Document:

<PAGE>
                                                                   Exhibit 10.21

                                                                     Page 1 of 4

August 16, 2000

Mr. Frederick R. Fromm
c/o 3469 North First Street
San Jose, California 95134

Dear Mr. Fromm:

         This employment letter agreement sets forth the terms of your
employment agreement with Oplink Communications, Inc. (the "Company"). If you
accept this employment letter agreement, it will supersede the employment offer
letter dated June 30, 2000, by and between you and the Company.

         1. POSITION AND RESPONSIBILITIES. The Company hereby employs you as its
President effective July 24, 2000. In that position, you will be responsible for
the Sales & Marketing, R&D, and Merger & Acquisition activities and will report
to the Chief Executive Officer of the Company. Your responsibilities may change
from time to time as the Company deems it necessary.

         2. OFFICE LOCATION AND HOURS. You will work at our facility located at
3469 North First Street in San Jose, California. Normal office hours are from
8:30 a.m. to 5:30 p.m., Monday through Friday. As an exempt salaried employee,
you will be expected to work additional hours as required by the nature of your
responsibilities.

         3. COMPENSATION. For your services under this Employment Letter
Agreement, you will receive the following compensation from the Company. All
references to the "$" symbol below refer to the U.S. dollar.

                  (a) BASE SALARY. You will receive a base salary of $250,000
per year, less payroll deductions and all required withholdings, payable under
the Company's regular payroll practices, which currently includes payment on a
bi-weekly basis. Your base salary will be reviewed on an annual basis.

                  (b) BENEFITS.

                           (1) STANDARD BENEFITS. You will be eligible for the
following standard Company benefits on the first of the month following 30 days
of continuous service with the Company: medical insurance, 401(k) retirement
savings plan, vacation, sick leave and holidays. Details about these benefits
are provided in the Employee Handbook and plan summaries, available for your
review. The Company may modify compensation and benefits from time to time, as
it deems necessary.

                           (2) SUPPLEMENTAL LIFE INSURANCE. The Company will
purchase a term life insurance policy on your life for $1,000,000 for the
benefit of your designated beneficiary.

<PAGE>
                                                                     Page 2 of 4

                  (c) RELOCATION AND TEMPORARY HOUSING EXPENSES.

                           (1)      RELOCATION ALLOWANCE. You will be paid
$50,000 as relocation compensation, payable in full upon your arrival, for
your move from Florida to California. If you voluntarily terminate your
employment or are terminated for cause within the first year of your
employment, you will be required to pay back to the Company a pro-rated
portion of the $50,000 within 30 days of termination. The pay back amount is
equal to $50,000 multiplied by the following percentage, (i) the numerator of
which is the number of full months remaining until the first anniversary of
your arrival date and (ii) the denominator of which is 12. For example, if
you voluntarily terminate your employment 3 months following your arrival
date, then you will be obligated to pay back 9/12ths of the $50,000 to the
Company.

                           (2) TEMPORARY HOUSING EXPENSES. You will be eligible
for a temporary monthly housing allowance of $3,000 per month for your first
three months of employment with the Company.

                  (d) LOAN. You will be eligible for a loan from the Company in
the amount of $400,000 at an annual interest rate of 6.5%. The outstanding
principal amount and any accrued and unpaid interest hereunder shall be due and
payable over a period of four years in two equal installments due on the second
and fourth anniversary of the date hereof; provided, however, that in the event
that you terminate your employment or are terminated for cause, the entire
principal balance and all accrued interest shall become immediately due and
payable.

                  (e) EMPLOYEE STOCK PURCHASE PLAN. You will be eligible to
participate in the new Employee Stock Purchase Plan as provided under the terms
of the plan. The Employee Stock Purchase Plan will become effective upon the
completion of the Company's public offering.

                  (f) INITIAL STOCK OPTIONS. Subject to approval by the
Company's Board of Directors, you will be granted an initial stock option to
purchase 800,000 shares of the Company's Common Stock ("Option") on the
following terms.

                           (1) EXERCISE PRICE. The exercise price of the Option
shall be the fair market value of the stock at the time of the sale, as
determined by the Company's Board of Directors.

                           (2) VESTING.

                                    (A) STANDARD VESTING. Your Option shall be
subject to vesting on the following terms: one-fourth (1/4th) shall vest after
one year of your employment with the Company commencing July 24, 2000, with the
balance vesting equally on a monthly basis for each month of your employment
with the Company over the next three years.

<PAGE>
                                                                     Page 3 of 4

                                    (B) ACCELERATION OF VESTING FOLLOWING CHANGE
OF CONTROL. In the event of a "Change of Control" (as defined below) within the
first year of your employment with the Company, the vesting of one-fourth
(1/4th) of your Option shall be accelerated immediately upon the Closing of the
Change of Control, provided that if the value of the shares covered by the
one-fourth (1/4th) of your Option has a value of less than $10 million (or $50
per share), then the vesting of an additional portion of your Option shall be
accelerated so that the total value of the shares for which the vesting on the
Option is accelerated shall be equal to $10 million. In calculating the
additional shares covered by the Option for which vesting shall be accelerated
(to provide you with vested shares with a value of $10 million), the Company
shall use the highest market price of its common stock during the last trading
month in which the Change of Control occurs.

                                    (C) ACCELERATION OF VESTING FOLLOWING
TERMINATION WITHOUT CAUSE. If you are terminated without a "Cause" within the
first year of your employment with the Company, a minimum of one-eighth (1/8th)
of your stock options will vest immediately upon your termination of employment,
provided that if the value of the shares covered by the one-eighth (1/8th) of
your Option has a value of less than $5 million (or $50 per share), then the
vesting of an additional portion of your Option shall be accelerated so that the
total value of the shares for which the vesting on the Option is accelerated
shall be equal to $5 million. In calculating the additional shares covered by
the Option for which vesting shall be accelerated (to provide you with vested
shares with a value of $5 million), the Company shall use the highest market
price of its common stock during the last trading month in which your employment
is terminated.

                                    (D) DEFINITIONS. For purposes of this
Employment Letter Agreement, the following terms shall have the meanings set
forth below.

                                             (1) "CAUSE" means the occurrence of
any of the following: (i) theft, misappropriation or embezzlement of Company
property by the employee, or falsification of any Company documents or records
by the employee; or (ii) conviction (including any plea of guilty or NOLO
CONTENDERE) of any felony or other crime involving moral turpitude or dishonesty
by the employee; or (iii) any material breach by the employee of any employment
agreement between the employee and the Company, which breach is not cured
pursuant to the terms of such agreement.

                                             (2) "CHANGE OF CONTROL" means any
one of the following transactions: (i) a sale, lease or other disposition of all
or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving corporation, or (iii) a
reverse merger in which the Company is the surviving corporation but the shares
of the Common Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise.

                  (g) ANNUAL STOCK OPTIONS. You will be eligible to purchase up
to 50,000 shares of the Company's common stock under the Company's 2000 Equity
Incentive Plan each year of your employment while the plan is in effect. Stock
options granted under this Section 3(g) shall be granted on the first day
following the Company's annual shareholders meeting during the calendar year and
have an exercise price at the fair market value of the Company's common stock at
the date of the grant. All other terms of the stock option shall be according to

<PAGE>
                                                                     Page 4 of 4

the standard stock option terms of stock option grants made under the Company's
equity incentive plans.

         4.       TERMS OF EMPLOYMENT.

                  (a) COMPANY POLICIES AND AGREEMENTS. As a Company employee,
you will be expected to abide by the Company's rules and regulations,
acknowledge in writing that you have read the Company's Employee Handbook, and
sign and comply with the attached Employment, Confidential Information and
Invention Agreement, which prohibits unauthorized use or disclosure of the
Company's proprietary information. During the period of your employment, you
will not engage in any employment or business activity other than for the
Company without the express written consent of the Company. The Company may
amend its rules and regulations at any time.

                  (b) EMPLOYMENT AT WILL. You may terminate your employment with
the Company at any time and for any reason whatsoever simply by notifying the
Company. Likewise, the Company may terminate your employment at any time and for
any reason whatsoever, with or without cause or advance notice. This at-will
employment relationship cannot be changed except in a writing signed by the
Chief Executive Officer of the Company.

                  (c) ELIGIBILITY FOR EMPLOYMENT. As required by law, your
employment with the Company is subject to satisfactory proof of your right to
work in the United States.

         5. COMPLETE AGREEMENT. This Employment Letter Agreement, together with
your Confidential Information and Invention Agreement and stock option
agreements, forms the complete and exclusive statement of the terms of your
employment agreement with the Company. The employment terms in this Employment
Letter Agreement and the Confidential Information and Invention Agreement
supersede any other prior or contemporaneous agreements or promises made to you
by anyone, whether oral or written.

         If you agree to the terms of this Employment Letter Agreement, please
sign and date the attached copy of this Employment Letter Agreement and return
that copy to me.

         We hope that your expertise will be an important part of our continued
effort to strive for excellence and greater success.

Very truly yours,

---------------------------
Joseph Y. Liu
Chief Executive Officer

Agreed:

---------------------------                        ---------------------------
Frederick R. Fromm                                 Date<PAGE>

                                                                  Exhibit 10.22

                                      LEASE

                                 BY AND BETWEEN

                      SAN JOSE TECHNOLOGY PROPERTIES, LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY,
                                   AS LANDLORD

                                       AND

                           OPLINK COMMUNICATIONS, INC.
                            A CALIFORNIA CORPORATION
                                    AS TENANT

                          AFFECTING PREMISES LOCATED AT
                         2144 BERING DRIVE, SAN JOSE, CA

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                    <C>
SUMMARY OF BASIC LEASE TERMS............................................................1

ARTICLE 1 DEFINITIONS...................................................................1

ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE..........................................3

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

ARTICLE 4 USE OF PREMISES...............................................................5

ARTICLE 5 TRADE FIXTURES AND ALTERATIONS................................................7

ARTICLE 6 REPAIR AND MAINTENANCE........................................................9

ARTICLE 7 WASTE DISPOSAL AND UTILITIES.................................................11

ARTICLE 8 COMMON OPERATING EXPENSES....................................................12

ARTICLE 9 INSURANCE....................................................................14

ARTICLE 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY............................17

ARTICLE 11 DAMAGE TO PREMISES..........................................................17

ARTICLE 12 CONDEMNATION................................................................19

ARTICLE 13 DEFAULT AND REMEDIES........................................................20

ARTICLE 14 ASSIGNMENT AND SUBLETTING...................................................22

ARTICLE 15 GENERAL PROVISIONS..........................................................27
</TABLE>

<PAGE>

                          SUMMARY OF BASIC LEASE TERMS
                          ----------------------------

SECTION                                                       TERMS
(LEASE REFERENCE)

         A.             LEASE REFERENCE DATE: July 24, 2000
(Introduction)

         B.             LANDLORD:        SAN JOSE TECHNOLOGY PROPERTIES, LLC
(Introduction)                           a Delaware limited liability company

         C.             TENANT:          OPLINK COMMUNICATIONS, INC.
(Introduction)                           a California corporation

     D.                 PREMISES:        That area consisting of approximately
(Section 1.20)                           6,387 square feet of gross leasable
                                         area, the address of which is 2144
                                         Bering Drive, San Jose, CA,
                                         within the Building as
                                         shown on EXHIBIT A.

     E.                 PROJECT:         The land and improvements shown on
(Section 1.21)                           EXHIBIT A consisting of the Building
                                         and another commercial building
                                         containing approximately 34,177 square
                                         feet of space. The total gross leasable
                                         area in the Project is approximately
                                         74,621.

     F.                 BUILDING:        The building in which the Premises are
(Section 1.7)                            located having a street address of
                                         2140-2150 Bering Drive, San Jose, CA,
                                         which Building contains approximately
                                         40,444 square feet of gross leasable
                                         area.

     G.                 TENANT'S SHARE:  15.79% of the Building (i.e., 6,387
                                         divided by 40,444) (Section 1.28)
                                         8.56% of the Project (i.e., 6,387
                                         divided by 74,621)

     H.                 TENANT'S ALLOCATED PARKING STALLS: 25 spaces, based
                                         on the ratio of four parking
                                         (Section 4.5) space for each 1,000
                                         square feet of leasable space in the
                                         Premises.

     I.                 SCHEDULED COMMENCEMENT DATE: August 1, 2000.
(Section 1.24)

     J.                 LEASE TERM:      Sixty (60) months PLUS, if the
(Section 1.17)                           Commencement Date is other than the
                                         first day of a calendar month, the
                                         first month shall include the remainder
                                         of the calendar month in which the
                                         Commencement Date occurs plus the first
                                         full calendar month thereafter and Base
                                         Monthly Rent and all Additional Rent
                                         for such first month shall include the
                                         full Base Monthly Rent and Additional
                                         Rent for the first full calendar month
                                         plus Base Monthly Rent and Additional
                                         Rent for the partial month in which the
                                         Commencement Date occurs prorated on a
                                         daily basis at the monthly rent
                                         provided for the first calendar month.

                                       1
<PAGE>

     K.     BASE MONTHLY RENT:  MONTHS                            MONTHLY AMOUNT
(Section 3.1)                   (FROM THE COMMENCEMENT DATE)
                                1 - 12                             $17,564.25
                                13 - 24                            $18,266.82
                                25 - 36                            $18,997.49
                                37 - 48                            $19,757.39
                                49 - 60                            $20,547.69

     L.                 PREPAID RENT:    $18,490.13 of which $17,564.25 is for
                                         Base Monthly Rent and $925.88 is for
                                         Tenant's Share of Common Operating
                                         Expenses.

     M.                 SECURITY DEPOSIT: $123,286.00.  The applicable amount of
(Section 3.5)                            the Security Deposit will be applied by
                                         Landlord for Base Monthly Rent due on
                                         the first day of the 24th, 36th and
                                         48th months following the Commencement
                                         Date with the remaining balance of the
                                         Security Deposit held by Landlord as
                                         the Security Deposit, provided that a
                                         default or breach by Tenant of any
                                         provision of the Lease does not exist
                                         at the time for the application of such
                                         portion of the Security Deposit and no
                                         such default or breach occurred during
                                         the year immediately prior to the
                                         effective date of the application under
                                         this section. If Tenant is entitled to
                                         have a portion of the Security Deposit
                                         applied to Base Monthly Rent pursuant
                                         to this section, Tenant must deliver to
                                         Landlord written notice of its request
                                         to so apply the amount of the Security
                                         Deposit thirty (30) days prior to the
                                         applicable date the application would
                                         apply.

     N.                 PERMITTED USE:   General office, administration,
(Section 4.1)                            engineering, sales, warehousing, light
                                         assembly and other uses directly
                                         incidental thereto. The original party
                                         signing this Lease as Tenant may use a
                                         portion of the Premises for fiber
                                         optics silicon coating lab that does
                                         not involve the use of any Hazardous
                                         Materials (as hereinafter defined).

     O.                 PERMITTED TENANT'S ALTERATIONS LIMIT:  $5,000.00
(Section 5.2)

     P.                 TENANT'S LIABILITY INSURANCE MINIMUM:  $3,000,000.00
(Section 9.1)

     Q.                 LANDLORD'S ADDRESS:    c/o Divco West Group, LLC
(Section 1.3)                                  100 Park Center Plaza, Suite 425
                                               San Jose, California 95113
                                               Attn: Property Manager

                        With a copy to:        c/o Divco West Group, LLC
                                               150 Almaden Boulevard, Suite 700
                                               San Jose, CA 95113
                                               Attn.: Asset Manager

     R.                 TENANT'S ADDRESS:      Oplink Communications, Inc.
(Section 1.3)                                  3475 N. First Street
                                               San Jose, CA 95134
                                               Attn.: Alex Hsu

     S.                 RETAINED REAL ESTATE BROKERS:  Colliers International
(Section 15.13)                          representing Landlord and Tenant.

                                       2

<PAGE>

     T.                 LEASE: This Lease includes the summary of the Basic
(Section 1.16)                 Lease Terms, the Lease, and the following
                               exhibits and addenda:

                               EXHIBIT A - Project Site Plan and Outline of the
                                           Premises
                               EXHIBIT B - Work Letter for Tenant Improvements
                               EXHIBIT C - Acceptance Agreement

         The foregoing Summary is hereby incorporated into and made a part of
this Lease. Each reference in this Lease to any term of the Summary shall mean
the respective information set forth above and shall be construed to incorporate
all of the terms provided under the particular paragraph pertaining to such
information. In the event of any conflict between the Summary and the Lease, the
Summary shall control.

LANDLORD:                                      TENANT:

SAN JOSE TECHNOLOGY PROPERTIES, LLC,           By:  OPLINK COMMUNICATIONS, INC.
a Delaware limited liability company                a California corporation

By:    Divco West Group, LLC,                       By:      ___________________
       a Delaware limited liability company         Name:    ___________________
       Its Manager                                  Title:   ___________________

       By:      __________________________     Dated:   _______________, 2000
       Name:    __________________________
       Its:     __________________________

Dated:   _______________, 2000

                                       3

<PAGE>

                                     LEASE

         This Lease is dated as of the lease reference date specified in SECTION
A of the Summary and is made by and between the party identified as Landlord in
SECTION B of the Summary and the party identified as Tenant in SECTION C of the
Summary.

                              ARTICLE 1 DEFINITIONS

         1.1 GENERAL: Any initially capitalized term that is given a special
meaning by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.

         1.2 ADDITIONAL RENT:  The term "Additional Rent" is defined in PARA
3.2.

         1.3 ADDRESS FOR NOTICES: The term "Address for Notices" shall mean the
addresses set forth in SECTIONS Q AND R of the Summary; provided, however, that
after the Commencement Date, Tenant's Address for Notices shall be the address
of the Premises.

         1.4 AGENTS: The term "Agents" shall mean the following: (i) with
respect to Landlord, the agents, employees and contractors of such party; and
(ii) with respect to Tenant, the agents, employees, contractors, and invitees of
Tenant, and Tenant's subtenants and their respective agents, employees,
contractors, and invitees.

         1.5 AGREED INTEREST RATE: The term "Agreed Interest Rate" shall mean
that interest rate determined as of the time it is to be applied that is equal
to the lesser of (i) 5% in excess of the discount rate established by the
Federal Reserve Bank of San Francisco as it may be adjusted from time to time,
or (ii) the maximum interest rate permitted by Law.

         1.6 BASE MONTHLY RENT: The term "Base Monthly Rent" shall mean the
fixed monthly rent payable by Tenant pursuant to PARA 3.1 which is specified
iN SECTION K of the Summary.

         1.7 BUILDING: The term "Building" shall mean the building in which the
Premises are located which Building is identified in SECTION F of the Summary,
the gross leasable area of which is referred to herein as the "Building Gross
Leasable Area."

         1.8 COMMENCEMENT DATE: The term "Commencement Date" shall mean the
later of: (i) the date Landlord offers to deliver possession of the Premises to
Tenant following "Substantial Completion" of the "Tenant Improvements" (as such
terms are defined in EXHIBIT B attached hereto); or (ii) the date Tenant
occupies the Premises. To the extent the Commencement Date is delayed due to any
"Tenant Delay" (as defined in EXHIBIT B attached hereto), then the calculation
of the date under clause (i) above shall be deemed the date the Tenant
Improvements would have been Substantially Completed (as defined in Exhibit B)
but for such Tenant Delay

         1.9 COMMON AREA: The term "Common Area" shall mean all areas and
facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant or any other lessee or other occupant of the Project,
including the parking areas, access and perimeter roads, pedestrian sidewalks,
landscaped areas, trash enclosures, recreation areas and the like.

         1.10 COMMON OPERATING EXPENSES: The term "Common Operating Expenses" is
defined in PARA 8.2.

         1.11 EFFECTIVE DATE: The term "Effective Date" shall mean the date the
last signatory to this Lease whose execution is required to make it binding on
the parties hereto shall have executed this Lease.

                                       1
<PAGE>

         1.12 EVENT OF TENANT'S DEFAULT: The term "Event of Tenant's Default" is
defined in PARA 13.1.

         1.13 HAZARDOUS MATERIALS: The terms "Hazardous Materials" and
"Hazardous Materials Laws" are defined in PARA 7.2E.

         1.14 INSURED AND UNINSURED PERIL: The terms "Insured Peril" and
"Uninsured Peril" are defined in PARA 11.2E.

         1.15 LAW: The term "Law" shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order,
or other requirement of any municipal, county, state, federal or other
government agency or authority having jurisdiction over the parties to this
Lease or the Premises, or both, in effect either at the Effective Date or any
time during the Lease Term, including, without limitation, any Hazardous
Material Law (as defined in PARA 7.2E) and the Americans with Disabilities
Act, 42 U.S.C. Sections 12101 et. SEQ. and any rules, regulations,
restrictions, guidelines, requirements or publications promulgated or
published pursuant thereto.

         1.16 LEASE: The term "Lease" shall mean the Summary and all elements of
this Lease identified in SECTION T of the Summary, all of which are attached
hereto and incorporated herein by this reference.

         1.17 LEASE TERM: The term "Lease Term" shall mean the term of this
Lease which shall commence on the Commencement Date and continue for the period
specified in SECTION J of the Summary.

         1.18 LENDER: The term "Lender" shall mean any beneficiary, mortgagee,
secured party, lessor, or other holder of any Security Instrument.

         1.19 PERMITTED USE: The term "Permitted Use" shall mean the use
specified in SECTION N of the Summary.

         1.20 PREMISES: The term "Premises" shall mean that building area
described in SECTION D of the Summary that is within the Building.

         1.21 PROJECT: The term "Project" shall mean that real property and the
improvements thereon which are specified in SECTION E of the Summary, the
aggregate gross leasable area of which is referred to herein as the "Project
Gross Leasable Area."

         1.22 PRIVATE RESTRICTIONS: The term "Private Restrictions" shall mean
all recorded covenants, conditions and restrictions, private agreements,
reciprocal easement agreements, and any other recorded instruments affecting the
use of the Premises which (i) exist as of the Effective Date, or (ii) are
recorded after the Effective Date and are approved by Tenant.

         1.23 REAL PROPERTY TAXES: The term "Real Property Taxes" is defined in
PARA 8.3.

         1.24 SCHEDULED COMMENCEMENT DATE: The term "Scheduled Commencement
Date" shall mean the date specified in SECTION I of the Summary.

         1.25 SECURITY INSTRUMENT: The term "Security Instrument" shall mean any
underlying lease, mortgage or deed of trust which now or hereafter affects the
Project, and any renewal, modification, consolidation, replacement or extension
thereof.

         1.26 SUMMARY: The term "Summary" shall mean the Summary of Basic Lease
Terms executed by Landlord and Tenant that is part of this Lease.

         1.27 TENANT'S ALTERATIONS: The term "Tenant's Alterations" shall mean
all improvements, additions, alterations, and fixtures installed in the Premises
by Tenant at its expense which are not Trade Fixtures.

                                       2
<PAGE>

         1.28 TENANT'S SHARE: The term "Tenant's Share" shall mean the
percentage obtained by dividing the gross leasable area in the Premises by the
Building Gross Leasable Area for Tenant's Share of the Building and by the
Project Gross Leasable Area for Tenant's Share of the Project, which as of the
Effective Date are the applicable percentages identified in SECTION G of the
Summary.

         1.29 TRADE FIXTURES: The term "Trade Fixtures" shall mean (i) Tenant's
inventory, furniture, signs and business equipment, and (ii) anything affixed to
the Premises by Tenant at its expense for purposes of trade, manufacture,
ornament or domestic use (except replacement of similar work or material
originally installed by Landlord) which can be removed without material injury
to the Premises unless such thing has, by the manner in which it is affixed,
become an integral part of the Premises.

                 ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE

         2.1 DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term upon the terms and conditions of
this Lease, the Premises for Tenant's own use in the conduct of Tenant's
business together with (i) the non-exclusive right to use the number of
Tenant's Allocated Parking Stalls within the Common Area (subject to the
limitations set forth in PARA 4.5), and (ii) the non-exclusive right to use
the Common Area for ingress to and egress from the Premises. Landlord
reserves the use of the exterior walls, the roof and the area beneath and
above the Premises, together with the right to install, maintain, use, and
replace ducts, wires, conduits and pipes leading through the Premises in
locations which will not materially interfere with Tenant's use of the
Premises.

         2.2 COMMENCEMENT DATE: The Lease Term shall commence on the
Commencement Date as defined in PARA 1.8 hereof.

         2.3 CONSTRUCTION OF IMPROVEMENTS: Landlord shall construct certain
improvements that shall constitute or become part of the Premises if required
by, and then in accordance with, the terms of EXHIBIT B.

         2.4 DELIVERY AND ACCEPTANCE OF POSSESSION: The parties anticipate that
the "Tenant Improvements" will be "Substantially Completed," subject to "Tenant
Delays" and "Force Majeure Delays" (as such terms are defined in Exhibit B
attached hereto) by the Scheduled Commencement Date. If Landlord is unable to
deliver possession of the Premises to Tenant on or before the Scheduled
Commencement Date for any reason whatsoever, this Lease shall not be void or
voidable. If the Commencement Date has not occurred within 60 days after the
Scheduled Commencement Date, then (i) Tenant shall have the right to terminate
upon written notice to Landlord within five (5) days after the earlier of
receipt of notice from Landlord that there will be a delay beyond said 60 day
period or the end of said 180 day period, provided that any delay is not due to
a Tenant Delay or a Force Majeure Delay, and (ii) Landlord shall have the right
to terminate upon written notice to Tenant within five (5) days after the end of
said 60 period if such delay is due to any Tenant Delay or Force Majeure Delay.
Landlord shall not be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall accept possession and enter into good faith occupancy of
the entire Premises and commence the operation of its business therein within 30
days after the Commencement Date. Tenant acknowledges that it has had an
opportunity to conduct, and has conducted, such inspections of the Premises as
it deems necessary to evaluate its condition. Except as otherwise specifically
provided herein, Tenant agrees to accept possession of the Premises in its then
existing condition, "as-is", including all patent and latent defects, except as
provided in the following paragraph of this section 2.4. Tenant's taking
possession of any part of the Premises shall be deemed to be an acceptance by
Tenant of any work of improvement done by Landlord in such part as complete and
in accordance with the terms of this Lease except for punch list items of which
Tenant has given Landlord written notice as provided in EXHIBIT B attached
hereto. At the time Landlord delivers possession of the Premises to Tenant,
Landlord and Tenant shall together execute an acceptance agreement in the form
attached as EXHIBIT C, appropriately completed. If Tenant fails to execute and
deliver such acceptance agreement within five (5) days after request by
Landlord, the information contained in such acceptance agreement shall be deemed
accurate and binding on the parties. Landlord shall have no obligation to
deliver possession, nor shall Tenant be entitled to take occupancy, of the
Premises until such acceptance agreement has been executed, and Tenant's
obligation to pay Base Monthly Rent and Additional Rent shall not be excused or
delayed because of Tenant's failure to execute such acceptance agreement.

                                       3
<PAGE>

         On the Commencement Date, Landlord shall deliver the Premises to
Tenant with the roof free from leaks and with the HVAC, electrical, lighting
and plumbing systems in good working condition. If such components of the
Premises are not in such condition on the Commencement Date, Tenant must
provide written notice to Landlord within thirty (30) days after the
Commencement Date specifying which such components are not in such condition.
If Landlord receives such notice within said time period, then Landlord, at
its expense, shall rectify such problem as soon as is commercially reasonable
in a manner reasonably determined by Landlord. The failure of Tenant to
provide such written notice within the specified time period shall be
conclusively deemed that such components were in good working condition.

         2.5 EARLY OCCUPANCY: If Tenant enters or permits its contractors to
enter the Premises prior to the Commencement Date with the written permission of
Landlord, it shall do so upon all of the terms of this Lease (including its
obligations regarding indemnity and insurance) except those regarding the
obligation to pay rent, which shall commence on the Commencement Date.

                                 ARTICLE 3 RENT

         3.1 BASE MONTHLY RENT: Commencing on the Commencement Date and
continuing throughout the Lease Term, Tenant shall pay to Landlord the Base
Monthly Rent set forth in SECTION K of the Summary.

         3.2 ADDITIONAL RENT: Commencing on the Commencement Date and
continuing throughout the Lease Term, Tenant shall pay the following as
additional rent (the "Additional Rent"): (i) any late charges or interest due
Landlord pursuant to PARA 3.4; (ii) Tenant's Share of Common Operating
Expenses as provided in PARA 8.1; (iii) Landlord's share of any Subrent
received by Tenant upon certain assignments and sublettings as required by
PARA 14.1; (iv) any legal fees and costs due Landlord pursuant to PARA 15.9;
and (v) any other charges due Landlord pursuant to this Lease.

         3.3 PAYMENT OF RENT: Concurrently with the execution of this Lease
by both parties, Tenant shall pay to Landlord the amount set forth in SECTION
L of the Summary as prepayment of rent for credit against the first
installment(s) of Base Monthly Rent. All rent required to be paid in monthly
installments shall be paid in advance on the first day of each calendar month
during the Lease Term. If SECTION K of the Summary provides that the Base
Monthly Rent is to be increased during the Lease Term and if the date of such
increase does not fall on the first day of a calendar month, such increase
shall become effective on the first day of the next calendar month. All rent
shall be paid in lawful money of the United States, without any abatement,
deduction or offset whatsoever (except as specifically provided in PARA 11.4
and PARA 12.3), and without any prior demand therefor. Rent shall be paid to
Landlord at its address set forth in SECTION Q of the Summary, or at such
other place as Landlord may designate from time to time. Tenant's obligation
to pay Base Monthly Rent and Tenant's Share of Common Operating Expenses
shall be prorated at the commencement and expiration of the Lease Term.

         3.4 LATE CHARGE, INTEREST AND QUARTERLY PAYMENTS:

             (a) LATE CHARGE. Tenant acknowledges that the late payment by
Tenant of any installment of rent, or any other sum of money required to be paid
by Tenant under this Lease, will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs and expenses will
include, without limitation, attorneys' fees, administrative and collection
costs, and processing and accounting expenses and other costs and expenses
necessary and incidental thereto. If any Base Monthly Rent or Additional Rent is
not received by Landlord from Tenant when such payment is due, then Tenant shall
immediately pay to Landlord a late charge equal to 10% of such delinquent rent
as liquidated damages for Tenant's failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rent or prevent Landlord
from exercising any right or remedy available to Landlord upon Tenant's failure
to pay any rent due under this Lease in a timely fashion, including any right to
terminate this Lease pursuant to PARA 13.2B.

                                       4
<PAGE>

             (b) INTEREST. If any rent remains delinquent for a period in excess
of five (5) days then, in addition to such late charge, Tenant shall pay to
Landlord interest on any rent that is not paid when due at the Agreed Interest
Rate following the date such amount became due until paid.

             (c) QUARTERLY PAYMENTS. If Tenant during any six (6) month period
shall be more than five (5) days delinquent in the payment of any rent or other
amount payable by Tenant hereunder on three (3) or more occasions, then,
notwithstanding anything herein to the contrary, Landlord may, by written notice
to Tenant, elect to require Tenant to pay all Base Monthly Rent and Additional
Rent quarterly in advance. Such right shall be in addition to and not in lieu of
any other right or remedy available to Landlord hereunder or at law on account
of Tenant's default hereunder.

         3.5 SECURITY DEPOSIT: On the Effective Date, Tenant shall deposit with
Landlord the amount set forth in SECTION M of the Summary as security for the
performance by Tenant of its obligations under this Lease, and not as prepayment
of rent (the "Security Deposit"). Landlord may from time to time apply such
portion of the Security Deposit as is reasonably necessary for the following
purposes: (i) to remedy any default by Tenant in the payment of rent; (ii) to
repair damage to the Premises caused by Tenant; (iii) to clean the Premises upon
termination of the Lease; and (iv) to remedy any other default of Tenant to the
extent permitted by Law and, in this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be put contained in
California Civil Code Section 1950.7. In the event the Security Deposit or any
portion thereof is so used, Tenant agrees to pay to Landlord promptly upon
demand an amount in cash sufficient to restore the Security Deposit to the full
original amount. Landlord shall not be deemed a trustee of the Security Deposit,
may use the Security Deposit in business, and shall not be required to segregate
it from its general accounts. Tenant shall not be entitled to any interest on
the Security Deposit. If Landlord transfers the Premises during the Lease Term,
Landlord may pay the Security Deposit to any transferee of Landlord's interest
in conformity with the provisions of California Civil Code Section 1950.7 and/or
any successor statute, in which event the transferring Landlord will be released
from all liability for the return of the Security Deposit. Within thirty (30)
days after the expiration of the Lease Term, Landlord agrees to refund the
portion of the Security Deposit not previously applied towards any Tenant
obligation, provided that Tenant has vacated and surrendered possession as
required under this Lease.

         3.6 ELECTRONIC PAYMENT. Landlord shall have the right, on not less than
thirty (30) days prior written notice to Tenant (the "Electronic Payment
Notice"), to require Tenant to make subsequent payments of Monthly Base Rent and
Additional Rent due pursuant to the terms of this Lease by means of a federal
funds wire transfer or such other method of electronic funds transfer as may be
required by Landlord in its sole and absolute discretion (the "Electronic
Payment"). The Electronic Payment Notice shall set forth the proper bank ABA
number, account number and designation of the account to which such Electronic
Payment shall be made. Tenant shall promptly notify Landlord in writing of any
additional information that will be required to establish and maintain
Electronic Payment from Tenant's bank or financial institution. Landlord shall
have the right, after at least ten (10) days prior written notice to Tenant, to
change the name of the depository for receipt of any Electronic Payment and to
discontinue payment of any sum by Electronic Payment.

                            ARTICLE 4 USE OF PREMISES

         4.1 LIMITATION ON USE: Tenant shall use the Premises solely for the
Permitted Use specified in SECTION N of the Summary. There shall not be any
change in use without the prior written consent of Landlord which will not be
unreasonably withheld. Tenant shall not do anything in or about the Premises
which will (i) cause structural injury to the Building, or (ii) cause damage to
any part of the Building except to the extent reasonably necessary for the
installation of Tenant's Trade Fixtures and Tenant's Alterations, and then only
in a manner which has been first approved by Landlord in writing. Tenant shall
not operate any equipment within the Premises which will (i) materially damage
the Building or the Common Area, (ii) overload existing electrical systems or
other mechanical equipment servicing the Building, (iii) impair the efficient
operation of the sprinkler system or the heating, ventilating or air
conditioning ("HVAC") equipment within or servicing the Building, or (iv)
damage, overload or corrode the sanitary sewer system. Tenant shall not attach,
hang or suspend anything from the ceiling, roof, walls or columns of the
Building or set any load on the floor in excess of the load limits for which
such items are designed nor operate hard wheel forklifts within the Premises.
Any dust, fumes, or waste products generated by Tenant's use

                                       5
<PAGE>

of the Premises shall be contained and disposed so that they do not (i) create
an unreasonable fire or health hazard, (ii) damage the Premises, or (iii) result
in the violation of any Law. Except as approved by Landlord, Tenant shall not
change the exterior of the Building or install any equipment or antennas on or
make any penetrations of the exterior or roof of the Building. Tenant shall not
commit any waste in or about the Premises, and Tenant shall keep the Premises in
a neat, clean, attractive and orderly condition, free of any nuisances. If
Landlord designates a standard window covering for use throughout the Building,
Tenant shall use this standard window covering to cover all windows in the
Premises. Tenant shall not conduct on any portion of the Premises or the Project
any sale of any kind, including any public or private auction, fire sale,
going-out-of-business sale, distress sale or other liquidation sale.

         4.2 COMPLIANCE WITH REGULATIONS: Tenant shall not use the Premises in
any manner which violates any Laws or Private Restrictions which affect the
Premises. Tenant shall abide by and promptly observe and comply with all Laws
and Private Restrictions. Tenant shall not use the Premises in any manner which
will cause a cancellation of any insurance policy covering Tenant's Alterations
or any improvements installed by Landlord at its expense or which poses an
unreasonable risk of damage or injury to the Premises. Tenant shall not sell, or
permit to be kept, used, or sold in or about the Premises any article which may
be prohibited by the standard form of fire insurance policy. Tenant shall comply
with all reasonable requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain the
insurance coverage carried by either Landlord or Tenant pursuant to this Lease.

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

         4.4 SIGNS: Tenant shall not place on any portion of the Premises any
sign, placard, lettering in or on windows, banner, displays or other advertising
or communicative material which is visible from the exterior of the Building
without the prior written approval of Landlord. All such approved signs shall
strictly conform to all Laws, Private Restrictions, and Landlord's sign criteria
then in effect, and shall be installed at the expense of Tenant. Tenant shall
maintain such signs in good condition and repair. At its expense, Tenant shall
be entitled to have its name on the brick sign wall and on the monument sign
along with the names of other tenants and such sign identifying Tenant shall be
of a type, design, color and size approved in writing by Landlord and consistent
with the other identifying signs currently located and all applicable Laws.

         4.5 PARKING: Tenant is allocated and shall have the non-exclusive right
to use not more than the number of Tenant's Allocated Parking Stalls contained
within the Project described in SECTION H of the Summary for its use and the use
of Tenant's Agents, the location of which may be designated from time to time by
Landlord. Tenant shall not at any time use more parking spaces than the number
so allocated to Tenant or park its vehicles or the vehicles of others in any
portion of the Project not designated by Landlord as a non-exclusive parking
area. Tenant shall not have the exclusive right to use any specific parking
space. If Landlord grants to any other tenant the exclusive right to use any
particular parking space(s), Tenant shall not use such spaces. Landlord reserves
the right, after having given Tenant reasonable notice, to have any vehicles
owned by Tenant or Tenant's Agents utilizing parking spaces in excess of the
parking spaces allowed for Tenant's use to be towed away at Tenant's cost. All
trucks and delivery vehicles shall be (i) parked at the rear of the Building,
(ii) loaded and unloaded in a manner which does not interfere with the
businesses of other occupants of the Project, and (iii) permitted to remain on
the Project only so long as is reasonably necessary to complete loading and
unloading. In the event Landlord elects or is required by any Law to limit or
control parking in the Project, whether by validation of parking tickets or any
other method of assessment, Tenant agrees to participate in such validation or
assessment program under such reasonable rules and regulations as are from time
to time established by Landlord.

         4.6 RULES AND REGULATIONS: Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees. Such rules and regulations shall be
binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees
to abide by such rules and regulations. If

                                       6
<PAGE>

there is a conflict between the rules and regulations and any of the provisions
of this Lease, the provisions of this Lease shall prevail. Landlord shall not be
responsible for the violation by any other tenant of the Project of any such
rules and regulations.

                    ARTICLE 5 TRADE FIXTURES AND ALTERATIONS

         5.1 TRADE FIXTURES: Throughout the Lease Term, Tenant may provide and
install (subject to the requirements of this Lease for the installation of
Tenant's Alterations), and shall maintain in good condition, any Trade Fixtures
required in the conduct of its business in the Premises, except to the extent
any Trade Fixture will use, generate, store or dispose of any Hazardous Material
in which case the prior written consent of Landlord in its sole and absolute
discretion shall be required before such Trade Fixture may be installed. All
Trade Fixtures shall remain Tenant's property.

         5.2 TENANT'S ALTERATIONS: Construction by Tenant of Tenant's
Alterations shall be governed by the following:

             A. Tenant shall not construct any Tenant's Alterations or otherwise
alter the Premises without Landlord's prior written approval. Tenant shall be
entitled, without Landlord's prior approval, to make Tenant's Alterations (i)
which do not affect the structural or exterior parts or water tight character of
the Building, and (ii) the reasonably estimated cost of which, plus the original
cost of any part of the Premises removed or materially altered in connection
with such Tenant's Alterations, together do not exceed the Permitted Tenant
Alterations Limit specified in SECTION O of the Summary per work of improvement.
In the event Landlord's approval for any Tenant's Alterations is required,
Tenant shall not construct the leasehold improvement until Landlord has approved
in writing the plans and specifications therefor, and such Tenant's Alterations
shall be constructed substantially in compliance with such approved plans and
specifications by a licensed contractor first approved by Landlord. All Tenant's
Alterations constructed by Tenant shall be constructed by a licensed contractor
in accordance with all Laws using new materials of good quality.

             B. Tenant shall not commence construction of any Tenant's
Alterations until (i) all required governmental approvals and permits have been
obtained, (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant has given Landlord at least five days' prior
written notice of its intention to commence such construction, and (iv) if
reasonably requested by Landlord, Tenant has obtained contingent liability and
broad form builders' risk insurance in an amount reasonably satisfactory to
Landlord if there are any perils relating to the proposed construction not
covered by insurance carried pursuant to Article 9.

             C. All Tenant's Alterations shall remain the property of Tenant
during the Lease Term but shall not be altered or removed from the Premises. At
the expiration or sooner termination of the Lease Term, all Tenant's Alterations
shall be surrendered to Landlord as part of the realty and shall then become
Landlord's property, and Landlord shall have no obligation to reimburse Tenant
for all or any portion of the value or cost thereof; provided, however, that if
Landlord requires Tenant to remove any Tenant's Alterations, Tenant shall so
remove such Tenant's Alterations prior to the expiration or sooner termination
of the Lease Term. Notwithstanding the foregoing, Tenant shall not be obligated
to remove any Tenant's Alterations with respect to which the following is true:
(i) Tenant was required, or elected, to obtain the approval of Landlord to the
installation of the leasehold improvement in question; (ii) at the time Tenant
requested Landlord's approval, Tenant requested of Landlord in writing that
Landlord inform Tenant of whether or not Landlord would require Tenant to remove
such leasehold improvement at the expiration of the Lease Term; and (iii) at the
time Landlord granted its approval, it did not inform Tenant that it would
require Tenant to remove such leasehold improvement at the expiration of the
Lease Term.

             D. Tenant has informed Landlord that Tenant may want to install a
chiller unit outside the building at the rear of the Premises and two roof vents
(each approximately two feet by three feet in size (collectively, the "Special
Equipment"), which chiller will be used for chilling water in the lab area of
the Premises, in lieu of installing the chiller inside the Premises. The
installation of the Special Equipment outside of the Premises or in a manner
that will penetrate the roof or the Building shall be subject to the approval of
Landlord in

                                       7
<PAGE>

Landlord's sole and absolute discretion. Tenant may install such Special
Equipment only in an area approved by Landlord and otherwise provided that
Tenant complies with all other requirements for the installation of Tenant
Alterations and the provisions of this subsection D and all subsections hereof,
including, without limitation, the written approval of Landlord for all plans
and specifications for such Tenant Alterations. Landlord shall not be
responsible or liable for any damage, loss or theft of such Special Equipment.
Landlord's approval of the installation and use of the Special Equipment shall
not be deemed consent by Landlord to the installation of any other similar or
additional Special Equipment or the right to engage in any use of any Hazardous
Materials. However, Tenant shall be allowed to install an exhaust fan on the
roof of the building provided the dimensions of the fan do not exceed a height
of 36" and does not weigh more than 250 pounds.

                 (1) LOCATION. The precise location of the Special Equipment
shall be subject to the approval of Landlord in its sole and absolute
discretion. The area where the Special Equipment will be located shall be
referred to herein as the "Special Equipment Area." Landlord shall specify the
method of shielding the Special Equipment from view, or other decorative
architectural features required to make the Special Equipment aesthetically
pleasing in Landlord's sole and absolute discretion.

                 (2) ACCESS. Tenant's access to areas to the Special Equipment
Area and areas outside of the Leased Premises for purposes of installing and
maintaining the Special Equipment shall be subject to such procedures,
regulations and limitations as Landlord may impose; provided, however, that any
such procedures, regulations and limitations shall not prohibit or preclude
access at all times. However, to the extent any cost to operate the Special
Equipment is not separately metered to Tenant, Landlord will estimate Tenant's
allocable share and Tenant covenants and agrees to reimburse Landlord for any
cost incurred in connection therewith, plus ten percent (10%) of such costs as
an administrative fee to Landlord, as additional rent, which payment shall be
made within ten (10) days after request therefor.

                 (3) NON-RESPONSIBILITY. Tenant agrees and understands that the
review of all plans by Landlord is solely to protect the interests of Landlord
in the Building, and Landlord shall not be the guarantor of, nor responsible
for, the correctness, completeness or accuracy of any such plans or compliance
of such plans with applicable laws. Landlord's approval of any plans, work or
any matter shall not: (i) impose any present or future liability on Landlord;
(ii) constitute a waiver of Landlord's rights hereunder or under the Lease;
(iii) impose on Landlord any responsibility for a design and/or construction
defect or fault in the Special Equipment, (iv) constitute a representation or
warranty regarding the accuracy, completeness or correctness thereof of any
plans or that such plans comply with any Laws, including, without limitation,
the Hazardous Material Laws, or (v) such plans or any work are in accordance
with industry standards or will make the Special Equipment operational or
functional upon completion. Accordingly, Landlord (and its agents) shall not be
responsible for any defect, flaw, error or omission in such plans,
specifications or work, nor shall any inspection or failure to inspect by
Landlord constitute a waiver of any right of Landlord under the Lease, as
amended by this Amendment, or give rise to any liability thereby on the part of
Landlord or its agents.

                 (4) BUILDING OR COMMON AREA WORK. Tenant agrees that, if
Landlord makes any repairs or maintenance to the Building, Common Areas or other
structures or facilities in and about Project, or any alterations,
modifications, additions or improvements to the Building, Common Areas or
Project, including any such work to the electrical, mechanical or other
operating systems within or about the Building, Common Areas or Project, Tenant
at its sole cost shall make any concomitant adjustments or modifications to the
Special Equipment and its related facilities, as such adjustments and
modifications are determined to be necessary by any architect, engineer or other
contractor engaged by Landlord in connection therewith, or, at Tenant's option,
the Special Equipment may be removed by Tenant from the Special Equipment. The
making of the requisite adjustments and modifications for the Special Equipment
and its related facilities shall be made in accordance with plans and
specifications which are prepared, submitted, reviewed and approved by Landlord
in its sole and absolute discretion.

                 (5) PERSONAL RIGHTS. The right of Tenant to install and operate
the Special Equipment are personal to the original party signing this Amendment
as Tenant, but may not be assigned or in any way transferred to or relied upon
by any assignee, sublessee or other transferee under any kind of a transfer.

                                       8
<PAGE>

         5.3 ALTERATIONS REQUIRED BY LAW: Tenant shall make any alteration,
addition or change of any sort to the Premises that is required by any Law
because of (i) Tenant's particular use or change of use of the Premises; (ii)
Tenant's application for any permit or governmental approval; or (iii)
Tenant's construction or installation of any Tenant's Alterations or Trade
Fixtures. Any other alteration, addition, or change required by Law which is
not the responsibility of Tenant pursuant to the foregoing shall be made by
Landlord (subject to Landlord's right to reimbursement from Tenant specified
in PARA 5.4).

         5.4 AMORTIZATION OF CERTAIN CAPITAL IMPROVEMENTS: Tenant shall pay
Additional Rent in the event Landlord reasonably elects or is required to make
any of the following kinds of capital improvements to the Project: (i) capital
improvements required to be constructed in order to comply with any Law
(excluding any Hazardous Materials Law) not in effect or applicable to the
Project as of the Effective Date; (ii) modification of existing or construction
of additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Common Operating Expenses of
the Project; (iii) replacement of capital improvements or building service
equipment existing as of the Effective Date when required because of normal wear
and tear; and (iv) restoration of any part of the Project that has been damaged
by any peril to the extent the cost thereof is not covered by insurance proceeds
actually recovered by Landlord up to a maximum amount per occurrence of 10% of
the then replacement cost of the Project. The amount of Additional Rent Tenant
is to pay with respect to each such capital improvement shall be determined as
follows:

             A. All costs paid by Landlord to construct such improvements
(including financing costs) shall be amortized over the useful life of such
improvement (as reasonably determined by Landlord in accordance with generally
accepted accounting principles) with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it borrowed funds to construct
such improvements from an institutional lender, and Landlord shall inform Tenant
of the monthly amortization payment required to so amortize such costs, and
shall also provide Tenant with the information upon which such determination is
made.

             B. As Additional Rent, Tenant shall pay at the same time the Base
Monthly Rent is due an amount equal to Tenant's Share of that portion of such
monthly amortization payment fairly allocable to the Building (as reasonably
determined by Landlord) for each month after such improvements are completed
until the first to occur of (i) the expiration of the Lease Term (as it may be
extended), or (ii) the end of the term over which such costs were amortized.

         5.5 MECHANIC'S LIENS: Tenant shall keep the Project free from any liens
and shall pay when due all bills arising out of any work performed, materials
furnished, or obligations incurred by Tenant or Tenant's Agents relating to the
Project. If any claim of lien is recorded (except those caused by Landlord or
Landlord's Agents), Tenant shall bond against or discharge the same within 10
days after the same has been recorded against the Project. Should any lien be
filed against the Project or any action be commenced affecting title to the
Project, the party receiving notice of such lien or action shall immediately
give the other party written notice thereof.

         5.6 TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency any
and all taxes, assessments, license fees and public charges levied, assessed or
imposed against Tenant or Tenant's estate in this Lease or the property of
Tenant situated within the Premises which become due during the Lease Term. If
any tax or other charge is assessed by any governmental agency because of the
execution of this Lease, such tax shall be paid by Tenant. On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments.

                        ARTICLE 6 REPAIR AND MAINTENANCE

         6.1 TENANT'S OBLIGATION TO MAINTAIN: Except as otherwise provided in
PARA 6.2, PARA 11.1, and PARA 12.3, Tenant shall be responsible for the
following during the Lease Term:

             A. Tenant shall clean and maintain in good order, condition, and
repair and replace when necessary the Premises and every part thereof, through
regular inspections and servicing, including, but not limited to: (i) all
plumbing and sewage facilities (including all sinks, toilets, faucets and
drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing
system; (ii) all fixtures, interior walls, floors, carpets and ceilings; (iii)
all

                                       9
<PAGE>

windows, doors, entrances, plate glass, showcases and skylights (including
cleaning both interior and exterior surfaces); (iv) all electrical facilities
and all equipment (including all lighting fixtures, lamps, bulbs, tubes, fans,
vents, exhaust equipment and systems); and (v) any automatic fire extinguisher
equipment in the Premises.

             B. With respect to utility facilities serving the Premises
(including electrical wiring and conduits, gas lines, water pipes, and plumbing
and sewage fixtures and pipes), Tenant shall be responsible for the maintenance
and repair of any such facilities which serve only the Premises, including all
such facilities that are within the walls or floor, or on the roof of the
Premises, and any part of such facility that is not within the Premises, but
only up to the point where such facilities join a main or other junction (e.g.,
sewer main or electrical transformer) from which such utility services are
distributed to other parts of the Project as well as to the Premises. Tenant
shall replace any damaged or broken glass in the Premises (including all
interior and exterior doors and windows) with glass of the same kind, size and
quality. Tenant shall repair any damage to the Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry.

             C. Tenant shall (i) maintain, repair and replace when necessary all
HVAC equipment which services only the Premises, and shall keep the same in good
condition through regular inspection and servicing, and (ii) maintain
continuously throughout the Lease Term a service contract for the maintenance of
all such HVAC equipment with a licensed HVAC repair and maintenance contractor
approved by Landlord, which contract provides for the periodic inspection and
servicing of the HVAC equipment at least once every 60 days during the Lease
Term. Notwithstanding the foregoing, Landlord may elect at any time to assume
responsibility for the maintenance, repair and replacement of such HVAC
equipment which serves only the Premises. Tenant shall maintain continuously
throughout the Lease Term a service contract for the washing of all windows
(both interior and exterior surfaces) in the Premises with a contractor approved
by Landlord, which contract provides for the periodic washing of all such
windows at least once every 60 days during the Lease Term. Tenant shall furnish
Landlord with copies of all such service contracts, which shall provide that
they may not be canceled or changed without at least 30 days' prior written
notice to Landlord.

             D. All repairs and replacements required of Tenant shall be
promptly made with new materials of like kind and quality. If the work affects
the structural parts of the Building or if the estimated cost of any item of
repair or replacement is in excess of the Permitted Tenant's Alterations Limit,
then Tenant shall first obtain Landlord's written approval of the scope of the
work, plans therefor, materials to be used, and the contractor.

         6.2 LANDLORD'S OBLIGATION TO MAINTAIN: Landlord shall repair, maintain
and operate the Common Area and repair and maintain the roof, exterior and
structural parts of the building(s) located on the Project so that the same are
kept in good order and repair. If there is central HVAC or other building
service equipment and/or utility facilities serving portions of the Common Area
and/or both the Premises and other parts of the Building, Landlord shall
maintain and operate (and replace when necessary) such equipment. Landlord shall
not be responsible for repairs required by an accident, fire or other peril or
for damage caused to any part of the Project by any act or omission of Tenant or
Tenant's Agents except as otherwise required by Article 11. Landlord may engage
contractors of its choice to perform the obligations required of it by this
Article, and the necessity of any expenditure to perform such obligations shall
be at the sole discretion of Landlord.

         6.3 CONTROL OF COMMON AREA: Landlord shall at all times have exclusive
control of the Common Area. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any abatement of rent, to: (i) close any part of the Common Area to whatever
extent required in the opinion of Landlord's counsel to prevent a dedication
thereof or the accrual of any prescriptive rights therein; (ii) temporarily
close the Common Area to perform maintenance or for any other reason deemed
sufficient by Landlord; (iii) change the shape, size, location and extent of the
Common Area; (iv) eliminate from or add to the Project any land or improvement,
including multi-deck parking structures; (v) make changes to the Common Area
including, without limitation, changes in the location of driveways, entrances,
passageways, doors and doorways, elevators, stairs, restrooms, exits, parking
spaces, parking areas, sidewalks or the direction of the flow of traffic and the
site of the Common Area; (vi) remove unauthorized persons from the Project;
and/or (vii) change the name or address of the Building or Project. Tenant shall
keep the Common Area clear of all obstructions created or permitted by Tenant.
If in the opinion of Landlord unauthorized persons are using any of the Common
Area by reason of the

                                       10
<PAGE>

presence of Tenant in the Building, Tenant, upon demand of Landlord, shall
restrain such unauthorized use by appropriate proceedings. In exercising any
such rights regarding the Common Area, (i) Landlord shall make a reasonable
effort to minimize any disruption to Tenant's business, and (ii) Landlord shall
not exercise its rights to control the Common Area in a manner that would
materially interfere with Tenant's use of the Premises without first obtaining
Tenant's consent. Landlord shall have no obligation to provide guard services or
other security measures for the benefit of the Project. Tenant assumes all
responsibility for the protection of Tenant and Tenant's Agents from acts of
third parties; provided, however, that nothing contained herein shall prevent
Landlord, at its sole option, from providing security measures for the Project.

                     ARTICLE 7 WASTE DISPOSAL AND UTILITIES

         7.1 WASTE DISPOSAL: Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are fully fenced and screened
in compliance with all Private Restrictions, and designed for such purpose. All
entrances to such outside trash enclosures shall be kept closed, and waste shall
be stored in such manner as not to be visible from the exterior of such outside
enclosures. Tenant shall cause all of its waste to be regularly removed from the
Premises at Tenant's sole cost. Tenant shall keep all fire corridors and
mechanical equipment rooms in the Premises free and clear of all obstructions at
all times.

         7.2 HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Project:

             A. Any handling, transportation, storage, treatment, disposal or
use of Hazardous Materials by Tenant and Tenant's Agents after the Effective
Date in or about the Project shall strictly comply with all applicable Hazardous
Materials Laws. Tenant shall indemnify, defend upon demand with counsel
reasonably acceptable to Landlord, and hold harmless Landlord from and against
any liabilities, losses, claims, damages, lost profits, consequential damages,
interest, penalties, fines, monetary sanctions, attorneys' fees, experts' fees,
court costs, remediation costs, investigation costs, and other expenses which
result from or arise in any manner whatsoever out of the use, storage,
treatment, transportation, release, or disposal of Hazardous Materials on or
about the Project by Tenant or Tenant's Agents after the Effective Date.

             B. If the presence of Hazardous Materials on the Project caused or
permitted by Tenant or Tenant's Agents after the Effective Date results in
contamination or deterioration of water or soil resulting in a level of
contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Tenant
shall promptly take any and all action necessary to investigate and remediate
such contamination if required by Law or as a condition to the issuance or
continuing effectiveness of any governmental approval which relates to the use
of the Project or any part thereof. Tenant shall further be solely responsible
for, and shall defend, indemnify and hold Landlord and its agents harmless from
and against, all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with any investigation and remediation
required hereunder to return the Project to its condition existing prior to the
appearance of such Hazardous Materials.

             C. Landlord and Tenant shall each give written notice to the other
as soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Project, and (ii) any contamination of the Project by Hazardous Materials which
constitutes a violation of any Hazardous Materials Law. Tenant may use small
quantities of household chemicals such as adhesives, lubricants, and cleaning
fluids in order to conduct its business at the Premises and such other Hazardous
Materials as are necessary for the operation of Tenant's business of which
Landlord receives notice prior to such Hazardous Materials being brought onto
the Premises and which Landlord consents in writing may be brought onto the
Premises. At any time during the Lease Term, Tenant shall, within five days
after written request therefor received from Landlord, disclose in writing all
Hazardous Materials that are being used by Tenant on the Project, the nature of
such use, and the manner of storage and disposal.

             D. Landlord may cause testing wells to be installed on the Project,
and may cause the ground water to be tested to detect the presence of Hazardous
Material by the use of such tests as are then

                                       11
<PAGE>

customarily used for such purposes. If Tenant so requests, Landlord shall
supply Tenant with copies of such test results. The cost of such tests and of
the installation, maintenance, repair and replacement of such wells shall be
paid by Tenant if such tests disclose the existence of facts which give rise
to liability of Tenant pursuant to its indemnity given in PARA 7.2A and/or
PARA 7.2B.

             E. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42
U.S.C. 6903), or (iii) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response; Compensation and Liability Act,
42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.

             F. The obligations of Landlord and Tenant under this PARA 7.2
shall survive the expiration or earlier termination of the Lease Term. The
rights and obligations of Landlord and Tenant with respect to issues relating
to Hazardous Materials are exclusively established by this PARA 7.2. In the
event of any inconsistency between any other part of this Lease and this PARA
7.2, the terms of this PARA 7.2 shall control.

         7.3 UTILITIES: Tenant shall promptly pay, as the same become due, all
charges for water, gas, electricity, telephone, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, and water service available to the Premises as of the
Commencement Date), and (ii) penalties for discontinued or interrupted service.
If any utility service is not separately metered to the Premises, then Tenant
shall pay its pro rata share of the cost of such utility service with all others
served by the service not separately metered. However, if Landlord determines
that Tenant is using a disproportionate amount of any utility service not
separately metered, then Landlord at its election may (i) periodically charge
Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the
cost of Tenant's excess use of such utility service, or (ii) install a separate
meter (at Tenant's expense) to measure the utility service supplied to the
Premises.

         7.4 COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Landlord and Tenant shall
comply with all rules, regulations and requirements promulgated by national,
state or local governmental agencies or utility suppliers concerning the use of
utility services, including any rationing, limitation or other control. Tenant
shall not be entitled to terminate this Lease nor to any abatement in rent by
reason of such compliance.

                       ARTICLE 8 COMMON OPERATING EXPENSES

         8.1 TENANT'S OBLIGATION TO REIMBURSE: As Additional Rent, Tenant shall
pay Tenant's Share (specified in SECTION G of the Summary) of all Common
Operating Expenses; provided, however, if the Project contains more than one
building, then Tenant shall pay Tenant's Share of all Common Operating Expenses
fairly allocable to the Building, including (i) all Common Operating Expenses
paid with respect to the maintenance, repair, replacement and use of the
Building, and (ii) a proportionate share (based on the Building Gross Leasable
Area as a percentage of the Project Gross Leasable Area) of all Common Operating
Expenses which relate to the Project in general are not fairly allocable to any
one building that is part of the Project. Tenant shall pay such share of the
actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within 10 days after receipt of a written bill
therefor from Landlord, on such periodic basis as Landlord shall designate, but
in no event more frequently than once a month. Alternatively, Landlord may from
time to time require that Tenant pay Tenant's Share of Common Operating Expenses
in advance in estimated monthly installments, in accordance with the following:
(I) Landlord shall deliver to Tenant Landlord's reasonable estimate of the
Common Operating expenses it

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<PAGE>

anticipates will be paid or incurred for the Landlord's fiscal year in question;
(ii) during such Landlord's fiscal year Tenant shall pay such share of the
estimated Common Operating Expenses in advance in monthly installments as
required by Landlord due with the installments of Base Monthly Rent; and (iii)
within 180 days after the end of each Landlord's fiscal year, Landlord shall
furnish to Tenant a statement in reasonable detail of the actual Common
Operating Expenses paid or incurred by Landlord during the just ended Landlord's
fiscal year and thereupon there shall be an adjustment between Landlord and
Tenant, with payment to Landlord or credit by Landlord against the next
installment of Base Monthly Rent, as the case may require, within 10 days after
delivery by Landlord to Tenant of said statement, so that Landlord shall receive
the entire amount of Tenant's Share of all Common Operating Expenses for such
Landlord's fiscal year and no more. Tenant shall have the right at its expense,
exercisable upon reasonable prior written notice to Landlord, to inspect at
Landlord's office during normal business hours Landlord's books and records as
they relate to Common Operating Expenses. Such inspection must be within 30 days
of Tenant's receipt of Landlord's annual statement for the same, and shall be
limited to verification of the charges contained in such statement. Tenant may
not withhold payment of such bill pending completion of such inspection.

         8.2 COMMON OPERATING EXPENSES DEFINED: The term "Common Operating
Expenses" shall mean the following:

             A. All costs and expenses paid or incurred by Landlord in doing
the following (including payments to independent contractors providing
services related to the performance of the following): (i) maintaining,
cleaning, repairing and resurfacing the roof (including repair of leaks) and
the exterior surfaces (including painting) of all buildings located on the
Project; (ii) maintenance of the liability, fire, property damage, earthquake
and other insurance covering the Project carried by Landlord pursuant to PARA
9.2 (including the prepayment of premiums for coverage of up to one year);
(iii) maintaining, repairing, operating and replacing when necessary HVAC
equipment, utility facilities and other building service equipment; (iv)
providing utilities to the Common Area (including lighting, trash removal and
water for landscaping irrigation); (v) complying with all applicable Laws and
Private Restrictions; (vi) operating, maintaining, repairing, cleaning,
painting, restriping and resurfacing the Common Area; (vii) replacement or
installation of lighting fixtures, directional or other signs and signals,
irrigation systems, trees, shrubs, ground cover and other plant materials,
and all landscaping in the Common Area; and (viii) providing security
(provided, however, that Landlord shall not be obligated to provide security
and if it does, Landlord may discontinue such service at any time and in any
event Landlord shall not be responsible for any act or omission of any
security personnel); and (ix) capital improvements as provided in PARA 5.4
hereof;

             B. The following costs: (i) Real Property Taxes as defined in
PARA 8.3; (ii) the amount of any "deductible" paid by Landlord with respect
to damage caused by any Insured Peril; (iii) the cost to repair damage caused
by an Uninsured Peril up to a maximum amount in any 12 month period equal to
2% of the replacement cost of the buildings or other improvements damaged;
and (iv) that portion of all compensation (including benefits and premiums
for workers' compensation and other insurance) paid to or on behalf of
employees of Landlord but only to the extent they are involved in the
performance of the work described by PARA 8.2A that is fairly allocable to
the Project;

             C. Fees for management services rendered by either Landlord or a
third party manager engaged by Landlord (which may be a party affiliated with
Landlord), except that the total amount charged for management services and
included in Tenant's Share of Common Operating Expenses shall not exceed the
monthly rate of 3% of the Base Monthly Rent.

             D. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of the
Project which would be considered a current expense (and not a capital
expenditure) pursuant to generally accepted accounting principles; provided,
however, that Common Operating Expenses shall not include any of the following:
(i) payments on any loans or ground leases affecting the Project; (ii)
depreciation of any buildings or any major systems of building service equipment
within the Project; (iii) leasing commissions; (iv) the cost of tenant
improvements installed for the exclusive use of other tenants of the Project;
and (v) any cost incurred in complying with Hazardous Materials Laws, which
subject is governed exclusively by PARA 7.2.

                                       13
<PAGE>

         Since the Project consists of multiple buildings, certain Common Area
Expenses may pertain to a particular building(s) and other Common Area Expenses
to the Project as a whole (such as Common Area Expenses for the Common Areas of
the Project). Common Area Expenses applicable to any particular building within
the Project shall be charged to the building in question whose tenants shall be
responsible for payment of their respective proportionate shares in the
pertinent building and other Common Area Expenses applicable to the Project
(such as the Common Areas of the Project) shall be charged to each building in
the Project (including the Building) with the tenants in each such building
being responsible for paying their respective proportionate shares in such
building of such costs. Landlord shall in good faith attempt to allocate such
Common Area Expenses to the buildings (including the Building) and such
allocation shall be binding on Tenant.

         8.3 REAL PROPERTY TAXES DEFINED: The term "Real Property Taxes" shall
mean all taxes, assessments, levies, and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments resulting from a change in
ownership, new construction, or any other cause), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any
portion of the Project (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein, the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located on the Project, the gross receipts, income, or
rentals from the Project, or the use of parking areas, public utilities, or
energy within the Project, or Landlord's business of leasing the Project. If at
any time during the Lease Term the method of taxation or assessment of the
Project prevailing as of the Effective Date shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlord's interest therein, or (ii) on or measured by the gross receipts,
income or rentals from the Project, on Landlord's business of leasing the
Project, or computed in any manner with respect to the operation of the Project,
then any such tax or charge, however designated, shall be included within the
meaning of the term "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is based upon property or rents unrelated to the Project, then
only that part of such Real Property Tax that is fairly allocable to the Project
shall be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
estate, inheritance, transfer, gift or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all sources.

                               ARTICLE 9 INSURANCE

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

             A. Tenant shall procure, pay for and keep in full force and effect
the following:

                 (1) Commercial general liability insurance, including property
damage, against liability for personal injury, bodily injury, death and damage
to property occurring in or about, or resulting from an occurrence in or about,
the Premises with combined single limit coverage of not less than the amount of
Tenant's Liability Insurance Minimum specified in SECTION P of the Summary,
which insurance shall contain a "contractual liability" endorsement insuring
Tenant's performance of Tenant's obligation to indemnify Landlord contained in
PARA 10.3;

                 (2) Fire and property damage insurance in so-called "all risk"
form insuring Tenant's Trade Fixtures and Tenant's Alterations for the full
actual replacement cost thereof;

                 (3) Business interruption insurance with limits of liability
representing at least approximately six months of income, business auto
liability covering owned, non-owned and hired vehicles with a limit of not less
than $1,000,000 per accident, insurance protecting against liability under
workers' compensation laws with limits at least as required by statute,
insurance for all plate glass in the Premises, and such other insurance

                                       14
<PAGE>

that is either (i) required by any Lender, or (ii) reasonably required by
Landlord and customarily carried by tenants of similar property in similar
businesses.

             B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this PARA 9.1: (i)
shall name Landlord and such other parties in interest as Landlord reasonably
designates as additional insured; (ii) shall be primary insurance which
provides that the insurer shall be liable for the full amount of the loss up
to and including the total amount of liability set forth in the declarations
without the right of contribution from any other insurance coverage of
Landlord; (iii) shall be in a form satisfactory to Landlord; (iv) shall be
carried with companies reasonably acceptable to Landlord; (v) shall provide
that such policy shall not be subject to cancellation, lapse or change except
after at least 30 days prior written notice to Landlord so long as such
provision of 30 days notice is reasonably obtainable, but in any event not
less than 10 days prior written notice; (vi) shall not have a "deductible" in
excess of such amount as is approved by Landlord; (vii) shall contain a cross
liability endorsement; and (viii) shall contain a "severability" clause. If
Tenant has in full force and effect a blanket policy of liability insurance
with the same coverage for the Premises as described above, as well as other
coverage of other premises and properties of Tenant, or in which Tenant has
some interest, such blanket insurance shall satisfy the requirements of this
PARA 9.1.

             C. A copy of each paid-up policy evidencing the insurance
required to be carried by Tenant pursuant to this PARA 9.1 (appropriately
authenticated by the insurer) or a certificate of the insurer, certifying
that such policy has been issued, providing the coverage required by this
PARA 9.1, and containing the provisions specified herein, shall be delivered
to Landlord prior to the time Tenant or any of its Agents enters the Premises
and upon renewal of such policies, but not less than 5 days prior to the
expiration of the term of such coverage. Landlord may, at any time, and from
time to time, inspect and/or copy any and all insurance policies required to
be procured by Tenant pursuant to this PARA 9.1. If any Lender or insurance
advisor reasonably determines at any time that the amount of coverage
required for any policy of insurance Tenant is to obtain pursuant to this
PARA 9.1 is not adequate, then Tenant shall increase such coverage for such
insurance to such amount as such Lender or insurance advisor reasonably deems
adequate, not to exceed the level of coverage for such insurance commonly
carried by comparable businesses similarly situated.

         9.2 LANDLORD'S INSURANCE: Landlord shall have the following obligations
and options regarding insurance:

             A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents for a period of not
less than 12 months and from physical damage to the Project with coverage of not
less than the full replacement cost thereof. Landlord may so insure the Project
separately, or may insure the Project with other property owned by Landlord
which Landlord elects to insure together under the same policy or policies.
Landlord shall have the right, but not the obligation, in its sole and absolute
discretion, to obtain insurance for such additional perils as Landlord deems
appropriate, including, without limitation, coverage for damage by earthquake
and/or flood. All such coverage shall contain "deductibles" which Landlord deems
appropriate, which in the case of earthquake and flood insurance, may be up to
10% of the replacement value of the property insured or such higher amount as is
then commercially reasonable. Landlord shall not be required to cause such
insurance to cover any Trade Fixtures or Tenant's Alterations of Tenant.

             B. Landlord may maintain a policy or policies of commercial general
liability insurance insuring Landlord (and such others as are designated by
Landlord) against liability for personal injury, bodily injury, death and damage
to property occurring or resulting from an occurrence in, on or about the
Project, with combined single limit coverage in such amount as Landlord from
time to time determines is reasonably necessary for its protection.

             C. TENANT'S OBLIGATION TO REIMBURSE: If Landlord's insurance rates
for the Building are increased at any time during the Lease Term as a result of
the nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for
the full amount of such increase immediately upon receipt of a bill from
Landlord therefor.

                                       15
<PAGE>

         9.3 RELEASE AND WAIVER OF SUBROGATION: The parties hereto release
each other, and their respective agents and employees, from any liability for
injury to any person or damage to property that is caused by or results from
any risk insured against under any valid and collectible insurance policy
carried by either of the parties which contains a waiver of subrogation by
the insurer and is in force at the time of such injury or damage; subject to
the following limitations: (i) the foregoing provision shall not apply to the
commercial general liability insurance described by subparagraphs PARA 9.1A
and PARA 9.2B; (ii) such release shall apply to liability resulting from any
risk insured against or covered by self-insurance maintained or provided by
Tenant to satisfy the requirements of PARA 9.1 to the extent permitted by
this Lease; and (iii) Tenant shall not be released from any such liability to
the extent any damages resulting from such injury or damage are not covered
by the recovery obtained by Landlord from such insurance, but only if the
insurance in question permits such partial release in connection with
obtaining a waiver of subrogation from the insurer. This release shall be in
effect only so long as the applicable insurance policy contains a clause to
the effect that this release shall not affect the right of the insured to
recover under such policy. Each party shall use reasonable efforts to cause
each insurance policy obtained by it to provide that the insurer waives all
right of recovery by way of subrogation against the other party and its
agents and employees in connection with any injury or damage covered by such
policy. However, if any insurance policy cannot be obtained with such a
waiver of subrogation, or if such waiver of subrogation is only available at
additional cost and the party for whose benefit the waiver is to be obtained
does not pay such additional cost, then the party obtaining such insurance
shall notify the other party of that fact and thereupon shall be relieved of
the obligation to obtain such waiver of subrogation rights from the insurer
with respect to the particular insurance involved.

                                       16
<PAGE>

           ARTICLE 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

         10.1 LIMITATION ON LANDLORD'S LIABILITY: Landlord shall not be
liable to Tenant, nor shall Tenant be entitled to terminate this Lease or to
any abatement of rent (except as expressly provided otherwise herein), for
any injury to Tenant or Tenant's Agents, damage to the property of Tenant or
Tenant's Agents, or loss to Tenant's business resulting from any cause,
including without limitation any: (i) failure, interruption or installation
of any HVAC or other utility system or service; (ii) failure to furnish or
delay in furnishing any utilities or services when such failure or delay is
caused by fire or other peril, the elements, labor disturbances of any
character, or any other accidents or other conditions beyond the reasonable
control of Landlord; (iii) limitation, curtailment, rationing or restriction
on the use of water or electricity, gas or any other form of energy or any
services or utility serving the Project; (iv) vandalism or forcible entry by
unauthorized persons or the criminal act of any person; or (v) penetration of
water into or onto any portion of the Premises or the Building through roof
leaks or otherwise. Notwithstanding the foregoing but subject to PARA 9.3,
Landlord shall be liable for any such injury, damage or loss which is
proximately caused by Landlord's willful misconduct or gross negligence of
which Landlord has actual notice and a reasonable opportunity to cure but
which it fails to so cure.

         10.2 LIMITATION ON TENANT'S RECOURSE: If Landlord is a corporation,
trust, partnership, joint venture, unincorporated association or other form of
business entity: (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity; and (ii) Tenant shall not have recourse to the assets of such
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, principals or representatives except to the extent of their
interest in the Project. Tenant shall have recourse only to the interest of
Landlord in the Project for the satisfaction of the obligations of Landlord and
shall not have recourse to any other assets of Landlord for the satisfaction of
such obligations.

         10.3 INDEMNIFICATION OF LANDLORD: Tenant shall hold harmless,
indemnify and defend Landlord, and its employees, agents and contractors,
with competent counsel reasonably satisfactory to Landlord (and Landlord
agrees to accept counsel that any insurer requires be used), from all
liability, penalties, losses, damages, costs, expenses, causes of action,
claims and/or judgments arising by reason of any death, bodily injury,
personal injury or property damage resulting from (i) any cause or causes
whatsoever (other than the willful misconduct or gross negligence of Landlord
of which Landlord has had notice and a reasonable time to cure, but which
Landlord has failed to cure) occurring in or about or resulting from an
occurrence in or about the Premises during the Lease Term, (ii) the
negligence or willful misconduct of Tenant or its agents, employees and
contractors, wherever the same may occur, or (iii) an Event of Tenant's
Default. The provisions of this PARA 10.3 shall survive the expiration or
sooner termination of this Lease.

                          ARTICLE 11 DAMAGE TO PREMISES

         11.1 LANDLORD'S DUTY TO RESTORE: If the Premises are damaged by any
peril after the Effective Date, Landlord shall restore the Premises unless
the Lease is terminated by Landlord pursuant to PARA 11.2 or by Tenant
pursuant to PARA 11.3. All insurance proceeds available from the fire and
property damage insurance carried by Landlord pursuant to PARA 9.2 shall be
paid to and become the property of Landlord. If this Lease is terminated
pursuant to either PARA 11.2 or PARA 11.3, then all insurance proceeds
available from insurance carried by Tenant which covers loss to property that
is Landlord's property or would become Landlord's property on termination of
this Lease shall be paid to and become the property of Landlord. If this
Lease is not so terminated, then upon receipt of the insurance proceeds (if
the loss is covered by insurance) and the issuance of all necessary
governmental permits, Landlord shall commence and diligently prosecute to
completion the restoration of the Premises, to the extent then allowed by
Law, to substantially the same condition in which the Premises were
immediately prior to such damage. Landlord's obligation to restore shall be
limited to the Premises and interior improvements constructed by Landlord as
they existed as of the Commencement Date, excluding any Tenant's Alterations,
Trade Fixtures and/or personal property constructed or installed by Tenant in
the Premises. Tenant shall forthwith replace or fully repair all Tenant's
Alterations and Trade Fixtures installed by Tenant and existing at the time
of such damage or destruction,

                                       17
<PAGE>

and all insurance proceeds received by Tenant from the insurance carried by it
pursuant to PARA 9.1A(2) shall be used for such purpose.

         11.2 LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within 30 days after the date of such damage:

             A. Either the Project or the Building is damaged by an Insured
Peril to such an extent that the estimated cost to restore exceeds 33% of the
then actual replacement cost thereof;

             B. Either the Project or the Building is damaged by an Uninsured
Peril to such an extent that the estimated cost to restore exceeds 2% of the
then actual replacement cost thereof; provided, however, that Landlord may
not terminate this Lease pursuant to this PARA 11.2B if one or more tenants
of the Project agree in writing to pay the amount by which the cost to
restore the damage exceeds such amount and subsequently deposit such amount
with Landlord within 30 days after Landlord has notified Tenant of its
election to terminate this Lease;

             C. The Premises are damaged by any peril within 12 months of the
last day of the Lease Term to such an extent that the estimated cost to
restore equals or exceeds an amount equal to six times the Base Monthly Rent
then due; provided, however, that Landlord may not terminate this Lease
pursuant to this PARA 11.2C if Tenant, at the time of such damage, has a then
valid express written option to extend the Lease Term and Tenant exercises
such option to extend the Lease Term within 15 days following the date of
such damage; or

             D. Either the Project or the Building is damaged by any peril and,
because of the Laws then in force, (i) cannot be restored at reasonable cost to
substantially the same condition in which it was prior to such damage, or (ii)
cannot be used for the same use being made thereof before such damage if
restored as required by this Article.

             E. As used herein, the following terms shall have the following
meanings: (i) the term "Insured Peril" shall mean a peril actually insured
against for which the insurance proceeds actually received by Landlord are
sufficient (except for any "deductible" amount specified by such insurance) to
restore the Project under then existing building codes to the condition existing
immediately prior to the damage; and (ii) the term "Uninsured Peril" shall mean
any peril which is not an Insured Peril. Notwithstanding the foregoing, if the
"deductible" for earthquake or flood insurance exceeds 2% of the replacement
cost of the improvements insured, such peril shall be deemed an "Uninsured
Peril".

         11.3 TENANT'S RIGHT TO TERMINATE: If the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled
to terminate this Lease pursuant to PARA 11.2, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration
work required of Landlord may be completed. Tenant shall have the right to
terminate this Lease in the event any of the following occurs, which right
may be exercised only by delivery to Landlord of a written notice of election
to terminate within 7 days after Tenant receives from Landlord the estimate
of the time needed to complete such restoration.

             A. The Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration of
the Premises cannot be substantially completed within 180 days after the date of
such damage if the casualty was not caused by Tenant or Tenant's Agents; or

             B. The Premises are damaged by any peril within 12 months of the
last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Premises cannot be
substantially completed within 90 days after the date of such damage and such
damage renders unusable more than 30% of the Premises.

         11.4 ABATEMENT OF RENT: In the event of damage to the Premises which
does not result in the termination of this Lease, the Base Monthly Rent and the
Additional Rent shall be temporarily abated during the

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<PAGE>

period of restoration in proportion to the degree to which Tenant's use of the
Premises is impaired by such damage. Tenant shall not be entitled to any
compensation or damages from Landlord for loss of Tenant's business or property
or for any inconvenience or annoyance caused by such damage or restoration.
Tenant hereby waives the provisions of California Civil Code Sections 1932(2)
and 1933(4) and the provisions of any similar law hereinafter enacted.

                             ARTICLE 12 CONDEMNATION

         12.1 LANDLORD'S TERMINATION RIGHT: Landlord shall have the right to
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to a
condemnor under threat of condemnation), (i) all or any part of the Premises is
so taken, (ii) more than 10% of the Building Leasable Area is so taken, or (iii)
more than 50% of the Common Area is so taken. Any such right to terminate by
Landlord must be exercised within a reasonable period of time, to be effective
as of the date possession is taken by the condemnor.

         12.2 TENANT'S TERMINATION RIGHT: Tenant shall have the right to
terminate this Lease if, as a result of any taking by means of the exercise
of the power of eminent domain (including any voluntary sale or transfer by
Landlord to any condemnor under threat of condemnation), (i) 10% or more of
the Premises is so taken and that part of the Premises that remains cannot be
restored within a reasonable period of time and thereby made reasonably
suitable for the continued operation of the Tenant's business, or (ii) there
is a taking affecting the Common Area and, as a result of such taking,
Landlord cannot provide parking spaces within reasonable walking distance of
the Premises equal in number to at least 80% of the number of spaces
allocated to Tenant by PARA 2.1, whether by rearrangement of the remaining
parking areas in the Common Area (including construction of multi-deck
parking structures or restriping for compact cars where permitted by Law) or
by alternative parking facilities on other land. Tenant must exercise such
right within a reasonable period of time, to be effective on the date that
possession of that portion of the Premises or Common Area that is condemned
is taken by the condemnor.

         12.3 RESTORATION AND ABATEMENT OF RENT: If any part of the Premises or
the Common Area is taken by condemnation and this Lease is not terminated, then
Landlord shall restore the remaining portion of the Premises and Common Area and
interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant. Thereafter, except in the
case of a temporary taking, as of the date possession is taken the Base Monthly
Rent shall be reduced in the same proportion that the floor area of that part of
the Premises so taken (less any addition thereto by reason of any
reconstruction) bears to the original floor area of the Premises.

         12.4 TEMPORARY TAKING: If any portion of the Premises is temporarily
taken for thirty (30) days or less, this Lease shall remain in effect. If any
portion of the Premises is temporarily taken by condemnation for a period which
exceeds one year or which extends beyond the natural expiration of the Lease
Term, and such taking materially and adversely affects Tenant's ability to use
the Premises for the Permitted Use, then Tenant shall have the right to
terminate this Lease, effective on the date possession is taken by the
condemnor.

         12.5 DIVISION OF CONDEMNATION AWARD: Any award made as a result of any
condemnation of the Premises or the Common Area shall belong to and be paid to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided, however, that Tenant shall be entitled to
receive any condemnation award that is made directly to Tenant for the following
so long as the award made to Landlord is not thereby reduced: (i) for the taking
of personal property or Trade Fixtures belonging to Tenant, (ii) for the
interruption of Tenant's business or its moving costs, (iii) for loss of
Tenant's goodwill; or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant
regarding any condemnation shall be determined as provided in this Article, and
each party hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 and the provisions of any similar law hereinafter enacted
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.

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<PAGE>

                         ARTICLE 13 DEFAULT AND REMEDIES

         13.1 EVENTS OF TENANT'S DEFAULT: Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):

             A. Tenant shall have failed to pay Base Monthly Rent or Additional
Rent when due, and such failure is not cured within 3 days after delivery of
written notice from Landlord specifying such failure to pay; or

             B. Tenant shall have failed to perform any term, covenant, or
condition of this Lease except those requiring the payment of Base Monthly Rent
or Additional Rent, and Tenant shall have failed to cure such breach within 30
days after written notice from Landlord specifying the nature of such breach
where such breach could reasonably be cured within said 30 day period, or if
such breach could not be reasonably cured within said 30 day period, Tenant
shall have failed to commence such cure within said 30 day period and thereafter
continue with due diligence to prosecute such cure to completion within such
time period as is reasonably needed but not to exceed 90 days from the date of
Landlord's notice; or

             C. Tenant shall have sublet the Premises or assigned its interest
in the Lease in violation of the provisions contained in Article 14; or

             D. Tenant shall have abandoned the Premises or left the Premises
substantially vacant; or

             E. The occurrence of the following: (i) the making by Tenant of
any general arrangements or assignments for the benefit of creditors; (ii)
Tenant becomes a "debtor" as defined in 11 USC Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within 60 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 30 days; or (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 30 days; provided, however, in the event that any provision
of this Section 13.1E is contrary to any applicable Law, such provision shall
be of no force or effect; or

             F. Tenant shall have failed to deliver documents required of it
pursuant to PARA 15.4 or PARA 15.6 within the time periods specified therein;
or

             G. Any two (2) failures by Tenant to observe and perform any
provision of this Lease during any twelve (12) month period of the term, as such
may be extended, shall constitute, at the option of Landlord, a separate and
noncurable default.

         Any written notice of default sent by Landlord to Tenant shall be in
lieu of, and not in addition to, any termination notice required under
applicable statutory or regulatory provisions (and no further notice shall be
required should Landlord elect to terminate this Lease as set forth below).

         13.2 LANDLORD'S REMEDIES: If an Event of Tenant's Default occurs,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by any Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:

             A. Landlord may keep this Lease in effect and enforce by an action
at law or in equity all of its rights and remedies under this Lease, including
(i) the right to recover the rent and other sums as they become due by
appropriate legal action, (ii) the right to make payments required of Tenant or
perform Tenant's obligations and be reimbursed by Tenant for the cost thereof
with interest at the Agreed Interest Rate from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to compel Tenant to perform its
obligations under this Lease. Notwithstanding anything contained in this Lease,
in the event of a breach of an obligation by Tenant which results in a condition
which poses an imminent danger to safety of persons or damage to property, an
unsightly condition visible from the exterior of the Building, or a threat to
insurance coverage, then if Tenant does not cure such breach within 3 days after
delivery to it of

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<PAGE>

written notice from Landlord identifying the breach, Landlord may cure the
breach of Tenant and be reimbursed by Tenant for the cost thereof with interest
at the Agreed Interest Rate from the date the sum is paid by Landlord until
Landlord is reimbursed by Tenant.

             B. Landlord may enter the Premises and release them to third
parties for Tenant's account for any period, whether shorter or longer than the
remaining Lease Term. Tenant shall be liable immediately to Landlord for all
costs Landlord incurs in releasing the Premises, including brokers' commissions,
expenses of altering and preparing the Premises required by the releasing.
Tenant shall pay to Landlord the rent and other sums due under this Lease on the
date the rent is due, less the rent and other sums Landlord received from any
releasing. No act by Landlord allowed by this subparagraph shall terminate this
Lease unless Landlord notifies Tenant in writing that Landlord elects to
terminate this Lease. Notwithstanding any releasing without termination,
Landlord may later elect to terminate this Lease because of the default by
Tenant.

             C. Landlord may terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date
set forth for termination in such notice. Any termination under this PARA
13.2C shall not relieve Tenant from its obligation to pay sums then due
Landlord or from any claim against Tenant for damages or rent previously
accrued or then accruing. In no event shall any one or more of the following
actions by Landlord, in the absence of a written election by Landlord to
terminate this Lease, constitute a termination of this Lease: (i) appointment
of a receiver or keeper in order to protect Landlord's interest hereunder;
(ii) consent to any subletting of the Premises or assignment of this Lease by
Tenant, whether pursuant to the provisions hereof or otherwise; or (iii) any
other action by Landlord or Landlord's Agents intended to mitigate the
adverse effects of any breach of this Lease by Tenant, including without
limitation any action taken to maintain and preserve the Premises or any
action taken to relet the Premises or any portions thereof to the extent such
actions do not affect a termination of Tenant's right to possession of the
Premises.

             D. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including
those described by PARA 13.C, shall constitute a termination of Tenant's
right to possession unless Landlord gives Tenant written notice of
termination. Should Landlord not terminate this Lease by giving Tenant
written notice, Landlord may enforce all its rights and remedies under this
Lease, including the right to recover the rent as it becomes due under the
Lease as provided in California Civil Code Section 1951.4.

             E. In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Effective Date. For
purposes of computing damages pursuant to California Civil Code Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include:

                 (1) The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided,
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%); and

                 (2) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom, including the following: (i) expenses for cleaning, repairing
or restoring the Premises; (ii) expenses for altering, remodeling or otherwise
improving the Premises for the purpose of reletting, including installation of
leasehold improvements (whether such installation be funded by a reduction of
rent, direct payment or allowance to a new tenant, or otherwise); (iii) broker's
fees, advertising costs and other expenses of reletting the Premises; (iv) costs
of carrying the Premises, such as taxes, insurance premiums, utilities and
security precautions; (v) expenses in retaking possession of the Premises; and
(vi) attorneys' fees and court costs incurred by Landlord in retaking possession
of the Premises and in releasing the Premises or otherwise incurred as a result
of Tenant's default.

                                       21
<PAGE>

             F. Nothing in this PARA 13.2 shall limit Landlord's right to
indemnification from Tenant as provided in PARA 7.2 and PARA 10.3. Any notice
given by Landlord in order to satisfy the requirements of PARA 13.1A or PARA
13.1B above shall also satisfy the notice requirements of California Code of
Civil Procedure Section 1161 regarding unlawful detainer proceedings.

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

         13.4 LIMITATION ON EXERCISE OF RIGHTS: At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give, and (ii)
Tenant may not exercise any option to extend, right to terminate this Lease, or
other right granted to it by this Lease which would otherwise be available to
it.

         13.5 WAIVER BY TENANT OF CERTAIN REMEDIES: Tenant waives the provisions
of Sections 1932(1), 1941 and 1942 of the California Civil Code and any similar
or successor law regarding Tenant's right to terminate this Lease or to make
repairs and deduct the expenses of such repairs from the rent due under this
Lease. Tenant hereby waives any right of redemption or relief from forfeiture
under the laws of the State of California, or under any other present or future
law, including the provisions of Sections 1174 and 1179 of the California Code
of Civil Procedure.

                      ARTICLE 14 ASSIGNMENT AND SUBLETTING

         14.1 TRANSFER BY TENANT: The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subtenant or
assignee or other successor in interest of the original Tenant (collectively
referred to in this PARA 14.1 as "Tenant"):

             A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of law, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld: (i) sublet all or any part of the
Premises or allow it to be sublet, occupied or used by any person or entity
other than Tenant; (ii) assign its interest in this Lease; (iii) mortgage or
encumber the Lease (or otherwise use the Lease as a security device) in any
manner; or (iv) materially amend or modify an assignment, sublease or other
transfer that has been previously approved by Landlord. Tenant shall
reimburse Landlord for all reasonable costs and attorneys' fees incurred by
Landlord in connection with the evaluation, processing, and/or documentation
of any requested Transfer, whether or not Landlord's consent is granted.
Landlord's reasonable costs shall include the cost of any review or
investigation performed by Landlord or consultant acting on Landlord's behalf
of (i) Hazardous Materials (as defined in Section 7.2E of this Lease) used,
stored, released, or disposed of by the potential Subtenant or Assignee,
and/or (ii) violations of Hazardous Materials Law (as defined in Section 7.2E
of this lease) by the Tenant or the proposed Subtenant or Assignee. Any
Transfer so approved by Landlord shall not be effective until Tenant has
delivered to Landlord an executed counterpart of the document evidencing the
Transfer which (i) is in a form reasonably approved by Landlord, (ii)
contains the same terms and conditions as stated in Tenant's notice given to
Landlord pursuant to PARA 14.1B, and (iii) in the case of an assignment of
the Lease, contains the agreement of the proposed transferee to assume all
obligations of Tenant under this Lease arising after the effective date of
such Transfer and to remain jointly and severally liable therefor with
Tenant. Any attempted Transfer without Landlord's consent shall constitute an
Event of Tenant's Default and shall be voidable at Landlord's option.
Landlord's consent to any one Transfer shall not constitute a waiver of the
provisions of this PARA 14.1 as to any subsequent Transfer or a consent to
any subsequent Transfer. No Transfer, even

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<PAGE>

with the consent of Landlord, shall relieve Tenant of its personal and primary
obligation to pay the rent and to perform all of the other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any
person shall not be deemed to be a waiver by Landlord of any provision of this
Lease nor to be a consent to any Transfer.

             B. At least 30 days before a proposed Transfer is to become
effective, Tenant shall give Landlord written notice of the proposed terms of
such Transfer and request Landlord's approval, which notice shall include the
following: (i) the name and legal composition of the proposed transferee; (ii) a
current financial statement of the transferee, financial statements of the
transferee covering the preceding three years if the same exist, and (if
available) an audited financial statement of the transferee for a period ending
not more than one year prior to the proposed effective date of the Transfer, all
of which statements are prepared in accordance with generally accepted
accounting principles; (iii) the nature of the proposed transferee's business to
be carried on in the Premises; (iv) all consideration to be given on account of
the Transfer; (v) a current financial statement of Tenant; and (vi) an
accurately filled out response to Landlord's standard hazardous materials
questionnaire. Tenant shall provide to Landlord such other information as may be
reasonably requested by Landlord within seven days after Landlord's receipt of
such notice from Tenant. Landlord shall respond in writing to Tenant's request
for Landlord's consent to a Transfer within the later of (i) 30 days of receipt
of such request together with the required accompanying documentation, or (ii)
15 days after Landlord's receipt of all information which Landlord reasonably
requests within seven days after it receives Tenant's first notice regarding the
Transfer in question. If Landlord fails to respond in writing within said
period, then Tenant shall provide a second written notice to Landlord requesting
such consent and if Landlord fails to respond within 7 days after receipt of
such second notice, then Landlord will be deemed to have consented to such
Transfer. Tenant shall immediately notify Landlord of any modification to the
proposed terms of such Transfer, which shall also be subject Landlord's consent
in accordance with the same process for obtaining Landlord's initial consent to
such Transfer.

             C. In the event that Tenant seeks to make any Transfer, Landlord
shall have the right to terminate this Lease or, in the case of a sublease of
less than all of the Premises, terminate this Lease as to that part of the
Premises proposed to be so sublet, either (i) on the condition that the proposed
transferee immediately enter into a direct lease of the Premises with Landlord
(or, in the case of a partial sublease, a lease for the portion proposed to be
so sublet) on the same terms and conditions contained in Tenant's notice, or
(ii) so that Landlord is thereafter free to lease the Premises (or, in the case
of a partial sublease, the portion proposed to be so sublet) to whomever it
pleases on whatever terms are acceptable to Landlord. In the event Landlord
elects to so terminate this Lease, then (i) if such termination is conditioned
upon the execution of a lease between Landlord and the proposed transferee,
Tenant's obligations under this Lease shall not be terminated until such
transferee executes a new lease with Landlord, enters into possession and
commences the payment of rent, and (ii) if Landlord elects simply to terminate
this Lease (or, in the case of a partial sublease, terminate this Lease as to
the portion to be so sublet), the Lease shall so terminate in its entirety (or
as to the space to be so sublet) fifteen (15) days after Landlord has notified
Tenant in writing of such election. Upon such termination, Tenant shall be
released from any further obligation under this Lease if it is terminated in its
entirety, or shall be released from any further obligation under the Lease with
respect to the space proposed to be sublet in the case of a proposed partial
sublease. In the case of a partial termination of the Lease, the Base Monthly
Rent and Tenant's Share shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Premises which remains subject to the Lease bears to the original area of the
Premises. Landlord and Tenant shall execute a cancellation and release with
respect to the Lease to effect such termination.

             D. If Landlord consents to a Transfer proposed by Tenant, Tenant
may enter into such Transfer, and if Tenant does so, the following shall apply:

                 (1) Tenant shall not be released of its liability for the
performance of all of its obligations under the Lease.

                 (2) If Tenant assigns its interest in this Lease, then
Tenant shall pay to Landlord 75% of all Subrent (as defined in PARA 14.1D(5))
received by Tenant over and above (i) the assignee's agreement to assume the
obligations of Tenant under this Lease, and (ii) all Permitted Transfer Costs
related to such assignment.

                                       23
<PAGE>

In the case of assignment, the amount of Subrent owed to Landlord shall be paid
to Landlord on the same basis, whether periodic or in lump sum, that such
Subrent is paid to Tenant by the assignee. All Permitted Transfer Costs shall be
amortized on a straight line basis over the term of such sublease (including any
extension options) for purposes of calculating the amount due Landlord
hereunder.

                 (3) If Tenant sublets any part of the Premises, then with
respect to the space so subleased, Tenant shall pay to Landlord 75% of the
positive difference, if any, between (i) all Subrent paid by the subtenant to
Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent allocable
to the space sublet and all Permitted Transfer Costs related to such sublease.
Such amount shall be paid to Landlord on the same basis, whether periodic or in
lump sum, that such Subrent is paid to Tenant by its subtenant. All Permitted
Transfer Costs shall be amortized on a straight line basis over the term of such
sublease (including any extension options) for purposes of calculating the
amount due Landlord hereunder.

                 (4) Tenant's obligations under this PARA 14.1D shall survive
any Transfer, and Tenant's failure to perform its obligations hereunder shall
be an Event of Tenant's Default. At the time Tenant makes any payment to
Landlord required by this PARA 14.1D, Tenant shall deliver an itemized
statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the
right at reasonable intervals to inspect Tenant's books and records relating
to the payments due hereunder. Upon request therefor, Tenant shall deliver to
Landlord copies of all bills, invoices or other documents upon which its
calculations are based. Landlord may condition its approval of any Transfer
upon obtaining a certification from both Tenant and the proposed transferee
of all Subrent and other amounts that are to be paid to Tenant in connection
with such Transfer.

                 (5) As used in this PARA 14.1D, the term "Subrent" shall
mean any consideration of any kind received, or to be received, by Tenant as
a result of the Transfer, if such sums are related to Tenant's interest in
this Lease or in the Premises, including payments from or on behalf of the
transferee (in excess of the book value thereof) for Tenant's assets,
fixtures, leasehold improvements, inventory, accounts, goodwill, equipment,
furniture, and general intangibles. As used in this PARA 14.1D, the term
"Permitted Transfer Costs" shall mean (i) all reasonable leasing commissions
paid to third parties not affiliated with Tenant in order to obtain the
Transfer in question, and (ii) all reasonable attorneys' fees incurred by
Tenant with respect to the Transfer in question.

             E. If Tenant is a corporation, the following shall be deemed a
voluntary assignment of Tenant's interest in this Lease: (i) any dissolution,
merger, consolidation, or other reorganization of or affecting Tenant, whether
or not Tenant is the surviving corporation; and (ii) if the capital stock of
Tenant is not publicly traded, the sale or transfer to one person or entity (or
to any group of related persons or entities) stock possessing more than 50% of
the total combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors. If Tenant is a
partnership, limited liability company or other entity any withdrawal or
substitution (whether voluntary, involuntary or by operation of law, and whether
occurring at one time or over a period of time) of any partner, member or other
party owning 25% or more (cumulatively) of any interest in the capital or
profits of the partnership, limited liability company or other entity or the
dissolution of the partnership, limited liability company or other entity, shall
be deemed a voluntary assignment of Tenant's interest in this Lease.

             F. Notwithstanding anything contained in PARA 14.1, so long as
Tenant otherwise complies with the provisions of PARA 14.1 Tenant may
sublease all or part of the Premises or assign its interest in this Lease to
(i) Tenant's parent corporation or any wholly owned subsidiary thereof, or
(ii) to any affiliate of Tenant, which means any corporation which controls,
is controlled by, or is under common control with the original Tenant to this
Lease by means of an ownership interest of more than 50% (a "Permitted
Transfer"). Tenant may enter into a Permitted Trasnfer without Landlord's
prior written consent but only after at least 10 days prior written notice to
Landlord, and Landlord shall not be entitled to terminate the Lease pursuant
to PARA 14.1C or to receive any part of any Subrent resulting therefrom that
would otherwise be due it pursuant to PARA 14.1D.

                                       24
<PAGE>

             G. The consent of Landlord to a Transfer may not be unreasonably
withheld, provided that it is agreed to be reasonable for Landlord to consider
any of the following reasons, which list is not exclusive, in electing to deny
consent:

                 (1) The financial strength, credit, character and business or
professional standing of the proposed transferee at the time of the proposed
Transfer is not at least equal to that of Tenant at the time of execution of
this Lease;

                 (2) A proposed transferee whose occupation of the Premises
would cause a diminution in the value of the Building or Project;

                 (3) A proposed transferee whose impact or affect on the common
facilities or the utility, efficiency or effectiveness of any utility or
telecommunication system serving the Building or the Project or the other
occupants of the Project would be adverse, disadvantageous or require
improvements or changes in any utility or telecommunication capacity currently
serving the Building or the Project;

                 (4) A proposed transferee whose occupancy will require a
variation in the terms of this Lease (including, without limitation, a variation
in the use clause) or which otherwise adversely affects any interest of
Landlord;

                 (5) The existence of any default by Tenant under any provision
of this Lease;

                 (6) A proposed transferee who is or is likely to be, or whose
business is or is likely to be, subject to compliance with additional laws or
other governmental requirements beyond those to which Tenant or Tenant's
business is subject;

                 (7) Either the proposed transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed transferee or an affiliate of the proposed
transferee, (i) occupies space in the Building at the time of the request for
consent, or (ii) is negotiating with Landlord to lease space in the Building or
in the Project at such time;

                 (8) the proposed Transferee is a governmental agency or unit or
an existing tenant in the Project;

                 (9) Landlord otherwise determines that the proposed Transfer
would have the effect of decreasing the value of the Building or the Project, or
increasing the expenses associated with operating, maintaining and repairing the
Building or the Project;

                 (10) The rent proposed to be charged by Tenant to the proposed
transferee during the term of such Transfer, calculated using a present value
analysis, is less than ninety-five percent (95%) of the rent then being quoted
by Landlord, at the proposed time of such Transfer, for comparable space in the
Building or any other building in the Project for a comparable term, calculated
using a present value system, or

                 (11) the proposed Transferee will use, store or handle
Hazardous Materials (defined below) in or about the Premises of a type, nature
or quantity not then acceptable to Landlord

             H. REASONABLE RESTRICTION. The restrictions on Transfer described
in this Lease are acknowledged by Tenant to be reasonable for all purposes,
including, without limitation, the provisions of California Civil Code (the
"Code") Section 1951.4(b)(2). Tenant expressly waives any rights which it might
otherwise be deemed to possess pursuant to applicable law, including, without
limitation, Section 1997.040 of the Code, to limit any remedy of Landlord
pursuant to Section 1951.2 or 1951.4 of the Code by means of proof that
enforcement of a restriction on use of the Premises would be unreasonable.

                                       25
<PAGE>

         14.2 TRANSFER BY LANDLORD: Landlord and its successors in interest
shall have the right to transfer their interest in this Lease and the Project at
any time and to any person or entity. In the event of any such transfer, the
Landlord originally named herein (and, in the case of any subsequent transfer,
the transferor) from the date of such transfer, shall be automatically relieved,
without any further act by any person or entity, of all liability for the
performance of the obligations of the Landlord hereunder which may accrue after
the date of such transfer. After the date of any such transfer, the term
"Landlord" as used herein shall mean the transferee of such interest in the
Premises.

                                       26
<PAGE>

                          ARTICLE 15 GENERAL PROVISIONS

         15.1 LANDLORD'S RIGHT TO ENTER: Landlord and its agents may enter
the Premises at any reasonable time after giving at least 24 hours' prior
notice to Tenant (and immediately in the case of emergency) for the purpose
of: (i) inspecting the same; (ii) posting notices of non-responsibility;
(iii) supplying any service to be provided by Landlord to Tenant; (iv)
showing the Premises to prospective purchasers, mortgagees or tenants; (v)
making necessary alterations, additions or repairs; (vi) performing Tenant's
obligations when Tenant has failed to do so after written notice from
Landlord; (vii) placing upon the Premises ordinary "for lease" signs or "for
sale" signs; and (viii) responding to an emergency. Landlord shall have the
right to use any and all means Landlord may deem necessary and proper to
enter the Premises in an emergency. Any entry into the Premises obtained by
Landlord in accordance with this PARA 15.1 shall not be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual
or constructive, of Tenant from the Premises.

         15.2 SURRENDER OF THE PREMISES: Upon the expiration or sooner
termination of this Lease, Tenant shall vacate and surrender the Premises to
Landlord in the same condition as existed at the Commencement Date, except
for (i) reasonable wear and tear, (ii) damage caused by any peril or
condemnation, and (iii) contamination by Hazardous Materials for which Tenant
is not responsible pursuant to PARA 7.2A or PARA 7.2B. In this regard, normal
wear and tear shall be construed to mean wear and tear caused to the Premises
by the natural aging process which occurs in spite of prudent application of
the best standards for maintenance, repair and janitorial practices, and does
not include items of neglected or deferred maintenance. In any event, Tenant
shall cause the following to be done prior to the expiration or the sooner
termination of this Lease: (i) all interior walls shall be painted or cleaned
so that they appear freshly painted; (ii) all tiled floors shall be cleaned
and waxed; (iii) all carpets shall be cleaned and shampooed; (iv) all broken,
marred, stained or nonconforming acoustical ceiling tiles shall be replaced;
(v) all exterior and interior windows shall be washed; (vi) the HVAC system
shall be serviced by a reputable and licensed service firm and left in good
operating condition and repair as so certified by such firm; and (vii) the
plumbing and electrical systems and lighting shall be placed in good order
and repair (including replacement of any burned out, discolored or broken
light bulbs, ballasts, or lenses). If Landlord so requests, Tenant shall,
prior to the expiration or sooner termination of this Lease, (i) remove any
Tenant's Alterations which Tenant is required to remove pursuant to PARA 5.2
and repair all damage caused by such removal, and (ii) return the Premises or
any part thereof to its original configuration existing as of the time the
Premises were delivered to Tenant. If the Premises are not so surrendered at
the termination of this Lease, Tenant shall be liable to Landlord for all
costs incurred by Landlord in returning the Premises to the required
condition, plus interest on all costs incurred at the Agreed Interest Rate.
Tenant shall indemnify Landlord against loss or liability resulting from
delay by Tenant in so surrendering the Premises, including, without
limitation, any claims made by any succeeding tenant or losses to Landlord
due to lost opportunities to lease to succeeding tenants.

         15.3 HOLDING OVER: This Lease shall terminate without further notice at
the expiration of the Lease Term. Any holding over by Tenant after expiration of
the Lease Term shall not constitute a renewal or extension of the Lease or give
Tenant any rights in or to the Premises except as expressly provided in this
Lease. Any holding over after such expiration with the written consent of
Landlord shall be construed to be a tenancy from month to month on the same
terms and conditions herein specified insofar as applicable except that Base
Monthly Rent shall be increased to an amount equal to 200% of the greater of (a)
the Base Monthly Rent payable during the last full calendar month of the Lease
Term, or (b) the then prevailing fair market rent.

         15.4 SUBORDINATION: The following provisions shall govern the
relationship of this Lease to any Security Instrument:

             A. The Lease is subject and subordinate to all Security Instruments
existing as of the Effective Date. However, if any Lender so requires, this
Lease shall become prior and superior to any such Security Instrument.

             B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Effective Date.
Notwithstanding such subordination, Tenant's right to quiet possession

                                       27
<PAGE>

of the Premises shall not be disturbed so long as Tenant is not in default and
performs all of its obligations under this Lease, unless this Lease is otherwise
terminated pursuant to its terms.

             C. Tenant shall upon request execute any document or instrument
required by any Lender to make this Lease either prior or subordinate to a
Security Instrument, which may include such other matters as the Lender
customarily and reasonably requires in connection with such agreements,
including provisions that the Lender not be liable for (i) the return of any
security deposit unless the Lender receives it from Landlord, and (ii) any
defaults on the part of Landlord occurring prior to the time the Lender takes
possession of the Project in connection with the enforcement of its Security
Instrument. Tenant's failure to execute any such document or instrument within
10 days after written demand therefor shall constitute an Event of Tenant's
Default.

         15.5 MORTGAGEE PROTECTION AND ATTORNMENT: In the event of any default
on the part of the Landlord, Tenant will use reasonable efforts to give notice
by registered mail to any Lender whose name has been provided to Tenant and
shall offer such Lender a reasonable opportunity to cure the default, including
time to obtain possession of the Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings, if such should prove
necessary to effect a cure. Tenant shall attorn to any purchaser of the Premises
at any foreclosure sale or private sale conducted pursuant to any Security
Instrument encumbering the Premises, or to any grantee or transferee designated
in any deed given in lieu of foreclosure.

         15.6 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS: At all times
during the Lease Term, each party agrees, following any request by the other
party, promptly to execute and deliver to the requesting party within 15 days
following delivery of such request an estoppel certificate: (i) certifying that
this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect, (ii) stating the date to which the rent and other
charges are paid in advance, if any, (iii) acknowledging that there are not, to
the certifying party's knowledge, any uncured defaults on the part of any party
hereunder or, if there are uncured defaults, specifying the nature of such
defaults, and (iv) certifying such other information about the Lease as may be
reasonably required by the requesting party. A failure to deliver an estoppel
certificate within 15 days after delivery of a request therefor shall be a
conclusive admission that, as of the date of the request for such statement: (i)
this Lease is unmodified except as may be represented by the requesting party in
said request and is in full force and effect, (ii) there are no uncured defaults
in the requesting party's performance, and (iii) no rent has been paid more than
30 days in advance. At any time during the Lease Term Tenant shall, upon 15
days' prior written notice from Landlord, provide Tenant's most recent financial
statement and financial statements covering the 24 month period prior to the
date of such most recent financial statement to any existing Lender or to any
potential Lender or buyer of the Premises. Such statements shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant.

         15.7 CONSENT: Whenever Landlord's approval or consent is required by
this Lease, such approval or consent may be exercised in Landlord's sole and
absolute discretion, unless a different standard has been expressly provided in
this Lease for the particular matter requiring Landlord's consent or approval.

         15.8 NOTICES: Any notice required or desired to be given regarding
this Lease shall be in writing and may be given by personal delivery, by
facsimile, by courier service, or by mail. A notice shall be deemed to have
been given (i) on the third business day after mailing if such notice was
deposited in the United States mail, certified or registered, postage
prepaid, addressed to the party to be served at its Address for Notices
specified in SECTION Q or SECTION R of the Summary (as applicable), (ii) when
delivered if given by personal delivery, and (iii) in all other cases when
actually received at the party's Address for Notices. Either party may change
its address by giving notice of the same in accordance with this PARA 15.8,
provided, however, that any address to which notices may be sent must be a
California address.

         15.9 ATTORNEYS' FEES: In the event either Landlord or Tenant shall
bring any action or legal proceeding for an alleged breach of any provision of
this Lease, to recover rent, to terminate this Lease or otherwise to enforce,
protect or establish any term or covenant of this Lease, the prevailing party
shall be entitled to recover as a part of

                                       28
<PAGE>

such action or proceeding, or in a separate action brought for that purpose,
reasonable attorneys' fees, court costs, and experts' fees as may be fixed by
the court.

         15.10 CORPORATE AUTHORITY: If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of such
corporation in accordance with the by-laws of such corporation (or partnership
in accordance with the partnership agreement of such partnership) and that this
Lease is binding upon such corporation (or partnership) in accordance with its
terms. Each of the persons executing this Lease on behalf of a corporation does
hereby covenant and warrant that the party for whom it is executing this Lease
is a duly authorized and existing corporation, that it is qualified to do
business in California, and that the corporation has full right and authority to
enter into this Lease.

         15.11 MISCELLANEOUS: Should any provision of this Lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect, impair
or invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof. Any
executed copy of this Lease shall be deemed an original for all purposes. This
Lease shall, subject to the provisions regarding assignment, apply to and bind
the respective heirs, successors, executors, administrators and assigns of
Landlord and Tenant. "Party" shall mean Landlord or Tenant, as the context
implies. If Tenant consists of more than one person or entity, then all members
of Tenant shall be jointly and severally liable hereunder. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either
Landlord or Tenant. When the context of this Lease requires, the neuter gender
includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms "shall", "will" and
"agree" are mandatory. The term "may" is permissive. When a party is required to
do something by this Lease, it shall do so at its sole cost and expense without
right of reimbursement from the other party unless a provision of this Lease
expressly requires reimbursement. Landlord and Tenant agree that (i) the gross
leasable area of the Premises includes any atriums, depressed loading docks,
covered entrances or egresses, and covered loading areas, (ii) each has had an
opportunity to determine to its satisfaction the actual area of the Project and
the Premises, (iii) all measurements of area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more or
less than the amount of area reflected in this Lease, and (iv) any such
subsequent determination that the area is more or less than shown in this Lease
shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a factor.
Where a party hereto is obligated not to perform any act, such party is also
obligated to restrain any others within its control from performing said act,
including the Agents of such party. Landlord shall not become or be deemed a
partner or a joint venturer with Tenant by reason of the provisions of this
Lease.

         15.12 TERMINATION BY EXERCISE OF RIGHT: If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease
shall terminate 30 days after the date the right to terminate is properly
exercised (unless another date is specified in that part of the Lease
creating the right, in which event the date so specified for termination
shall prevail), the rent and all other charges due hereunder shall be
prorated as of the date of termination, and neither Landlord nor Tenant shall
have any further rights or obligations under this Lease except for those that
have accrued prior to the date of termination or those obligations which this
Lease specifically provides are to survive termination. This PARA 15.12 does
not apply to a termination of this Lease by Landlord as a result of an Event
of Tenant's Default.

         15.13 BROKERAGE COMMISSIONS: Each party hereto (i) represents and
warrants to the other that it has not had any dealings with any real estate
brokers, leasing agents or salesmen, or incurred any obligations for the payment
of real estate brokerage commissions or finder's fees which would be earned or
due and payable by reason of the execution of this Lease, other than to the
Retained Real Estate Brokers described in SECTION S of the Summary, and (ii)
agrees to indemnify, defend, and hold harmless the other party from any claim
for any such commission or fees which result from the actions of the
indemnifying party. Landlord shall be responsible for the

                                       29
<PAGE>

payment of any commission owed to the Retained Real Estate Brokers if there is a
separate written commission agreement between Landlord and the Retained Real
Estate Brokers for the payment of a commission as a result of the execution of
this Lease.

         15.14 FORCE MAJEURE: Any prevention, delay or stoppage due to strikes,
lock-outs, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefor, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other acts
of God, and other causes beyond the reasonable control of Landlord (except
financial inability) shall excuse the performance by Landlord, for a period
equal to the period of any said prevention, delay or stoppage, of any obligation
hereunder.

         15.15 ENTIRE AGREEMENT: This Lease constitutes the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that neither
Landlord nor Landlord's Agents has made any legally binding representation or
warranty as to any matter except those expressly set forth herein, including any
warranty as to (i) whether the Premises may be used for Tenant's intended use
under existing Law, (ii) the suitability of the Premises or the Project for the
conduct of Tenant's business, or (iii) the condition of any improvements. There
are no oral agreements between Landlord and Tenant affecting this Lease, and
this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant or displayed by Landlord to Tenant with respect to the subject matter
of this Lease. This instrument shall not be legally binding until it is executed
by both Landlord and Tenant. No subsequent change or addition to this Lease
shall be binding unless in writing and signed by Landlord and Tenant.

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

LANDLORD:                                     TENANT:

SAN JOSE TECHNOLOGY PROPERTIES, LLC,          By: OPLINK COMMUNICATIONS, INC.
a Delaware limited liability company              a California corporation

By:   Divco West Group, LLC,                      By:    /s/ Bruce Horn
      a Delaware limited liability company               -----------------------
      Its Manager                                 Name:  Bruce Horn
                                                         -----------------------
      By:   __________________________            Title: Chief Financial Officer
      Name: __________________________                   -----------------------
      Its:  __________________________        Dated:  _______________, 2000

Dated:   _______________, 2000

                                       30

<PAGE>

                                   EXHIBIT A

                         [Site plan of leased property.]

<PAGE>

                                   EXHIBIT B

                       WORK LETTER FOR TENANT IMPROVEMENTS

         This EXHIBIT B forms a part of that certain Lease (the "Lease") by and
between San Jose Technology Properties, LLC, a Delaware limited liability
company, as Landlord, and Oplink Communications, Inc., as Tenant, to which this
Exhibit is attached. If there is any conflict between this Exhibit and the
Lease, this Exhibit shall govern.

         1. DEFINED TERMS. All defined terms referred to in this Exhibit shall
have the same meaning as defined in the Lease to which this Exhibit is a part,
except where expressly defined to the contrary.

         2. ADDITIONAL DEFINITIONS. Each of the following terms shall have the
following meaning:

             "FORCE MAJEURE DELAYS" - Any delay, other than a Tenant Delay, by
Landlord in completing the Tenant Improvements by the Scheduled Commencement
Date set forth in the Lease by reason of (i) any strike, lockout or other labor
trouble or industrial disturbance (whether or not on the part of the employees
of either party hereto), (ii) governmental preemption of priorities or other
controls in connection with a national or other public emergency, civil
disturbance, riot, war, sabotage, blockade, embargo, inability to secure
customary materials, supplies or labor through ordinary sources by reason of
regulation or order of any government or regulatory body, or (iii) shortages of
fuel, materials, supplies or labor, (iv) lightning, earthquake, fire, storm,
tornado, flood, washout explosion, inclement weather or any other similar
industry-wide or Building-wide cause beyond the reasonable control of Landlord,
or (v) any other cause, whether similar or dissimilar to the above, beyond
Landlord's reasonable control. The time for performance of any obligation of
Landlord to construct the Tenant Improvements under this Exhibit or the Lease
shall be extended at Landlord's election by the period of any delay caused by
any of the foregoing events.

             "SUBSTANTIAL COMPLETION," "SUBSTANTIALLY COMPLETE," "SUBSTANTIALLY
COMPLETED" - The terms Substantial Completion, Substantially Completed and
Substantially Complete shall mean Landlord has delivered to Tenant a written
notice stating that the Tenant Improvements have been substantially completed,
except "punch list" items which may be completed without materially impairing
Tenant's use of the Premises or a material portion thereof.

             "TENANT DELAY" Any delay incurred by Landlord in completing the
Tenant Improvements due to (i) a delay by Tenant, or by any person employed or
engaged by Tenant, in approving or delivering to Landlord any samples, plans,
schedules or information beyond the applicable time period set forth in this
Exhibit, if any; (ii) a delay in the performance of work in the Premises by
Tenant or any person employed by Tenant; (iii) any changes requested by Tenant
in or to previously approved work; (iv) requests for materials and finishes
which are not readily available, and/or delays in delivery of any materials
specified by Tenant through change orders; (v) interference with the
construction of the Tenant Improvements; or (vi) any delay attributable to the
failure of Tenant to pay, when due, any amounts required to be paid by Tenant
pursuant to this Exhibit or otherwise provided in the Lease.

             "TENANT IMPROVEMENTS" - The improvements to be installed by
Landlord in the Premises consisting of the following work:

             1. New carpeting shall be installed throughout the Premises in the
                areas where carpeting is currently located;

             2. The interior walls of the Premises shall be painted with a color
                comparable to the existing color, unless a different color
                sample is offered by Landlord as building standard;

             The type, quality and color of the carpet and paint shall be
Landlord's standard building color and materials. Tenant shall select color of
the carpet and paint from samples or colors offered by Landlord within two

                                       1
<PAGE>

(2) business days after request by Landlord. If Tenant fails to make such
selection within such time period, Landlord may make the selection in its sole
and absolute discretion or Landlord may elect, in its sole and absolute
discretion, not to make such selection and treat the failure of Tenant to make
such color selection as a Tenant Delay. If Tenant wants any carpet, paint or
color that is not offered by Landlord as its building standard, such request by
Tenant shall be subject to Landlord's approval in its sole and absolute
discretion and any additional time to order and obtain such materials shall
constitute a Tenant Delay and all additional costs for such materials shall be
paid by Tenant within ten (10) days after request by Landlord.

         2. CONSTRUCTION OF THE TENANT IMPROVEMENTS.

             2.1 CONSTRUCTION. Landlord shall construct the Tenant Improvements.
The construction contract for constructing the Tenant Improvements and the
contractor(s) to perform the work shall be approved and/or selected, as the case
may be, by Landlord at its sole and absolute discretion without the consent of
Tenant.

             2.2 TENANT'S RESPONSIBILITY. Tenant shall be solely responsible for
the suitability for Tenant's needs and business of the design and function of
the Premises. Tenant shall also be responsible for procuring or installing in
the Premises any trade fixtures, equipment, furniture, furnishings, telephone
equipment or other personal property ("Personal Property") to be used in the
Premises by Tenant, and the cost of such Personal Property shall be paid by
Tenant. Tenant shall conform to the Building's wiring standards in installing
any telephone, computer and communication equipment and shall be subject to any
and all rules of Landlord during construction.

         3. PAYMENT OF CONSTRUCTION COSTS. Landlord shall pay for the costs to
construct the Tenant Improvements based on the Tenant Improvements described as
of the date hereof. Any additional costs due to changes in the Tenant
Improvements requested by Tenant, or the selection by Tenant of non-standard
building materials or colors, or as a result of any Tenant Delay shall be paid
by Tenant as provided in section 4 below.

         4. CHANGES IN WORK. Tenant shall not be permitted to make any change in
the Tenant Improvements without the prior written approval of Landlord, which
may be exercised, and made subject to such conditions as Landlord may require,
in its sole and absolute discretion. Any change approved by Landlord that in
Landlord's judgment results in a delay in constructing the Tenant Improvements
shall be deemed a Tenant Delay, and shall extend the time period by which
Landlord must Substantially Complete the Tenant Improvements, but shall not
extend or postpone the date for payment of rent or for commencement of the
extended term under this Lease. The cost of such changes and the additional
costs as a result of any other Tenant Delay, including the cost to obtain any
permits and construct any additional improvements required as a result thereof,
and the cost for materials and labor, and all other additional costs incurred by
Landlord from resulting delays in completing the Tenant Improvements, shall be
paid by Tenant to Landlord within ten (10) days after Tenant's receipt of notice
from Landlord. If Landlord does not receive such payment within said ten (10)
day period, Landlord shall have the right, in addition to any other rights or
remedies available under the Lease, at law or in equity, to (i) discontinue all
or any portion of the work until it receives said payment; (ii) proceed with the
other work not affected by such change until such payment is received; (iii)
proceed with the work contemplated with such change; or (iv) proceed with the
work without making such change; in which case the commencement or completion of
such work shall not be deemed a waiver of Tenant's obligation to pay for same or
any additional costs or expenses incurred as a result thereof. Any delay caused
as a result of such a change or request for a change shall constitute a Tenant
Delay.

         5. PUNCH LIST WORK. Within thirty (30) days after the date of
Substantial Completion of the Tenant Improvements, Tenant may provide Landlord
with a punch list which sets forth any corrective work to be performed by
Landlord with respect to the Tenant Improvements; provided, however, that
Tenant's obligation to pay Base Monthly Rent, additional rent and other sums
under the Lease shall not be affected thereby. If Tenant fails to submit a punch
list to Landlord within such thirty (30) day period, Tenant agrees that it will
conclusively be deemed to have inspected the Tenant Improvements and found it to
be in satisfactory condition, with all work required of Landlord completed.

                                       2
<PAGE>

                                   EXHIBIT "C"

                              ACCEPTANCE AGREEMENT

         This Acceptance Agreement is made as of _______________, 2000, by and
between the parties hereto with regard to that Lease dated ________________,
2000, by and between San Jose Technology Properties, LLC, a Delaware limited
liability company, as Landlord ("Landlord"), and Oplink Communications, Inc., a
California corporation, as Tenant ("Tenant"), affecting those premises located
at 2144 Bering Drive, San Jose, California. The parties hereto agree as follows:

1.       All improvements required to be constructed by Landlord by the Lease
         have been completed in accordance with the terms of the Lease and are
         hereby accepted by Tenant.

2.       The Commencement Date of the Lease Term is _______________, 19___, and
         the Lease Term for the Premises shall expire on __________________,
         ____, unless sooner terminated according to the terms of the Lease.

LANDLORD:                                      TENANT:

SAN JOSE TECHNOLOGY PROPERTIES, LLC,           OPLINK COMMUNICATIONS, INC.
a Delaware limited liability company           a California corporation

By:  Divco West Group, LLC,                    By:      _______________________
     a Delaware limited liability company      Name:    _______________________
     Its Manager                               Title:   _______________________

     By:      __________________________       Dated:   ________________
     Name:    __________________________
     Its:     __________________________

Dated:   ____________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]