Document:

<PAGE>

                                                                   EXHIBIT 10.20

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") dated October 18, 1999 by
and between WESTERN MULTIPLEX CORPORATION, a California corporation ("WMC") and
GLENAYRE ELECTRONICS, INC., a Colorado corporation ("GEI").

                              Statement of Purpose

GEI, as tenant, entered into that certain lease agreement dated July 1, 1996
("Lease") with Yercaf, N.V. ("Landlord") covering the premises at 1196 Borregas
Avenue, Sunnyvale, California ("Premises"), a complete and correct copy of which
is attached hereto as Attachment A. GEI desires to assign the Lease to its
affiliate, WMC and WMC desires to assume all such interests. The purpose of this
Agreement is to set forth the parties' understanding regarding the assignment
and assumptions of the Lease.

NOW, THEREFORE, in consideration of the foregoing Statement of Purpose and the
mutual agreements set forth herein, the parties, intending to be legally bound,
do hereby agree as follows:

1.   Assignment. Subject to WMC's agreement under Paragraph 2 below, all of
     GEI's a right, title and interest in and to the Lease are hereby
     transferred, conveyed and assigned to WMC. Both parties shall reasonably
     cooperate and execute such further documentation or take any further action
     as may be permitted and necessary to effectuate the transfer of the Lease
     to WMC.

2.   Assumption. WMC does hereby assume and agree to pay, perform and discharge,
     as and when due, all of the obligations of the Lease (the "Assumed
     Obligations"). Without limiting the generality of the foregoing, WMC
     further agrees that its current use and any future use will be a permitted
     use under the Lease. Notwithstanding anything to the contrary, WMC agrees
     to defend, indemnify and hold GEI and GTI harmless for its failure to
     perform and discharge the Assumed Obligations.

3.   Miscellaneous.

     3.1. This Agreement contains the final, complete and exclusive statement of
          the agreement between the parties with respect to the transactions
          contemplated herein and all prior or contemporaneous written or oral
          agreements with respect to the subject matter hereof are merged
          herein. No modification or amendment hereof shall be effective unless
          in writing and executed by each of the parties hereto.

     3.2. This Agreement shall be binding upon and inure to the benefit of the
          parties hereto and their respective successors and assigns.
<PAGE>

                                                                               2

     3.3. The captions herein are for convenience of reference only and shall
          not be construed as a part of this Agreement. If any provisions of the
          Agreement is deemed to be invalid or unenforceable, the parties agree
          to substitute a mutually agreed-upon valid and enforceable provision
          which reflect the parties' original intent. Notwithstanding, the
          invalidity or unenforceability of any provision of this Agreement
          shall not affect the validity or enforceability of the remaining
          portions of this Agreement or any part thereof. This Agreement shall
          be construed, interpreted, enforced and governed by and under the laws
          of the State of North Carolina.

     3.4. This Agreement may be exercised in any number of counterparts, each of
          which shall be deemed an original, but all of which shall constitute
          one and the same agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed by WMC and GEI and
shall be effective as of October 30, 1999.

       Western Multiplex Corporation          Glenayre Electronics, Inc.

       By: /s/ Stanley Ciepcielinski          By: /s/ Billy C. Layton
          -----------------------------          -------------------------------

       Name: Stanley Ciepcielinski            Name: Billy C. Layton
            ---------------------------            -----------------------------

       Title: Chief Financial Officer         Title: Vice President
             --------------------------             ----------------------------
<PAGE>

                                      LEASE

                              1196 Borregas Avenue
                              Sunnyvale, California

                                     between

                                   YERCAF N.V.

                                   "LANDLORD"

                                       and

                           GLENARYE ELECTRONICS, INC.

                                    "TENANT"

                               Dated July 1, 1996
<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE 1
                 DEMISE, DELIVERY OF POSSESSION AND DEFINITIONS...............1

1.1    Demise.................................................................1
1.2    Delivery of Possession.................................................1
1.3    Definitions............................................................2

                                    ARTICLE 2
                                 USE OF PREMISES..............................4

2.1    Permitted Uses.........................................................4
2.2    Prohibited Uses........................................................4
2.3    Compliance with Laws...................................................4

                                    ARTICLE 3
                                   LEASE TERM.................................5

3.1    Initial Term...........................................................5
3.2    Option to Extend.......................................................5
3.3    Delivery of Premises...................................................5
3.4    Surrender of the Premises..............................................6
3.5    Early Termination......................................................6

                                    ARTICLE 4
                                    BASE RENT.................................7

4.1    Base Rent..............................................................7
4.2    Additional Rent........................................................7

                                    ARTICLE 5
                                    TENANT'S..................................7

5.1    Tenant's Expenses......................................................7
5.2    Definition of Property Taxes...........................................9

                                    ARTICLE 6
                                SECURITY DEPOSIT..............................9

6.1    Security Deposit.......................................................9

                                      - i -
<PAGE>

                                    ARTICLE 7
                              HAZARDOUS SUBSTANCES...........................10

7.1    Compliance with Law...................................................10
7.2    Tenant's Indemnification..............................................10
7.3    Tenant's Responsibilities.............................................10
7.4    Notification of Hazardous Substances..................................10
7.5    Handling of Hazardous Substances......................................10
7.6    Testing by Landlord...................................................10

                                    ARTICLE 8
                             REPAIRS AND MAINTENANCE.........................11

8.1    Landlord's Responsibilities...........................................11
8.2    Tenant's Responsibilities.............................................11
8.3    HVAC; Windows.........................................................12
8.4    Standards for Repairs.................................................12
8.5    Tenant's Failure to Perform...........................................12

                                    ARTICLE 9
                                   ALTERATIONS...............................12

9.1    Landlord's Consent....................................................12
9.2    Requirements for Commencement of Alterations..........................13
9.3    Payment for Alterations...............................................13
9.4    Ownership of Alterations..............................................13
9.5    Required Alterations..................................................14

                                   ARTICLE 10
                                 TRADE FIXTURES..............................14

10.1   Tenant's Trade Fixtures...............................................14
10.2   Abandonment of Trade Fixtures.........................................14

                                   ARTICLE 11
                                    INSURANCE................................14

11.1   Tenant's Insurance....................................................14
11.1.2 Landlord's Insurance..................................................15
11.2   Tenant's Payment of Increases.........................................15
11.3   Waiver of Subrogation.................................................15

                                     - ii -
<PAGE>

                                   ARTICLE 12
                             DAMAGE AND DESTRUCTION..........................15

12.1   Uninsured Casualty....................................................15
12.2   Insured Casualty......................................................16
12.3   Substantial Damage....................................................16
12.4   Abatement of Base Rent................................................16
12.5   No Right of Offset....................................................16
12.6   Tenant's Leasehold Improvements.......................................16

                                   ARTICLE 13
                                  CONDEMNATION...............................17

13.1   Condemnation..........................................................17

                                   ARTICLE 14
                            ASSIGNMENT AND SUBLETTING........................17

14.1   Landlord's Consent....................................................17
14.2   Landlord's Costs......................................................18
14.3   Evidence of Assignment................................................18
14.4   Effect of Tenant's Assignment.........................................18
14.5   Procedure to Assign...................................................18
14.6   Conditions to Landlord's Consent......................................19
14.7   Landlord's Discretion.................................................19
14.8   Tenant Remains Liable.................................................19
14.9   Attornment............................................................19
14.10  Binding on Assignee...................................................19
14.11  No Further Assignment.................................................19
14.12  Effect of Assignment on Default.......................................19

                                   ARTICLE 15
                                    INDEMNITY................................19

15.1   Tenant's Indemnification of Landlord..................................19
15.2   Exculpation of Landlord...............................................20

                                   ARTICLE 16
                                     DEFAULT.................................20

16.1   Event of Default......................................................20

                                    - iii -
<PAGE>

                                   ARTICLE 17
                                    REMEDIES.................................21

17.1   Landlord's Remedies...................................................21
17.2   Termination of Lease..................................................22
17.3   Revenues from Reletting...............................................22
17.4   Landlord's Right to Cure..............................................22
17.5   No Defense to Action..................................................22
17.6   Rights Not Exclusive..................................................23
17.7   Default by Landlord...................................................23

                                   ARTICLE 18
                            LATE CHARGES AND INTEREST........................23

18.1   Late Charges..........................................................23
18.2   Interest..............................................................23

                                   ARTICLE 19
                       SUBORDINATION; TRANSFER BY LANDLORD...................24

19.1   Subordination.........................................................24
19.2   Attornment............................................................24
19.3   Transfer by Landlord..................................................24

                                   ARTICLE 20
                              ESTOPPEL CERTIFICATES..........................24

20.1   Estoppel Certificates.................................................24
20.2   Failure to Deliver....................................................25
20.3   Guarantor's Financial Statements......................................25

                                   ARTICLE 21
                                  MISCELLANEOUS..............................25

21.1   Severability..........................................................25
21.2   Time of Essence.......................................................25
21.3   Additional Rent.......................................................25
21.4   Entire Agreement......................................................25
21.5   Notices...............................................................26
21.6   Waivers...............................................................26
21.7   No Recording..........................................................26
21.8   Holding Over..........................................................26
21.9   Cumulative Remedies...................................................26
21.10  Covenants and Conditions..............................................26
21.11  Binding Effect........................................................27

                                     - iv -
<PAGE>

21.12  Attorneys' Fees.......................................................27
21.13  Rights Reserved by Landlord...........................................27
21.14  Signs.................................................................27
21.15  No Merger.............................................................27
21.16  Security Measures.....................................................28
21.17  Easements.............................................................28
21.18  Authority.............................................................28
21.19  Governing Law.........................................................28
21.20  Counterparts..........................................................28
21.21  No Offer..............................................................28
21.22  Memorandum of Lease...................................................28

                                     - v -
<PAGE>

                                                                               3

                                      LEASE

     This Lease (the "Lease") is entered into as of July 1, 1996 between YERCAF
N.V., a Delaware corporation ("Landlord") and GLENAYRE ELECTRONICS, INC., a
Colorado corporation ("Tenant").

                                    RECITALS

     A. Landlord desires to lease to Tenant and Tenant desires to lease from
Landlord the premises (including all improvements thereon) constituting the
approximately 45,709 square foot two-story building and the land located at 1196
Borregas Avenue, Sunnyvale, California (the "Premises"), as more particularly
described on Exhibit A attached hereto and incorporated herein.

     B. Landlord and Tenant desire to set forth the terms and conditions
pursuant to which Tenant shall lease and occupy the Premises.

     C. Tenant's corporate parent, Glenayre Technologies, Inc., a Delaware
corporation ("Guarantor") has agreed to guarantee the performance of Tenant's
obligations hereunder.

     NOW THEREFORE, in consideration of the Premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

                                   ARTICLE 1
                 DEMISE, DELIVERY OF POSSESSION AND DEFINITIONS

     1.1 Demise. Landlord leases to Tenant and Tenant leases from Landlord the
Premises for the term, at the rental, and upon all other terms, covenants, and
conditions in this Lease. If Tenant disagrees with the rentable square footage
of the Premises set forth in Recital A, then, upon Tenant's request made no
later than fifteen (15) days after execution of this Lease, Landlord's architect
shall calculate and certify in writing to Landlord and Tenant the rentable area
of the Premises. If Tenant disagrees with the determination of the rentable area
of the premises as calculated by the architect, Tenant shall provide Landlord
with written notice of Tenant's disapproval thereof within fifteen (15) days
after the date on which Tenant receives the architect's calculation. If the
architect determines that the rentable area of the Premises is different from
45,709 square feet, then all Rent that is based thereon (and the Basic Allowance
and the Additional Allowance, as those terms are defined in the Work Letter
Agreement) shall be adjusted in accordance with that determination.

     1.2 Delivery of Possession. Landlord shall deliver possession of the
Premises to Tenant in the condition required by Section 8.1, and Tenant shall
accept possession of the
<PAGE>

                                                                               4

Premises subject to all applicable laws, ordinances, and regulations governing
and regulating the use of the Premises, and any recorded covenants or
restrictions.

     1.3 Definitions. As used in this Lease the following terms shall have the
following meanings.

          (a) "Alterations" is defined in Section 9.1.

          (b) "Base Rent" is defined in Section 4.1.

          (c) "Commencement Date" is the later of (i) July 1, 1996, and (ii)
     substantial completion of the Tenant Improvements, as defined in Section 3
     of the Work Letter Agreement, attached hereto as Exhibit B and incorporated
     herein.

          (d) "Environmental Laws" means all federal, state, local, or municipal
     laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
     requirements of any government authority regulating, relating to, or
     imposing liability or standards of conduct concerning any Hazardous
     Substance (as hereinafter defined), or pertaining to occupational health or
     industrial hygiene, occupational or environmental conditions on, under, or
     about the Property, as now or may at any later time be in effect, including
     without limitation, the Comprehensive Environmental Response, Compensation
     and Liability Act of 1980 (CERCLA) [42 USCS ss.ss. 9601 et seq.]; the
     Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS ss.ss. 6901
     et seq.]; the Clean Water act, also known as the Federal Water Pollution
     control Act (FWPCA) [33 USCS ss.ss. 1251 et seq.]; the Toxic Substances
     Control Act (TSCA) [15 USCS ss.ss. 2601 et seq.]; the hazardous Materials
     Transportation Act (HMTA) [49 USCS ss.ss. 1801 et seq.]; the Occupational
     Safety and Health Act [29 USCS ss.ss. 655 and 657]; the California
     Underground Storage of Hazardous Substances Act [H&SC ss.ss. 25280 et
     seq.]; the California Underground Storage of Hazardous Substances Act [H&SC
     ss.ss. 25280 et seq.]; the California Hazardous Substances Account Act
     [H&SC ss.ss. 25380 et seq.]; the California Hazardous Waste Control Act
     [H&SC ss.ss. 25180 et seq.]; the California Safe Drinking Water Toxic
     enforcement Act [H&SC ss.ss. 24249 et seq.]; the Porter-Cologne Water
     Quality Act [Wat C ss.ss. 13000 et seq.] equal with any amendment of or
     regulations promulgated under the statutes cited above, and any other
     federal, state, or local law, statute, ordinance, or regulation now in
     effect or later enacted that pertains to occupational health or industrial
     hygiene, or the regulation or protection of the environment, including
     ambient air, soil, soil vapor, groundwater, surface water, or land use.

          (e) "Event of Default" is defined in Section 16.1

          (f) "Extended Term" is defined in Section 3.2.

          (g) "Hazardous Substances" includes without limitation any substance:
     (i) the presence of which requires investigation or remediation under any
     Environmental Law; (ii) which is or becomes defined as a "hazardous waste,"
     "hazardous substance," pollutant
<PAGE>

                                                                               5

     or contaminant under any Environmental Law; (iii) which is toxic,
     explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
     mutagenic or otherwise hazardous and is or becomes regulated by any
     governmental authority, agency, department, commission, board, agency or
     instrumentality of the United States, the State of California or any
     political subdivision thereof; (iv) which contains gasoline, diesel fuel or
     other petroleum hydrocarbons; (v) which contains polychlorinated biphenyls,
     asbestos or urea formaldehyde foam insulation; or (vi) radon gas.

          (h) "Initial Term" is defined in Section 3.1.

          (i) "Landlord's Parties" shall mean Landlord's officers, directors,
     partners, members, employees, agents and contractors.

          (j) "Law" shall mean any constitution, statute, ordinance, regulation,
     rule, judicial decision, administrative order, or other requirement of any
     governmental entity.

          (k) "Liabilities" shall mean any and all liabilities, losses, claims,
     costs, expenses, damages, injuries, penalties, fines, judgments and court
     costs (including without limitation, attorneys' fees and costs whether or
     not suit is commenced or judgment is entered).

          (l) "Option Notice" is defined in Section 3.2.

          (m) "Option Rent" is defined in Section 3.2.

          (n) "Potential Default" is defined in Section 3.2.

          (o) "Property Taxes" is defined in Section 5.2.

          (p) "Security Deposit" is defined in Section 6.1.

          (q) "Tenant Delays" is defined in Section 3 of the Work Letter
     Agreement.

          (r) "Tenant's Expenses" is defined in Section 5.1.

          (s) "Tenant's Improvements" is defined in Section 1(a) of the Work
     Letter Agreement.

          (t) "Termination Date" is defined in Section 3.5.

          (u) "Termination Fee" is defined in Section 3.5.

          (v) "Termination Notice" is defined in Section 3.5.

          (w) "Trade Fixtures" is defined in Section 10.1.

<PAGE>

                                                                               6

                                   ARTICLE 2
                                USE OF PREMISES

     2.1 Permitted Uses. The Premises shall be used by Tenant or any subsidiary
or affiliate thereof (including, without limitation, Western Multiplex
Corporation) for general office and light assembly purposes and other legally
permitted uses incidental and ancillary thereto (including the use of
approximately 5,000 square feet on the first floor of the premises for
warehouse, shipping and receiving), or as otherwise approved by landlord in
writing (which consent shall not be unreasonably withheld or delayed) and for no
other purpose. Tenant shall insure that its use of the Premises complies with
Law and any covenants, conditions or restrictions applicable to the Premises.

     2.2 Prohibited Uses. i. Tenant shall not do or permit any act that is
likely to cause any structural damages to the Premises.

     (a) Tenant shall not operate or permit the operation of any equipment or
machinery on the Premises that is likely to (i) materially damage the Premises,
(ii) impair the efficient operation of the Premises' heating, ventilation, or
air conditioning system, (iii) block or otherwise impede the operation of the
Premises' sprinkler system, (iv) overload or otherwise place an undue strain on
the Premises' electrical and mechanical systems, or (v) damage, overload, or
corrode the Premises' sanitary sewer system.

     (b) Tenant shall not install or attach anything in the Premises in excess
of the load limits established for the Premises and disclosed to Tenant. Tenant
shall contain and dispose of all dust, fumes, or waste products generated by
Tenant's use of the Premises so as to avoid (i) unreasonable fire or health
hazards, (ii) damage to the Premises, and (iii) any violation of any Law.

     2.3 Compliance with Laws.

     (a) Except as may be approved by Landlord in advance and in writing, Tenant
shall not change the exterior of the Premises or install any equipment,
machinery, or antennas on or make any penetrations of the exterior or roof of
the Premises. If Tenant desires to install an antenna atop the Premises, Tenant
shall provide Landlord at least thirty (30) days' advance written notice of its
intention to install an antenna, together with detailed plans and specifications
therefor, and such installation shall require Landlord's approval, which shall
not be unreasonably withheld. Tenant shall, upon Landlord's request, execute an
agreement pertaining to the installation, maintenance, repair and removal
thereof in form and substance acceptable to Landlord. Tenant shall not commit
any waste in or around the Premises and shall keep the Premises in a neat,
clean, attractive and orderly condition, free of any nuisances. Tenant shall use
and maintain only standard window coverings, as approved by Landlord, to cover
all windows in the Premises. Tenant shall not conduct on any portion of the
Premises any sale of any kind, including but not limited to any public or
private auction, going out-of-business sale, distress sale, or other liquidation
sale.
<PAGE>

                                                                               7

     (b) As provided in Section 8.1, Landlord shall deliver the Premises in
compliance with all Laws, recorded covenants and restrictions and requirements
of any fire insurance or rating bureaus. Tenant shall use the Premises in
compliance with all Laws, recorded covenants and restrictions, and requirements
of any fire insurance underwriters or rating bureaus, now or later in effect.

                                   ARTICLE 3
                                   LEASE TERM

     3.1 Initial Term. The initial term of this Lease shall be for ten (10) (the
"Initial Term") commencing on the Commencement Date, unless sooner terminated
according to this Lease.

     3.2 Option to Extend. Tenant shall have the option to extend the term of
this Lease for one (1) period of five (5) years following the expiration of the
Initial Term (the "Extended Term") on all of the terms and conditions in this
Lease, except that during that Extended Term, Tenant shall not have the further
option to extend the term described in this Section and the Base Rent during the
Extended Term shall be equal to the monthly rent, including all escalations, at
which, as of the commencement date of the Extended Term, landlords are offering
for lease non-sublease, non-encumbered, non-equity space comparable in size and
location to the Premises for terms of five (5) years, as reasonably determined
by Landlord (the "Option Rent'); provided, however, that in no event shall the
Option Rent be less than the Base Rent, as escalated pursuant to the terms of
this Lease, due and payable during the last month of the Initial Term. To
exercise this option, Tenant must give Landlord written notice of exercise of
the option (the "Option Notice") no earlier than nine (9) months and no later
than six (6) months prior to the expiration of the Initial Term. However, if, as
of Landlord's receipt of the Option Notice, Tenant is in default under this
Lease, or has committed or failed to perform acts that with the giving of notice
or the lapse of time would constitute a default under this Lease (a "Potential
Default"), the Option Notice shall, at Landlord's election, be ineffective. If
after giving the Option Notice, Tenant is in default under this Lease, or if a
Potential Default has occurred, and that default or Potential Default remains
uncured as of the expiration of the Initial term, this Lease shall, at the
election of Landlord, terminate as of the expiration of the Initial Term. Tenant
shall have no right to extend the term of this Lease beyond the additional term
set forth above.

     3.3 Delivery of Premises. If Landlord fails to deliver possession of the
Premises to tenant by the Commencement Date, Landlord shall not be liable for
any damages resulting from that failure, nor shall that failure cause a
termination of this Lease or Tenant's obligations under this Lease, nor shall
that failure extend the term of this Lease; provided, however, that if Landlord
does not deliver the Premises on or before November 1, 1996, and such delay is
not due to any Tenant Delay, as defined in the work letter agreement attached
hereto as Exhibit B or other cause beyond Landlord's control (and, for this
purpose, failure by Tenant to execute and deliver to Landlord this Lease on or
before July 8, 1996, shall be deemed a Tenant Delay), then Tenant may terminate
this Lease.
<PAGE>

                                                                               8

     3.4 Surrender of the Premises.

     (a) Condition upon Surrender. Upon the expiration or earlier termination of
this Lease, Tenant shall surrender the Premises to Landlord broom clean, with
all equipment in good operating condition and with the Premises in its condition
existing as of the date hereof, ordinary wear and tear excepted. The phrase
"ordinary wear and tear" means wear which manifests itself solely through the
passage of time and ordinary use. Items which are not deemed "ordinary wear and
tear" shall include, but not be limited to, the following items, which items
shall be Tenant's obligation to repair or correct (i) material damage to or
defacement of portions of any walls, partitions, woodwork, plaster or surface
finishes or any other portion of the Premises from any cause (including, without
limitation, from nails or screws); (ii) material damage to the flooring
(including stains, marks or soiling); (iii) material damage to the Premises from
any cause except for any casualty not caused by Tenant or Tenant's agents; and
(iv) any other materially damaged or non-functioning improvements within the
Premises, such as light fixtures, electrical outlets, telephone jacks, door
knobs and ceiling panels.

     (b) Removal of Alterations. Tenant shall remove from the Premises all of
Tenant's Alterations and Trade Fixtures required to be removed pursuant to this
Lease and all Tenant's personal property, and shall repair any damage and
perform any restoration work caused by such removal. If Tenant is then in
default, then notwithstanding any other provision of this Lease and/or the terms
of any other previous notice given by Landlord to Tenant, Tenant shall only
remove such Alterations, Trade Fixtures and Tenant's personal property as are
specified in a written notice from Landlord to Tenant. If Tenant fails to remove
such Alterations, Trade Fixtures and Tenant's personal property on or before the
termination of this Lease (or on any such earlier date that Tenant abandons or
surrenders the Premises), Landlord may retain such property and, at Landlord's
option, (i) apply it toward the satisfaction of Tenant's obligations under this
Lease pursuant to Landlord's security interest in such property as set forth in
this Lease, and all rights of Tenant with respect to such property shall cease,
or (ii) place all or any portion of such property in public storage for Tenant's
account. Tenant shall be liable to Landlord for costs of removal of any such
Alterations and Tenant's personal property and storage and transportation costs
of same, and the cost of repairing and restoring the Premises, together with
interest at the rate of ten percent (10%) per annum from the date of expenditure
by Landlord.

     (c) Indemnification of Landlord. If the Premises are not surrendered to
Landlord in accordance with the terms of this Section, then Tenant shall
indemnify, defend and hold harmless Landlord and Landlord's Parties against all
Liabilities resulting from Tenant's default and/or delay in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs.

     3.5 Early Termination. At the end of the eighty-fourth (84th) month of the
Initial Term (the "Termination Date"), Tenant may elect to cancel the Lease
provided that Tenant delivers at least six (6) months' prior written notice
thereof to Landlord (the "Termination Notice"), which Termination Notice if so
given shall be conditionally effective as of the
<PAGE>

                                                                               9

Termination Date; provided, however, that Tenant shall pay Landlord a
termination fee (the "Termination Fee") equal to the following: (a) the amount
of the Basic Allowance and the Additional Allowance that has not yet been
amortized as of the Termination Date; and (b) the amount of leasing commissions
incurred by Landlord in connection with this Lease that has not yet been
amortized as of the Termination Date. Tenant acknowledges that if Tenant so
elects to terminate this Lease pursuant to this Section, Landlord will suffer
damages due to the fact that Landlord will have incurred expenses based on the
full term of this Lease and Landlord will lose the benefit of the rentals
provided for the balance of the Initial Term. The Termination Fee shall
constitute compensation for such damages and payment for Tenant's privilege of
terminating the Lease. The Termination Fee shall be made by certified or
cashier's check and delivered to Landlord with the Termination Notice, and the
Termination Notice shall be of no force or effect unless it is accompanied by
the Termination Fee.

                                   ARTICLE 4
                                   BASE RENT

     4.1 Base Rent. Commencing on the Commencement Date and continuing
thereafter; on the first day of each month until the end of the terms of this
Lease, Tenant shall pay to Landlord, in advance, base rent in the amount set
forth below for the following periods (the "Base Rent"), all without offset or
reduction, except as otherwise provided herein. Tenant shall pay Landlord, upon
execution of this Lease, an amount equal to Ninety-One Thousand Four Hundred
Eighteen Dollars ($91,418.00), representing the Base Rent for the first month of
the Lease Term and the Security Deposit.

<TABLE>
<CAPTION>
       Period (Lease Years)                         Base Rent (Monthly)
       --------------------                         -------------------
<S>           <C>                                        <C>
              0-5                                        $45,709.00
              6-10                                       $52,565.35
</TABLE>

     Rent shall be payable in lawful money of the United States to Landlord at
the address stated in this Lease or to any other address that Landlord may
designate from time to time.

     4.2 Additional Rent. In the event that Landlord contributes the Additional
Allowance pursuant to Section 2(b) of the work Letter Agreement, then Tenant
shall repay the Additional Allowance in monthly installments together with the
Base Rent. Such payments shall be calculated as set forth in Section 2(b) of the
Work Letter Agreement and shall be deemed "additional rent" for purposes of this
Lease.

                                   ARTICLE 5
                                   TENANT'S

     5.1 Tenant's Expenses. Tenant shall promptly pay, as additional rent, as
they become due, all charges for water, gas, heat, light, power, telephone,
garbage and trash removal and other utilities and services supplied to the
Premises (including but not limited to any
<PAGE>

                                                                              10

connection or hook-up fees beyond building standard connections and hookups for
water, sewer and electricity, and any penalties for discontinued or interrupted
service), together with any taxes thereon, and all other reasonable costs
incurred in connection with the operation, management, maintenance and repair of
the Premises ("Tenant's Expenses"). Tenant's Expenses shall include, limitation,
the following:

          (a) all costs and expenses for the following (which may be subject to
     amortization in accordance with Section 8.2): (i) the maintenance, repair,
     operation, and replacement of the Premises' hearing, ventilation or air
     conditioning systems; (ii) the maintenance, repair, cleaning, resurfacing
     or painting, as appropriate, of the premises's roof and walls; (iii) the
     maintenance of all landscaping in the Premise, including the maintenance of
     irrigation systems, the re-planting (as necessary) and maintenance of
     shrubs, trees, flowering plants, and ground cover; (iv) the compliance with
     all Laws enacted or implemented after the Commencement Date; (v) the
     installation, repair, and maintenance of all light fixtures and signs
     located in the Premises; (vi) the provision of security to the Premises;
     (vii) the maintenance, repair, cleaning, painting, and resurfacing of all
     parking areas, roadways, sidewalks, walkways, driveways, striping, fences,
     and gates contained in the Premises; (viii) the maintenance and repair of
     all the prevention and detection systems, including smoke detectors and
     sprinkler systems; and

          (b) Property Taxes as described in Section 5.2;

          (c) the cost of any insurance maintained by Landlord with respect to
     the premises;

          (d) the amount of any uninsured loss resulting from damage to the
     Premises (unless uninsured due to Landlord's failure to maintain insurance
     as required by this Lease); and

          (e) a management/administrative fee equal to Five Hundred Dollars
     ($500.00) per month.

Commencing with the Commencement Date, Tenant shall pay an amount reasonably
estimated by Landlord to be sufficient to pay Tenant's Expenses on a monthly
basis. The foregoing estimated monthly payment may be adjusted by Landlord at
the end of any calendar quarter, on the basis of Landlord's experience and
anticipated costs. Within one hundred twenty (120) days following the end of the
calendar year during the term, Landlord shall endeavor to give Tenant a
statement showing the total of Tenant's Expenses incurred for the prior calendar
year. The first and last such statements during the term shall be prorated from
the Commencement Date and the expiration of the Term or earlier termination of
this Lease. In the event the total of the monthly payments which Tenant has made
for the prior calendar year shall be less than the actual amount of Tenant's
Expenses incurred, then Tenant shall pay the difference to Landlord within
thirty (30) days after receipt of such statement from Landlord. In the event the
total of the monthly payments which Tenant has made for the prior calendar year
shall be more than the actual Tenant's Expenses, then Tenant shall be entitled
to a credit in the amount of such excess against
<PAGE>

                                                                              11

Tenant's monthly payment of Tenant's expenses next coming due during this Lease,
and the monthly amount to be paid by Tenant for the ensuing year for Tenant's
Expenses will be proportionately adjusted based on the prior year's actual
expenses and reasonable projections for the ensuing year.

     5.2 Definition of Property Taxes. As used in this Lease, the term "Property
Taxes" shall mean any and all taxes, assessments, levies, and other charges of
any kind, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments, and any increases resulting from reassessments
made in connection with a change in ownership, new construction, or any other
cause), now or later imposed by any governmental or quasi-governmental authority
or special district having the power to tax or levy assessments, which are
levied or assessed against or with respect to the value of all or any portion of
the Premises (as now constructed or as may at any later time be constructed,
altered, or otherwise changed) or Landlord's interest in the Premises, the
fixtures, equipment, and other property of Landlord, real or personal, that are
part of and located on the Premises. If at any time during the term of this
Lease, the method of taxation or assessment of the Premises prevailing as of the
Commencement Date is altered so that in lieu of or in addition to any Property
Tax described above there shall be levied, assessed, or imposed by governmental
authority (whether because 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 (a) on the value, use, or occupancy of the Premises or Landlord's
interest in the Premises, or (b) on or measured by the gross receipts, income or
rentals from the Premises, then any tax or charge, however designated, shall be
included within the meaning of the term Property Taxes for purposes of this
Lease. However, the term 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 6
                                SECURITY DEPOSIT

     6.1 Security Deposit. Tenant agrees to deposit with Landlord on the date of
this Lease the sum of Forty-Five Thousand Seven Hundred Nine Dollars ($45,709)
(the "Security Deposit"), which shall be held by Landlord, without interest, as
security for the performance of Tenant's covenants and obligations under this
Lease, it being expressly understood and agreed that the deposit is not an
advance rental deposit or a measure of the Landlord's damages in case or
Tenant's default. Upon the occurrence of any Event of Default by Tenant,
Landlord may, from time to time and without prejudice to any other remedy
provided by this Lease or by law, use and apply the Security Deposit to any
arrears of rent or other payments, damages or liability caused by the Event of
Default. Tenant shall pay to landlord on demand the amount that was applied in
order to restore the Security Deposit to the amount then required under this
Lease. Although the Security Deposit shall be deemed the property of Landlord,
any remaining balance of the Security Deposit shall promptly be returned by
Landlord to Tenant at the time after termination of this Lease that all of
Tenant's obligations under this Lease have been fulfilled. Landlord shall not be
required to keep the Security Deposit separate from the general accounts of
Landlord.
<PAGE>

                                                                              12

                                   ARTICLE 7
                              HAZARDOUS SUBSTANCES

     7.1 Compliance with Law. Tenant agrees that any and all handling,
transportation, storage, treatment, disposal, or use of Hazardous Substances in
or about the Premises by Tenant, its employees, agents, contractors, invitees
and any others controlled by Tenant or for whom Tenant is otherwise responsible
shall comply with all applicable Environmental Laws.

     7.2 Tenant's Indemnification. Tenant agrees to indemnify, defend and hold
harmless Landlord from any Liabilities, remediation costs, investigation costs,
or other expenses resulting from or arising from or arising out of the use,
storage, treatment, transportation, release, or disposal of Hazardous Substances
in, on, under or about the Premises.

     7.3 Tenant's Responsibilities. Tenant shall comply with all Environmental
Laws in connection with its use of the Premises. If any Hazardous Substances
come to be located on or about the Premises or any other property or any water
or soil on, around, about, or beneath the Premises or any other property, Tenant
shall promptly take all action necessary to investigate, remove and remedy that
contamination to the extent required by the governmental authority enforcing the
Environmental Laws.

     7.4 Notification of Hazardous Substances. Tenant agrees to promptly notify
Landlord of any communication received from any governmental entity concerning
Hazardous Substances or the violation of Environmental Laws that relate to the
Premises.

     7.5 Handling of Hazardous Substances. Tenant shall not use, handle, store,
transport, generate, release, or dispose of any Hazardous Substances in, on,
under or about the Premises, except that Tenant may use small quantities of
common chemicals which are common office products such as office copier toner
and cleaning fluids in order to conduct business at the Premises, which shall be
stored and used safely and in compliance with all Laws. At any time during the
term of this Lease, Tenant shall within ten (10) days after written request from
Landlord, disclose in writing all Hazardous Substances other than those
permitted above in this Section 7.5 that are being used by Tenant on the
Premises, the nature of the use, and the manner of storage and disposal.

     7.6 Testing by Landlord. At any time and upon prior written notice to
Tenant, Landlord may require testing wells or other apparatus to be placed or
drilled on the Premises and may require the ground water to be tested to detect
the presence of Hazardous Substances by the use of any tests that are then
customarily used for those purposes. The reasonable cost of these tests and of
the installation, maintenance, repair, and replacement of the wells shall be
paid by the Tenant if the tests disclose the existence of facts that give rise
to liability of Tenant with respect to Hazardous Substances pursuant to this
Article.
<PAGE>

                                                                              13

                                   ARTICLE 8
                             REPAIRS AND MAINTENANCE

     8.1 Landlord's Responsibilities. Landlord shall deliver the Premises at the
commencement of this Lease in compliance with all applicable laws (including
then applicable building codes), including the then applicable provisions of
Title III of the Americans with Disabilities Act, and Tenant shall be
responsible for any compliance necessitated by Tenant's Use, Tenant's
Improvements, and any changes in Tenant's use and any subsequent improvements,
installations or alterations made by or for Tenant. Landlord shall have no
responsibility for any repair and maintenance costs in connection with the
Premises. Tenant expressly waives the benefits of any statute now or later in
effect that would otherwise give Tenant the right to make repairs at Landlord's
expense and deduct that cost from rent owing to Landlord. Landlord warrants that
the roof, exterior walls, structural support elements, and utility systems shall
be in good working order and repair at the Commencement Date, and Landlord shall
enforce for Tenant's benefit all warranties received by Landlord in connection
with the construction and/or installation thereof. Further, and notwithstanding
anything to the contrary set forth in this Lease, Landlord shall maintain and
repair the foundation, the structural portions of the exterior walls and the
structural components of the roof (provided that, as respects the roof, it shall
be Tenant's responsibility to maintain the roof membrane to guard against and
prevent leakage and deterioration). Landlord's maintenance and repair
obligations pursuant to this Section 8.1 shall include those that are
necessitated by the enactment of a new Law, unless such obligations arise from
or are triggered by one of the conditions set forth in Section 9.5.

     8.2 Tenant's Responsibilities. Subject to the provisions of Section 8.1,
Tenant shall maintain in good order, condition, and repair and replace when
necessary each and every portion of the Premises including, without limitation,
the following: (a) all plumbing and sewage facilities in the Premises, including
but not limited to all plumbing fixtures, pipes, fittings, or other parts of the
plumbing system in the Premises; (b) all fixtures, interior walls, floors,
carpets, draperies, window coverings, and ceilings in the Premises; (c) the
non-structural components of the roof (including the roof membrane in a
water-tight condition) and exterior of the Premises; (d) all windows, doors,
entrances, and plate glass in the Premises; (e) all electrical facilities and
all equipment in the Premises, including all light fixtures, lamps, bulbs,
tubes, fans, vents, exhaust equipment, and systems; and (f) all heating, air
condition, ventilation or other equipment or utility facilities serving the
Premises, keeping them in good condition through regular inspection and
servicing; (g) any fire detection or extinguisher equipment in the Premises. If
Tenant properly repairs and maintains said systems and facilities (including
those items set forth in section 5.1(a)), but due to ordinary wear and tear or
the enactment of a new Law, subsequent to the Commencement Date but on or before
the expiration of this Lease, such system and/or facility (which shall include
those items set forth in Section 5.1(a)) must be replaced to keep it in good
working order and in compliance with such new Law, and the cost thereof would
exceed $7,500 for such item and otherwise be characterized as a capital
expenditure as determined in accordance with generally accepted accounting
principles, then Landlord shall pay for such item and the cost thereof shall be
amortized over its useful life as reasonably determined by Landlord with the
annual amount to amortized payable by Tenant during the term of this Lease as
part of Tenant's Expenses under Section 5.1.
<PAGE>

                                                                              14

     8.3 HVAC; Windows. Tenant shall maintain continuously throughout the term
of the lease a service contract for the maintenance of all hearing, air
conditioning, and ventilation equipment with a licensed repair and maintenance
contractor approved by Landlord, the contract shall provide for periodic
inspections and servicing of the hearing, air conditioning, and ventilation
equipment at least once every ninety (90) days during the term of the Lease.
Tenant will use its best efforts to cause its maintenance contractor to provide
to Tenant and Landlord a written inspection/service report describing the
condition of the equipment and any service or repair recommendations within
fifteen (15) days after each inspection. If Landlord reasonably suspects that
facilities are not being maintained, Landlord may elect at any time during the
term of the Lease to assume responsibility at Tenant's expense for the
maintenance, repair, and replacement of the heating, air conditioning, and
ventilation equipment that serves the Premises.

     Tenant shall maintain continuously throughout the term of the Lease a
service contract for the washing of all windows, both interior and exterior
surfaces, at the Premises at commercially reasonable times.

     8.4 Standards for Repairs. All repairs and replacements required of Tenant
shall be promptly made with new materials of like kind and qualify. If the work
affects the mechanical or structural parts or exterior appearances of the
Premises or if the estimated cost of any item of repair or replacement is in
excess of Five Thousand Dollars ($5,000), Tenant shall first obtain Landlord's
written approval of the scope of the work, the plans for the work, the materials
to be used, and the contractor hired to perform the work. Upon completion of any
work performed by or for Tenant, Tenant shall deliver as-built plans to
Landlord.

     8.5 Tenant's Failure to Perform. If Tenant fails to perform Tenant's
obligations under this Section or under any other section of this Lease, and
does not commence performance five (5) days' after written notice to Tenant and
thereafter diligently and continuously prosecute such cure to completion, in any
case completing such cure within the cure period specified in Section 16.1(b),
except in an emergency when no notice shall be required, Landlord may, in
addition and without prejudice any other of Landlord's rights or remedies, enter
the Premises, perform the obligations on Tenant's behalf, and recover the
reasonable cost of performance, together with interest at the maximum rate then
allowed by law, as additional rent payable by Tenant with the next installment
of Base Rent.

                                   ARTICLE 9
                                  ALTERATIONS

     9.1 Landlord's Consent. Tenant shall not construct any alterations,
improvements, or additions or otherwise alter the Premises (collectively,
"Alternations") without Landlord's prior written consent; provided, however,
that Tenant shall be entitled, without Landlord's prior consent, to make
Alterations (i) that do not affect the structural or mechanical components or
systems, the exterior sections, or water-tight nature of the Premises, and (ii)
the reasonably estimated cost of which does not exceed Twenty-Five Thousand
Dollars ($25,000). If Landlord's approval for any Alterations is required.
Tenant shall not undertake the Alterations
<PAGE>

                                                                              15

until Landlord has given written consent to the plans and specifications, and
the Alterations shall be constructed in compliance with plans and specifications
approved by a licensed contractor and by Landlord. All Alterations shall be
constructed by a licensed contractor in accordance with all Laws using new
material of good quality. Upon completion of any work performed by or for
Tenant, Tenant shall deliver as-built plans to Landlord.

     9.2 Requirements for Commencement of Alterations. Tenant shall not commence
construction of any Alterations until: (a) all required governmental approvals
and permits have been obtained, (b) all requirements regarding insurance imposed
by this Lease have been satisfied, and (c) Tenant has given Landlord at least
ten (10) days' prior written notice of Tenant's intention to commence
construction.

     9.3 Payment for Alterations. Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished in connection
with the Alterations that are or may become mechanics' or materialmen's liens
against the Premises or any interest therein. Tenant shall have the right to, in
good faith, contest the validity of any lien, claim, or demand, provided that
Tenant shall, at Tenant's sole expense, defend Landlord against the lien, claim,
or demand, and, upon the request of Landlord, Tenant shall furnish to Landlord a
surety bond or other commercially reasonable assurance reasonably acceptable to
Landlord, in an amount equal to the contested lien, claim, or demand
indemnifying Landlord against liability and holding the Premises free from the
effect of the lien, claim, or demand. In addition, Landlord may require Tenant
to pay Landlord's attorneys' fees and costs in connection with the defense of
any lien, claim, or demand. Tenant shall pay and satisfy any adverse judgment
that may be rendered to enforce the lien, claim, or demand against the Landlord
or the Premises.

     9.4 Ownership of Alterations. All Alterations shall be and remain the
property of Tenant during the term of this Lease but shall not be altered or
removed from the Premises. At the expiration or sooner termination of the term
of this Lease, all Alterations shall become the property of Landlord, and
Landlord shall have no obligation to reimburse Tenant for any portion of the
value or cost. Notwithstanding the foregoing, if Tenant gives notice to Landlord
gives notice to Landlord at the time of the installation of a custom trade
fixture that Tenant desires to remove such fixture at the end of the term, then
Tenant shall be permitted to remove such fixture provided that it can and does
so without damage to the Premises, and, in any event, repairs any damage
occasioned by the installation or removal of such fixture and restores the
Premises to its condition existing prior to such installation. However, Landlord
shall have the right to require Tenant to remove any Alterations; in that case,
Tenant shall remove the Alterations prior to the expiration or sooner
termination of the term of this Lease. Notwithstanding the foregoing, Tenant
shall not be obligated to remove any Alterations with respect to which (a)
Tenant was required or selected to obtain the consent of Landlord; (b) at the
time Tenant requested the consent of Landlord, Tenant requested that Landlord
inform Tenant of whether Landlord would require Tenant to remove the Alteration
at the expiration of the term of this Lease; and (c) at the time Landlord
granted consent, Landlord notified Tenant that Landlord would not require the
removal of the Alteration at the expiration of the term of this Lease.
<PAGE>

                                                                              16

     9.5 Required Alterations. Except as provided in Section 8.1, Tenant shall
make all alterations, additions, or charges of any sort to the Premises that are
required by any Law and result from: (a) Tenant's use or change of use of the
Premises; (b) Tenant's application for any permit or governmental approval; or
(c) Tenant's construction or installation of any Alterations.

                                  ARTICLE 10
                                TRADE FIXTURES

     10.1 Tenant's Trade Fixtures. Tenant shall have the right, at any time and
from time to time during the Term and any renewal or extension, at Tenant's sole
cost and expense, to install and affix in, to, or on the Premises items for use
in Tenant's trade or business that Tenant, in Tenant's reasonable discretion,
deems advisable (collectively, "Trade Fixtures"). Trade Fixtures or any other
equipment installed in the Premises by Tenant shall remain the property of
Tenant and may be removed at the expiration of the Term or any extension,
provided that any damage to the Premises caused by the removal of Trade Fixtures
or equipment shall be repaired by Tenant, and further provided that Landlord
shall have the right to keep any Trade Fixtures or equipment that Tenant
otherwise elects to abandon.

     10.2 Abandonment of Trade Fixtures. Any Trade Fixtures that are not removed
from the Premises by Tenant within thirty (30) days after the Termination Date
shall be deemed abandoned by Tenant and shall automatically become the property
of Landlord as the owner of the real property to which they are affixed and not
due to the lien provided to Landlord in Section 10.2.

                                  ARTICLE 11
                                   INSURANCE

     11.1 Tenant's Insurance. Tenant shall, Tenant's expense, obtain and keep in
force during the term of this Lease:

          (a) Commercial general liability insurance, including property damage,
     against liability for bodily injury, personal injury, death, and damage to
     property occurring on the Premises with combined single limit coverage of
     at least Two Million Dollars ($2,000,000) per occurrence and a general
     aggregate combined single limit of bodily injury and property damage
     liability of at least Five Million Dollars ($5,000,000); that policy shall
     include contractual liability, insuring Tenant's performance of
     indemnification obligations contained in this Lease; and

          (b) Fire and all risk property damage insurance, insuring any
     Alterations and all of Tenant's equipment and Trade Fixtures located on the
     Premises for full replacement cost.

          (c) Where applicable, each policy of insurance required to be carried
     by Tenant pursuant to this Section: (i) shall name Landlord and any other
     parties in interest
<PAGE>

                                                                              17

     that Landlord reasonably designates as additional insureds; (ii) shall be
     primary insurance that provides that the insurer shall be liable for the
     full amount of the loss 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 the policy shall not be subject to
     cancellation, lapse, or change, except after at least thirty (30) days'
     prior written notice to Landlord; (vi) shall not have a deductible in
     excess of any amount reasonably approved by Landlord; (vii) shall contain a
     cross liability endorsement; and (viii) shall contain a severability
     clause.

          (d) If Tenant has in full force a blanket policy of liability
     insurance with the same coverage for the Premises as described in this
     Section, that blanket insurance shall satisfy the requirements of this
     Section, provided that the blanket policy specifically states the address
     of the Premises as being covered with at least the policy amounts specified
     herein for that location. A copy of each policy evidencing the insurance
     required to be carried by Tenant pursuant to this Section or a certificate
     of the insurer, certifying that the policy has been issued, which provides
     the coverage required by this Section and which contains the specified
     provisions, shall be delivered to Landlord prior to the time Tenant takes
     possession of the Premises and upon renewal of those policies, not less
     than thirty (30) days prior to the expiration of the term of the coverage.

     11.1.2 Landlord's Insurance. Landlord shall maintain fire and all-risk
property damage insurance, with extended coverage and a commercially reasonable
deductible, in the amount of the full replacement cost of the Premises.
Landlord's insurance shall not be required to cover the property which Tenant is
obligated to insure hereunder. Landlord shall provide Tenant with a certificate
of insurance evidencing such coverage on an annual basis. Landlord's insurance
will include provision for notice to Tenant of any cancellation, non-renewal
and/or material reduction of coverage.

     11.2 Tenant's Payment of Increases. Tenant shall pay any increase in
Landlord's property insurance over the amount of the premium immediately prior
to the commencement of the Term that is attributed by Landlord's insurance
carrier to the nature of Tenant's occupancy or any act or omission of Tenant.

     11.3 Waiver of Subrogation. Tenant and Landlord each release the other and
waive the entire right of recovery against the other for any damage or liability
arising out of or incident to the perils insured against, whether due to the
negligence of Landlord, Tenant, or their respective employees, agents,
contractors, and invitees. Prior to obtaining the required policies of
insurance, Tenant and Landlord shall notify their respective insurance carriers
that the previous waiver of subrogation is in this Lease.

                                  ARTICLE 12
                             DAMAGE AND DESTRUCTION

     12.1 Uninsured Casualty. If the Premises are destroyed or damaged to the
extent of twenty percent (20%) or more of the then full replacement cost from a
cause not
<PAGE>

                                                                              18

required to be insured against under either Landlord's or Tenant's casualty
insurance policy, Landlord shall have the right to terminate this Lease by
giving written notice of termination to Tenant within thirty (30) days after the
date of the damage or destruction, in which case this Lease shall terminate as
of the receipt by Tenant of Landlord's notice. If the Lease is not so
terminated, then Landlord shall diligently proceed to repair and restore the
Premises; provided that if Landlord undertakes such repair and restoration but
fails to substantially complete same within 150 days after the date of damage or
destruction, then Tenant shall have the right to terminate this Lease by written
notice to Landlord given within thirty (30) days of the expiration of such
150-day period.

     12.2 Insured Casualty. If the Premises are destroyed or damaged to the
extent of twenty percent (20%) or more of the then full replacement cost from a
cause covered by either Tenant's or Landlord's casualty insurance, and that
damage or destruction may be repaired or restored within ninety (90) days after
commencement of repair or restoration, then Landlord shall proceed to repair and
restore the Premises. If Landlord reasonably determines that the Premises cannot
be repaired or restored within that period, then Landlord shall have the right
to terminate this Lease by written notice to Tenant given within thirty (30)
days after the date of damage or destruction; Tenant's obligation to pay rent
and other charges under this Lease shall terminate as of the date of the receipt
by Tenant of Landlord's notice.

     12.3 Substantial Damage. If the Premises are damaged to the extent of fifty
percent (50%) or more of its replacement cost, and a contractor mutually
agreeable to Landlord and Tenant determines that the Premises cannot be repaired
or restored within 180 days after commencement of repair or restoration, then
Landlord or Tenant may elect to terminate this Lease by written notice to the
other given within thirty (30) days after the date of such determination, in
which case this Lease shall terminate as of the receipt of such notice.

     12.4 Abatement of Base Rent. If, in any case that is the subject of this
Article 12, the Premises or any portion of the Premises is rendered unfit for
use and occupancy and this Lease is not terminated as provided above, a just
proportion of the Base Rent, in light of the nature and extent of the damage,
shall be abated until the Premises are restored by Landlord as provided above,
excluding any fixtures or items installed or paid for by Tenant that Tenant is
entitled or required to remove under this Lease.

     12.5 No Right of Offset. Except as expressly provided in this Lease, damage
to or destruction of the Premises shall not terminate this Lease or result in
any abatement of rentals. Tenant waives any right of offset against Tenant's
rental obligations that may be provided by any statute or rule of law in
connection with Landlord's duties of repair and restoration under the provisions
of this Lease.

     12.6 Tenant's Leasehold Improvements. Landlord shall not be responsible for
any loss, damage, or destruction to Tenant's leasehold improvements or to
fixtures, inventory, or other Tenant-owned improvements or property, unless
caused solely by the negligence or willful misconduct of Landlord.
<PAGE>

                                                                              19

                                   ARTICLE 13
                                  CONDEMNATION

     13.1 Condemnation. If any part of the Premises is condemned or otherwise
taken under the power of eminent domain or conveyed in lieu of condemnation, and
the condemnation or taking materially and adversely affects Tenant's occupancy
of the Premises, either party shall, at each party's option, have the right to
terminate this Lease; provided that Landlord shall not exercise such option to
terminate this Lease unless the taking or conveyance in lieu of condemnation
affects at least twenty percent (20%) of the value or area of the Premises. In
either event, except as set forth below in this paragraph, Landlord shall
receive any award that may be paid in connection with any condemnation or
taking, and Tenant shall have no claim or interest in any award, whether or not
the award or any part of it is attributable to the value of the unexpired term
of this Lease. If a part of the Premises is condemned or taken, and neither
party elects to terminate this Lease, but the Premises have been damaged as a
consequence, Landlord shall not be required to repair or restore any damage to
the Premises, provided that the Base Rent for the remainder of the term of this
Lease shall be proportionately reduced, based on the degree of interference with
Tenant's use of the Premises. If the Premises is temporarily condemned or taken,
this Lease shall be unaffected, and Tenant shall continue to pay all rent
payable under this Lease; provided, however, that in such case, Tenant shall be
entitled to receive that portion of any award that represents compensation for
its use or occupancy of the Premises. Notwithstanding anything to the contrary
set forth hereinabove, Tenant shall have the right to pursue a separate claim
for the diminution of the value of its leasehold estate so long as it can do so
without interfering or reducing any condemnation claim by Landlord.

                                  ARTICLE 14
                           ASSIGNMENT AND SUBLETTING

     14.1 Landlord's Consent. The terms and conditions in this Lease were
offered solely to Tenant as an inducement to lease the Premises for its use or
the use by any of its subsidiaries or affiliates, as permitted under the terms
of Section 2.1. Landlord would not necessarily lease the Premises to another
tenant on such favorable terms and conditions, it being understood that Landlord
is specifically relying on the identity of Tenant in agreeing to the terms and
conditions in this Lease. Tenant acknowledges that the lease terms and
conditions are for Tenant's benefit only so long as Tenant, or any of its
subsidiaries or affiliates, operates the business allowed by this Lease, and
that Tenant is not entering into this Lease for any other purpose, such as the
recognition of a leasehold value that it could later sell. It is understood and
agreed that any value, upon the early termination of Tenant's occupancy of the
Premises, shall revert to Landlord, either by termination of this Lease or as a
condition of assignment or subletting, as provided in this Section. But for
these reasons, Landlord would not enter into this Lease. Therefore, Tenant shall
not voluntarily, involuntarily, or by operation of laws, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld or
delayed, (a) 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; (b) assign Tenant's
interest in this Lease; (c) mortgage or encumber the Lease, or otherwise use the
Lease as a security device in any manner; or (d) amend or modify an assignment,
sublease, or other transfer that has been previously approved by Landlord.
<PAGE>

                                                                              20

Notwithstanding the foregoing, Tenant may without the consent of Landlord, but
following at least fifteen (15) days advance written notice, assign this Lease
to a subsidiary of Tenant or affiliate under common ownership with Tenant
provided, however, that (x) no such assignment shall result in Tenant being
released or discharged from any obligation or liability under this Lease, (y)
the proposed Assignee agrees in writing to be bound by all of the terms and
conditions of this Lease in an instrument reasonably acceptable to Landlord, and
(z) the use proposed by the proposed Assignee is a permitted use under this
Lease.

     Any action taken or proposed to be taken pursuant to this Section shall be
collectively referred to as an "Assignment," and any third party succeeding to
all or a portion of Tenant's interest under this Lease or proposed to succeed to
all or a portion of Tenant's interest under this Lease shall be referred to as
an Assignee.

     14.2 Landlord's Costs. Tenant shall pay to Landlord, as additional rent,
all reasonable costs and attorney fees incurred by Landlord in connection with
the evaluation, processing, or documentation of any requested Assignment,
whether or not Landlord's consent is granted. Landlord's reasonable costs shall
include the reasonable cost of any review or investigation performed by Landlord
or consultant acting on behalf of Landlord of (a) any Hazardous Substances used,
stored, released, or disposed of by the proposed Assignee, or (b) violations of
any Environmental Law by the Tenant or the proposed Assignee.

     14.3 Evidence of Assignment. Any Assignment approved by Landlord shall not
be effective until Tenant has delivered to Landlord an executed counterpart of
the document evidencing the Assignment that (a) is in form and substance
reasonably satisfactory to Landlord, and (b) contains the same terms and
conditions as stated in Tenant's notice given to Landlord pursuant to this
Section.

     14.4 Effect of Tenant's Assignment. Except as otherwise expressly permitted
hereby, any attempted Assignment without Landlord's consent shall constitute an
Event of Default and shall be voidable at Landlord's option. Landlord's consent
to any one Assignment shall not constitute a waiver of the provisions of this
Article as to any subsequent Assignment or a consent to any subsequent
Assignment. No Assignment, even with the consent of Landlord, shall relieve
Tenant of the obligation to pay the rent and to perform all of the other
obligations to be performed by Tenant. 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 Assignment.

     14.5 Procedure to Assign. Except as otherwise expressly permitted hereby,
at least sixty (60) days before a proposed Assignment is to become effective,
Tenant shall give Landlord written notice of the proposed terms of the
Assignment and request Landlord's approval, which notice shall include the
following: (a) the name and legal composition of the Assignee; (b) a current
financial statement of the Assignee, financial statements of the Assignee
covering the preceding three (3) years, if they exist, and, if available, an
audited financial statement of the Assignee for a period ending not more than
one (1) year prior to the proposed effective date of the Assignment, all of
which are to be prepared in accordance with generally
<PAGE>

                                                                              21

accepted accounting principles; (c) the nature of the Assignee's business to be
carried on in the Premises; (d) a statement of all consideration to be given on
account of the Assignment; and (e) any other information that Landlord requests.

     14.6 Conditions to Landlord's Consent. Landlord's consent to a requested
Assignment shall not be unreasonably withheld, and shall be subject to the
payment to Landlord of one-half of all consideration paid or to be paid or to be
paid by the Assignee which exceeds the rent payable by Tenant under this Lease.

     14.7 Landlord's Discretion. EXCEPT AS OTHERWISE EXPRESSLY PERMITTED HEREIN,
ANY ASSIGNMENT, SUBLETTING, OCCUPANCY, OR USE WITHOUT THE PRIOR WRITTEN CONSENT
OF LANDLORD, SHALL BE VOID AND SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS
LEASE. TENANT SPECIFICALLY UNDERSTANDS AND AGREES THAT AT ANY TIME AN EVENT OF
DEFAULT OCCURS AND IS CONTINUING, TENANT SHALL HAVE NO RIGHT TO ASSIGN TENANT'S
INTEREST IN THIS LEASE, AND LANDLORD SHALL HAVE NO OBLIGATION TO GIVE LANDLORD'S
APPROVAL UNDER THIS ARTICLE IF TENANT ATTEMPTS AN ASSIGNMENT OR SUBLETTING WHILE
IN DEFAULT.

     14.8 Tenant Remains Liable. If an Event of Default occurs and is
continuing, Landlord may proceed directly against Tenant, any Assignee, any
guarantors or any other party responsible for the performance of this Lease,
without first exhausting Landlord's remedies against any other party responsible
to Landlord, or resorting to any security held by Landlord.

     14.9 Attornment. If an Event of Default occurs and is continuing, Landlord
may require any subtenant to attorn to Landlord, in which event Landlord shall
undertake the obligations of Tenant under any sublease, provided, however, that
Landlord shall not be liable for any amounts paid by the subtenant to Tenant or
for any defaults by Tenant under the sublease.

     14.10 Binding on Assignee. Every provision of this Article shall be binding
on any Assignee as if that Assignee were the tenant under this Lease.

     14.11 No Further Assignment. No Assignee shall further assign or sublet the
Premises without Landlord's prior written consent.

     14.12 Effect of Assignment on Default. Landlord's consent to any Assignment
shall not constitute an acknowledgement that no default exists under this Lease,
nor shall consent be deemed a waiver of any existing default, except as
otherwise stated by Landlord at the time.

                                  ARTICLE 15
                                   INDEMNITY

     15.1 Tenant's Indemnification of Landlord. Tenant agrees to indemnify,
defend, and hold harmless Landlord and Landlord's Parties from Liabilities
arising by reason of any death, bodily injury, personal injury, or property
damage resulting from (a) any cause
<PAGE>

                                                                              22

occurring in or about or resulting from an occurrence in or about the Premises
during the Lease Term (except if caused solely by Landlord's negligence or
willful misconduct), (b) the negligence or willful misconduct of Tenant or
Tenant's agents, employees, and contractors, wherever it occurs, or (c) an Event
of Tenant's Default. The provisions of this Section shall survive the expiration
or sooner termination of this Lease.

     15.2 Exculpation of Landlord. Except as otherwise provided in this Lease,
Landlord shall not be liable to Tenant, nor shall Tenant be entitled to
terminate this Lease or to any abatement of rent for any damage to Tenant's
property or any injury to Tenant or any of Tenant's employees, agents, or
invitees, or loss to Tenant's business arising out of any cause (except if
caused solely by Landlord's negligence or willful misconduct), including, but
not limited to: (a) the failure, interruption, or installation of any heating,
air conditioning, or ventilation equipment; (b) the loss or interruption of any
utility service; (c) the failure to furnish or delay in furnishing any utilities
or services when the failure or delay is caused by fire or other casualty, the
elements, labor disputes, acts of God, or any other circumstance beyond the
control of Landlord; (d) the limitation, curtailment, rationing, or restriction
on the use of water or electricity, gas or any other form of utility; (e)
vandalism, malicious mischief, or forcible entry by unauthorized persons or the
criminal act of any person; or (f) seepage, flooding, or other penetration of
water into any portion of the Premises.

                                  ARTICLE 16
                                    DEFAULT

     16.1 Event of Default. Each of the following shall constitute an event of
default under this Lease (each an "Event of Default"):

          (a) Tenant's failure to make any payment required under this Lease
     within five (5) days after written notice thereof from Landlord;

          (b) The failure of Tenant to perform any of the covenants, conditions,
     or provisions of this Lease to be performed by Tenant, other than those
     requiring any payment to Landlord, where this failure continues for a
     period of thirty (30) days after written notice from Landlord to Tenant.
     However, if the nature of Tenant's failure requires more than thirty (30)
     days for cure, Tenant shall not be deemed to be in default if Tenant
     commences to cure within thirty (30) days after notice from Landlord and
     thereafter diligently continues this cure to completion;

          (c) Any of the following:

               (i) The making by Tenant of any general arrangements or
          assignments for the benefit of creditors;

               (ii) Tenant's becoming a debtor as defined in 11 USCss.101 or any
          successor statute, unless, in the case of a petition filed against
          Tenant, it is dismissed within sixty (60) days after filing;
<PAGE>

                                                                              23

               (iii) The appointment of a trustee or receiver to take possession
          of substantially all of Tenant's assets at the Premises or of Tenant's
          interest in this Lease, where possession is not restored to Tenant
          within sixty (60) days of this appointment; or

               (iv) The attachment, execution, or other judicial seizure of
          substantially all of Tenant's assets located at the Premises of or
          Tenant's interest in this Lease, where this seizure is not discharged
          within thirty (30) days after the seizure.

          (d) Tenant's Assignment in violation of Article 14.

                                  ARTICLE 17
                                   REMEDIES

     17.1 Landlord's Remedies. Upon the occurrence of an Event of Default,
Landlord, in addition to any other rights or remedies available to Landlord at
law or in equity, shall have the right to:

          (a) terminate this Lease and all rights of Tenant by giving Tenant
     written notice that this Lease is terminated, in which case Landlord may
     recover from Tenant the sum of:

               (i) the worth at the time of award of any unpaid rent that had
          been earned at the time of termination;

               (ii) the worth at the time of award of the amount by which (A)
          the unpaid rent that would have been earned after termination until
          the time of award exceeds (B) the amount of rental loss, if any, as
          Tenant affirmatively proves could have been reasonable avoided;

               (iii) the worth at the time of award of the amount by which (A)
          the unpaid rent for the balance of the term after the time of award
          exceeds (B) the amount of rental loss, if any, as Tenant affirmatively
          proves could be reasonably avoided;

               (iv) any other amount reasonably necessary to compensate Landlord
          for all the detriment proximately caused by Tenant's failure to
          perform Tenant's obligations or that, in the ordinary course of
          things, would be likely to result therefrom; and

               (v) all other amounts in addition to or in lieu of those
          previously stated as may be permitted from time to time by California
          law.

          As used in clauses (i) and (ii) of this Section, the "worth at the
     time of award" is computed by allowing interest at the rate of ten percent
     (10%) per annum. As used in clause (iii) of this Section, the "worth at the
     time of award" is computed by discounting that amount at the discount rate
     of the Federal Reserve Bank of San Francisco at the time of award plus one
     percent (1%). As used int his Section the term "rent" shall include Base
     Rent, additional rent, and any other payments required by Tenant.
<PAGE>

                                                                              24

          (b) continue this Lease, and from time to time, without terminating
     this Lease, either (i) recover all rent and other amounts payable as they
     become due or (ii) relet the Premises or any part of the Premises on behalf
     of Tenant for any term, at any rent, and pursuant to any other provisions
     as Landlord deems advisable, all with the right, at Tenant's cost, to make
     reasonably necessary alterations and repairs to the Premises.

          (c) Upon the occurrence of an Event of Default, Landlord shall also
     have the right, with or without terminating this Lease, to re-enter the
     Premises and remove all persons and property from the Premises. Landlord
     may cause property so removed from the Premises to be stored in a public
     warehouse or elsewhere at the expense and for the account of Tenant.

     17.2 Termination of Lease. No remedial actions, including the following
actions taken singly or in combination, shall be construed as an election by
Landlord to terminate this Lease unless Landlord has in fact given Tenant
written notice that this Lease is terminated or unless a court of competent
jurisdiction decrees termination of this Lease; any act by landlord to maintain
or preserve the Premises; any efforts by Landlord to relet the Premises; any
re-entry, repossession, or reletting of the Premises; or any re-entry,
repossession, or reletting of the Premises by Landlord pursuant to this Article.
If Landlord takes any of the foregoing remedial actions without terminating this
Lease, Landlord may nevertheless at any time after taking any remedial action
terminate this Lease by written notice to Tenant.

     17.3 Revenues from Reletting. If Landlord relets the Premises, Landlord
shall apply the revenue as follows: first, to the payment of any indebtedness,
other than rent due from Tenant to landlord; second, to the payment of any
reasonable cost of reletting, including without limitation finder's fees and
leasing commissions; third, to the payment of the cost of any maintenance and
repairs to the Premises; and fourth, to the payment of rent and other amounts
due and unpaid. Landlord shall hold and apply the residue, if any, to payment of
future amounts payable as they become due. Should revenue from reletting during
any months, after application pursuant to the foregoing provisions, be less than
the sum of (i) Landlord's expenditures for the Premises during that month and
(ii) the amounts due from Tenant during that month, Tenant shall pay the
deficiency to Landlord immediately upon demand.

     17.4 Landlord's Right to Cure. After the occurrence of an Event of Default,
Landlord, in addition to or in lieu of exercising other remedies, may, but
without any obligation to do so, cure the breach underlying the Event of Default
for the account and at the expense of Tenant; provided that Landlord by prior
notice shall first allow Tenant a reasonable opportunity to cure, except in
cases of emergency, where Landlord may proceed without prior notice to Tenant.
Tenant shall, upon demand, immediately reimburse Landlord for all costs,
including reasonable costs of settlements, defense, court costs, and attorney
fees, that Landlord may incur in the course of any cure.

     17.5 No Defense to Action. No security or guaranty for the performance of
Tenant's obligations, which Landlord may now or hereafter hold, shall in any way
constitute a bar or defense to any action initiated by Landlord for unlawful
detainer or for the recovery of the
<PAGE>

                                                                              25

Premises, for enforcement of any obligation of Tenant, or for the recovery of
damages caused by a breach of this Lease by Tenant or by an Event of Default.

     17.6 Rights Not Exclusive. Except insofar as this is inconsistent with or
contrary to any provisions of this Lease, no right or remedy conferred upon or
reserved to either party is intended to be exclusive of any other right or
remedy given now or later or existing at law or in equity or by statute. Except
to the extent that either party may have otherwise agreed in writing, no waiver
by that party of any violation or nonperformance by the other party of any
obligations, agreements, or covenants shall be deemed to be a waiver of any
subsequent violation or nonperformance of the same or any other covenant,
agreement, or obligation, nor shall any forbearance by either party to exercise
a remedy for any violation or nonperformance by the other party be deemed a
waiver by that party of rights or remedies with respect to that violation or
nonperformance.

     17.7 Default by Landlord. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within thirty (30) days after
written notice by Tenant to Landlord and to the holder of any first mortgage or
deed of trust covering the Premises, the name and address for that holder having
been furnished to Tenant in writing, specifying in what respect Landlord has
failed to perform the obligation. However, if Landlord's obligation requires
more than thirty (30) days for performance, Landlord shall not be in default if
Landlord commences to perform within thirty (30) days after notice from Tenant
and afterwards diligently completes it.

                                  ARTICLE 18
                           LATE CHARGES AND INTEREST

     18.1 Late Charges. Tenant acknowledges that late payment of sums due under
this Lease will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Therefore,
if any sum due from Tenant is not received by Landlord when due, then without
any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to the greater of fifty dollars ($50.00) or two percent (2%) of the
overdue sum. The parties agree that the late charge represents a fair and
reasonable estimate of the costs Landlord will incur because of late payment by
Tenant. Acceptance of the late charge by Landlord shall not constitute a waiver
of Tenant's default for the overdue sum, nor prevent Landlord from exercising
any of the other rights and remedies in this Lease.

     18.2 Interest. Any amount that is due to Landlord and not paid when due
shall bear interest from the date due at the maximum rate then allowable by law,
not to exceed twelve percent (12%) per annum; provided, however, that interest
shall not be payable on late charges incurred by Tenant. Payment of the interest
shall not cure any default by Tenant under this Lease.
<PAGE>

                                                                              26

                                  ARTICLE 19
                      SUBORDINATION; TRANSFER BY LANDLORD

     19.1 Subordination. This Lease shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation for security now or later
placed upon the Premises and to any advances made on the security of it or
Landlord's interest in it, and to all renewals, modifications, consolidations,
replacements, and extensions of it. However, if any mortgagee, trustee, or
ground landlord elects to have this Lease prior to the lien of the mortgage or
deed or trust or prior to the ground lease, and gives notice of that to Tenant,
this Lease shall be deemed prior to the mortgage, deed of trust, or ground
lease, whether this Lease is dated prior or subsequent to the date of the
mortgage, deed of trust, or ground lease, or the date of recording. If any
mortgage or deed of trust to which this Lease is subordinate is foreclosed or a
deed in lieu of foreclosure is given to the mortgagee or beneficiary, Tenant
shall attorn to the purchaser at the foreclosure sale or to the grantee under
the deed in lieu of foreclosure. If any ground lease to which this Lease is
subordinate is terminated, Tenant shall attorn to the ground lessor. Tenant
agrees to execute any documents, in form and substance reasonably acceptable to
Tenant, required to subordinate, to make this Lease prior to the lien of any
mortgage or deed of trust or ground lease, or to evidence the attornment.

     19.2 Attornment. If any mortgage or deed of trust to which this Lease is
subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, or if any ground lease to which this Lease is
subordinate is terminated, this Lease shall not be barred, terminated, cut off,
or foreclosed. Neither shall the rights and possession of Tenant under this
Lease be disturbed, if Tenant is not then in default in the payment of rental
and other sums due under this Lease or otherwise in default under the terms of
this Lease, and if Tenant attorns to the purchaser, grantee, or ground lessor as
provided in Section 19.1 or, if requested, enters into a new lease for the
balance of the term of this Lease on the same terms and provisions in this
Lease. Tenant's covenant under Section 19.1 to subordinate this Lease to any
ground lease, mortgage, deed of trust, or other hypothecation later executed is
conditioned on each senior instrument containing the commitments specified in
this Section.

     19.3 Transfer by Landlord. If Landlord transfers the Premises, Landlord
shall be relieved of all liability for the performance of Landlord's obligations
arising after the date of the transfer. However, any prepaid rent or Security
Deposit held by Landlord at the time of the transfer shall be delivered to the
transferee.

                                  ARTICLE 20
                             ESTOPPEL CERTIFICATES

     20.1 Estoppel Certificates. At all times during the term of this Lease,
Tenant agrees, following any request by Landlord, promptly to execute and
deliver to Landlord within ten (10) business days following delivery of a
request an estoppel certificate: (a) certifying that this Lease is unmodified
and in full force, or if modified stating the nature of the modification and
certifying that this Lease, as so modified, is in full force, (b) stating the
date to which the rent and other charges are paid in advance, if any, (c)
acknowledging that there are not any uncured
<PAGE>

                                                                              27

defaults on the part of Tenant, or if there are uncured defaults, specifying the
nature of the defaults, and (d)certifying any other information about the Lease
as may be requested by Landlord.

     20.2 Failure to Deliver. Tenant's failure to deliver an estoppel
certificate within ten (10) business days after delivery of a request shall be a
conclusive admission that, as of the date of the request for such statement: (a)
this Lease is unmodified except as may be represented by Landlord in the request
and is in full force, (b) there are no uncured defaults in Landlord's
performance, and (c) no rent has been paid more than thirty (30) days in
advance.

     20.3 Guarantor's Financial Statements. At any time during the term of this
Lease, Tenant shall, upon ten (10) days' prior written notice from Landlord,
provide Guarantor's most recent consolidated financial statement and financial
statements covering the three (3) year period prior to the date of the most
recent financial statement to any existing or potential lender or buyer of the
Premises. The statements shall be prepared in accordance with generally accepted
accounting principles.

                                  ARTICLE 21
                                 MISCELLANEOUS

     21.1 Severability. If any provision of this Lease is held by a court of
competent jurisdiction to be either invalid or unenforceable, the remaining
provisions of this Lease shall remain in effect, unimpaired by the holding.

     21.2 Time of Essence. Time is of the essence under this Lease.

     21.3 Additional Rent. All monetary obligations of Tenant to Landlord under
the Lease, including but not limited to the Base Rent and additional rent, shall
be deemed rent. Except as otherwise provided herein, all additional rent shall
be paid by Tenant within ten (10) days after receipt of an invoice therefor.

     21.4 Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant, and there are no agreements or representations between the
parties except as expressed in this Lease. Tenant acknowledges that neither
Landlord nor Landlord's representatives have made any legally binding
representation or warranty as to any matter except those expressly set forth,
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 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 all previous negotiations, arrangements,
brochures, agreements, and understandings, if any, between Landlord and 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.
<PAGE>

                                                                              28

     21.5 Notices. Except as otherwise expressly provided by law, all notices or
other communications required or permitted by this Lease or by law to be served
on or given to either party to this Lease by the other party shall be in writing
and shall be deemed given when personally delivered to the party to whom they
are directed, or in lieu of the personal service, upon deposit in the United
States Mail, certified or registered, return receipt requested, postage prepaid,
addressed to Tenant at the Premises, with a copy to each of: (i) Glenayre
Electronics, Inc., 5935 Carnegie Boulevard, Charlotte, North Carolina, 28209,
Attention: Chief Financial Officer, and (ii) Kennedy Covington Lobdell &
Hickman, L.L.P., NationsBank Corporate Center, 100 North Tryon Street, Suite
4200, Charlotte, NC 28202-4006, Attention: Eugene C. Pridgen, Esq., or to
Landlord in care of Dennis Henry, CB Commercial Real Estate Group, Inc., 155
Grand Avenue, Suite 100, Oakland, CA 94612. Either party may change its address
for the purpose of this Section by giving written notice of the change to the
other party in the manner provided in this Section.

     21.6 Waivers. The waiver by Landlord of any agreement, condition or
provision contained in this Lease shall not be deemed to be a waiver of any
subsequent breach of the agreement, condition or provision or any other
agreement, condition or provision contained in this Lease, nor shall any custom
or practice that may arise between the parties in the administration of the
terms of this Lease be construed to waive or to lessen the right of Landlord to
the performance by Tenant in strict accordance with these terms. Landlord's
consent to or approval of any act by Tenant shall not waive the necessity for
Landlord's consent to or approval of any subsequent act by Tenant. Landlord's
acceptance of rent shall not be a waiver of any preceding breach of Tenant,
other than Tenant's failure to pay the rent that Landlord accepted, regardless
of Landlord's knowledge of the preceding breach at the time of acceptance of the
rent.

     21.7 No Recording. Tenant shall not execute, acknowledge, or record a
memorandum of this Lease without the express written consent of Landlord.

     21.8 Holding Over. At the end of the Term, or any extension, if Tenant
holds over for any reason, it is hereby agreed that in the absence of a written
agreement to the contrary that tenancy shall be from month-to-month only and not
a renewal of this Lease, nor an extension for any further term. In that case,
Tenant shall pay Base Rent in an amount equal to one hundred twenty-five percent
(125%) of the amount of the Base Rent payable prior to the end of the term or
any extension for the first two (2) months of any such holdover and, with
respect to any continuing holdover thereafter, one hundred fifty percent (150%)
of the amount of the Base Rent payable prior to the end of the Term or any
extension, and the month-to-month tenancy shall be subject to every other term,
covenant, and condition contained in this Lease that is consistent with and not
contrary to a month-to-month tenancy.

     21.9 Cumulative Remedies. No remedy of election under this Lease shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

    21.10 Covenants and Conditions. Each term of this Lease performable by
Tenant shall be deemed both a covenant and a condition.
<PAGE>

                                                                              29

     21.11 Binding Effect. Subject to Article 14, this Lease shall be binding on
and inure to the benefit of the parties and their successors and assigns.

     21.12 Attorneys' Fees. In any action among the parties to enforce any of
the terms of this Lease, to seek a declaration of any rights under this Lease,
or to recover damages for a breach of this Lease, the prevailing party shall be
entitled to recover reasonable attorneys' fees together with any costs and
expenses, to resolve the dispute and to enforce the final judgment. The
"prevailing party" shall include, without limitation, (a) a party who dismisses
an action in exchange for sums allegedly due; (b) a party who receives
performance from the other party for an alleged breach of covenant or who
receives a desired remedy that is substantially equal to the relief sought in an
action; or (c) a party determined to be the prevailing party by a court of law.

     21.13 Rights Reserved by Landlord.

     (a) Landlord and its agents may enter the Premises at any reasonable time
after giving at least forty-eight (48) hours' prior written notice to Tenant,
and immediately in the case of emergency, for the purpose of (i) inspecting the
Premises; (ii) posting notices of nonresponsibility; (iii) supplying any service
to be provided by Landlord to Tenant; (iv) showing the Premises to prospective
purchasers, mortgagees, or Tenants within six (6) months of the Termination
Date; (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 on the Premises ordinary for lease signs within six (6)
months of the Termination Date or for sale signs; and (viii) responding to an
emergency.

     (b) Landlord shall have the right to use any means Landlord deems
reasonably necessary and proper to enter the Premises in an emergency. Any entry
into the Premises obtained by Landlord in accordance with this Section 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.

     21.14 Signs. Tenant shall not place, maintain, nor permit on any exterior
door, wall, or window of the Premises any sign, awning, canopy, marquee, or
other advertising without the express prior written consent of Landlord, which
shall not be unreasonably withheld or delayed. Furthermore, Tenant shall not
place any decoration, lettering, or advertising matter on the glass of any
exterior window of the Premises without the written approval of Landlord. If
Landlord consents to any sign, awning, canopy, marquee, decoration, or
advertising matter, Tenant shall, at its sole cost and in compliance with all
applicable Laws, covenants, conditions and restrictions, maintain it in good
appearance and repair at all times during this Lease. If at the end of the term
of this Lease, any of the items mentioned in this Section are not removed from
the Premises by Tenant, that item may, without liability, be disposed of by
Landlord with the removal and any repair necessary to the Premises in connection
therewith at Tenant's sole cost.

     21.15 No Merger. To the extent permitted by Law, the voluntary or other
surrender of this Lease by Tenant, a mutual cancellation of this Lease, or a
termination by Landlord shall not cause a merger, and shall, at the option of
Landlord, terminate all existing
<PAGE>

                                                                              30

subtenancies or may, at the option of Landlord, cause an assignment to a
Landlord of all such subtenancies.

     21.16 Security Measures. Tenant acknowledges that Landlord shall have no
obligation to provide any guard service or other security measures to the
Premises, and Tenant assumes all responsibility for the protection of tenant,
Tenant's agents, invitees, and customers, and the property of Tenant and of
Tenant's agents, invitees, and customers form acts of third parties.

     21.17 Easements. Landlord reserves the right to grant easements, rights,
and dedications that Landlord deems necessary or desirable, and to record parcel
maps and restrictions, so long as these easements, rights, dedications, maps,
and restrictions do not unreasonably interfere with Tenant's use of the
Premises. Tenant agrees to sign any of these documents as soon as practicable
upon request of Landlord.

     21.18 Authority. If Tenants is a corporation or partnership, each
individual executing this Lease on behalf of Tenant represents and warrants that
individual is duly authorized to execute and deliver this Lease on behalf of the
corporation in accordance with the by-laws of the corporation, or on behalf of
the partnership in accordance with the partnership agreement of the partnership,
and that this lease is binding upon the corporation or partnership, as
applicable, in accordance with its terms. Each of the persons executing this
Lease on behalf of a corporation covenants and warrants that the party for whom
the person 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 and perform its
obligations under this Lease.

     21.19 Governing Law. This Lease shall be governed by California law.

     21.20 Counterparts. This Lease may be executed in any number of
counterparts, all of which when taken together shall be deemed one and the same
original.

     21.21 No Offer. Preparation of this Lease by Landlord or Landlord's agent
and submission to Tenant shall not be deemed an offer to lease. This lease shall
become binding on Landlord and Tenant only when fully executed by Landlord and
Tenant.

     21.22 Memorandum of Lease. Landlord and Tenant agree to execute
concurrently herewith a customary memorandum of lease document evidencing the
terms hereof in recordable form and to permit the recordation of same in the
county records for the county in which the Premises are located. Upon the
expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord for recording purposes a quitclaim or other
instrument sufficient to terminate the effect of the Memorandum of Lease of
record. Should Tenant fail or refuse to deliver such quitclaim or other
appropriate Instrument, Tenant shall indemnify, defend, and hold Landlord
harmless from and against all damages, liabilities, claims and costs (including
reasonable attorneys' fees and costs) resulting therefrom. The form of
Memorandum of Lease is attached hereto as Exhibit C.
<PAGE>

                                                                              31

     IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.

LANDLORD:

       YERCAF N.V.,
       a Delaware corporation

       By: /s/ Denise Jackson
          -------------------------------
          Name:  Denise Jackson
                -------------------------
          Title: Director
                -------------------------

TENANT:

       GLENAYRE ELECTRONICS, INC.
       a Colorado corporation

       By: /s/ Stanley Ciepcielinski
          -------------------------------
          Name: Stanley Ciepcielinski
                -------------------------
          Title: Chief Financial Officer
                -------------------------<PAGE>

                                                                   EXHIBIT 10.21

                              REDWOOD BUSINESS PARK
                                    NET LEASE
                             BASIC LEASE INFORMATION
<TABLE>
<CAPTION>
<S>                                <C>       <C>                 <C>
1.  DATE                           2/27/98
2.  LANDLORD                       G & W/Copley Redwood Business Park, L.P.
3.  TENANT                         Ubiquity Communication, Inc.,
                                   a California corporation
4.  PREMISES                                                     REFERENCE
    a. Project                     Sequoia Court                 Paragraph 1
    b. Building                    Building C
    c. Address                     1367 Redwood Way
    d. Assessor's Parcel #         137-160-011 thru 014
    e. Suite
    f. Usable Sq. Ft.              3,315
    g. Rentable Sq. Ft.            3,315
5.  TERM                                                         Paragraph 2
    a. Estimated Commencement Date           March 15, 1998

    b. Length of Term                        2 years
6.  BASE RENT                                                    Paragraph 3
    a. Monthly Base Rent                     See Addendum

    b. Advanced Base Rent                    $1,050
        (Paid Upon Lease Execution)

    c. Adjustment Date of Monthly            Month 4
        Base Rent
7.  PROPERTY TAXES AND OPERATING EXPENSES                        Paragraph 4
    a. Initial Monthly Allocation per
        rentable Sq. Ft.                     $0.21

    b. Premises v. Building Sq. Ft. Ratio
                                             3315/16382 = 20%
    c. Premises v. Project Sq. Ft. Ratio
                                             3315/87713 = 3.8%

8.  SECURITY DEPOSIT               $6,962                        Paragraph 16

9.  TENANT IMPROVEMENTS            Turn-key up to $10/sf         Exhibit B

10. USE                                      General office      Paragraph 6

11. TENANT'S ADDRESS FOR NOTICES                                 Paragraph 20
    1367 Redwood Way
    Petaluma, CA  94954

12. LANDLORD'S ADDRESS FOR NOTICES                               Paragraph 20
    G & W/Copley Redwood Business Park, L.P.
    c/o G&W Management Co.
    P.O. Box 808030
    Petaluma, CA  94975-8030
    1318 Redwood Way, Suite 140
    Petaluma, CA  94954

    With a Copy to:

13. REAL ESTATE BROKERS                                          Paragraph 23
    Keegan & Coppin
    G & W Management Co.

EXHIBITS AND ADDENDUM
    Exhibit A:        Diagram of Premises
    Exhibit A-1:      Diagram of the Project
    Exhibit B:        Work Letter Agreement
    Exhibit B-1:      Space Plan
    Exhibit C:        Rules and Regulations
    Exhibit D:        Hazardous Materials List
    Exhibit E:        Tenant's Financial Statement

</TABLE>
<PAGE>

                              REDWOOD BUSINESS PARK
                                    NET LEASE

THIS LEASE, dated February 27, 1998, is made and entered into by and between G &
W/Copley Redwood Business Park, L.P. ("Landlord"), and Ubiquity Communication,
Inc., a California corporation ("Tenant").

     1. Premises.

     Landlord leases to Tenant, and Tenant hereby leases from Landlord for the
term of this Lease ("Term") and at the rent and upon the conditions set forth
below, the Premises described in the Basic Lease Information and identified on
the floor plan attached hereto as Exhibit A. The Premises are located within the
Building described in the Basic Lease Information, and constitute part of the
Project described in the Basic Lease Information and as shown in Exhibit A-1
attached hereto, at the Redwood Business Park, located in Petaluma, California.
All areas and facilities outside the Buildings and within the exterior
boundaries of the Project that are provided and designated by Landlord from time
to time for the general nonexclusive use and convenience of the tenants of the
Project shall be known as "Common Areas".

     2. Term.

     (a) The Term shall commence upon the date ("Commencement Date") which is
the earlier of: (i) substantial completion of the Premises, as the term
"substantial completion" is defined in the WorkLetter Agreement, attached hereto
as Exhibit B; or (ii) the date substantial completion would have occurred but
for Tenant Delays (as the term is defined in the Work Letter Agreement). The
Estimated Commencement Date is set forth in the Basic Lease Information, which
date may be postponed due to a delay in delivering the Premises as provided in
Paragraph 2(b) below. A "Lease Year" is a period of twelve (12) consecutive
calendar months. A "Lease Month" is a calendar month. The initial Term of this
Lease shall be determined as follows:

     (1) If the Commencement Date of this Lease occurs on the first calendar day
of a calendar month, the Term shall be for a period of Lease Years and Months as
specified in the Basic Lease Information, unless terminated sooner as provided
in this Lease.

     (2) If the Commencement Date of this Lease occurs on other than the first
calendar day of a calendar month, the Term shall be for a period of Lease Years
and Months as specified in the Basic Lease Information, plus the number of days
remaining in the calendar month in which the Commencement Date occurs, unless
terminated sooner as provided in this Lease.

     (b) Subject to the provisions of Paragraph 22 below, in the event the
Premises are not substantially completed (in accordance with the Work Letter
Agreement) on or within six (6) months after the Estimated Commencement Date,
then Tenant may, at Tenant's option, by notice in writing to Landlord within ten
(10) days thereafter, cancel this Lease, in which event, (i) this Lease shall be
deemed null and void and have no further force or effect, (ii) all security or
other

                                        1
<PAGE>

deposits made herewith shall be promptly returned to Tenant, and (iii) the
parties shall have no further obligation to each other; provided further,
however, that if such written notice of Tenant is not received by Landlord
within said 10-day period, Tenant's right to cancel this Lease hereunder shall
terminate and be of no further force or effect.

     3. Rent.

     (a) For purposes of this Lease, the term "Rent" shall mean the Base Rent,
Advanced Base Rent, all additional rent, and all of the other monetary
obligations of Tenant under this Lease. Upon execution of this Lease, Tenant
shall pay to Landlord the Advanced Base Rent set forth in the Basic Lease
Information. Tenant shall pay to Landlord the Base Rent specified in the Basic
Lease Information, payable on or before the first day of each and every
successive calendar month following the Commencement Date. If the Term commences
on other than the first day of a calendar month, the first payment of Base Rent
shall be appropriately prorated, on the basis of a 30-day month. Tenant's
payment of any Advanced Base Rent (excluding that portion attributable to last
month's rent, if any) shall be credited against Tenant's obligation to pay Base
Rent beginning as of the Commencement Date.

     (b) Tenant shall pay, as additional rent, all amounts of money required to
be paid to Landlord by Tenant under this Lease in addition to monthly Base Rent,
whether or not the same be designated "additional rent." If such amounts are not
paid at the time provided in this Lease, they shall nevertheless be collectable
as additional rent with the next installment of monthly Base Rent thereafter
falling due, but nothing herein contained shall be deemed to suspend or delay
the payment of any amount of money at the time the same becomes due and payable
hereunder, or limit any other remedy of Landlord.

     (c) Tenant acknowledges that late payment by Tenant to Landlord of Rent
after the expiration of any applicable grace period will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the Premises. Accordingly, if
any installment of Rent or any other sums due from Tenant shall not be received
by Landlord when due, Tenant shall pay to Landlord a late charge equal to six
percent (6%) of such overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.

     (d) Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) per annum. Payment
of interest shall not excuse or cure any default hereunder by Tenant.

     (e) All payments due from Tenant to Landlord hereunder shall be made to
Landlord without deduction or offset, in lawful money of the United States of
America at Landlord's address for notices hereunder, or to such other person or
at such other place as Landlord may from time to time designate in writing to
Tenant.

                                        2
<PAGE>

     4. Taxes and Operating Expenses.

     (a) In addition to the Base Rent, Tenant shall pay (i) Tenant's Percentage
Share of Property Taxes (according to the percentage set forth in the Basic
Lease Information) relating to those Property Taxes (as the term is defined
under Paragraph 4(a)(1) below) which are assessed during the Term, and (ii)
Tenant's Percentage Share of Operating Expenses (according to the percentage set
forth in the Basic Lease Information) relating to those Operating Expenses (as
the term is defined under Paragraph 4(a)(2) below) which are paid or incurred by
Landlord during the Term.

     (1) "Property Taxes" shall mean all real property taxes, bonds and
assessments and governmentally imposed fees or charges (and any tax levied
wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which
have become a lien against the Building (which for the purposes of defined
"Property Taxes" shall include the tax parcel of which the Building is a part)
and Common Areas.

     (2) "Operating Expenses" shall mean the following: (A) all costs of
management, operation, maintenance and repair of the Building and Common Areas,
including, without limitation, property management expenses, maintenance and
repair materials, supplies and equipment; (B) all costs of water, power,
electricity, refuse collection, parking lot sweeping, landscaping, and other
services relating to the Common Areas; (C) all costs of alterations or
improvements to the Building or Common Areas made to achieve compliance with
federal, state and local law including, without limitation, the Americans with
Disabilities Act (42 U.S.C. Section 12101 et seq.), which costs will be
amortized over the useful life of each alteration or improvement; (D) all costs
of public liability and casualty insurance maintained by Landlord with respect
to the Building and Common Areas; (E) all costs incurred by Landlord for making
any capital improvements, structural repairs or modifications to the Building or
Common Areas or making any improvements or modifications to reduce the operating
expenses, which costs will be amortized over the useful life of each capital
improvement, structural repair or modification; (F) all costs of maintaining
machinery, equipment and directional signage or other markers; and (G) the share
allocable to the Building of dues and assessments payable under any reciprocal
easement or common area maintenance agreements or declarations or by any owners'
associations affecting the Building. That portion of the Operating Expenses
relating to the property management expenses for the Building and Common Areas
which shall be charged to Tenant shall be four percent (4%) of both Tenant's
annual Base Rent and the subtotal of Tenant's share of Operating Expenses of the
Building. In the event that Landlord calculates the Operating Expenses based
upon the Project instead of the Building, as indicated on the Basic Lease
Information, then the term "Project" shall be substituted in the place of all
references to the term "Building" in this paragraph.

     (b) The Property Taxes to be paid by Tenant shall be determined by
multiplying the total amount of the Property Taxes by Tenant's Percentage Share
of Property Taxes (which percentage is determined by multiplying 100% by a
fraction, the numerator of which is the rentable area of the Premises and the
denominator of which is the total rentable area of all improvements located
within the tax parcel of which the Premises are a part). Landlord may cause the
Common Areas of the Project to be separately assessed from other areas and
buildings of the Project. In such case, Tenant's Percentage Share of Property
Taxes attributable to the Common Areas shall be

                                        3
<PAGE>

determined by the ratio that the total rentable square feet in the Premises
bears to the total number of square feet of rentable area which is included in
the property subject to the assessment.

     (c) Operating Expenses for each calendar year shall be adjusted to equal
Landlord's reasonable estimate of Operating Expenses as though ninety-five
percent (95%) of the total rentable area of the Building had been occupied. When
the Building is one hundred percent (100%) occupied, the Operating Expenses
shall be adjusted to reflect a 100% occupied building. The Operating Expenses to
be paid by Tenant shall be determined by multiplying the total amount of the
Operating Expenses as adjusted above by Tenant's Percentage Share of Operating
Expenses (which percentage is determined by multiplying 100% by a fraction, the
numerator of which is the rentable area of the Premises and the denominator of
which is the total rentable area located within the Building, if the Operating
Expenses are calculated for the Building, or within the Project, if the
Operating Expenses are calculated for the Project).

     (d) Tenant shall pay to Landlord each month at the same time and in the
same manner as monthly Base Rent one-twelfth (1/12th) of Landlord's estimate of
the amount of Property Taxes and one- twelfth (1/12th) of Landlord's estimate of
Operating Expenses payable by Tenant for the then- current calendar year. The
initial monthly amount shall be as set forth in the Basic Lease Information.
Within one hundred twenty (120) days after the close of each calendar year, or
as soon after such 120-day period as practicable, Landlord shall deliver to
Tenant a statement in reasonable detail of the actual amount of Property Taxes
and Operating Expenses payable by Tenant in accordance with this Paragraph 4 for
such calendar year. Tenant may request further information if desired.
Landlord's failure to provide such statement to Tenant within the 120-day period
shall not act as a waiver and shall not excuse Tenant or Landlord from making
the adjustments to reflect actual costs as provided herein. If on the basis of
such statement Tenant owes an amount that is less than the estimated payments
for such calendar year previously made by Tenant, Landlord shall credit such
excess to Tenant against future additional rent due under this Paragraph 4. If
on the basis of such statement Tenant owes an amount that is more than the
estimated payments for such calendar year previously made by Tenant, Tenant
shall pay the deficiency to Landlord within fifteen (15) days after delivery of
the statement. The obligations of Landlord and Tenant under this Paragraph 4(d)
with respect to the reconciliation between the estimated and actual amounts of
Property Taxes and Operating Expenses payable by Tenant for the last year of the
Term shall survive the termination of the Lease. When the final determination is
made of the actual amounts of Property Taxes and Operating Expenses payable by
Tenant for the year in which this Lease terminates, Tenant shall immediately pay
any increase due over the estimated payments and, conversely, any overpayment
made by Tenant shall be immediately reimbursed to Tenant by Landlord.

     5. Other Taxes.

     In addition to Tenant's obligations under Paragraph 4 above, Tenant shall
pay or reimburse Landlord for (i) any taxes upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures,
and other personal property located in the Premises or leasehold improvements
made in or to the Premises at Tenant's expense, (ii) for taxes, if any, measured
by or reasonably attributable to tenant improvements paid for by Tenant, and
(iii) for

                                        4
<PAGE>

any taxes, assessments, fees, or charges imposed by any public authority or
private community maintenance association upon or by reason of the development,
possession, use or occupancy of the Premises or the parking facilities used by
Tenant in connection with the Premises. On request by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of payment of Tenant's business
personal property taxes and deliver copies of such business personal property
tax bills to Landlord.

     6. Use.

     6.1 Prohibited Uses.

     (a) The Premises shall be used and occupied by Tenant solely for the use
set forth in the Basic Lease Information. Tenant shall, at Tenant's expense,
comply promptly with all applicable federal, state and local laws, regulations,
ordinances, rules, orders, and requirements in effect during the Term relating
to the condition, use or occupancy of the Premises. Tenant shall not use or
permit the use of the Premises in any manner that will tend to create waste or a
nuisance, or that unreasonably disturbs other tenants of the Building or
Project, nor shall Tenant place or maintain any signs, antennas, awnings,
lighting or plumbing fixtures, loudspeakers, exterior decoration or similar
devises on or visible from the exterior of the Premises, without Landlord's
prior written consent, which may be withheld in Landlord's sole discretion.
Tenant shall not use any corridors, sidewalks, stairs, elevators, or other areas
outside of the Premises for storage or any purpose other than access to the
Premises. Tenant shall not use, keep, or permit to be used or kept on the
Premises any foul or noxious gas or substance, nor shall Tenant do or permit to
be done anything in and about the Premises, either in connection with activities
hereunder expressly permitted or otherwise, which would cause an increase in
premiums for or a cancellation of any policy of insurance (including fire
insurance) maintained by Landlord in connection with the Premises or the
Building or which would violate the terms of any covenants, conditions, or
restrictions, or the design guidelines, or the sign guidelines affecting the
Building or the land on which it is located, or the Rules (as the term is
defined under Paragraph 6.3(b) below).

     (b) Tenant shall not attach any signage to or on any part of the outside of
the Premises, the Building or the Project, or in the halls, lobbies, windows or
elevator banks of the Building without Landlord's prior written consent, which
consent may be withheld in Landlord's sole discretion. Any signage so permitted
shall be subject to prior approval of and conformance with the requirements of
the design review committee of the Project and the design review agency of the
city. At Tenant's expense, Tenant shall (i) maintain all permitted signage, and
(ii) upon the expiration or termination of this Lease, remove such signage and
repair any damage caused by their removal. If Tenant fails to do so, Landlord
may maintain, repair or remove such signage without notice to Tenant and at
Tenant's expense, the cost of which shall be payable by Tenant as additional
rent in accordance with Paragraph 14(b)(2) below.

     6.2 Suitability. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises or
the Building or with respect to the suitability or fitness of either for the
conduct of Tenant's business or for any other purpose. Nor has Landlord agreed
to undertake any modification, alteration or improvement to the Premises except
as provided in this Lease. Tenant acknowledges that the Premises are located in
a 100-

                                       5
<PAGE>

year flood zone and that the finished floor elevations of the Building are
designed to be at least one (1) foot above the federal government's estimate of
the 100-year flood level at the time of initial construction.

     6.3 Use of Common Areas.

     (a) Landlord gives Tenant and its authorized employees, agents, customers,
representatives, and invitees the nonexclusive right to use the Common Areas,
with others who are entitled to use the Common Areas, subject to Landlord's
rights as set forth in this Paragraph 6.3.

     (b) All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right to establish, modify,
amend, and enforce reasonable rules and regulations with respect to the Common
Areas. Tenant acknowledges receipt of a copy of the current rules and
regulations, attached hereto as Exhibit C, and agrees that they may, from time
to time, be modified or amended by Landlord in a commercially reasonable manner
(the "Rules"). Tenant agrees to abide by and conform with such Rules; to cause
its concessionaires and its and their employees and agents to abide by such
Rules; and to use its best efforts to cause its customers, invitees, and
licensees to abide by such Rules.

     (c) Landlord shall have the right to close temporarily any portion of the
Common Areas for the purpose of discouraging use by parties who are not tenants
or customers of tenants; to use portions of the Common Areas while engaged in
making additional improvements or repairs or alterations to the Property; to use
or permit the use of the Common Areas by others to whom Landlord may grant or
have granted such rights; and to do and perform such acts in, to, and with
respect to, the Common Areas as in the use of good business judgment Landlord
shall determine to be appropriate for the Project.

     (d) Landlord shall have the unqualified right to increase or reduce the
Common Areas, provided the Project meets the parking requirement under Paragraph
6.5 below.

     (e) Tenant shall cooperate with Landlord and other tenants in the Project
in recycling waste paper, cardboard, or such other materials identified under
any trash recycling program that may be established in order to reduce trash
collection costs.

     6.4 Environmental Matters.

     (a)(1) The term "Hazardous Materials" as used herein means any petroleum
products, asbestos, polychlorinated biphenyls, P.C.B.'s, chemicals, compounds,
materials, mixtures or substances that are now or hereafter defined or listed
in, or otherwise classified as a "hazardous substance", "hazardous material",
"hazardous waste", "extremely hazardous waste", "infectious waste", "toxic
substance", "toxic pollutant" or any other formulation intended to define, list
or classify substances by reason of deleterious properties such asignitability,
corrosivity, reactivity, carcinogenicity or toxicity pursuant to any federal,
state or local environmental law, regulation, ordinance, resolution, order or
decree relating to industrial hygiene, environmental protection or the use,
analysis, generation, manufacture, storage, release, disposal or transportation
of the same ("Hazardous Materials Laws").

                                       6
<PAGE>

     (2) Except for ordinary office supplies and janitorial cleaning materials
which in common business practice are customarily and lawfully used, stored and
disposed of in small quantities, and except for those Hazardous Materials listed
on Exhibit D attached hereto, Tenant shall not use, manufacture, store, release,
dispose or transport any Hazardous Materials in, on, under or about the
Premises, the Building or the Project without giving prior written notice to
Landlord and obtaining Landlord's prior written consent, which consent Landlord
may withhold in its sole discretion. Subject to Landlord's prior written
consent, Hazardous Materials may be added to Exhibit D on an annual review
basis; any such amendments to Exhibit D shall be signed by each party and
attached hereto. Tenant shall at its own expense procure, maintain in effect,
and comply with all conditions of any and all permits, licenses, and other
governmental and regulatory approvals required in connection with Tenant's
generation, use, storage, disposal and transportation of Hazardous Materials.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes. Regardless whether permitted under the Hazardous
Material Laws, Tenant shall not maintain in, on, under, or about the Premises,
the Building or the Project any above or below ground storage tanks, clarifiers,
or sumps, nor shall any wells for the monitoring of ground water, soils, or
subsoils be allowed.

     (3) Tenant shall immediately notify Landlord in writing of: (a) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Law; (b)
any claim made or threatened by any person or entity against Tenant or the
Premises relating to damage, contribution, cost, recovery, compensation, loss or
injury resulting from or claimed to result from any Hazardous Materials; and (c)
any reports, information, inquiries or demands made, ordered, or received by or
on behalf of Tenant which arise out of or in connection with the existence or
potential existence of any Hazardous Materials in, on, under or about the
Premises, the Building, or the Project, including, without limitation, any
complaints, notices, warnings, asserted violations, or mandatory or voluntary
informational filings with any governmental agency in connection therewith, and
immediately supply Landlord with copies thereof.

     (b) Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord), protect, and hold Landlord, and each of Landlord's partners,
officers, directors, partners, employees, affiliates, joint ventures, members,
trustees, owners, shareholders, principals, agents, representatives, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities, damages, fines, penalties, forfeitures, losses, cleanup and
remediation costs or expenses (including attorneys' fees) or death of or injury
to any person or damage to any property whatsoever, arising from or caused in
whole or in part, directly or indirectly, by (i) Tenant's use, analysis,
generation, manufacture, storage, release, disposal, or transportation of
Hazardous Materials by Tenant, Tenant's agents, employees, contractors,
licensees or invitees to, in, on, under, about or from the Premises, the
Building, or the Project, or (ii) Tenant's failure to comply with any Hazardous
Materials Law. Tenant's obligations hereunder shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup, detoxification or decontamination of the Premises, the
Building, or the Project and the

                                        7
<PAGE>

preparation and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration or earlier
termination of this Lease.

     (c) Landlord shall have the right to enter the Premises during regular
business hours upon reasonable prior notice at all times for the purposes of
ascertaining compliance by Tenant with all applicable Hazardous Materials Laws,
provided, however, that in the instance of any emergency Landlord's entry onto
the Premises shall not be restricted to regular business hours nor shall notice
be required.

     (d) Landlord shall have the option to declare a default of this Lease for
the release or discharge of Hazardous Materials by Tenant's employees, agents,
contractors, or invitees on the Premises, Building or Project or in violation of
law or in deviation from prescribed procedures in Tenant's use or storage of
Hazardous Materials. If Tenant fails to comply with any of the provisions under
this Paragraph 6.4, Landlord shall have the right (but not the obligation) to
remove or otherwise cleanup any Hazardous Materials from the Premises, the
Building or the Project. In such case, the costs of any Hazardous Materials
investigation, removal or other clean up (including, without limitation,
transportation, storage, disposal and attorneys' fees and costs) will be
additional rent due under this Lease, whether or not a court has ordered the
cleanup, and will become due and payable on demand by Landlord.

     6.5 Parking. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees a nonexclusive license to use unassigned and unreserved
parking spaces in the Common Areas for the use of motor vehicles during the Term
subject to rights reserved to Landlord as specified in this Paragraph 6.5.
Landlord reserves the right to grant similar nonexclusive and unassigned and
unreserved use to other tenants; to promulgate rules and regulations relating to
the use of the Common Areas including parking by tenants and employees of
tenants; to make changes in the parking layout from time to time; and to do and
perform any other acts in and to these areas and improvements as Landlord
determines to be advisable. Tenant agrees not to overburden the parking
facilities and to abide by and conform with the rules and regulations and to
cause its employees and agents to abide by and conform to the rules and
regulations. Upon request, Tenant shall provide Landlord with license plate
numbers of all vehicles driven by its employees and to cause Tenant's employees
to park only in spaces specifically designated for tenant parking. Landlord
shall have the unqualified right to rearrange or reduce the number of
parkingspaces; provided, however, the ratio of the number of parking spaces
available to Tenant will be no less than four (4) spaces per 1,000 usable square
feet of the Premises.

     7. Services.

     (a) Tenant shall pay for all water, sewer, gas, electricity, heat, cooling,
telephone, refuse collection, and other utility-type services furnished to
Tenant or the Premises, together with all related installation or connection
charges or deposits. Wherever it is practical to do so such services shall be
separately metered or charged to Tenant by the provider thereof and paid for
directly by Tenant. To the extent any of the foregoing services are provided by
Landlord, Tenant shall reimburse Landlord for all costs incurred by Landlord in
connection with the provision of such services based on Landlord's reasonable
estimate of the level of Tenant's use or consumption of such services. Landlord
shall bill Tenant on a monthly or other periodic basis for

                                        8
<PAGE>

such services and payment shall be made by Tenant within ten (10) days after
submittal of Landlord's statement.

     (b) Landlord shall not be in default hereunder or be liable for any damages
or personal injuries to any person directly or indirectly resulting from nor
shall there be any Rent abatement by reason of, any interruption or curtailment
whatsoever in utility services.

     8. Maintenance, Repairs and Alterations.

     (a) Tenant shall, at Tenant's expense, maintain every part of the Premises
in good order, condition and repair, including without limitation, (i) all
interior surfaces, ceilings, walls, door frames, window frames, floors, carpets,
draperies, window coverings and fixtures, (ii) all windows, doors, locks and
closing devices, entrances, plate glass, and signs, (iii) all plumbing and
sewage pipes, fixtures and fittings, (iv) all phone lines, electrical wiring,
equipment, switches, outlets, and light bulbs, (v) any fire detection, fire
sprinkler or extinguisher equipment, (vi) all of Tenant's personal property,
improvements and alterations, and (vii) all other fixtures and special items
installed by or for the benefit of, or at the expense of Tenant. Tenant shall,
at its expense, cause to be maintained in good operating condition and repair,
all heating, ventilating, and air conditioning equipment installed in, or on the
roof of the Premises. Tenant shall keep in force a preventive maintenance
contract with a qualified maintenance company covering all heating, ventilating
and air conditioning equipment and shall annually provide Landlord with a copy
of this contract. Tenant shall not enter onto the roof area of the Building,
except for the purpose of maintaining the heating, ventilating, and air
conditioning equipment and provided that Tenant shall repair any damage to the
roof area caused by its entry. Tenant shall be responsible for its own
janitorial service. Landlord shall incur no expense (nor have any obligation) of
any kind whatsoever in connection with the maintenance of the Premises.

     (b) Landlord shall keep in good condition and repair the foundation, roof
structure, exterior walls and other structural parts of the Building, and all
other portions of the Building not the obligation of Tenant or any other tenant
in the Building. Tenant expressly waives the benefits of any statute, including
Civil Code Sections 1941 and 1942, which would afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease due to Landlord's
failure to keep the Building in good order, condition and repair. Landlord shall
have no liability to Tenant for any damage, inconvenience, or interference with
the use of the Premises by Tenant as the result of Landlord performing any such
maintenance and repair work.

     (c) In the event Tenant fails to perform Tenant's obligations under this
Paragraph 8, Landlord may, but shall not be required to, give Tenant notice to
do such acts as are reasonably required to so maintain the Premises. If Tenant
shall fail to commence such work and diligently prosecute it to completion, then
Landlord shall have the right (but not the obligation) to do such acts and
expend such funds at the expenses of Tenant as are reasonably required to
perform such work. Any amounts so expended by Landlord will be additional rent
due under this Lease, and such amounts will become due and payable on demand by
Landlord. Landlord shall have no liability to Tenant for any such damages,
inconvenience, or interference with the use of the Premises by Tenant as a
result of performing such work.

                                        9
<PAGE>

     (d) Upon the expiration or earlier termination of this Lease, Tenant shall
surrender the Premises in good condition and repair, only ordinary wear and tear
excepted. Tenant, at its sole cost and expense, agrees to repair any damages to
the Premises caused by or in connection with the removal of any articles of
personal property, business or trade fixtures, signs, machinery, equipment,
cabinetwork, furniture, moveable partitions, or permanent improvements or
additions, including, without limitation thereto, repairing the floor and
patching and painting the walls where required by Landlord, to Landlord's
reasonable satisfaction. Tenant shall indemnify Landlord against any loss or
liability resulting from delay by Tenant in so surrendering the Premises,
including without limitation, any claims made by any succeeding tenant resulting
from such delay.

     (e) Tenant shall not make any alterations, improvements, or additions in,
on, or about the Premises without Landlord's prior written consent, except that
Tenant may make alterations, improvements, or additions without Landlord's prior
written consent where (i) the reasonably estimated cost does not exceed $2,500,
and (ii) such alterations, improvements, or additions do not affect or involve
the structural integrity, roof membrane, exterior areas, building systems, or
water-tight nature of the Premises, the Building or the Project. In requesting
Landlord's consent, Tenant shall, at Tenant's sole cost, submit to Landlord
complete drawings and specifications describing such work and the identity of
the proposed contractor at least ten (10) business days prior to the
commencement of any work.

     With respect to any alterations, improvements or additions made to the
Premises by Tenant:

          (1) Before commencing any work relating to alterations, additions, or
     improvements affecting the Premises, Tenant shall notify Landlord of the
     expected date of commencement thereof and of the anticipated cost thereof.
     Landlord shall then have the right at any time and from time to time to
     post and maintain on the Premises such notices as Landlord reasonably deems
     necessary to protect the Premises and Landlord from mechanics' liens or any
     other liens.

          (2) Tenant shall pay when due all claims for labor or materials
     furnished to Tenant for use in the Premises. Tenant shall not permit any
     mechanics' liens or any other liens to be levied against the Premises for
     any labor or materials furnished to Tenant in connection with work
     performed on the Premises by or at the direction of Tenant. Tenant shall
     indemnify, hold harmless and defend Landlord (by counsel reasonably
     satisfactory to Landlord) from any liens and encumbrances arising out of
     any work performed or materials furnished by, or at the direction of
     Tenant. In the event that Tenant shall not, within twenty (20) days
     following the imposition of any such lien, cause such lien to be released
     of record by payment or posting of a proper bond, Landlord shall have, in
     addition to all other remedies provided herein by law, the right, but not
     the obligation, to cause the same to be released by such means as it shall
     deem proper, including payment of the claim giving rise to such lien. All
     such sums paid by Landlord and all expenses incurred by it in connection
     therewith, including attorneys' fees and costs, shall be payable to
     Landlord by Tenant on demand with interest at the rate of ten percent (10%)
     per annum.

          (3) All alterations, improvements or additions in or about the
     Premises performed by or on behalf of Tenant shall be done in a
     first-class, workmanlike manner, shall not unreasonably lessen the value of
     leasehold improvements in the Premises, and shall be completed in
     compliance with all

                                       10
<PAGE>

     applicable laws, ordinances, regulations and orders of any governmental
     authority having jurisdiction thereover, as well as the requirements of
     insurers of the Premises and the Building.

          (4) Upon Landlord's request, Tenant shall remove any contractor,
     subcontractor or material supplier from the Premises and the Building if
     the work or presence of such person or entity results in labor disputes in
     or about the Building or Project or damage to the Premises, Building or
     Project.

          (5) Landlord, at Landlord's sole discretion, may refuse to grant
     Tenant permission for alterations, improvements or additions which require,
     because of application of Americans with Disabilities Act or other laws,
     substantial improvements or alterations to be made to the Common Areas.

          (6) Landlord may, up to sixty (60) days prior to the expiration of the
     Term, require that Tenant, at Tenant's expense, remove any such
     alterations, improvements or additions prior to or upon the expiration of
     this Lease, and restore the Premises to their condition prior to such
     alterations, improvements or additions.

          (7) Unless Landlord requires their removal, as set forth above, all
     alterations, improvements, or additions made to the Premises shall become
     the property of Landlord and remain upon and be surrendered with the
     Premises upon the expiration of this Lease; provided, however, that
     Tenant's machinery, equipment, and trade fixture, other than any which may
     be affixed to the Premises so that they cannot be removed without material
     damage to the Premises, shall remain the property of Tenant and may be
     removed by Tenant subject to the provisions of Paragraph 8(d) above.

     9. Construction of Tenant Improvements.

     Landlord shall be responsible for constructing the tenant improvements
("Tenant Improvements") in the Premises, as provided in the Work Letter
Agreement, attached hereto as Exhibit B.

     10. Insurance and Indemnity.

     10.1 Insurance.

     (a) Tenant shall obtain and maintain during the Term commercial general
liability insurance with a combined single limit for personal injury and
property damage in an amount of not less than $2,000,000 (in a form, with a
deductible amount, and with carriers reasonably acceptable to Landlord) and
employer's liability and workers' compensation insurance as required by law. The
insurance carrier shall be authorized to do business in the State of California,
with a policyholders and financial rating of at least A:IX Class status as rated
in the most recent edition of Best's Key-Rating guide. Tenant's comprehensive
general liability insurance policy shall be endorsed to provide that (i) it may
not be canceled or altered in such a manner as to adversely affect the coverage
afforded thereby without thirty (30) days' prior written notice to Landlord,
(ii) Landlord is designated as an additional insured, (iii) the insurer
acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant
pursuant to Paragraph 10.2(b) below, and (iv)

                                       11
<PAGE>

such insurance is primary with respect to Landlord and that any other insurance
maintained by Landlord is excess and noncontributing with such insurance. If, in
the opinion of Landlord's lender or in the commercially reasonable opinion of
Landlord's insurance adviser, the specified amounts of coverage are no longer
adequate, such coverage shall, within 30 days written notice to Tenant, be
appropriately increased. Prior to the commencement of the Term, Tenant shall
deliver to Landlord a duplicate of such policy or a certificate thereof to
Landlord for retention by it, with endorsements. At least thirty (30) days prior
to the expiration of such policy or any renewal or modification thereof, Tenant
shall deliver to Landlord a replacement or renewal binder, followed by a
duplicate policy or certificate within a reasonable time thereafter. If Tenant
fails to obtain such insurance or to furnish Landlord any such duplicate policy
or certificate as herein required, Landlord may, at its election, without notice
to Tenant and without any obligation to do so, procure and maintain such
coverage and Tenant shall reimburse Landlord on demand as additional rent for
any premium so paid by Landlord.

     (b) Landlord waives all claims against Tenant, and Tenant's officers,
directors, partners, employees, agents and representatives for loss or damage to
the extent that such loss or damage is insured against under any valid and
collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy. Tenant waives all
claims against Landlord, and Landlord's officers, directors, partners,
employees, affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns, for loss or damage
to the extent such loss or damage is insured against under any valid and
collectable insurance policy insuring Tenant or required to be maintained by
Tenant under this Leased, or would have been insured against but for any
deductible amount under any such policy. The insuring party shall, upon
obtaining the policies of insurance required under this Lease, give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease. Tenant agrees that in the event of a
sale, assignment or transfer of the Premises by Landlord, this waiver of
subrogation shall continue in favor of the original Landlord and any subsequent
Landlord.

     (c) Tenant shall at its own cost maintain on all its personal property,
Tenant's improvements, and alterations, in, on, or about the Premises, a policy
of standard fire and extended coverage insurance, with vandalism and malicious
mischief endorsements, to the extent of at least one hundred percent (100%) of
their full replacement value. The proceeds from any such policy shall be used by
Tenant for the replacement of personal property and the restoration of Tenant's
improvements or alterations. Notwithstanding any other provisions of the Lease,
Landlord shall have no liability for damage to or destruction of Tenant's
personal property, regardless of whether the damage or destruction results from
the acts or omissions of Landlord.

     (d) During the Term, Landlord shall keep the Building, and improvements
within which the Premises are located, insured against loss or damage by (i)
fire, with extended coverage and vandalism, malicious mischief and special
extended perils (all risk) endorsements or their equivalents, in amounts not
less than one hundred percent (100%) of the replacement cost of the Building and
structures insured, and (ii) flood, in the maximum amount provided for by FEMA
under its flood loss insurance program, with loss payable thereunder to Landlord
and to any authorized encumbrancer of Landlord (with standard mortgagee loss
payable clause) in accordance with their respective interests. Landlord may
maintain rent insurance, for the benefit

                                       12
<PAGE>

of Landlord, equal to at least one year's Base Rent hereunder. If the Lease is
terminated as a result of damage by fire, casualty or earthquake as set forth in
this Paragraph 10, all insurance proceeds shall be paid to and retained by
Landlord, subject to the rights of any authorized encumbrancer of Landlord.

     (e) Tenant acknowledges that Landlord does not, at the time of the signing
of this Lease, insure the Building for earthquake damage. Landlord may, when
Landlord deems the premiums to be reasonable, insure the Building fully or
partially for earthquake damage. At such time, the premium for earthquake
insurance will be added to the Operating Expenses for purposes of determining
additional rent.

     10.2 Indemnity.

     (a) Tenant waives all claims against Landlord for damage to any property or
injury to or death of any person in, on, or about the Premises, the Building, or
any other portion of the Project arising at any time and from any cause, unless
caused by the active negligence or willful misconduct of Landlord, its agents,
employees, or contractors. Tenant shall indemnify, defend (by counsel reasonably
satisfactory to Landlord) and hold harmless Landlord, and Landlord's officers,
directors, partners, employees, affiliates, joint venturers, members, trustees,
owners, shareholders, principals, agents, representatives, successors and
assigns, from and against all claims, costs, damages, actions, indebtedness and
liabilities (except such as may arise from the active negligence or willful
misconduct of Landlord, and Landlord's officers, directors, partners, employees,
affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns) arising by reason
of any death, bodily injury, personal injury, property damage or any other
injury or damage in connection with (i) any condition or occurrence in or about
or resulting from any condition or occurrence in or about the Premises during
the Term, or (ii) any act or omission of Tenant, or Tenant's agents,
representatives, officers, directors, shareholders, partners, employees,
successors and assigns, wherever it occurs. The foregoing indemnity obligation
of Tenant shall include reasonable attorneys' fees, and all other reasonable
costs and expenses incurred by Landlord from the first notice that any claim or
demand is to be made. The provisions of this Paragraph 10.2 shall survive the
termination or expiration of this Lease with respect to any damage, injury, or
death occurring prior to such expiration or termination.

     (b) Neither party shall be liable to the other for any unauthorized or
criminal entry of third parties into the Premises, Building, Project, Common
Areas, or parking facilities, or for any damage to person or property, or loss
of property in and about the Premises, Building, Project, Common Areas, parking
facilities and the approaches, entrances, streets, sidewalks, stairs, elevators,
restrooms, or corridors thereto, by or from any unauthorized or criminal acts of
third parties, regardless of any breakdown, malfunction or insufficiency of any
security measures, practices or equipment provided by Landlord or Tenant. Tenant
shall immediately notify Landlord in writing of any breakdown or malfunction of
any security measures, practices or equipment provided by Landlord as to which
Tenant has knowledge.

                                       13
<PAGE>

     (c) Any diminution or interference with light, air or view by any structure
which may be erected on land adjacent to the Building or resulting from any
other cause shall in no way alter this Lease or impose any liability on
Landlord.

     (d) Tenant agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant's business or any loss of
income therefrom.

     (e) In the event that Landlord or any successor owner of the Building sells
or conveys the Building, then all liabilities and obligations of Landlord or the
successor owner under this Lease accruing after the sale or conveyance shall
terminate and become binding on the new owner, and Tenant shall release Landlord
from all liability under this Lease (including, without limitation, the Security
Deposit, as defined under Paragraph 16 (below), except for acts or omissions of
Landlord occurring prior to such sale or conveyance.

     (f) Tenant expressly agrees that so long as Landlord is a corporation,
limited liability company, 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, partners,
employees, affiliates, joint ventures, members, trustees, owners, shareholders,
or other principals, agents or representatives of such business entity ("Member
of Landlord"), and (ii) Tenant shall have recourse only to the interest of such
business entity in the Building of which the Premises are a part of the
satisfaction of such obligations and not against the assets of such Member of
Landlord other than to the extent of their respective interests in the Building.
In this regard, Tenant agrees that in the event of any actual or alleged
failure, breach or default by Landlord of its obligations under this Lease, that
(i) no Member of Landlord shall be sued or named as a party in any suit or
action (except as any be necessary to secure jurisdiction of Landlord), (ii) no
judgment will be taken against any Member of Landlord, and any judgment taken
against any Member of Landlord may be vacated and set aside at any time without
hearing, (iii) no writ or execution will ever be levied against the assets of
any Member of Landlord, and (iv) these agreements by Tenant are enforceable both
by Landlord and by any Member of Landlord.

     11. Damage or Destruction.

     (a) Subject to the provisions of Paragraph 11(b) and 11(c) below, if,
during the Term, the Premises are totally or partially destroyed from any
insured casualty, Landlord shall, within ninety (90) days after the destruction,
commence to restore the Premises to substantially the same condition as they
were in immediately before the destruction and prosecute the same diligently to
completion. Such destruction shall not terminate this Lease. Landlord's
obligation shall not include repair or replacement of Tenant's alterations or
Tenant's equipment, furnishings, fixtures and personal property. If the existing
laws do not permit the Premises to be restored to substantially the same
condition as they were in immediately before destruction, and Landlord is unable
to get a variance to such laws to permit the commencement of restoration of the
Premises within the 90-day period, then either party may terminate this Lease by
giving written notice to the other party within thirty (30) days after
expiration of the 90-day period.

                                       14
<PAGE>

     (b) Despite the provisions of Paragraph 11(a) above, Landlord may decide
within ninety (90) days after such destruction to demolish the Building rather
than rebuild it, in which case this Lease will terminate as of the date of the
destruction. Landlord shall give Tenant written notice of its intention within
ninety (90) days after the destruction.

     (c) If any destruction occurs to the Premises during the last six (6)
months of the initial Term or during the last six (6) months of any extension
period, regardless of the nature and extent of the destruction, either party can
elect to terminate this Lease within thirty (30) days after the destruction
occurs. If this Lease does not terminate pursuant to this Paragraph 11(c), the
provisions of Paragraph 11(a) above shall apply.

     (d) If the Premises are damaged from any uninsured casualty to any extent
whatsoever, Landlord may within ninety (90) days following the date of such
damage: (i) commence to restore the Premises to substantially the same condition
as they were in immediately before the destruction and prosecute the same
diligently to completion, in which event this Lease shall continue in full force
and effect; or (ii) within the 90-day period Landlord may elect not to so
restore the Premises, in which event this Lease shall cease and terminate. In
either such event, Landlord shall give Tenant written notice of its intention
within the 90-day period.

     (e) In the event of destruction or damage to the Premises which materially
interferes with Tenant's use of the Premises, if this Lease is not terminated as
above provided, there shall be an abatement or reduction of Base Rent between
the date of destruction and the date Landlord substantially completes its
reconstruction obligations, based upon the extent to which the destruction
materially interferes with Tenant's use of the Premises. All other obligations
of Tenant under this Lease shall remain in full force and effect. Except for
abatement of Base Rent, Tenant shall have no claim against Landlord for any loss
suffered by Tenant due to damage or destruction of the Premises or any work of
repair undertaken as herein provided.

     (f) the provisions of California Civil Code Sections 1932(2) and 1933(4),
and any successor statutes, are inapplicable with respect to any destruction of
the Premises, such sections providing that a lease terminates upon the
destruction of the Premises unless otherwise agreed between the parties to the
contrary.

     12. Eminent Domain.

     (a) If all or any part of the Premises shall be taken as a result of the
exercise of the power of eminent domain, this Lease shall terminate as to the
part so taken as of the date of taking. In the case of a partial taking of
greater than fifty percent (50%) of the rentable area of the Premises, either
Landlord or Tenant shall have the right to terminate this Lease as to the
balance of the Premises by notice to the other within thirty (30) days after the
date of the taking. In the event of a partial taking of the Premises which does
not result in a termination of this Lease, the monthly Base Rent thereafter to
be paid shall be equitably reduced on a square footage basis. If the continued
occupancy of Tenant is materially interfered with for any time during the
partial taking, notwithstanding the partial taking does not terminate this Lease
as to the part not so taken, the Base Rent shall proportionately abate so long
as Tenant is not able to continuously occupy the part remaining and not so
taken.

                                       15
<PAGE>

     (b) All compensation awarded or paid upon a total or partial taking of the
fee title shall belong to Landlord whether such compensation be awarded or paid
as compensation for diminution in value of the leasehold or of the fee except:
Tenant shall retain and have a claim for the following, to the extent
specifically designated by the condemning authority: (i) the unamortized value
over the Term of Tenant's leasehold improvements (to the extent Landlord has not
contributed to the cost thereof); (ii) that portion (if any) of the award made
to Landlord as a result of removing fixtures, removable by Tenant herein, under
the terms of this Lease but which are required to be taken by the condemnor or
are so acquired by the condemnor; and (iii) all relocation assistance, moving
and relocation expenses to the extent (if any) provided by the condemning
authority directly to Tenant.

     13. Assignment and Subletting.

     (a) Tenant shall not assign, sublet or hypothecate this Lease or any
interest herein or sublet the Premises or any part thereof or permit the use of
the Premises by any party other than Tenant without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Any of the foregoing
acts without Landlord's consent shall be void and shall, at the option of
Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction,
the identity of the parties to the transaction, the proposed documentation for
the transaction, current financial statements of any proposed assignee or
sublessee and all other information reasonably requested by Landlord concerning
the proposed transaction and the parties involved therein.

     (b) As used in this Paragraph 13, the term "assign" or "assignment" shall
include, without limitation, any sale, transfer, or other disposition of all or
any portion of Tenant's estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise, including any of the
following:

          (1) if Tenant is a corporation or a limited liability company: (A) any
     dissolution, merger, consolidation, or other reorganization of Tenant; or
     (B) a sale or other transfer of more than fifty percent (50%) of the value
     of the assets of Tenant; or (C) if Tenant is a corporation with fewer than
     500 shareholders, a sale or other transfer of a controlling percentage of
     the capital stock of Tenant; or (D) if Tenant is a limited liability
     company, a sale or other transfer of a controlling percentage of the
     interest in Tenant. The phrase "controlling percentage" means the ownership
     of, and the right to vote, stocks or interests possessing at least fifty
     percent (50%) of the total combined voting power of the limited liability
     company or, in the case of a corporation, of all classes of Tenant's stock
     issues, outstanding and permitted to vote for the election of directors of
     the corporation;

          (2) if Tenant is a trust, the transfer of more than fifty percent
     (50%) of the beneficial interest of Tenant, or the dissolution of the
     trust;

          (3) if Tenant is a partnership or joint venture, the withdrawal, or
     the transfer of the interest, of any general partner or joint venturer or
     the dissolution of the partnership or joint venture; and

                                       16
<PAGE>

          (4) if Tenant is composed of tenants-in-common, the transfer of
     interest of any cotenants or the partition or dissolution of the cotenancy.

     (c) No sublessee shall have a right further to sublet, and any assignment
by a sublessee of its sublease shall be subject to Landlord's prior written
consent in the same manner as if Tenant were entering into a new sublease.

     (d) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation, or alter the primary liability of Tenant
to pay the Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provisions hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.

     (e) In the event Tenant shall assign or sublet the Premises or request the
consent of Landlord to any assignment or subletting, then Tenant shall reimburse
Landlord for reasonable costs and attorney's fees incurred in connection
therewith in an amount not to exceed $1,000.00.

     14. Default by Tenant.

     (a) The following events shall constitute events of default under this
Lease:

          (1) a failure by Tenant to pay any Rent or to deliver an estoppel
     certificate (as provided in Paragraph 17 below) where such failure
     continues for five (5) days after written notice by Landlord to Tenant;

          (2) the bankruptcy or insolvency of Tenant, any transfer by Tenant to
     defraud creditors, any assignment by Tenant for the benefit of creditors,
     or the commencement of any proceedings of any kind by or against Tenant
     under any provision of the Federal Bankruptcy Act or under any
     other insolvency, bankruptcy or reorganization act unless, in the event any
     such proceedings are involuntary, Tenant is discharged from the same within
     sixty (60) days thereafter; the appointment of a receiver for a substantial
     part of the assets of Tenant; or the levy upon this Lease or any estate of
     Tenant hereunder by any attachment or execution;

          (3) the abandonment or vacation of the Premises;

          (4) the discovery by Landlord that any financial statement given to
     Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any
     successor in interest of Tenant or any guarantor of Tenant's obligation
     hereunder, and any of them, was materially false; and

          (5) a failure by Tenant to perform any of the terms, covenants,
     agreements or conditions of this Lease to be observed or performed by
     Tenant (excluding any event of default under Paragraph 14(a)(1) above),
     where such failure continues for thirty (30) days after written notice
     thereof by Landlord to Tenant; provided, however, that if the nature of the
     default is such that the same

                                       17
<PAGE>

     cannot reasonably be cured within the 30-day period, Tenant shall not be
     deemed to be in default if Tenant shall within such period commence such
     cure and thereafter diligently prosecute the same to completion.

     (b) In the event of any material default or breach by Tenant, Landlord may
at any time thereafter, without limiting Landlord in the exercise of any right
or remedy at law or in equity which Landlord may have by reason of such default
or breach:

          (1) Pursue the remedy described in California Civil Code Section
     1951.4 whereby Landlord may continue this Lease in full force and effect
     after Tenant's breach and abandonment and recover the Rent and any other
     monetary charges as they become due, without terminating Tenant's right to
     sublet or assign this Lease, subject only to reasonable limitations as
     herein provided. During the period Tenant is in default, Landlord shall
     have the right to do all acts necessary to preserve and maintain the
     Premises as Landlord deems reasonable and necessary, including removal of
     all persons and property from the Premise, and Landlord can enter the
     Premises and relet them, or any part of them, to third parties for Tenant's
     account. Tenant shall be liable immediately to Landlord for all costs
     Landlord incurs in reletting the Premises, including, without limitation,
     brokers' commissions, expenses of remodeling the Premises required by the
     reletting, and like costs. Reletting can be for a period shorter or longer
     than the remaining Term.

          (2) Pay or perform such obligation due (but shall not be obligated to
     do so), if Tenant fails to pay or perform any obligations when due under
     this Lease within the time permitted for their payment or performance. In
     such case, the costs incurred by Landlord in connection with the
     performance of any such obligation will be additional rent due under this
     Lease and will become due and payable on demand by Landlord.

          (3) Terminate Tenant's rights to possession by any lawful means, in
     which case this Lease shall terminate and Tenant shall immediately
     surrender possession of the Premises to Landlord. In such event Landlord
     shall be entitled to recover from Tenant all damages incurred by Landlord
     by reason of Tenant's default, including, without limitation, the
     following: (A) the worth at the time of award of any unpaid Rent which had
     been earned at the time of such termination; plus (B) the worth at the time
     of award of the amount by which the unpaid Rent which would have been
     earned after termination until the time of award exceeds the amount of such
     Rent loss that is proved could have been reasonably avoided; plus (C) 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 Rent
     loss that is proved could be reasonably avoided; plus (D) any other amount
     necessary to compensate Landlord for all the detriment proximately caused
     by Tenant's failure to perform its obligations under this Lease or which in
     the ordinary course of events would be likely to result therefrom; plus (E)
     at Landlord's election, such other amounts in addition to or in lieu of the
     foregoing as may be permitted from time to time by applicable State law.
     Upon any such termination of Tenant's possessory interest in and to the
     Premises, Tenant (and at Landlord's sole election, Tenant's sublessees)
     shall no longer have any interest in the Premises, and Landlord shall have
     the right to make any reasonable repairs, alterations or modifications to
     the Premises which Landlord in its sole discretion deems reasonable and
     necessary. The "worth at the time of award" of the amounts referred to in
     subparagraphs (A) and (B) above is computed by allowing interest at the
     maximum rate an individual is permitted by

                                       18
<PAGE>

     law to charge. The worth at the time of award of the amount referred to in
     subparagraph (C) above is 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%).

          (4) Pursue any other legal or equitable remedy available to Landlord.
     Unpaid installments of Rent and other unpaid monetary obligations of Tenant
     under the terms of this Lease shall bear interest from the date due at the
     rate of ten percent (10%) per annum.

     (c) In the event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder, Tenant hereby waives any
right of redemption or relief from forfeiture as provided by law.

     (d) Even though Tenant has breached this Lease and abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all its rights and
remedies under this Lease, including the right to recover Rent as it becomes due
under this Lease. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease, shall not constitute a termination
of Tenant's right to possession.

     (e) In the event Tenant is in material default under any provision of this
Lease then, at Landlord's sole election: (i) Tenant shall not have the right to
exercise any available right, option or election under this Lease ("Tenant's
Exercise Rights") if at such time Tenant is in default hereunder, (ii) Tenant
shall not have the right to consummate any transaction or event triggered by the
exercise of any of Tenant's Exercise Rights if at such time Tenant is in default
hereunder, and (iii) Landlord shall not be obligated to give Tenant any required
notices or information relating to the exercise of any of Tenant's Exercise
Rights hereunder.

     15. Default by Landlord, Notice to Mortgagee.

     Landlord shall not be in default unless Landlord, or the holder of any
mortgage, deed of trust or ground lease covering the Premises, fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord certified mail,
postage prepaid, and to the holder of any first mortgage, deed of trust or
ground lease covering the Premises whose name and address shall have been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord or the holder of any such
mortgage, deed of trust or ground lease commences performance within such 30-day
period and thereafter diligently prosecutes the same to completion. In no event
shall Tenant be entitled to terminate this Lease by reason of Landlord's
default, and Tenant's remedies shall be limited to an action for monetary
damages at law.

                                       19
<PAGE>

     16. Security Deposit.

     On execution of this Lease, Tenant shall deposit with Landlord the sum
specified in the Basic Lease Information (the "Security Deposit"). The Security
Deposit shall be held by Landlord as security for the performance by Tenant of
all of the provisions of this Lease. If Tenant fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Lease, Landlord may use, apply, or retain all or any portion of the
Security Deposit for the payment of any Rent or other charge in default, or the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of the Security Deposit, then within ten (10) days after demand therefor Tenant
shall deposit cash with Landlord in an amount sufficient to restore the deposit
to the full amount thereof, and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep the Security
Deposit separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, the Security Deposit, or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest for its use, to Tenant (or, at Landlord's option to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the Term, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to the Security Deposit.

     17. Estoppel Certificate.

     (a) Tenant shall within ten (10) days of notice from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) 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) amount of the Security Deposit, (iii) the date to which
the Rent has been paid, (iv) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any are claimed, and (v) such other matters as may reasonably
be requested by Landlord. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Building.

     (b) Tenants failure to deliver such statement within such time shall be
conclusive upon Tenant, (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, and (iii) that not more than one
month's Base Rent has been paid in advance.

     (c) If Landlord desires to finance or refinance the Building, Tenant agrees
to deliver to any lender designated by Landlord such financial statements of
Tenant as may be reasonably required by such lender. All such financial
statements shall be received by Landlord in confidence and shall be used for the
purposes herein set forth.

     18. Subordination

     This Lease, at Landlord's sole option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the Building and to any and all advances made on the
security thereof and to all renewals, modifications,

                                       20
<PAGE>

consolidations, replacements, refinancings and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the Rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee, or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, dead of trust or ground lease, and shall give notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of
trust, or ground lease, whether this Lease is dated prior to or subsequent to
the date of said mortgage, deed of trust or ground lease or the date of
recording thereof. If any mortgage or deed of trust to which this Lease is
subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, Tenant shall attorn to the purchaser at the
foreclosure sale or to the grantee under the deed in lieu of foreclosure; if any
ground lease to which this Lease is subordinate is terminated, Tenant shall
attorn to the ground lessor. Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be, or to evidence such
attornment. Any such document of attornment shall also provide that the
successor shall not disturb Tenant in its use of the Premises in accordance with
this Lease.

     19. Attorneys.

     In the event legal action is initiated by either party, the prevailing
party shall be entitled to recover all costs and expenses incurred in such
action, including, without limitation, reasonable attorneys' fees and costs,
including attorneys' fees incurred at trial and on appeal, if any.

     20. Notices.

     All notices, consents, demands, and other communications from one party to
the other given pursuant to the terms of this Lease shall be in writing and
shall be personally delivered, delivered by courier service, sent via facsimile
(confirmation receipt required), or deposited in the United States mail,
certified or registered, postage prepaid, and addressed as follows: To Tenant at
the address specified in the Basic Lease Information or to such other place as
Tenant may from time to time designate in a notice to Landlord; to Landlord at
the address specified in the Basic Lease Information, or to such other place and
to such other parties as Landlord may from time to time designate in a notice to
Tenant. All notices shall be effective upon delivery or refusal of delivery.

     21. General Provisions.

     (a) This Lease shall be governed by and construed in accordance with the
internal laws of the State of California, notwithstanding any choice of law
statutes, regulations, provisions or requirements to the contrary.

     (b) The invalidity of any provision of this Lease, as determined by a court
of competent jurisdiction, shall in no way affect the validity of any other
provision hereof.

     (c) This Lease including attached Exhibits, Addenda, and Basic Lease
Information contains all agreements and understandings of the parties and
supersedes and cancels any and all prior or contemporaneous written or oral
agreements, instruments, understandings and communications

                                       21
<PAGE>

of the parties with respect to the subject matter herein. This Lease, including
the attached Exhibits, Addenda, and Basic Lease Information, may be modified
only in a writing signed by each of the parties.

     (d) No waiver of any provision hereof by either party shall be deemed by
the other party to be a waiver of any other provision, or of any subsequent
breach of the same provision. Landlord's or Tenant's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's or
Tenant's consent to, or approval of, any subsequent act by the other party.

     (e) If Tenant remains in possession, with the expressed consent of
Landlord, of all or any part of the Premises after the expiration of the Term,
such tenancy shall be from month to month only, and not a renewal hereof or an
extension for any further term, and in such case, Rent shall be payable in the
amount of the last month's Base Rent and all other charges under the Lease and
such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein.

     (f) Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their personal
representatives, successors, and assigns.

     (g) Upon reasonable prior notice to Tenant (which notice shall not be
required in the event of an emergency), Landlord and Landlord's representatives
and agents shall have the right to enter the Premises during regular business
hours for the purpose of inspecting the same, showing the same to prospective
purchasers or lenders, and making such alterations, repairs, improvements, or
additions to the Premises, the Building or the Common Areas as Landlord may deem
necessary or desirable. Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the Premises any ordinary "For
Lease" sign. Landlord may at any time place on or about the Premises any
ordinary "For Sale" sign.

     (h) The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a result of
Tenant's default shall, at the option of Landlord, terminate all or any existing
subtenancies or may at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.

     (i) If Tenant is a corporation, limited liability company 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 the
corporation, company or partnership in accordance with, where applicable, a duly
adopted resolution of the board of directors of the corporation, the vote of the
members of the limited liability company or the vote of the partners within the
partnership, and that this Lease is binding upon the corporation, company or
partnership in accordance with its respective articles of incorporation and
bylaws, operating agreement or partnership agreement.

     (j) Time is expressly declared to be of the essence of this Lease and of
each and every covenant, term, condition, and provision hereof, except as to the
conditions relating to the delivery of possession of the Premises to Tenant.

                                       22
<PAGE>

     (k) If there is more than one party comprising Tenant, the obligations
imposed on Tenant shall be joint and several.

     (l) The language in all parts of this Lease shall be in all cases construed
as a whole according to its fair meaning and not strictly for nor against either
Landlord or Tenant.

     (m) As used in this Lease and whenever required by the context thereof,
each number, both singular and plural, shall include all numbers and in each
gender shall include all genders. Landlord and Tenant, as used in this Lease or
in any other instrument referred to in or made a part of this Lease, shall
likewise include both the singular and the plural, a corporation, limited
liability company, partnership, individual or person acting in any fiduciary
capacity as executor, administrator, trustee or in any other representative
capacity.

     (n) The Exhibits and Addendum if any, specified in the Basic Lease
Information are attached to this Lease and by this reference made a part hereof.

     22. Force Majeure.

     Any delay in construction, repairs, or rebuilding any building, improvement
or other structure herein shall be excused and the time limit extended to the
extent that the delay is occasioned by reason of acts of God, labor troubles,
laws or regulations of general applicability, acts of Tenant or Tenant Delays
(as the term is defined in the Work Letter Agreement attached hereto as Exhibit
B), or other occurrences beyond the reasonable control of Landlord.

     Accordingly, Landlord's obligation to perform shall be excused for the
period of the delay and the period for performance shall be extended for a
period equal to the period of such delay.

     23. Broker's Fee.

     Each party represents that it has not had dealings with any real estate
broker, finder, or other person, with respect to this Lease in any manner,
except the brokerage firm(s) specified in the Basic Lease information. Each
party shall hold harmless the other party from all damages resulting from any
claim that may be asserted against the other party by any broker, finder, or
other person with whom the other party has or purportedly had dealt. Landlord
shall pay any commissions of fees that are payable to the broker or finder
specified in the Basic Lease Information, with respect to this Lease in
accordance with the provisions of a separate commission contract.

     24. Financial Statement.

     It is acknowledged by all parties hereto that the attached financial
declaration of Tenant is incorporated as a pat of this Lease as Exhibit E, that
the information contained therein is true and correct in all material respects,
and that the accuracy of the information is a significant fact upon which
Landlord has relied in the granting of this Lease.

                                       23
<PAGE>

TENANT:                               LANDLORD:

Ubiquity Communication, Inc.          G & W/Copley Redwood Business Park, L.P.
a California corporation              a limited partnership

                                      By: G & W Management Co.
                                          Its: Manager
By: /s/ Joseph J. Tavormina
   --------------------------------
   Joseph J. Tavormina
Its: President and CEO

                                      By: /s/ William C. White
                                           -------------------------------
                                           William C. White, President
                                           G & W Management Co.

                                       24

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