteria to provide individual tenants maximum
        signing exposure, without visual clutter and in a manner that will
        enhance the overall image of the Center. It is not the intent of this
        Criteria to limit individual identity or corporate expression.

(ii)    General Conditions

        1.     Each tenant is responsible for providing his own sign at his own
               expense. Tenant to submit to the owner, for approval, two
               drawings to scale showing graphic layout and copy.

        2.     Each tenant is also responsible for obtaining all required
               building permits and approvals from the City of Costa Mesa for
               any sign proposed. The Center sign Program has been preapproved
               by the City and the sign contractor will assist in this matter.
               (Tenant any receive assistance for any matter relating to signing
               from the designated sign contractor.)

        3.     These criteria will be strictly enforced and any sign not
               conforming will be brought into conformance or removed at the
               expense of the tenant.

        4.     All signs and their installations must comply with all applicable
               local building codes.

        5.     No additional advertisement or temporary banners, flags, painted
               window glass, or similar devices are permitted in the Center
               unless provided herein.

        6.     No animated, flashing or audible signs will be allowed.

        7.     In the event that a tenant should terminate his occupancy he may
               remove the metal insert portion of his sign, (that portion which
               contains his personal graphics), however the wood portion of the
               sign is to remain in place and is considered a part of the
               building.

(iii)   Designated Sign Contractor

        In order to implement all signing (primary and secondary) throughout the
        Center, to minimize the cost to the tenant of completing the signing,
        and to ensure safe and quality workmanship and materials, Graphical
        Design has been selected as the graphic design consultant and sign
        contractor for the Center. Such firm is located at:

               Graphical Design
               17851 Sky Park Circle
               Suite A
               Irvine, CA 92714

        Its telephone number is: (949) 250-7120. All signs must be prepared and
        installed by that company unless otherwise authorized by Landlord. The
        sign company will be responsible to provide a written cost estimate for
        approval by each Tenant. The Landlord will have no responsibility to
        obtain any cost estimate for a Tenant and shall not be responsible for
        any estimate obtained by any Tenant.

                                  EXHIBIT "E"
<PAGE>

(iv)    Approvals

        Every tenant sign must be submitted to Landlord for approval. The
        drawings to be submitted must clearly indicate sign size, letter size,
        color, construction material, location and sign message. Written
        approval must be obtained before fabrication and installation of any
        sign.

(v)     Tenant Sign Specification, Page 3. *

(vi)    Typical Sign Location, Page 4. *

(vii)   Secondary (Window) Signage, Page 5. *

*All dimensions set forth are maximum sizes permitted.

                                   EXHIBIT "E"
<PAGE>

                                 OTHER DOCUMENTS

Amendment No. 1 dated February 18, 1983

Amendment No. 2 dated June 21, 1983

Amendment No. 4 dated December 7, 1983

Amendment No. 5 dated December 7, 1983

Amendment No. 6 dated December 7, 1983

Amendment No. 7 dated April 16, 1984

Amendment No. 9 dated July 1, 1984

Letter of Clarification and Confirmation of Second Lease dated May 25, 1984

Amendment No. 10 to Second Lease dated November 16, 1984

Amendment No. 11 to Second Lease dated January 21, 1985

Amendment No. 13 to Second Lease dated February 25, 1985

Amendment No. 14 to Second Lease dated May 5, 1986

Multi-Tenant Building Lease dated June 2, 1987

First Amendment to Multi-Tenant Building Lease dated June 2, 1987

Letter Agreement dated March 29, 1990

Letter Agreement dated July 23, 1990

Settlement Agreement dated April 29, 1993

                                   EXHIBIT "F"
<PAGE>

                         SHARED RIGHTS PARKING AGREEMENT

               THIS SHARED RIGHTS PARKING AGREEMENT (the "Agreement") is made
and entered into as of this 14th day of January, 1994 by and between EMULEX
CORPORATION, a California corporation ("Emulex"), and Q-LOGIC CORPORATION, a
Delaware corporation ("Q-Logic"), (Emulex and Q-Logic together being the
"Parties") with respect to the following:

                                    RECITALS

               A. Pursuant to that certain Standard Industrial Lease dated April
6, 1982 by and between C.J. Segerstrom & Sons, a California general partnership,
as landlord ("Segerstrom"), and Emulex, as tenant, Emulex leased space in a
certain office park project located in Costa Mesa, California and commonly known
as Harbor Gateway Business Center (the "Center").

               B. Since 1982, Emulex has leased from Segerstrom, space in the
Center in various buildings located in and comprising the Center pursuant to a
series of leases, lease amendments, and other instruments (collectively, and
together with the 1982 Lease, the "Lease"). Pursuant to the Lease, Emulex
currently holds, among other spaces, that certain single story office and
industrial building consisting of approximately 70,000 square feet of rentable
area and commonly known as 3545 Harbor Boulevard, Costa Mesa, California
("Building B") and that certain single story industrial building consisting of
approximately 54,910 square feet of rentable area and commonly known as 3535
Harbor Boulevard, Costa Mesa, California ("Building A").

               C. Segerstrom, Emulex, Citibank N.A., a national banking
association ("Citibank"), and Ticor Title Insurance Company, a California
corporation ("Ticor") have made, executed and delivered that certain Reciprocal
Parking Agreement, Amendment No. 8 to Lease with Emulex Corporation and Notice
of Deletion of Territory as to Declaration as to Easements, Restrictions and
Common Facilities Provisions for Harbor Gateway Center dated as of May 25, 1984
and recorded as Instrument No. 84-265616 on June 27, 1984 in the Official
Records in the Office of the County Recorder of Orange County, California
("Official Records") as amended by that certain Amendment to Reciprocal Parking
Agreement dated July 15, 1986 and recorded as Instrument No. 86-334897 on July
31, 1986 in the Official Records (together, the "Parking Agreement"), which
Parking Agreement, among other things, provides for both temporary and permanent
parking and ingress and egress to such parking for the benefit of the tenants
of, among other buildings at the Center, Buildings A and B. The parking area so
allocated to tenants of Buildings A and B shall be defined as the "Common
Parking Area."

               D. Emulex has divided its operations and formed Q-Logic as a
second, independent corporation. Pursuant to that certain Assignment,
Assumption, and Consent Re: Lease dated January 14, 1994 and executed by
Segerstrom, Emulex, and Q-Logic (the "Assignment") and without being relieved of
any of its obligations under the Lease, Emulex assigned all of its right, title,
and interest in Building B under the Lease to Q-Logic.

               E. Emulex and Q-Logic desire to enter into this Agreement with
respect to the Common Parking Area serving Buildings A and B as set forth in the
Parking Agreement.

                                    AGREEMENT

               IN CONSIDERATION of the foregoing recitals and the mutual
promises and covenants contained herein, the Parties agree as follows:

               1. Rights, Duties, and Obligations. The Parties shall share on a
non-exclusive basis all of the rights granted to Emulex under the Parking
Agreement with respect to the Common Parking Area and all of the duties and
obligations incurred by Emulex under the same, including, without limitation,
all liabilities, fees, taxes, costs, losses, and expenses (including, without
limitation, maintenance, landscaping, repair, cleaning, and insurance) accrued
in connection therewith ("Parking Agreement Duties"). Specifically, Emulex and
Q-Logic shall each be entitled, for their own use and the use by their
respective customers, invitees, and

                                   EXHIBIT "G"
<PAGE>

employees, to that number of parking spaces equal to one half of the number of
total parking spaces allocated to the Common Parking Area under the Parking
Agreement.

               2.     Performance of Parking Agreement Duties

                        (i) Emulex shall be the primary party charged with
        performance of all Parking Agreement Duties. Within ten (10) days of
        receiving written notice ("Reimbursement Request") from Emulex outlining
        the expenses incurred by Emulex in performing the Parking Agreement
        Duties (the "Expenses"), Q-Logic shall pay to Emulex an amount equal to
        fifty percent (50%) of the Expenses, not to exceed Five Thousand Dollars
        ($5,000.00) per month without the prior approval of Q-Logic.

                        (ii) Emulex shall provide Q-Logic with an annual budget
        statement (the "Expense Budget") setting forth the estimated Expenses
        for the forthcoming year.

                        (iii)If Emulex should fail to perform the Parking
        Agreement Duties and, ten (10) days after receipt of written notice by
        Q-Logic requesting that Emulex so perform, Emulex fails to commence and
        proceed toward completion of the Parking Agreement Duties, Q-Logic shall
        be entitled to perform the Parking Agreement Duties itself. In the event
        that Q-Logic should so perform the Parking Agreement Duties under the
        provisions of this Paragraph 2(iii), Q-Logic shall be entitled to (a)
        offset fifty percent (50%) of all costs and expenses incurred by such
        performance ("Q-Logic's Costs") against the amount stated in the
        subsequent Reimbursement Request or (b) charge Emulex directly for
        Q-Logic's Costs, not to exceed Five Thousand Dollars ($5,000.00) per
        month without the prior approval of Emulex.

               3. No Release from Obligations. Nothing in this Agreement shall
operate to relieve or release Emulex from all or any of its tenant
responsibilities, obligations and duties arising under or incurred by the Lease,
the Assignment, or the Parking Agreement with regard to Buildings A and B or to
the Common Parking Area.

               4. Successors and Assigns. This Agreement shall bind and inure to
the benefit of the Parties hereto and their respective successors and assigns.

               IN WITNESS WHEREOF, Emulex and Q-Logic have executed this Shared
Rights Parking Agreement as of the day and year first written above.

EMULEX CORPORATION,                      Q-LOGIC CORPORATION,
a California corporation                 a Delaware corporation

By:     /s/Paul F. Folino                By:     /s/Thomas R. Anderson
   ------------------------------------     ------------------------------------

Title:  CEO                              Title:  CFO

By:                                      By:
   ------------------------------------     ------------------------------------

Title:                                   Title:
      ---------------------------------        ---------------------------------

                                   EXHIBIT "G"<PAGE>
                                                                   EXHIBIT 10.17

                            FIRST AMENDMENT TO LEASE

               THIS FIRST AMENDMENT TO LEASE (the "Amendment") is made and
entered into as of the 21st day of January, 2000, by and between C. J.
SEGERSTROM & SONS, a California general partnership ("Landlord"), and EMULEX
CORPORATION, a California corporation ("Tenant"), with respect to the following:

                                    RECITALS

               A. Landlord is the landlord and Tenant is the tenant pursuant to
that certain Lease dated June 30, 1999 (the "Lease"). The Lease covers certain
premises (the "Premises") in the Harbor Gateway Business Center, Costa Mesa,
California (the "Center") as more particularly described in the Lease.

               B. Landlord and Tenant desire to enter into this Amendment to add
to the Premises upon the terms and conditions set forth herein those certain
premises consisting of 12,771 square feet of Rentable Area commonly known as
Suites 103 and 104 (the "New Premises") in that certain building commonly known
as Research and Development Building No. 6, located at 3545 Harbor Gateway South
in the Center (the "New Building"). The New Building contains 21,797 square feet
of Rentable Area. The New Premises and New Building are shown cross-hatched on
Exhibit "A" attached hereto.

                                    AGREEMENT

               IN CONSIDERATION OF the foregoing recitals and the mutual
promises and covenants contained herein, the parties hereto agree as follows:

               1. Leasing of New Premises. Landlord hereby leases to Tenant, and
Tenant hereby hires from Landlord, the New Premises upon all of the terms and
conditions of the Lease, as hereby amended. Tenant shall hold and occupy the New
Premises as part of the Premises upon all the terms and conditions of the Lease,
as hereby amended, except that:

                      (a) The commencement date of the Lease with respect to the
New Premises (the "New Premises Commencement Date") shall be the date upon which
Landlord delivers possession of the New Premises to Tenant broom clean and with
all mechanical systems therein in good working order as of the date of such
delivery. The target New Premises Commencement Date shall be February 1, 2000.
Tender of delivery of possession of the New Premises shall be upon written
notice to Tenant stating that the New Premises are in the condition stated
above. From and after the New Premises Commencement Date, Tenant shall lease the
New Premises as part of the Premises upon all the terms and conditions of the
Lease, as hereby amended, and shall otherwise perform or observe all obligations
of the tenant under the Lease, as hereby amended, with respect to the New
Premises, including the payment of all Monthly Basic Rent and Tenant's
Proportionate Share of Total Operating Expenses with respect to the New Premises
and New Building as herein provided. If Landlord is unable to tender delivery of
possession of the New Premises to Tenant on or before the target New Premises
Commencement Date, the Lease, as hereby amended, shall not be void or voidable
with respect to the New Premises nor shall Landlord be liable for any loss or
damage resulting therefrom; provided, however, that Landlord shall use
reasonable efforts to deliver possession of the New Premises to Tenant as close
to the target New Premises Commencement Date as practicable. From and after the
New Premises Commencement Date (i) the term of the Lease with respect to the New
Premises shall be coterminous with the term of the Lease for the balance of the
Premises, and (ii) except as otherwise expressly provided in this Amendment, (A)
the term "Premises" as used herein and in the Lease (including, without
limitation, in Section 48.4 of the Lease) shall mean and include, respectively,
both the Premises (as defined in the Lease) and the New Premises (as defined in
this Amendment), (B) the terms "Building" and/or "Building A" as used in the
Lease shall mean and include both Building A (as defined in the Lease) and the
New Building (as defined in this Amendment). The actual New Premises
Commencement Date shall be confirmed by a letter agreement prepared by Landlord
and executed by Landlord and Tenant; provided, however, that failure of either
party to execute and deliver such letter agreement shall not invalidate the
determination of the New Premises Commencement Date in accordance with the
provisions of this subparagraph (a).

<PAGE>

                      (b) From and after the New Premises Commencement Date and
continuing through the balance of the initial stated term of the Lease (i.e.,
August 31, 2001), Tenant shall pay Monthly Basic Rent for the New Premises in
accordance with the provisions of paragraph 3 below. In addition, Tenant shall
also pay at the times and in the manner provided paragraph 4 below and Exhibit
"B" attached hereto, Tenant's Proportionate Share of Total Operating Expenses
with respect to and based upon the Rentable Area of the New Premises, as well as
all other charges and additional rent provided for in the Lease with respect to
the New Premises.

                      (c) The provisions of Articles/Sections 7, 8, 32, 41,
48.1(b), 48.1(d), 48.1(g), 48.1(h), 48.3(a) through 48.3(c), inclusive, 48.5,
48.6(a), 48.7, 48.8, 48.9(c) (i.e., under no circumstances shall Tenant paint
the exterior of the New Building or make any alterations of the type specified
in such Section with respect to the New Building or the New Premises), 48.9(f),
48.9(g), 48.11, 48.19, 48.23 and 48.27 shall have no application with respect to
the New Premises or New Building.

                      (d) For purposes of Section 48.25 of the Lease, the phrase
"or the New Premises" shall be added directly after the phrase "Building A Area"
wherever such later phrase appears in such Section 48.25.

                      (e) Those provisions of the Lease superseded or modified
by the provisions of this Amendment shall have no application (if superseded) or
shall apply only as modified (if modified) with respect to the New Premises.

               2. Condition of the New Premises.

                      (a) On the New Premises Commencement Date, Landlord shall
deliver the New Premises to Tenant broom clean and with all mechanical systems
therein in good working order.

                      (b) Within three (3) days after the New Premises
Commencement Date, Landlord and Tenant shall conduct a joint inspection of the
New Premises. The purpose of such inspection shall be to establish the condition
of the New Premises as of the New Premises Commencement Date.

                      (c) Except as expressly provided in subsection (a) above,
Landlord shall deliver the New Premises to Tenant "AS IS," and Landlord shall
have no responsibility, either as to performance or payment of costs, to improve
the New Premises for Tenant. Any work of remodeling or improvement of the New
Premises by Tenant shall be the sole responsibility of Tenant and shall be in
accordance with the applicable provisions of the Lease.

                      (d) Notwithstanding anything to the contrary in the Lease,
as hereby amended, Landlord may require restoration of the New Premises as to
any improvements and alterations by Tenant (i.e., alterations and improvements
by Tenant following the New Premises Commencement Date), but only as to such
alterations and improvements (i) as to which Landlord gives written notice as to
the requirement of such removal at the time of Landlord's approval of such
alterations or improvements or (ii) which are installed without the prior
written approval of Landlord.

               3. Monthly Basic Rent. For the period from the New Premises
Commencement Date through and including the expiration of the initial stated
term of the Lease (i.e., August 31, 2001), Tenant shall pay Monthly Basic Rent
for the New Premises in the sum of $11,493.90 (i.e., $0.90 per square foot of
Rentable Area per month). All such Monthly Basic Rent for the New Premises shall
be paid at the times and in the manner provided in Section 3.1 of the Lease.

               4. Additional Rent and Other Charges.

                      (a) From and after the New Premises Commencement Date,
Tenant shall also pay at the times and in the manner provided in this
subparagraph (a) and Exhibit "B" attached hereto, Tenant's Proportionate Share
of Total Operating Expenses for the New Premises in accordance with the
following:

                                       2
<PAGE>

                              (i) Tenant's Proportionate Share of Total
Operating Expenses for the New Premises shall be fifty-nine percent (59%) (i.e.,
the Rentable Area of the New Premises/the Rentable Area of the New Building).

                              (ii) Notwithstanding anything to the contrary in
Exhibit "B," Tenant's Total Operating Expenses for each full year or partial
lease year during the initial stated term of the Lease (i.e., through and
including August 31, 2001) shall be $0.265 per square foot per month (which
amount is not included in the Monthly Basic Rent for the New Premises) and shall
be paid at the times and in the manner provided in Exhibit "B." Actual Total
Operating Expenses for the year immediately preceding any extended or additional
term shall be determined and used as the basis for adjustments for future years
as described in Section 4 of Exhibit "B."

                              (iii) With respect to each full or partial lease
year during the initial stated term, Tenant shall pay the amount set forth in
clause (ii) above. With respect to each full or partial lease year during any
extended or additional term, Tenant shall pay an amount equal to Tenant's
Proportionate Share of Landlord's estimate of Total Operating Expenses for such
full year or partial lease year. Thereafter, at the end of each lease year
during any such extended or additional term, an adjustment shall be made by
Landlord, and Tenant shall pay such amount or receive a credit of such amount as
is necessary to adjust Tenant's payments to Tenant's actual Proportionate Share
of Total Operating Expenses for such lease year during any such extended or
additional term. Such payments and adjustments shall be made as provided in
Exhibit "B. "Total Operating Expenses" and "Tenant's Proportionate Share" are
each defined in Exhibit "B."

                      (b) The payment by Tenant of Tenant's Proportionate Share
of Total Operating Expenses for the New Premises shall be in addition to the
payment of Monthly Basic Rent for the New Premises. All Monthly Basic Rent paid
for the Premises and the New Premises together with all such expenses are
hereinafter sometimes referred to herein and in the Lease, as hereby amended,
collectively, as the "rent."

                      (c) In addition to Monthly Basic Rent and Tenant's
Proportionate Share of Total Operating Expenses for the New Premises, Tenant
shall also pay all other charges and additional rent provided for in the Lease,
as hereby amended, with respect to the New Premises and based (to the extent
applicable) upon the Rentable Area thereof.

               5. Utilities. Notwithstanding anything to the contrary in Section
6.1 or Section 48.6(a) of the Lease, it is acknowledged and agreed that:

                      (a) Electrical Service to the New Premises shall be
directly metered to Tenant and Tenant shall pay the charge for such service
directly to the purveyor.

                      (b) Water and sewer service is not separately metered to
Tenant and the cost of such service shall be allocated between Tenant and the
other occupant(s) of the New Building based upon their respective Rentable
Areas.

               6. Taxes on Tenant's Property.

                      (a) Tenant shall pay not later than ten (10) days before
delinquency, all taxes, levies, assessments, fees and other governmental charges
of every kind or nature (hereinafter, collectively called "taxes") levied
against personal property or trade fixtures placed by Tenant in the New
Premises. If any such taxes are levied against Landlord or Landlord's property,
Landlord, after written notice to Tenant, may pay the same regardless of the
validity of such levy, but only under proper protest if requested by Tenant. If
the assessed value of Landlord's property is increased by inclusion of a value
placed upon such personal property or trade fixtures of Tenant, Landlord, after
written notice to Tenant, may pay the taxes based upon such increased assessment
regardless of the validity thereof, but only under proper protest if requested
by Tenant. In either such event, Tenant shall upon demand repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from
such increase in the assessment; provided that, in any such event Tenant shall
have the right, in the name of Landlord and with Landlord's full cooperation,
but at no cost to Landlord, to bring suit to recover the amount of any such
taxes so paid under protest.

                                       3
<PAGE>

               (b) If any tenant improvements constructed or installed by Tenant
in the New Premises, whether or not affixed to the real property so as to become
a part thereof, are assessed for real property tax purposes at a valuation
higher than the valuation at which tenant improvements conforming to Landlord's
Building standard materials are assessed, then the real property taxes and
assessments levied against Landlord or Landlord's property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by subparagraph (a) above. If the
County Assessor's records are available and sufficient to determine whether said
Tenant improvements are assessed at a higher valuation than Landlord's Building
standard materials, such records shall be binding on Landlord and Tenant;
otherwise the actual cost of construction shall be the basis for such
determination. Whether and the extent to which any of the improvements in the
New Premises constitute non-Building standard or otherwise exceed Building
standard shall be reasonably determined by Landlord's architect or engineer,
which determination shall be conclusive.

               7. Maintenance and Repair.

               (a) Except as provided in subparagraphs (b) and (c) below and
Articles 17 and 18 of the Lease, Tenant at its expense shall keep in good order,
condition, and repair (including replacement of parts and equipment, if
necessary) the New Premises and every part thereof, and all equipment (other
than main plumbing and electrical systems and the main heating, ventilating and
air conditioning equipment), trade fixtures, furnishings and other personal
property in the New Premises or serving the New Premises, and shall furnish and
repair all expendables (soap, towels, etc.). Tenant shall promptly at Tenant's
cost make all repairs necessary to maintain the New Premises in good condition.
Tenant shall provide whatever treatment may be necessary, as often as may be
required, to keep the New Premises neat and attractive. On the last day of the
term hereof, or on any sooner termination of the Lease, as hereby amended,
Tenant shall, subject to the provisions of Articles 17 and 18 of the Lease,
surrender the New Premises to Landlord in good condition, ordinary wear and tear
to the wall covering, carpet and other floor covering in the New Premises
excepted.

               (b) Landlord shall repair and maintain the exterior walls of the
New Building and the roof and foundations of the New Building. Landlord shall
also use commercially reasonable efforts to provide maintenance and repair with
respect to the main plumbing and electrical systems and the main heating,
ventilating and air conditioning equipment serving the New Premises. Landlord
shall not be liable for failure to make any repairs or maintenance unless such
failure persists for an unreasonable time after written notice of the need
therefor is given to Landlord by Tenant. Except as provided in Articles 17 and
18 of the Lease, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to the
New Premises or to the fixtures, appurtenances and equipment therein or to the
Common Facilities (as defined in Exhibit "B") or the improvements thereon;
provided, however, that in taking such actions, Landlord shall use its best
efforts not to interfere with Tenant's business operations in the New Premises.
Landlord's costs incurred in repair and maintenance of the New Building and all
equipment described in this Section and serving the New Building, including
heating, ventilating and air-conditioning equipment, shall be included in Total
Operating Expenses as defined in Exhibit "B." Except as provided in this
subparagraph and Articles 17 and 18 of the Lease, Landlord shall not be
obligated to repair or maintain the New Premises or to bear any part of the
expense of the New Premises. Tenant expressly waives and releases its right to
make repairs at Landlord's expense under Sections 1932(1) and 1942 of the
California Civil Code or any other statute or rule of law now or hereafter in
effect.

               (c) Tenant shall also be responsible to insure that all truck
loading areas and loading doors which constitute a part of the New Premises, if
any, are not unreasonably damaged and do not accumulate litter or debris as a
result of deliveries to and pickups from Tenant. Any unreasonable costs borne by
Landlord (i.e., any costs of work performed by Landlord over and above
Landlord's standard work with respect to the Common Facilities) to keep such
areas clean and in working order shall be billed by Landlord to Tenant and
Tenant shall pay the same within ten (10) days after receipt of an invoice from
Landlord.

               8. Common Facilities. From and after the New Premises
Commencement Date, the following shall apply:

               (a) Section 48.25 of the Lease shall be deleted in its entirety.

                                       4
<PAGE>

                      (b) For all purposes of the Lease, as hereby amended,
"Common Facilities" shall have the meaning given to such term in Exhibit "B,"
except notwithstanding anything to the contrary in such Exhibit "B," "Common
Facilities" shall not include the Building A Area, the New Premises or any other
portion of the Center designated for the exclusive use of a tenant of the
Center.

                      (c) With respect to Building A, Tenant's sole rights in
and to the Common Facilities shall be the non-exclusive right to the use
thereof, in common with Landlord and any other person to whom Landlord may grant
rights in the Common Facilities, for ingress and egress to and from the Building
A Area. With respect to the New Building, Tenant's rights in and to the Common
Facilities shall include the non-exclusive right to the uses thereof, in common
with Landlord and any other person to whom Landlord may grant rights in the
Common Facilities, for ingress and egress to and from the New Building and the
New Premises and for parking in the Parking Areas as provided in paragraph 9
below.

                      (d) Subject to Tenant's rights described in subsection
(c), Landlord shall have exclusive control of the Common Facilities and
exclusive discretion as to all decisions affecting the Common Facilities,
including but not limited to (i) construction of the Common Facilities, (ii)
maintenance, repair and operation of the Common Facilities and (iii)
modifications or changes to the Common Facilities. No such decisions or actions
by Landlord shall adversely affect Tenant's use and enjoyment of the Building A
Area or the New Premises.

               9. Parking Spaces for New Premises. From and after the New
Premises Commencement Date, the following shall apply:

                      (a) Tenant's "Allocated Parking Spaces" within the Parking
Areas (as defined in Section 48.26 of the Lease) for the New Premises is 51
spaces.

                      (b) Except as otherwise provided in the Lease, as hereby
amended, with respect to the Tenant's existing rights to use the Parking Areas
in connection with Tenant's occupancy of Building A, neither Tenant nor its
agents, employees, customers and invitees shall utilize in connection with
Tenant's occupancy of the New Premises in the aggregate at any time a number of
parking spaces in the Common Facilities in excess of the Allocated Parking
Spaces set forth above. In addition to any other remedies granted to Landlord in
the Lease, as hereby amended, or by law, upon default by Tenant under the terms
of this paragraph, Landlord shall have the right to tow away any vehicles
belonging to Tenant or Tenant's agents, employees, customers or invitees as
necessary to reduce the number of parking spaces used by Tenant and such persons
to that number of Allocated Parking Spaces set forth above.

                      (c) All costs of cleaning, maintaining, operating,
repairing, holding and making available the Parking Area shall be included
within Common Facilities Expenses, as defined in Exhibit "B" and a portion
thereof shall be included in Tenant's Proportionate Share as defined in Exhibit
"B" with respect to the New Premises.

                      (d) Landlord may authorize persons other than tenants of
the Center, their agents, employees, customers and invitees to utilize the
Parking Area; provided, however, that in no event shall the number of spaces
available for Tenant with respect to the New Premises be less than that number
of Allocated Parking Spaces set forth above. The terms of such usage shall be as
determined by Landlord in its sole discretion and may include the right to use
the Parking Area without charge.

                      (e) Section 48.26(f) of the Lease shall be deleted, in its
entirety. In lieu thereof, Landlord and Tenant agree that the parking and other
rights granted to Tenant pursuant to Section 48.1 and Section 48.26 of the Lease
as respects Building A are in lieu of rights in common with other tenants of the
Center to park throughout the Parking Area and that Tenant is not being charged
for any costs of maintaining the Common Facilities of the Center, including the
Parking Area, in connection with its occupancy of Building A based upon the
understanding that its parking, and the parking of its employees, business
visitors and suppliers, with respect to its use of Building A will be limited to
the exclusive parking spaces established for Tenant as provided in the Lease. If
Landlord determines that in connection with Tenant's use of Building A such
persons are parking in areas other than or in addition to the exclusive parking
spaces established for Tenant, Landlord may require Tenant to immediately cease
such practice and Tenant shall promptly cease such practice upon receipt of a
written request to do so from

                                       5
<PAGE>

Landlord. The foregoing shall not, however, be deemed to prohibit or restrict
Tenant's non-exclusive right to use up to the number of Allocated Parking Spaces
set forth above in connection with Tenant's occupancy of the New Premises and as
to which Tenant shall pay Tenant's Proportionate Share of Common Facilities
Expenses as defined in Exhibit "B."

               10. Defined Terms. Any term used in this Amendment and not
otherwise defined herein shall have the meaning assigned to such term in the
Lease.

               11. Lease in Effect. Landlord and Tenant acknowledge and agree
that the Lease, as hereby amended, remains in full force and effect in
accordance with its terms. In the event of any conflict between the terms of
this Amendment and the terms of the Original Lease and/or the Restatement, the
terms of this Amendment shall control.

               IN WITNESS WHEREOF, the parties have executed this First
Amendment to Lease as of the day and year first above written.

"Tenant"                                 "Landlord"

EMULEX CORPORATION,                      C. J. SEGERSTROM & SONS,
a California corporation                 a California general partnership

By      /s/ Michael J. Rockenbach        By      /s/ Henry Segerstrom
        -----------------------------            -------------------------------
                                                 Managing Partner

Title   VP Finance and CFO
                                         By      /s/ Jeanette E. Segerstrom
                                                 -------------------------------
                                                 Managing Partner
By      /s/ Sadie A. Herrera
        -----------------------------

Title   VP Human Resources

                                       6
<PAGE>

EXHIBIT "A"                  DEPICTION OF PREMISES

                                  EXHIBIT "A"
<PAGE>

EXHIBIT "B"

                  PAYMENT AND ADJUSTMENT OF OPERATING EXPENSES

               "Total Operating Expenses" means, with respect to each lease
year, the sum of (1) Landlord's Building Operating Expenses for such lease year
and (2) the Building Share of all Common Facilities Expenses for such lease
year. The definitions, method of proration and method of adjustment of these
expenses are as set forth in this Exhibit "B."

                              (A) As used in this Exhibit "B," the following
terms have the following meanings:

                                      (i) "Building Operating Expenses" means
the aggregate expenses incurred by Landlord in the management, operation,
maintenance and repair of the New Building, all determined in accordance with
sound management principles and generally accepted accounting practice on an
accrual basis and the cost, as reasonably amortized by Landlord, with interest
at the rate per annum determined pursuant to Article 34 of the Lease on the
unamortized amount, of any capital improvements made after the New Premises
Commencement Date which reduce other items of Building Operating Expenses, in an
amount not to exceed such reduction for the relevant year. Building Operating
Expenses shall include, but not be limited to:

                                            a) Wages, salaries, related fringe
benefits, all employer taxes and insurance of all on-site employees engaged by
Landlord in the operation and maintenance of the New Building;

                                            b) All supplies, materials and
utilities used by Landlord in operation and maintenance of the New Building;

                                            c) Cost of replacement of equipment
and all maintenance and service agreements on equipment located in or used to
maintain the New Building;

                                            d) Cost of casualty and liability
insurance applicable to the Building and Landlord's personal property used in
connection therewith;

                                            e) Cost of repairs and general
maintenance of the New Building;

                                            f) Cost of all accounting, legal and
other professional fees incurred in connection with the operation of the New
Building;

                                            g) Real Property Taxes, as defined
below, and all other taxes with respect to the New Building; and

                                            h) An amount equal to fifteen
percent (15%) of all such costs and expenses to cover Landlord's overhead and
administrative expenses with respect to the New Building.

                                      (ii) "Common Facilities" means all areas
(and all improvements thereon) within the exterior boundaries of the Center
which (i) are not now or hereafter held for exclusive use by Tenant, or any
other tenant of the Center and (ii) are made available for the common use of
Landlord, Tenant and other occupants and their respective employees and invitees
in or around the Center. Common Facilities shall include, without limiting the
generality of the foregoing, all parking areas, entrances, exits, landscaped and
planted areas, retaining walls, irrigation systems and controllers, drains,
sewers, lighting fixtures, wiring, electrical panels and automatic control
systems, driveways, delivery passages, loading docks, sidewalks, stairways,
ramps, open and enclosed courts and malls, central identification signs and
structures designed for the use of all owners, occupants, employees and invitees
and shall include any "greenbelt" or set back areas maintained by Landlord on
any parcel leased for the exclusive use of a tenant. Common Facilities shall not
include lobbies or other common areas within any building which is leased to one
or more tenants but shall include any legal

                                  EXHIBIT "B"
<PAGE>

parcel which constitutes a portion of the Center and on which no buildings have
been or may be constructed for occupancy.

                                      (iii) "Common Facilities Expenses" means
the aggregate expenses incurred by Landlord in the management, operation,
maintenance and repair of the Common Facilities, all determined in accordance
with sound management principles and generally accepted accounting practice on
an accrual basis and the cost, as reasonably amortized by Landlord, with
interest at the rate per annum determined pursuant to Article 34 of the Lease on
the unamortized amount, of any capital improvements to the Common Facilities
made after the New Premises Commencement Date which reduce other items of Common
Facilities Expenses, but in an amount not to exceed such reduction for the
relevant lease year. Common Facilities Expenses shall include, but not be
limited to:

                                            a) Expenses of the types specified
in subparagraph (a) above but applicable to the Common Facilities;

                                            b) Real property taxes as defined
below, and all other taxes, with respect to the Common Facilities;

                                            c) Repaving, resurfacing, painting
and striping, sweeping, trash removal and security with respect to the Common
Facilities;

                                            d) Advertising and similar expenses
for the general promotion of the Center (but not including any advertising
expenses incurred to procure tenants for vacant space); and

                                            e) An amount equal to fifteen
percent (15%) of all such costs and expenses to cover Landlord's overhead and
administrative expenses with respect to the Common Facilities.

                                      (iv) "Real property taxes" shall include
(i) all taxes, assessments and governmental charges and surcharges (including,
without limitation, assessments for public improvements or benefits whether or
not commenced or completed during the term of this Lease, or for water, sewer,
or storm drains, and other rents, rates, charges, excises, levies, license fees,
service fees, use fees, permit fees and other authorization fees) and all other
charges (in each case, whether general or special, ordinary or extraordinary,
foreseen or unforeseen) of every kind and character (including all penalties and
interest thereon), levied upon or with respect to the New Premises, New
Building, or Common Facilities, as applicable, (ii) any tax or excise on or
measured by rents, and (iii) any other tax, however described, levied against
Landlord or Tenant on account of the rent reserved hereunder or on the business
of renting the New Premises. Without limiting the generality of the foregoing,
real property taxes shall include any assessment by any governmental authority
pursuant to any enabling statute (such as, for example an "SB 55 Assessment") or
payment to retire bonds or other indebtedness created by a special assessment
district, an improvement district or other governmental authority (such as, for
example, 1911 Act and 1915 Act Bonds). Notwithstanding anything to the contrary
in the foregoing, "real property taxes" shall not include franchise, estate,
inheritance, succession, capital levy, net income or excise profits taxes
imposed upon Landlord, except that if real property taxes are withdrawn in whole
or in part and any substitute tax is made therefor, such tax shall for the
purpose of this Lease be considered a real property tax, regardless of how
denominated or the source from which collected.

                              (B) For the purposes of this Exhibit "B," the
following shall pertain:

                                      (i) Neither Building Operating Expenses
nor Common Facilities Expenses shall include the initial cost of construction of
the Common Facilities (or any improvements thereto).

                                      (ii) Neither Building Operating Expenses
nor Common Facilities Expenses shall include expenses for which Landlord is
indemnified (either by an insurer, condemnor, tenant or otherwise); expenses
incurred in leasing or procuring tenants (including, without limitation, lease
commissions, advertising expenses, and expenses of renovating space for
tenants); rental under any ground or underlying lease or leases; wages,

                                  EXHIBIT "B"
<PAGE>

salaries or other compensation paid to any executive employees above the grade
of property manager; or the cost of any work or service performed for or
facilities furnished to a tenant at the tenant's cost.

                                      (iii) If any real property tax or other
item of expense shall relate partly to any building occupied by one or more
tenants in the Center and partly to the Common Facilities, such item of expense
shall be allocated as between such building, on the one hand, and the Common
Facilities, on the other hand, on such basis as Landlord determines to be
reasonable under the circumstances.

                                      (iv) Tenant's Allocated Parking Spaces as
set forth in Paragraph 8 of the First Amendment to Lease to which this Exhibit
is attached (the "First Amendment") are those parking spaces allocated to Tenant
and located within the Common Facilities. Allocated Parking Spaces for Tenant
and for other tenants of the Building shall be as determined or redetermined
from time to time by Landlord.

                                      (v) Building Operating Expenses for any
year shall be extrapolated to reflect ninety-five percent (95%) occupancy of the
Rentable Area of the New Building, a full year of operation and a full year of
occupancy by Tenant.

                              (C) Method of Proration

                                      (i) The "Building Share of Common
Facilities Expenses" means:

                                            a) To and until completion of all
Common Facilities for the Center the sum of:

                                                   i) That portion of the costs
and expenses applicable to the parking areas (and landscaping located therein)
of the Center obtained by multiplying the total costs by a percentage obtained
by dividing the New Building's Allocated Parking Spaces by the average number of
Center spaces completed during the course of the lease year; and

                                                   ii) That portion of the costs
and expenses applicable to the Common Facilities other than those in (A) above
obtained by multiplying the total costs by a percentage obtained by dividing the
New Building's Allocated Parking Spaces by the total parking spaces planned
(whether or not then completed) for the Center as of the last day of a lease
year.

                                            b) From and after the completion of
all Common Facilities for the Center that portion of the total Common Facilities
Expenses for any lease year determined by multiplying such total by a percentage
determined by dividing the New Building's Allocated Parking Spaces by the total
parking spaces in the Center.

                                      (ii) "Tenant's Proportionate Share" is the
Rentable Area of the New Premises divided by the Rentable Area of the New
Building.

                              (D) Method of Adjustment.

               For each lease year, including the lease year in which the New
Commencement Date occurs, Tenant shall pay Tenant's Proportionate Share of the
Total Operating Expenses as follows:

                                      (i) For the first lease year, Tenant's
Proportionate Share of estimated Total Operating Expenses is specified in the
First Amendment. Prior to the commencement of each lease year subsequent to the
first lease year, Landlord shall provide to Tenant a written estimate of Total
Operating Expenses for such lease year and Tenant's Proportionate Share thereof.
Tenant shall pay during each lease year (including the first lease year), in
equal monthly installments in advance along with its monthly installments of
Monthly Basic Rent, the amount of such estimate.

                                      (ii) Within one hundred twenty (120) days
after the end of each lease year, including the first lease year, Landlord shall
provide to Tenant a statement in

                                  EXHIBIT "B"
<PAGE>

reasonable detail showing actual Total Operating Expenses for such lease year
and Tenant's Proportionate Share thereof. If the amount shown on such statement
exceeds the estimated amount previously paid by Tenant with respect to such
lease year as a part of Tenant's Basic Annual Rent, then Tenant shall pay such
excess to Landlord within thirty (30) days after receipt of such statement. If
the amount shown on such statement is less than the estimated amount previously
paid by Tenant with respect to such lease year, such overpayment shall be
credited by Landlord against the next amounts due from Tenant pursuant to this
Lease. Any overpayment by Tenant with respect to the last lease year of the term
shall be offset against any other amounts due from Tenant pursuant to this Lease
and the balance shall be refunded to Tenant without interest along with
Landlord's statement pursuant to this subparagraph (c).

                                      (iii) Any Total Operating Expenses for any
partial lease year during the term shall be apportioned so that Tenant shall pay
its Proportionate Share of only that portion of Total Operating Expenses for
such year as falls within the term. This provision shall survive the expiration
or earlier termination of the term.

                                      (iv) If any special assessment is included
as part of real property taxes and such assessment may be paid in installments,
Tenant shall be obligated to pay only Tenant's Proportionate Share of the
installments falling within the term whether or not Landlord pays such
assessment in installments.

                                      (v) All taxes for the first and last lease
year of the Lease term with respect to the New Premises shall be prorated on the
basis of the fiscal year of the appropriate governmental authority. Taxes which
are levied on a fiscal year basis shall be deemed to apply one-twelfth to each
calendar month in such fiscal year.

                                  EXHIBIT "B"

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