Document:

<PAGE>   1
                                                                    Exhibit 10.1

                                   BASIC LEASE INFORMATION
                                          OFFICE NET

LEASE DATE:                                   DECEMBER 1, 2000

TENANT:                                       Brocade Communications Systems,
                                              Inc., a Delaware corporation

TENANT'S NOTICE ADDRESS:                      1745 Technology Drive
                                              San Jose, CA 95110

TENANT'S BILLING ADDRESS:                     1745 Technology Drive
                                              San Jose, CA 95110

TENANT CONTACT:     Wendy Richardson,         PHONE NUMBER:     408/487-8100
                    Real Estate               FAX NUMBER:       408/487-8101
                    Facilities Director

LANDLORD:                                     MV Golden State San Jose, LLC, a
                                              Delaware limited liability company

LANDLORD'S NOTICE ADDRESS:                    1735 Technology Drive, Suite 125
                                              San Jose, CA  95110

LANDLORD'S REMITTANCE ADDRESS:                P.O. Box 45587 Dept. #12392
                                              San Francisco, CA 94145-0587

PROJECT DESCRIPTION:                          That certain real property, which
                                              real property includes the land,
                                              commonly known as Skyport (Phase
                                              I), and located in San Jose,
                                              California, as depicted on EXHIBIT
                                              B attached hereto, which Project
                                              shall include three (3) eight (8)
                                              story office buildings, and
                                              possible additional phases of a
                                              Multi-Phased development in the
                                              San Jose International Airport
                                              geographic area when construction
                                              on such additional phases
                                              commences (at which time Tenant's
                                              Proportionate Share shall be
                                              adjusted as provided herein).

BUILDING DESCRIPTION:                         That certain real property
                                              commonly known as Skyport Tower
                                              III, and located at 1600
                                              Technology Drive, San Jose,
                                              California, and as depicted on
                                              EXHIBIT B attached hereto.

PREMISES:                                     Approximately one hundred
                                              ninety-three thousand nine hundred
                                              seventy-seven (193,977) rentable
                                              square feet, which consists of one
                                              hundred percent (100%) of the
                                              Building and as depicted on
                                              EXHIBIT B attached hereto.

PERMITTED USE:                                General office and administrative,
                                              and up to thirty percent (30%) of
                                              the rentable area of the Premises
                                              may be used for communications
                                              laboratory purposes.

OCCUPANCY DENSITY:                            4.5 per 1,000 rentable square feet
                                              of the Premises.

PARKING DENSITY:                              3.2 spaces per 1,000 usable square
                                              feet of the Premises.

PARKING CHARGE:                               Initially at $0.00 per space/per
                                              month for nonreserved parking
                                              spaces subject to adjustment
                                              pursuant to Paragraph 37 hereof.

SCHEDULED TERM COMMENCEMENT DATE:             DECEMBER 1, 2001, subject to
                                              adjustment pursuant to the terms
                                              of this Lease, Paragraph 2 and
                                              Exhibit C hereof.

SCHEDULED LENGTH OF TERM:                     One hundred forty-four (144)
                                              months following the Term
                                              Commencement Date.

SCHEDULED TERM EXPIRATION DATE:               NOVEMBER 30, 2013, subject to
                                              adjustment pursuant to the terms
                                              of this Lease.

BASE RENT:                                    With respect to the Premises, see
                                              Paragraph 39.A hereof.

SECURITY DEPOSIT:                             Ten Million Four Hundred Five
                                              Thousand Nine Hundred Eighty-Three
                                              Dollars and No/100
                                              ($10,405,983.00) Letter of Credit
                                              delivered in accordance with the
                                              terms of Paragraph 39.C (subject
                                              to adjustment as provided in
                                              Paragraphs 39.C and 19 hereof).

TENANT'S NAICS CODE:                          51121

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TENANT'S PROPORTIONATE SHARE OF BUILDING:     100.00%

TENANT'S PROPORTIONATE SHARE OF PROJECT:      As defined in Paragraph 7.A
                                              hereof.

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

<TABLE>
<CAPTION>
LANDLORD                                          TENANT
<S>                                               <C>
MV Golden State San Jose, LLC,                    Brocade Communications Systems, Inc.
a Delaware limited liability company              a Delaware corporation

By:  Spieker Properties, L.P.,
     a California limited partnership,            By:
     its duly authorized agent for the               -----------------------------------------
     purpose of executing this Lease                 Michael J. Byrd
                                                     Its:  Vice President, Finance,
                                                     Chief Financial Officer
     By: Spieker Properties, Inc.,
         a Maryland corporation,
         its general partner                       By:
                                                       ---------------------------------------
                                                       Wendy Richardson
                                                       Its:  Real Estate Facilities Director
         By:
             ---------------------------------
             John W. Petersen
             Its:  Senior Vice President
</TABLE>

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                                      TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
    Basic Lease Information.................................................   1
    Table of Contents.......................................................   2
1.  Premises................................................................   4
2.  Possession and Lease Commencement.......................................   4
3.  Term....................................................................   5
4.  Use.....................................................................   5
5.  Rules and Regulations...................................................   6
6.  Rent....................................................................   6
7.  Operating Expenses......................................................   6
8.  Insurance and Indemnification...........................................   8
9.  Waiver of Subrogation...................................................  10
10. Landlord's Repairs and Maintenance......................................  10
11. Tenant's Repairs and Maintenance........................................  10
12. Alterations.............................................................  10
13. Signs...................................................................  11
14. Inspection/Posting Notices..............................................  12
15. Services and Utilities..................................................  12
16. Subordination...........................................................  13
17. Financial Statements....................................................  13
18. Estoppel Certificate....................................................  13
19. Security Deposit........................................................  13
20. Limitation of Tenant's Remedies.........................................  13
21. Assignment and Subletting...............................................  14
22. Authority of Tenant.....................................................  15
23. Condemnation............................................................  15
24. Casualty Damage.........................................................  16
25. Holding Over............................................................  16
26. Default.................................................................  17
27. Liens...................................................................  18
28. Substitution............................................................  18
29. Transfers by Landlord...................................................  18
30. Right of Landlord to Perform Tenant's Covenants.........................  18
31. Waiver..................................................................  18
32. Notices.................................................................  19
33. Attorney's Fees.........................................................  19
34. Successors and Assigns..................................................  19
35. Force Majeure...........................................................  19
36. Surrender of Premises...................................................  19
37. Parking.................................................................  19
38. Miscellaneous...........................................................  20
39. Additional Provisions...................................................  21
40. Jury Trial Waiver.......................................................  24
    Signatures..............................................................  25

Exhibits:
    Exhibit A..............................................Rules and Regulations
    Exhibit B....................................Site Plan, Property Description
    Exhibit C........................................Lease Improvement Agreement

    Additional Exhibits as Required
</TABLE>

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                                      LEASE

THIS LEASE is made as of the 1ST DAY OF DECEMBER, 2000, by and between MV Golden
State San Jose, LLC, a Delaware limited liability company (hereinafter called
"LANDLORD"), and Brocade Communications Systems, Inc., a Delaware corporation
(hereinafter called "TENANT").

                                   1. PREMISES

        Landlord leases to Tenant and Tenant leases from Landlord, upon the
terms and conditions hereinafter set forth, those premises (the "PREMISES")
which are to be constructed by Landlord as outlined in red on EXHIBIT B and
described in the Basic Lease Information. The Premises shall be all or part of a
building (the "BUILDING") and of a project (the "Project"), which may consist of
more than one building and additional facilities, as described in the Basic
Lease Information. The Building and Project are outlined in blue and green
respectively on EXHIBIT B. Landlord and Tenant acknowledge that physical changes
may occur from time to time in the Premises, Building or Project, and that the
number and type of buildings and additional facilities which constitute the
Project may change from time to time, which may result in an adjustment in
Tenant's Proportionate Share, as defined in the Basic Lease Information, as
provided in Paragraph 7.A. Landlord shall measure the square footage of the
Premises, the Building and the Project all in accordance with the standards set
forth in ANSI/BOMA Z65.1-1996, as promulgated by the Building Owners and
Managers Association, and its applicable guidelines ("BOMA STANDARD"). After
substantial completion of the Base Building Work (as defined in Exhibit C
attached hereto), Landlord shall have the right to remeasure the Premises and
the Building. Landlord and Tenant hereby acknowledge and agree that the total
amount of rentable square footage included in the definition of the Premises
and/or Project may be modified pursuant to the foregoing sentence and,
accordingly, Landlord and Tenant shall each execute an amendment to this Lease
prepared by Landlord which amendment shall reflect any changes in such rentable
square feet of the Premises and/or Project; provided, however, that, with
respect to the initial Premises defined in this Lease for the initial Term only,
the amount of the rentable square feet of the Building shall in no event be an
amount less than one hundred ninety-three thousand nine hundred seventy-seven
(193,977) rentable square feet and in no event be greater than one hundred
ninety-five thousand (195,000) rentable square feet. Tenant hereby acknowledges
that the Premises, Building and Project are not constructed as of the date of
this Lease and, consequently, changes in the descriptions of the Premises,
Building and Project contained in EXHIBIT B hereof are likely to occur. Prior to
the Term Commencement Date (as defined below) Tenant and Landlord hereby agree
to execute an amendment to this Lease prepared by Landlord which amendment
accurately reflects any such changes, if any. Notwithstanding the foregoing,
during the initial Term hereof, Landlord shall not make material changes in the
configuration of the Project with respect to the general location of the
Building as described in the Planned Development Zoning as approved by the city
counsel of the City of San Jose, without prior consent of Tenant, which consent
shall not be unreasonably withheld, conditioned or delayed.

                      2. POSSESSION AND LEASE COMMENCEMENT

A. INTENTIONALLY OMITTED.

B. CONSTRUCTION OF IMPROVEMENTS. The term commencement date ("TERM COMMENCEMENT
DATE") shall be the earlier of the date on which: (1) Tenant commences business
operations in the Premises, as evidenced by, among other things, the presence in
all or a portion of the Premises of business files and, during normal business
hours, employees (excluding employees or other agents of Tenant installing and
testing Tenant's equipment, furniture and fixtures); or (2) substantial
completion of the Base Building Work as described in EXHIBIT C attached hereto,
or (3) DECEMBER 1, 2001. If for any reason Landlord cannot deliver possession of
the Premises to Tenant with the Base Building Work substantially complete
(except for lobbies, penthouse and life safety testing) on the Delivery Date (as
defined in Paragraph 2.C below), Landlord shall not be subject to any liability
therefor, nor shall Landlord be in default hereunder nor shall such failure
affect the validity of this Lease, and Tenant agrees to accept possession of the
Premises at such time as Landlord delivers possession of the Premises to Tenant
(with the Base Building Work substantially complete (except for lobbies,
penthouse and life safety testing), which date shall then be deemed the Delivery
Date. Tenant shall not be liable for any Rent for any period prior to the Term
Commencement Date (but without affecting any obligations of Tenant under any
improvement agreement appended to this Lease). In the event of any dispute as to
substantial completion of work performed or required to be performed by
Landlord, the certificate of Landlord's architect or general contractor shall be
conclusive. Substantial completion of the Base Building Work shall have occurred
notwithstanding Tenant's submission of a punchlist to Landlord, which Tenant
shall submit, if at all, within fifteen (15) business days after the Delivery
Date or otherwise in accordance with any improvement agreement appended to this
Lease. Landlord shall promptly commence the correction of the punchlist items
described in this Paragraph 2.B, if any, following Landlord's receipt of any
such punchlist items list in accordance with this Lease. After the Term
Commencement Date and upon Landlord's request, Tenant shall promptly execute and
return to Landlord a "Start-Up Letter" in which Tenant shall agree, among other
things, to acceptance of the Premises (subject to Landlord's obligation to
correct punchlist items with respect to the Base Building Work, if any remain to
be corrected, as submitted by Tenant to Landlord in accordance with the terms of
this Paragraph 2.B) and to the determination of the Term Commencement Date, in
accordance with the terms of this Lease, but Tenant's failure or refusal to do
so shall not negate Tenant's acceptance of the Premises or affect determination
of the Term Commencement Date.

C. DELIVERY OF POSSESSION. Landlord shall deliver possession of the Premises
(without Tenant Improvements) to Tenant with Base Building Work substantially
complete (except for lobbies, penthouse and life safety testing) on or before
OCTOBER 1, 2001 subject to extension due to delays caused by Tenant or by
Tenant's contractor or anyone else performing services on behalf of Tenant
("DELIVERY DATE"). In the event Landlord fails to deliver possession of the
Premises to Tenant as of the Delivery Date, Landlord shall grant to Tenant, for
each day after the Delivery Date until the day Landlord delivers possession of
the Premises to Tenant with the Base Building Work substantially complete, a
credit against Base Rent in an amount equal to the daily amount of Base Rent in
effect for the first month of the Term of this Lease. The credit described in
the preceding sentence shall be granted against Tenant's obligation to pay Base
Rent commencing in the second month of the Term. Tenant may, as Tenant's sole
remedy, terminate this Lease by delivering written notice to Landlord on or
before JUNE 15, 2002 if: (i) Landlord has not substantially completed the Base
Building Work (as defined in EXHIBIT C) to be constructed by Landlord as
described in EXHIBIT C to this Lease by MAY 1, 2002; (ii) Tenant has given
Landlord at least twenty (20) days' prior written notice ("TENANT'S TERMINATION
NOTICE PERIOD") of Landlord's failure to do so, except for punchlist items, and
except for delays caused by Tenant or by Tenant's contractor or anyone else
performing services on behalf of Tenant or by Force Majeure Events or delays in
connection with any Tenant requested modifications to the Plans or any other
aspect of the Base Building Work, which delays will not be cause for termination
hereunder; and (iii) Landlord has not, as of the expiration of Tenant's
Termination Notice Period, substantially completed the Base Building Work and
delivered possession of the Premises to Tenant. In the event of such
termination, Landlord shall return any Security Deposit to Tenant as well as any
other sums paid hereunder by Tenant to Landlord. All obligations of Tenant and
Landlord under this Lease shall thereafter terminate and no party shall have any
further obligations under this Lease.

                                       4
<PAGE>   5

                                     3. TERM

        The term of this Lease (the "TERM") shall commence on the Term
Commencement Date and continue in full force and effect for the number of months
specified as the Scheduled Length of Term in the Basic Lease Information or
until this Lease is terminated as otherwise provided herein. If the Term
Commencement Date is a date other than the first day of the calendar month, the
Term shall be the number of months of the Length of Term in addition to the
remainder of the calendar month following the Term Commencement Date.

                                     4. USE

A. GENERAL. Tenant shall use the Premises for the permitted use specified in the
Basic Lease Information ("PERMITTED USE") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, assignees and subtenants (collectively, "TENANT'S
PARTIES") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the occupant density (the "OCCUPANCY DENSITY") or the parking density
(the "PARKING DENSITY") specified in the Basic Lease Information at any time.
Tenant shall pay the Parking Charge specified in the Basic Lease Information as
Additional Rent (as hereinafter defined) hereunder. So long as Tenant is
occupying the Premises, Tenant and Tenant's Parties shall have the nonexclusive
right to use, in common with other parties occupying the Building or Project,
the parking areas, driveways and other common areas of the Building and Project,
subject to the terms of this Lease and such rules and regulations as Landlord
may from time to time prescribe. Landlord reserves the right, without notice or
liability to Tenant, and without the same constituting an actual or constructive
eviction, to alter or modify the common areas from time to time, including the
location and configuration thereof, and the amenities and facilities which
Landlord may determine to provide from time to time, provided that any such
alteration or modification shall not materially adversely affect Tenant's use of
the Premises or the parking area as provided hereunder, and provided further
that any such alteration or modification shall not detract from the first-class
quality of the Building. In the event that any alteration or modification of the
common area materially and adversely affects Tenant's use of the parking areas
of the Project, Landlord may provide to Tenant a reasonable alternate parking
area for Tenant's and Tenant's Parties' use within a reasonable proximity to the
Building. During the Term hereof, provided that Tenant complies with the
reasonable requirements of Landlord's security system, Tenant shall have the
right to access the Premises via Landlord's security system, twenty-four (24)
hours per day, three hundred sixty-five (365) days per calendar year, in
accordance with the terms and conditions of this Lease, subject to Landlord's
repair and maintenance obligations pursuant to this Lease which obligations may
require the performance of after-hours repair or maintenance work by Landlord
which work may temporarily prevent after-hours access to the Building. As of the
date of this lease, Landlord employs a roving security service covering the
Project. Notwithstanding the foregoing, nothing in this Lease shall be deemed to
require that Landlord provide security services to Tenant or any tenant of the
Project at any time.

B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas, substances,
noise or vibrations to emanate from the Premises or from any portion of the
common areas as a result of Tenant's or any Tenant's Party's use thereof, nor
take any action which would constitute a nuisance or would disturb, obstruct or
endanger any other tenants or occupants of the Building or Project or elsewhere,
or interfere with their use of their respective premises or common areas.
Storage outside the Premises of materials, vehicles or any other items is
prohibited. Tenant shall not use or allow the Premises to be used for any
immoral, improper or unlawful purpose, nor shall Tenant cause or maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer the commission of any waste in, on or about the Premises. Tenant shall
not allow any sale by auction upon the Premises, or place any loads upon the
floors, walls or ceilings which could endanger the structure, or place any
harmful substances in the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Premises. Landlord shall not be responsible to Tenant for the non-compliance by
any other tenant or occupant of the Building or Project with any of the
above-referenced rules or any other terms or provisions of such tenant's or
occupant's lease or other contract.

C. COMPLIANCE WITH REGULATIONS. Subject to punchlist items, if any, provided by
Tenant to Landlord in accordance with Paragraph 2.B above, when entering the
Premises, Tenant accepts the Premises in the condition existing as of the date
of such entry. Tenant shall at its sole cost and expense strictly comply with
all existing or future applicable municipal, state and federal and other
governmental statutes, rules, requirements, regulations, laws and ordinances,
including zoning ordinances and regulations, and covenants, easements and
restrictions of record (to the extent Tenant has actual or constructive
knowledge of such restrictions of record) governing and relating to Tenant's
Permitted Use or other specific use by Tenant or Tenant's Parties; occupancy or
possession of the Premises, to Tenant's use of the common areas, or to the use,
storage, generation or disposal of Hazardous Materials (hereinafter defined) by
Tenant or Tenant's Parties (collectively "REGULATIONS"). Tenant hereby
acknowledges that Landlord has provided information regarding title restrictions
of record existing as of the date of this Lease. Tenant shall at its sole cost
and expense obtain any and all licenses or permits necessary for Tenant's use of
the Premises. Tenant shall at its sole cost and expense promptly comply with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted. Tenant shall not do or permit anything to be done in, on,
under or about the Project or bring or keep anything which will in any way
increase the rate of any insurance upon the Premises, Building or Project or
upon any contents therein or cause a cancellation of said insurance or otherwise
affect said insurance in any manner. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold Landlord harmless from and
against any loss, cost, expense, damage, attorneys' fees or liability arising
out of the failure of Tenant to comply with any Regulation to the extent that
such compliance is required of Tenant under this Lease. Tenant's obligations
pursuant to the foregoing indemnity shall survive the expiration or earlier
termination of this Lease. Landlord represents that, as of the date Landlord
delivers possession of the Premises to Tenant, the Premises shall comply in all
material respects with those Regulations applicable to real property located in
Santa Clara County and pertaining to the Premises. Landlord shall be responsible
for complying with Regulations (including ADA and Title 24 to the extent any
such compliance requirement of Landlord is expressly stated herein) pertaining
to the common areas of the Project to the extent such compliance is required as
a result of Tenant's Permitted Use or to the extent non-compliance would create
a hazardous condition in the common areas of the Project or to the extent such
Regulations pertain to the common areas of the Project which directly service
the Premises, except to the extent arising out of Tenant's occupancy or use of
the Premises or common areas or construction of any Tenant Improvements or
Alterations made by or on behalf of Tenant, whether by Landlord or otherwise and
whether performed before or after the Term Commencement Date, or installation of
any equipment, fixtures, furniture or other personal property in or about the
Premises. Tenant shall have the sole responsibility for complying, at Tenant's
cost, with any and all provisions of the Americans with Disabilities Act of
1990, as it has been and may later be amended ("ADA"), (i) with respect to the
Premises; and (ii) with respect to the common areas of the Project where in the
case of this clause (ii) such compliance has been brought about by: (A) any
Tenant Improvements or Alterations to the Premises or to the common areas made
by or on behalf of Tenant, whether by Landlord or otherwise; and whether
performed before or after the Term Commencement Date; (B) requirements of
Tenant's employees, or any changes to Tenant's use of the Premises; or (C) any
architectural barriers caused by Tenant's installation of any equipment,
fixtures, furniture, or other personal property in or about the Premises (items
(i) and (ii) collectively, "TENANT'S ADA RESPONSIBILITIES"). Tenant shall
indemnify, defend and hold landlord, its agents and employees harmless from and
against any and all claims, damages, or liabilities (including, without
limitation, reasonable attorneys' fees and costs) arising directly or indirectly
from Tenant's failure to satisfy any of Tenant's ADA Responsibilities. Landlord
shall indemnify, defend and hold Tenant, its agents and employees harmless from
and against any and all claims, damages or liabilities arising directly or
indirectly from Landlord's failure to comply with any obligations of a landlord
under the ADA, other than such claims, damages or liabilities arising from
Tenant's failure to satisfy any of Tenant's ADA Responsibilities; provided,
however, that Landlord may treat costs of ADA compliance with respect to the
common areas of the Project to the extent incurred after the date Landlord
delivers possession of the Premises to Tenant as an Operating Expense.
Notwithstanding anything to the contrary contained in Paragraph 7.A of this
Lease, costs of ADA and Title 24 compliance brought about by alterations to the
common areas performed before the date Landlord delivers possession of the
Premises to Tenant for Tenant's construction of the Tenant Improvements, or
which are expressly made Landlord's responsibility under this Lease, will be
borne solely by Landlord and shall neither be treated as an Operating Expense
nor be the responsibility of Tenant, except to the extent provided herein.
Landlord represents that, as of the date Landlord delivers possession of the
Premises to Tenant, to the best of Landlord's actual knowledge, the Premises and
the Building shall comply in all material respects with the ADA and Title 24 as
the ADA and Title 24

                                       5
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have, as of the date Landlord delivers possession of the Premises to Tenant,
been interpreted in Santa Clara County and pertain to the Premises and the
Building. Notwithstanding anything to the contrary contained in this Lease,
regardless of whether the cost of compliance with Regulations shall be borne by
Tenant, or Tenant and other tenants of the Project as an Operating Expense (as
defined herein), Landlord shall perform or cause to be performed any compliance
with Regulations items as described in this Lease which items are located in the
common area or are structural in nature; provided, however, that the costs of
such compliance items shall be allocated in accordance herewith.

D. HAZARDOUS MATERIALS. As used in this Lease, "HAZARDOUS MATERIALS" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be handled, used, generated, stored, released or
disposed of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials onto the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises; provided
that Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times and if Landlord determines in good faith that Tenant may
not be in compliance with this Paragraph 4.D to inspect the Premises and to
conduct tests and investigations to determine whether Tenant is in compliance
with the foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold Landlord harmless from and
against any and all claims, liabilities, losses, costs, loss of rents, liens,
damages, injuries or expenses (including reasonable attorneys' and consultants'
fees, and court costs), demands, causes of action, or judgments directly or
indirectly arising out of or related to the use, generation, storage, release,
or disposal of Hazardous Materials by Tenant or any of Tenant's Parties in, on,
under or about the Premises, the Building or the Project or surrounding land or
environment, which indemnity shall include, without limitation, damages for
personal or bodily injury, property damage, damage to the environment or natural
resources occurring on or off the Premises, losses attributable to diminution in
value or adverse effects on marketability, the cost of any investigation,
monitoring, government oversight, repair, removal, remediation, restoration,
abatement, and disposal, and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following the
expiration or earlier termination of this Lease. Neither the consent by Landlord
to the use, generation, storage, release or disposal of Hazardous Materials nor
the strict compliance by Tenant with all laws pertaining to Hazardous Materials
shall excuse Tenant from Tenant's obligation of indemnification pursuant to this
Paragraph 4.D. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or earlier termination of this Lease.

                            5. RULES AND REGULATIONS

        Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as EXHIBIT A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations.

                                     6. RENT

A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever, at the Remittance Address specified in the Basic
Lease Information or to such other place as Landlord may from time to time
designate in writing. Base Rent for the first full month of the Term for the
Premises shall be paid by Tenant upon Tenant's execution of this Lease. Such
payment of Base Rent for the first full month of the Term shall be applied to
the first full month of the Term by Landlord upon its receipt thereof so that,
upon such application by Landlord of such payment, no additional payment of Base
Rent allocable to the first full month of the Term shall be due from Tenant. If
the obligation for payment of Base Rent commences on a day other than the first
day of a month, then Base Rent shall be prorated and the prorated installment
shall be paid on the first day of the calendar month next succeeding the Term
Commencement Date. The Base Rent payable by Tenant hereunder is subject to
adjustment as provided elsewhere in this Lease, as applicable. As used herein,
the term "Base Rent" shall mean the Base Rent specified in the Basic Lease
Information as it may be so adjusted from time to time.

B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.D. and E., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("ADDITIONAL RENT"). "RENT" shall mean
Base Rent and Additional Rent.

                              7. OPERATING EXPENSES

A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Tenant's Proportionate Share of the Project shall mean the ratio of the
rentable square feet of the Premises over the sum of the number of rentable
square feet of (i) the applicable portion of the Project, and/or (ii) other
projects within the San Jose International Airport geographic area and owned by
Landlord which other projects share services with the Project, and, with respect
to each of clause (i) and (ii) above, for which an Operating Expense shall be
chargeable to Tenant pursuant to this Lease, Tenant shall pay the applicable
Tenant's Proportionate Share of each such Operating Expenses. Landlord and
Tenant acknowledge that if the number of buildings which constitute the Project
increases or decreases, or if physical changes are made to the Premises,
Building or Project or the configuration of any thereof, Landlord shall adjust
Tenant's Proportionate Share of the Building or Project to equitably and fairly
reflect the change. Landlord's determination of Tenant's Proportionate Share of
the Building and of the Project shall be conclusive so long as it is reasonably
and consistently applied. "OPERATING EXPENSES" shall mean all expenses and costs
of every kind and nature which Landlord shall pay or become obligated to pay,
because of or in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building or Project and its
supporting facilities and such additional facilities now and in subsequent years
as may be determined by Landlord to be necessary or desirable to the Building
and/or Project (as determined in a reasonable manner) other than those expenses
and costs which are specifically attributable to Tenant or which are expressly
made the financial responsibility of Landlord or specific tenants of the
Building or Project pursuant to this Lease. Operating Expenses shall include,
but are not limited to, the following:

        (1) TAXES. All real property taxes and assessments, possessory interest
        taxes, sales taxes, personal property taxes, business or license taxes
        or fees, gross receipts taxes, service payments in lieu of such taxes or
        fees, annual or periodic license or use fees, excises, transit charges,
        and other impositions, general and special, ordinary and extraordinary,
        unforeseen as well as foreseen, of any kind (including fees "in-lieu" of
        any such tax or assessment) which are now or hereafter assessed, levied,
        charged, confirmed, or imposed by any public authority upon the Building
        or Project, its operations or the Rent (or any portion or

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<PAGE>   7

        component thereof), or any tax, assessment or fee imposed in
        substitution, partially or totally, of any of the above. Operating
        Expenses shall also include any taxes, assessments, reassessments, or
        other fees or impositions with respect to the development, leasing,
        management, maintenance, alteration, repair, use or occupancy of the
        Premises, Building or Project or any portion thereof, including, without
        limitation, by or for Tenant, and all increases therein or reassessments
        thereof whether the increases or reassessments result from increased
        rate and/or valuation (whether upon a transfer of the Building or
        Project or any portion thereof or any interest therein or for any other
        reason). Operating Expenses shall not include inheritance or estate
        taxes imposed upon or assessed against the interest of any person in the
        Building or the Project, or taxes computed upon the basis of the net
        income of any owners of any interest in the Building or the Project. If
        it shall not be lawful for Tenant to reimburse Landlord for all or any
        part of such taxes, the monthly rental payable to Landlord under this
        Lease shall be revised to net Landlord the same net rental after
        imposition of any such taxes by Landlord as would have been payable to
        Landlord prior to the payment of any such taxes.

        (2) INSURANCE. All insurance premiums and costs, including, but not
        limited to, any deductible amounts, premiums and other costs of
        insurance incurred by Landlord, including for the insurance coverage set
        forth in Paragraph 8.A. herein.

        (3) COMMON AREA MAINTENANCE.

               (a) Repairs, replacements, and general maintenance of and for the
               Building and Project and public and common areas and facilities
               of and comprising the Building and Project, including, but not
               limited to, the roof and roof membrane, windows, elevators,
               restrooms, conference rooms, health club facilities, lobbies,
               mezzanines, balconies, mechanical rooms, building exteriors,
               alarm systems, pest extermination, landscaped areas, parking and
               service areas, driveways, sidewalks, loading areas, fire
               sprinkler systems, sanitary and storm sewer lines, utility
               services, heating/ventilation/air conditioning systems,
               electrical, mechanical or other systems, telephone equipment and
               wiring servicing, plumbing, lighting, and any other items or
               areas which affect the operation or appearance of the Building or
               Project, which determination shall be at Landlord's discretion,
               except for: those items to the extent paid for by the proceeds of
               insurance or paid directly by Tenant or other third parties; and
               those items attributable solely or jointly to specific tenants of
               the Building or Project.

               (b) Repairs, replacements, and general maintenance shall include
               the cost of any improvements made to or assets acquired for the
               Project or Building that in Landlord's discretion may reduce any
               other Operating Expenses, including present or future repair
               work, are reasonably necessary for the health and safety of the
               occupants of the Building or Project, or for the operation of the
               Building systems, services and equipment, or are required to
               comply with any Regulation, such costs or allocable portions
               thereof to be amortized over such reasonable period as Landlord
               shall determine which period is substantially in accordance with
               generally accepted accounting practices, together with interest
               on the unamortized balance at the publicly announced "prime rate"
               charged by Wells Fargo Bank, N.A. (San Francisco) or its
               successor at the time such improvements or capital assets are
               constructed or acquired, plus two (2) percentage points, or in
               the absence of such prime rate, then at the U.S. Treasury
               six-month market note (or bond, if so designated) rate as
               published by any national financial publication selected by
               Landlord, plus four (4) percentage points, but in no event more
               than the lesser of (i) ten percent (10%) or (ii) the maximum rate
               permitted by law, plus reasonable financing charges.

               (c) Payment under or for any easement, license, permit, operating
               agreement, declaration, restrictive covenant or instrument
               relating to the Building or Project.

               (d) All expenses and rental related to services and costs of
               supplies, materials and equipment used in operating, managing and
               maintaining the Premises, Building and Project, the equipment
               therein and the adjacent sidewalks, driveways, parking and
               service areas, including, without limitation, expenses related to
               service agreements regarding security, fire and other alarm
               systems, janitorial services, window cleaning, elevator
               maintenance, Building exterior maintenance, landscaping and
               expenses related to the administration, management and operation
               of the Project, including without limitation salaries, wages and
               benefits and management office rent.

               (e) The cost of supplying any services and utilities which
               benefit all or a portion of the Premises, Building or Project,
               including without limitation services and utilities provided
               pursuant to Paragraph 15 hereof.

               (f) Legal expenses and the cost of audits by certified public
               accountants; provided, however, that legal expenses chargeable as
               Operating Expenses shall not include the cost of negotiating
               leases, collecting rents, evicting tenants nor shall it include
               costs incurred in legal proceedings with or against any tenant or
               to enforce the provisions of any lease.

               (g) A management and accounting cost recovery fee not to exceed
               three percent (3%) of the sum of the Project's revenues.

If the rentable area of the Building and/or Project is not fully occupied during
any fiscal year of the Term as determined by Landlord, an adjustment shall be
made in Landlord's discretion in computing the Operating Expenses for such year
so that Tenant pays an equitable portion of all variable items (e.g., utilities,
janitorial services and other component expenses that are affected by variations
in occupancy levels) of Operating Expenses, as reasonably determined by
Landlord; provided, however, that in no event shall Landlord be entitled to
collect in excess of one hundred percent (100%) of the total Operating Expenses
actually incurred by Landlord from all of the tenants in the Building or
Project, as the case may be.

Operating Expenses shall not include the cost of providing tenant improvements
or other specific costs incurred for the account of specific tenants of the
Building or Project other than Tenant, the initial construction cost of the
Building, or debt service on any mortgage or deed of trust recorded with respect
to the Project other than pursuant to Paragraph 7.A(3)(b) above. Moreover, if
Landlord does not provide janitorial service to the Premises, Operating Expenses
with respect to the Premises shall not include the cost of janitorial service.
In addition, notwithstanding anything in the definition of Operating Expenses in
this Lease to the contrary, Operating Expenses shall not include the following,
except to the extent specifically provided in this Paragraph 7.A: costs of
capital improvements, replacements or equipment and any depreciation or
amortization expenses thereon, except to the extent included in Operating
Expenses in Paragraph 7.A of this Lease; marketing costs, including leasing
commissions, attorneys' fees in connection with the negotiation and preparation
or enforcement of letters, deal memos, letters of intent, leases, subleases
and/or assignments, space planning costs, and other costs and expenses incurred
in connection with lease, sublease and/or assignment negotiations and
transactions with present or prospective tenants or other occupants of the
Building or the Project; except to the extent included in Operating Expenses in
Paragraph 7.A(3) above, interest, principal, points and fees on debt or
amortization payments on any mortgage or deed of trust or any other debt
instrument encumbering the Building or Project or the land on which the Building
or Project is situated; and advertising and promotional expenditures; Landlord's
general corporate overhead and general administrative expenses not related to
the operation of the Building or the Project (including executive salaries),
except as specifically set forth in Paragraph 7.A of this Lease.

Notwithstanding anything herein to the contrary, in any instance wherein
Landlord, in Landlord's reasonable discretion, deems Tenant to be responsible
for any amounts greater than Tenant's Proportionate Share, Landlord shall have
the right to allocate costs in any manner

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<PAGE>   8

Landlord reasonably deems appropriate. Landlord shall not collect from the
tenants of the Project an amount greater that 100% of the Operating Expenses
incurred in the Project.

The above enumeration of services and facilities shall not be deemed to impose
an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that it
shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.

B. PAYMENT OF ESTIMATED OPERATING EXPENSES. "ESTIMATED OPERATING EXPENSES" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. If at any time
during the course of the fiscal year, Landlord reasonably determines that
Operating Expenses are projected to vary from the then Estimated Operating
Expenses by more than five percent (5%), Landlord may, by written notice to
Tenant, revise the Estimated Operating Expenses for the balance of such fiscal
year, and Tenant's monthly installments for the remainder of such year shall be
adjusted so that by the end of such fiscal year Tenant has paid to Landlord
Tenant's Proportionate Share of the revised Estimated Operating Expenses for
such year, such revised installment amounts to be Additional Rent for all
purposes hereunder.

C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "OPERATING EXPENSE ADJUSTMENT"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, or as
soon thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within thirty (30) days after receipt of such statement, such payment
to constitute Additional Rent for all purposes hereunder. If such statement
shows that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference within
thirty (30) days after delivery of such statement to Tenant. If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within thirty (30) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first day of the fiscal year, Tenant's Proportionate Share of the Operating
Expense Adjustment shall be prorated based on a month of 30 days and the number
of calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.

D. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and its supporting facilities and such additional facilities now
and in subsequent years as may be determined by Landlord to be necessary or
desirable to the Building and/or Project.

E. TENANT AUDIT. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than thirty (30) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to notify Landlord of such dispute and to request an audit in
writing, and within sixty (60) days after Landlord's receipt of such written
notice, to cause Landlord's books and records with respect to Operating Expenses
for such fiscal year to be audited by certified public accountants selected by
Tenant and subject to Landlord's reasonable right of approval. The Operating
Expense Adjustment shall be appropriately adjusted on the basis of such audit.
If such audit discloses a liability for a refund in excess of six percent (6%)
of Tenant's Proportionate Share of the Operating Expenses previously reported,
the cost of such audit shall be borne by Landlord; otherwise the cost of such
audit shall be paid by Tenant. If Tenant shall not request an audit in
accordance with the provisions of this Paragraph 7.E. within thirty (30) days
after receipt of Landlord's statement provided pursuant to Paragraph 7.B. or
7.C., such statement shall be final and binding for all purposes hereof. Tenant
acknowledges and agrees that any information revealed in the above described
audit may contain proprietary and sensitive information and that significant
damage could result to Landlord if such information were disclosed to any party
other than Tenant's auditors, Tenant's executives and financial managers and
Tenant's legal counsel, all of whom Tenant shall require to keep confidential
any information discovered through such audit, which requirement of
confidentiality shall survive the termination of this Lease. Except to the
extent required by an order of a court with proper jurisdiction (in which event,
Tenant shall give Landlord reasonable prior notice prior to any such disclosure
required of Tenant), Tenant shall not in any manner disclose, provide or make
available any information revealed by the audit to any person or entity without
Landlord's prior written consent, which consent may be withheld by Landlord in
its sole and absolute discretion. The information disclosed by the audit will be
used by Tenant solely for the purpose of evaluating Landlord's books and records
in connection with this Paragraph 7.E.

                        8. INSURANCE AND INDEMNIFICATION

A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.

        (1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
        insuring the Building against damage or destruction due to risk
        including fire, vandalism, and malicious mischief in an amount not less
        than the replacement cost thereof, in the form and with deductibles and
        endorsements as selected by Landlord. At its election, Landlord may
        instead (but shall have no obligation to) obtain "All Risk" coverage,
        and may also obtain earthquake, pollution, and/or flood insurance in
        amounts selected by Landlord.

        (2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also (but
        shall have no obligation to) carry (i) insurance against loss of rent,
        in an amount equal to the amount of Base Rent and Additional Rent that
        Landlord could be required to abate to all Building tenants in the event
        of condemnation or casualty damage for a period of twelve (12) months;
        and (ii) liability insurance and such other insurance as Landlord may
        deem prudent or advisable, in such amounts and on such terms as Landlord
        shall determine. Landlord shall not be obligated to insure, and shall
        have no responsibility whatsoever for any damage to, any furniture,
        machinery, goods, inventory or supplies, or other personal property or
        fixtures which Tenant may keep or maintain in the Premises, or any
        leasehold improvements, additions or alterations within the Premises.

B. TENANT'S INSURANCE. Tenant shall procure at Tenant's sole cost and expense
and keep in effect from the date of this Lease and at all times until the end of
the Term the following:

                                       8
<PAGE>   9

        (1) PROPERTY INSURANCE. Insurance on all personal property and fixtures
        of Tenant and all improvements, additions or alterations made by or for
        Tenant to the Premises on an "All Risk" basis, insuring such property
        for the full replacement value of such property.

        (2) LIABILITY INSURANCE. Commercial General Liability insurance covering
        bodily injury and property damage liability occurring in or about the
        Premises or arising out of the use and occupancy of the Premises and the
        Project, and any part of either, and any areas adjacent thereto, and the
        business operated by Tenant or by any other occupant of the Premises.
        Such insurance shall include contractual liability insurance coverage
        insuring all of Tenant's indemnity obligations under this Lease. Such
        coverage shall have a minimum combined single limit of liability of at
        least Two Million Dollars ($2,000,000.00), and a minimum general
        aggregate limit of Three Million Dollars ($3,000,000.00), with an
        "Additional Insured -- Managers or Lessors of Premises Endorsement." All
        such policies shall be written to apply to all bodily injury (including
        death), property damage or loss, personal and advertising injury and
        other covered loss, however occasioned, occurring during the policy
        term, shall be endorsed to add Landlord and any party holding an
        interest to which this Lease may be subordinated as an additional
        insured, and shall provide that such coverage shall be "PRIMARY" and
        non-contributing with any insurance maintained by Landlord, which shall
        be excess insurance only. Such coverage shall also contain endorsements
        including employees as additional insureds if not covered by Tenant's
        Commercial General Liability Insurance. All such insurance shall provide
        for the severability of interests of insureds; and shall be written on
        an "OCCURRENCE" basis, which shall afford coverage for all claims based
        on acts, omissions, injury and damage, which occurred or arose (or the
        onset of which occurred or arose) in whole or in part during the policy
        period.

        (3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Workers'
        Compensation Insurance as required by any Regulation, and Employers'
        Liability Insurance in amounts not less than One Million Dollars
        ($1,000,000) each accident for bodily injury by accident; One Million
        Dollars ($1,000,000) policy limit for bodily injury by disease; and One
        Million Dollars ($1,000,000) each employee for bodily injury by disease.

        (4) COMMERCIAL AUTO LIABILITY INSURANCE. Commercial auto liability
        insurance with a combined limit of not less than One Million Dollars
        ($1,000,000) for bodily injury and property damage for each accident.
        Such insurance shall cover liability relating to any auto of Tenant
        (including owned, hired and non-owned autos, and automobiles used within
        the scope of employment under Tenant).

        (5) ALTERATIONS REQUIREMENTS. In the event Tenant shall desire to
        perform any Alterations, Tenant shall deliver to Landlord, prior to
        commencing such Alterations (i) evidence reasonably satisfactory to
        Landlord that Tenant carries "Builder's Risk" insurance covering
        construction of such Alterations in an amount and form approved by
        Landlord, (ii) such other insurance as Landlord shall
        nondiscriminatorily and reasonably require, and (iii) if Landlord
        requests, in writing, a lien and completion bond or, in lieu of a lien
        and completion bond, Tenant may guarantee the financial and construction
        performance of Tenant's contractor, or other security in form and amount
        satisfactory to Landlord in Landlord's reasonable discretion (which
        amount of such bond or other security shall be approximately one hundred
        fifty percent (150%) of the total cost of completion of the portion of
        the Tenant Improvements for which Landlord requires such additional
        security). Landlord shall in no event be required to accept an
        instrument of security for purposes of the foregoing sentence which
        instrument of security is not customarily accepted by Landlord for such
        purposes in the ordinary course of Landlord's business operations.

        (6) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
        Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty
        (30) days' notice of cancellation or change in terms; and (ii) waive all
        rights of subrogation by the insurance carrier against Landlord. If at
        any time during the Term the amount or coverage of insurance which
        Tenant is required to carry under this Paragraph 8.B. is, in Landlord's
        reasonable judgment, materially less than the amount or type of
        insurance coverage typically carried by owners or tenants of properties
        located in the general area in which the Premises are located which are
        similar to and operated for similar purposes as the Premises or if
        Tenant's use of the Premises should change with or without Landlord's
        consent, Landlord shall have the right to require Tenant to increase the
        amount or change the types of insurance coverage required under this
        Paragraph 8.B. All insurance policies required to be carried by Tenant
        under this Lease shall be written by companies rated A X or better in
        "Best's Insurance Guide" and authorized to do business in the State of
        California. With respect to the Tenant named hereunder (Brocade
        Communications Systems, Inc."), in any event deductible amounts under
        all insurance policies required to be carried by Tenant under this Lease
        shall not exceed One Hundred Thousand Dollars ($100,000.00) per
        occurrence, provided that Tenant maintains a tangible net worth of at
        least Fifty Million and No/100 Dollars ($50,000,000.00) as reasonably
        determined by Landlord, or, if Tenant's net worth is less than Fifty
        Million and No/100 Dollars ($50,000,000.00), such deductible amounts
        shall not exceed Twenty-Five Thousand and No/100 Dollars ($25,000.00)
        per occurrence. With respect to any other party which becomes "Tenant"
        under this Lease, by assignment or operation of law, or otherwise, in
        any event deductible amounts under all insurance policies required to be
        carried by Tenant under this Lease shall not exceed Five Thousand
        Dollars ($5,000.00) per occurrence. Tenant shall deliver to Landlord on
        or before the Term Commencement Date, and thereafter at least fifteen
        (15) days before the expiration dates of the expired policies, certified
        copies of Tenant's insurance policies, or a certificate evidencing the
        same issued by the insurer thereunder; and, if Tenant shall fail to
        procure such insurance, or to deliver such policies or certificates,
        Landlord may, at Landlord's option and in addition to Landlord's other
        remedies in the event of a default by Tenant hereunder, procure the same
        for the account of Tenant, and the cost thereof shall be paid to
        Landlord as Additional Rent.

        (7) LIQUOR LIABILITY. Tenant shall, at its sole cost and expense, at all
        times from and after the date of this Lease and throughout the Term, and
        any extension thereof, keep in force liquor liability insurance in the
        minimum amount of Two Million Dollars ($2,000,000.00), per occurrence,
        naming Landlord and any parties designated by Landlord as additional
        insureds. Tenant's liquor liability insurance may, at Tenant's option,
        be in the form of host liquor liability coverage under Tenant's
        commercial general liability insurance provided that such coverage
        satisfies the criteria set forth in the immediately preceding sentence
        and Tenant provides to Landlord evidence of such coverage reasonably
        satisfactory to Landlord.

C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord, Spieker Properties, Inc., and
each of their respective directors, shareholders, partners, lenders, members,
managers, contractors, affiliates and employees (collectively, "LANDLORD
INDEMNITEES") harmless from and against any and all claims, liabilities, losses,
costs, loss of rents, liens, damages, injuries or expenses, including reasonable
attorneys' and consultants' fees and court costs, demands, causes of action, or
judgments, directly or indirectly arising out of or related to: (1) claims of
injury to or death of persons or damage to property or business loss occurring
or resulting directly or indirectly from the use or occupancy of the Premises,
Building or Project by Tenant or Tenant's Parties, or from activities or
failures to act of Tenant or Tenant's Parties; (2) claims arising from work or
labor performed, or for materials or supplies furnished to or at the request or
for the account of Tenant in connection with performance of any work done for
the account of Tenant within the Premises or Project; (3) claims arising from
any breach or default on the part of Tenant in the performance of any covenant
contained in this Lease; and (4) claims arising from the negligence or
intentional acts or omissions of Tenant or Tenant's Parties. The foregoing
indemnity by Tenant shall not be applicable to claims to the extent arising from
the gross negligence or willful misconduct of Landlord or Landlord's agents,
employees, or contractors or Landlord's breach of a material term of this Lease
beyond any applicable cure periods. Landlord shall not be liable to Tenant and
Tenant hereby waives all claims against Landlord for any injury to or death of,
or damage to any person or property or business loss in or about the Premises,
Building or Project by or from any cause whatsoever (other than Landlord's gross
negligence or willful misconduct or Landlord's breach of a material term of this
Lease beyond any applicable cure periods) and, without limiting the generality
of the foregoing, whether caused by water leakage of any character from the
roof, walls, basement or other portion of the Premises, Building or Project, or
caused by gas, fire, oil or electricity in, on or about the Premises,

                                       9
<PAGE>   10

Building or Project, acts of God or of third parties, or any matter outside of
the reasonable control of Landlord. The provisions of this Paragraph shall
survive the expiration or earlier termination of this Lease.

                            9. WAIVER OF SUBROGATION

        Landlord and Tenant each waives any claim, loss or cost it might have
against the other for any injury to or death of any person or persons, or damage
to or theft, destruction, loss, or loss of use of any property (a "LOSS"), to
the extent the same is insured against (or is required to be insured against
under the terms hereof) under any property damage insurance policy covering the
Building, the Premises, Landlord's or Tenant's fixtures, personal property,
leasehold improvements, or business, regardless of whether the negligence of the
other party caused such Loss.

                     10. LANDLORD'S REPAIRS AND MAINTENANCE

        Landlord shall maintain in good repair, reasonable wear and tear
excepted, the structural soundness of the roof, foundations, and exterior walls
of the Building. The term "exterior walls" as used herein shall not include
windows, glass or plate glass, doors, special store fronts or office entries.
Any damage caused by or repairs necessitated by any negligence or act of Tenant
or Tenant's Parties may be repaired by Landlord at Landlord's option and
Tenant's expense. Tenant shall promptly give Landlord written notice of any
defect or need of repairs in such components of the Building for which Landlord
is responsible upon Tenant's knowledge of the same, after which Landlord shall
have a reasonable opportunity and the right to enter the Premises at all
reasonable times to repair same. Landlord shall use commercially reasonable
efforts to cause its agents, employees and contractors who enter the Premises to
use commercially reasonable efforts not to unreasonably interfere with Tenant's
Permitted Use of the Premises. Landlord's liability with respect to any defects,
repairs, or maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises, the Building or the Project or to fixtures,
appurtenances or equipment in the Building, except as provided in Paragraph 24.
Subject to punchlist items with respect to the Base Building Work described in
Paragraph 2.B hereof, by taking possession of the Premises, Tenant accepts them
"as is," as being in good order, condition and repair and the condition in which
Landlord is obligated to deliver them and suitable for the Permitted Use and
Tenant's intended operations in the Premises, whether or not any notice of
acceptance is given.

                      11. TENANT'S REPAIRS AND MAINTENANCE

        Tenant shall at all times during the Term at Tenant's expense maintain
all parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant in a first-class, good, clean and secure condition
and promptly make all necessary repairs and replacements, as reasonably
determined by Landlord, with materials and workmanship of the same character,
kind and quality as the original. Notwithstanding anything to the contrary
contained herein, Tenant shall, at its expense, promptly repair any damage to
the Premises or the Building or Project resulting from or caused by any
negligence or act of Tenant or Tenant's Parties.

                                 12. ALTERATIONS

A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord's reasonable opinion, compatible with the Building or the Project and
its mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems, and will not cause the Building or Project or such systems to be
required to be modified to comply with any Regulations (including, without
limitation, the Americans With Disabilities Act) unless Tenant agrees in a
writing acceptable to Landlord to pay for all costs and expenses associated with
such compliance requirement (which agreement shall survive termination of this
Lease); and (c) will not interfere with the use and occupancy of any other
portion of the Building or Project by any other tenant or its invitees.
Specifically, but without limiting the generality of the foregoing, Landlord
shall have the right of written consent for all plans and specifications for the
proposed Alterations, construction means and methods, all appropriate permits
and licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose
reasonable rules and regulations for contractors and subcontractors performing
such work. Tenant shall also supply to Landlord any documents and information
reasonably requested by Landlord in connection with Landlord's consideration of
a request for approval hereunder. Notwithstanding the foregoing, Tenant shall
have the right, without consent of, but upon at least ten (10) business days'
prior written notice (as provided under Paragraph 12.B below) to Landlord, to
make non-structural, cosmetic Alterations within the interior of the Premises
(and which are not visible from the outside of the Premises), which do not
impair the value of the Building, and which cost, less than Twenty-Five Thousand
Dollars ($25,000.00), provided that such Alterations shall nevertheless be
subject to all of the remaining requirements of this Paragraph 12, including
without limitation, subparagraphs (a) through (c) above, other than the
requirement of Landlord's prior consent. Tenant shall also have the right,
without consent of, but upon at least ten (10) business days' prior written
notice (as provided under Paragraph 12.B below) to Landlord, to make
non-structural Alterations within the laboratories (and which are not visible
from the outside of the Premises), which do not impair the value of the
Building, and which cost, less than Fifty Thousand Dollars ($50,000.00),
provided that such Alterations shall nevertheless be subject to all of the
remaining requirements of this Paragraph 12, including without limitation,
subparagraphs (a) through (c) above, other than the requirement of Landlord's
prior consent. In addition, all Alterations shall be performed by duly licensed
contractors or subcontractors reasonably acceptable to Landlord, proof of
insurance shall be submitted to Landlord as required under Paragraph 8.B above,
and Landlord reserves the right to impose reasonable rules and regulations for
contractors and subcontractors. Tenant shall, if requested by Landlord, promptly
furnish Landlord with complete as-built plans and specifications for any
Alterations performed by Tenant to the Premises, at Tenant's sole cost and
expense. Tenant shall cause all Alterations to be accomplished in a first-class,
good and workmanlike manner, and to comply with all applicable Regulations and
Paragraph 27 hereof. Tenant shall at Tenant's sole expense, perform any
additional work required under applicable Regulations due to the Alterations
hereunder. No review or consent by Landlord of or to any proposed Alteration or
additional work shall constitute a waiver of Tenant's obligations under this
Paragraph 12, nor constitute any warranty or representation that the same
complies with all applicable Regulations, for which Tenant shall at all times be
solely responsible. Tenant shall reimburse Landlord for all costs which Landlord
may incur in connection with granting approval to Tenant for any such
Alterations, including any costs or expenses which Landlord may incur in
electing to have outside architects and engineers review said plans and
specifications, and shall pay Landlord an administration fee of eight percent
(8%) of the cost of the Alterations as Additional Rent hereunder. All such
Alterations shall remain the property of Tenant until the expiration or earlier
termination of this Lease, at which time they shall be and become the property
of Landlord; provided, however, that Landlord may, at Landlord's option, require
that Tenant, at Tenant's expense, remove any or all Alterations (excluding the
initial Tenant Improvements and any improvements installed by Landlord on behalf
of Tenant in the Phase I Temporary Premises or the Phase II Temporary Premises
(each as herein defined)) made by or on behalf of Tenant and restore the
Premises by the expiration or earlier termination of this Lease, to their
condition existing prior to the construction of any such Alterations, reasonable
wear and tear excepted. All such removals and restoration shall be accomplished
in a first-class and good and workmanlike manner so as not to cause any damage
to the Premises or Project whatsoever. If Tenant fails to remove such
Alterations or Tenant's trade fixtures or furniture or other personal property,
Landlord may keep and use them or remove any of them and cause them to be stored
or sold in accordance with applicable law, at Tenant's sole expense. In addition
to and wholly apart from Tenant's obligation to pay Tenant's Proportionate Share
of Operating Expenses, Tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees, possessory interest taxes,
fees or charges in lieu of any such taxes, capital levies, or other charges
imposed upon, levied with respect to or assessed against its fixtures or
personal property, on the value of Alterations within the Premises, and on
Tenant's interest pursuant to this Lease, or any

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<PAGE>   11

increase in any of the foregoing based on such Alterations. To the extent that
any such taxes are not separately assessed or billed to Tenant, Tenant shall pay
the amount thereof as invoiced to Tenant by Landlord.

At Landlord's election and notwithstanding the foregoing, however, Tenant shall
pay to Landlord the cost of removing any such Alterations and restoring the
Premises to their original condition, such cost to include a reasonable charge
for Landlord's overhead and profit as provided above at the time Landlord grants
written consent to a requested Alteration; provided, however, that Landlord
shall not require that Tenant pay to Landlord the cost of removing any such
Alterations and restoring the Premises to their original condition as described
in the foregoing sentence if the following conditions precedent are satisfied by
Tenant: (i) Tenant (and not a sublessee or assignee of Tenant) shall be the
party for which the Alterations are requested and Tenant is in possession of the
portion of the Premises upon which the Alterations shall be made, and (ii) the
removal costs of such Alterations described above are determined by Landlord in
its reasonable discretion to be less than a cumulative total of one hundred
thousand and no/100 dollars ($100,000.00) with respect to all existing
Alterations which Landlord may require to be removed pursuant to the terms of
this Lease. Nothing in the foregoing sentence shall be interpreted to relieve
Tenant of its obligations described in this Lease to remove Alterations and
restore the Premises at Tenant's cost in accordance with this Paragraph 12,
Paragraph 36 and with other applicable terms and conditions of this Lease. In
the event that Tenant does remove any such Alterations and restores the Premises
in accordance with the terms of this Lease, Landlord shall return any monies
delivered by Tenant to Landlord in accordance with the preceding sentence. In
the event Tenant fails to remove Alterations and restore the Premises in
accordance with the terms of this Lease, Landlord may perform the same on
Tenant's behalf apply monies collected by Landlord for such purpose to the
removal and restoration or, in the event Landlord does not require any such
payment by Tenant, the amount due from Tenant may be deducted from the Security
Deposit or any other sums or amounts held by Landlord under this Lease.

B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.

C. Notwithstanding anything to the contrary contained in Paragraph 12.A, at the
time Landlord gives its consent for any Alterations, Tenant shall also be
notified whether or not Landlord will require that such Alterations be removed
upon the expiration or earlier termination of this Lease. Landlord shall respond
to Tenant's written request for consent to any Alterations within fifteen (15)
business days. In the event Landlord fails to respond to Tenant's written
request within such fifteen (15) business day time period, Landlord shall not be
in default hereof nor shall Tenant be deemed to have received consent to the
requested Alterations; however Tenant is entitled to provide a second written
request for consent to Landlord. Landlord shall respond to Tenant's second
written request for consent described in this Paragraph 12.C within ten (10)
business days after Landlord's receipt thereof. In the event Landlord fails to
so respond to Tenant's second written request, Landlord shall be deemed to have
consented to Tenant's request to make Alterations; provided, however, that if
the total aggregate cost of any proposed Alterations by Tenant during the
previous six (6) month period is equal to or more than One Hundred Thousand
Dollars ($100,000.00), Landlord shall be deemed to have rejected Tenant's second
request to make such Alterations.

                                    13. SIGNS

        Tenant shall not place, install, affix, paint or maintain any signs,
notices, graphics or banners whatsoever or any window decor which is visible in
or from public view or corridors, the common areas or the exterior of the
Premises or the Building, in or on any exterior window or window fronting upon
any common areas or service area without Landlord's prior written approval which
Landlord shall have the right to withhold in its absolute and sole discretion;
provided that Tenant's name shall be included in any Building-standard door and
directory signage, if any, in accordance with Landlord's Building signage
program, including without limitation, payment by Tenant of any fee charged by
Landlord for maintaining such signage, which fee shall constitute Additional
Rent hereunder. Any installation of signs, notices, graphics or banners on or
about the Premises or Project approved by Landlord shall be subject to any
Regulations and to any other requirements imposed by Landlord. Tenant shall
remove all such signs or graphics by the expiration or any earlier termination
of this Lease. Such installations and removals shall be made in such manner as
to avoid injury to or defacement of the Premises, Building or Project and any
other improvements contained therein, and Tenant shall repair any injury or
defacement including without limitation discoloration caused by such
installation or removal. Any signage rights granted by Landlord to Tenant shall
be exclusive to Tenant and such rights shall not be assigned, subleased or
otherwise conveyed without the prior written approval of Landlord of which
Landlord shall have the right to withhold in its absolute and sole discretion.
Tenant's signage rights under this Paragraph are personal to the original Tenant
named in this Lease and shall not inure to the benefit of any assignees or
subtenants. Notwithstanding anything contained in this Paragraph 13 to the
contrary, provided that Tenant is occupying at least fifty percent (50%) of the
Premises, Tenant shall be entitled to two (2) signs to be located on the
upper-most portion of the side of the Building in locations to be reasonably
determined by Landlord. In addition, at Tenant's sole cost and expense, Landlord
shall provide non-exclusive monument signage to be designed within the
parameters of Landlord's Skyport signage program. All signage rights are
personal to Tenant and subject to the following terms and conditions:

        1.     Tenant shall submit plans and drawings for such signage to the
               City of San Jose and to any other public authorities having
               jurisdiction and shall obtain written approval from each such
               jurisdiction prior to installation, and shall fully comply with
               all applicable Regulations;

        2.     Tenant shall, at Tenant's sole cost and expense, design,
               construct and install such signage;

        3.     All signs shall be subject to Landlord's prior written approval,
               which Landlord shall have the right to withhold in its absolute
               and sole discretion;

        4.     Tenant shall maintain its signage in good condition and repair,
               and all costs of maintenance and repair shall be borne by Tenant.
               Maintenance shall include, without limitation, cleaning and, if
               such signage is illuminated, relamping at reasonable intervals.
               Tenant shall be responsible for any electrical energy used in
               connection with its signs;

        5.     At Landlord's option, Tenant's signage rights granted hereby may
               be revoked and terminated upon occurrence of any of the following
               events:

               (a)    Tenant shall be in material default, as defined in
                      Paragraph 26 as determined by Landlord in its sole
                      discretion, and shall not have cured said default for a
                      period of ninety (90) days;

               (b)    Except with respect to Permitted Transfers described in
                      Paragraph 21.A(3) hereof, Tenant shall assign this Lease
                      or sublet any portion of the Premises without Landlord's
                      prior written consent in accordance with Paragraph 21, or
                      Tenant occupies less than fifty percent (50%) of the
                      Premises;

               (c)    This Lease shall terminate or otherwise no longer be in
                      effect.

        6.     Upon the expiration or earlier termination of this Lease if
               Tenant fails to remove its signage in accordance with this
               Paragraph 13, or at such other time that Tenant's signage rights
               are terminated pursuant to the terms hereof, Landlord shall cause
               Tenant's signage to be removed from the Building and the Building
               to be repaired and restored to the condition which existed prior
               to the installation of Tenant's signage (including, if necessary,
               the

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<PAGE>   12

               replacement of any precast concrete panels), all at the sole cost
               and expense of Tenant and otherwise in accordance with Paragraph
               36 of this Lease, without further notice from Landlord
               notwithstanding anything to the contrary contained in this Lease.
               Tenant shall pay all costs and expenses for such removal and
               restoration within thirty (30) days following delivery of an
               invoice therefor.

                         14. INSPECTION/POSTING NOTICES

        After reasonable notice, except in emergencies where no such notice
shall be required, Landlord and Landlord's agents and representatives, shall
have the right to enter the Premises to inspect the same, to clean, to perform
such work as may be permitted or required hereunder, to make repairs,
improvements or alterations to the Premises, Building or Project or to other
tenant spaces therein, to deal with emergencies, to post such notices as may be
permitted or required by law to prevent the perfection of liens against
Landlord's interest in the Project or to exhibit the Premises to prospective
tenants, purchasers, encumbrancers or to others, or for any other purpose as
Landlord may deem necessary or desirable; provided, however, that Landlord shall
use reasonable efforts not to unreasonably interfere with Tenant's business
operations. Tenant shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry. Tenant waives any claim for damages for
any injury or inconvenience to or interference with Tenant's business, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant's vaults and
safes or special security areas (designated in advance), and Landlord shall have
the right to use any and all means which Landlord may deem necessary or proper
to open said doors in an emergency, in order to obtain entry to any portion of
the Premises, and any entry to the Premises or portions thereof obtained by
Landlord by any of said means, or otherwise, shall not be construed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an eviction,
actual or constructive, of Tenant from the Premises or any portions thereof. At
any time within six (6) months prior to the expiration of the Term or following
any earlier termination of this Lease or agreement to terminate this Lease,
Landlord shall have the right to erect on the Premises, Building and/or Project
a suitable sign indicating that the Premises are available for lease.

                           15. SERVICES AND UTILITIES

A. Provided Tenant shall not be in default hereunder, and subject to the
provisions elsewhere herein contained and to the rules and regulations of the
Building, Landlord shall furnish to the Premises during ordinary business hours
of generally recognized business days, to be reasonably determined by Landlord
(but exclusive, in any event, of Saturdays, Sundays and legal holidays), water
for lavatory and drinking purposes and electricity, heat and air conditioning as
usually furnished or supplied for use of the Premises for reasonable and normal
office use as of the date Tenant takes possession of the Premises as determined
by Landlord (but not including above-standard or continuous cooling for
excessive heat-generating machines, excess lighting or equipment), janitorial
services during the times and in the manner that such services are, in
Landlord's judgment, customarily furnished in comparable office buildings in the
immediate market area, and elevator service, which shall mean service either by
nonattended automatic elevators or elevators with attendants, or both, at the
option of Landlord. Tenant acknowledges that Tenant has inspected and accepts
the water, electricity, heat and air conditioning and other utilities and
services being supplied or furnished to the Premises as of the date Tenant takes
possession of the Premises, as being sufficient for use of the Premises for
reasonable and normal office use in their present condition, "as is," and
suitable for the Permitted Use, and for Tenant's intended operations in the
Premises. Landlord shall have no obligation to provide additional or after-hours
electricity, heating or air conditioning, but if Landlord elects to provide such
services at Tenant's request, Tenant shall pay to Landlord, upon demand, a
reasonable charge for such services as reasonably determined by Landlord. Tenant
agrees to keep and cause to be kept closed all window covering when necessary
because of the sun's position, and Tenant also agrees at all times to cooperate
fully with Landlord and to abide by all of the regulations and requirements
which Landlord may reasonably prescribe for the proper functioning and
protection of electrical, heating, ventilating and air conditioning systems.
Wherever heat-generating machines, excess lighting or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation and the cost of operation and maintenance thereof, shall be paid by
Tenant to Landlord upon demand by Landlord.

B. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises, including without limitation, computers,
electronic data processing machines, copying machines, and other machines, using
excess lighting or using electric current, water, or any other resource in
excess of or which will in any way increase the amount of electricity, water, or
any other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, and the Permitted Use, in each case as of the
date Tenant takes possession of the Premises and as determined by Landlord, or
which will require additions or alterations to or interfere with the Building
power distribution systems; nor connect with electric current, except through
existing electrical outlets in the Premises or water pipes, any apparatus,
equipment or device for the purpose of using electrical current, water, or any
other resource. If Tenant shall require water or electric current or any other
resource in excess of that being furnished or supplied for the use of the
Premises as of the date Tenant takes possession of the Premises as determined by
Landlord, Tenant shall first procure the written consent of Landlord which
Landlord may refuse, to the use thereof, and Landlord may cause a special meter
to be installed in the Premises so as to measure the amount of water, electric
current or other resource consumed for any such other use. Tenant shall pay
directly to Landlord upon demand as an addition to and separate from payment of
Operating Expenses the cost of all such additional resources, energy, utility
service and meters (and of installation, maintenance and repair thereof and of
any additional circuits or other equipment necessary to furnish such additional
resources, energy, utility or service). Landlord may add to the separate or
metered charge a recovery of additional expense incurred in keeping account of
the excess water, electric current or other resource so consumed. Following
receipt of Tenant's request to do so, Landlord shall use good faith efforts to
restore any service specifically to be provided under Paragraph 15 that becomes
unavailable and which is in Landlord's reasonable control to restore; provided,
however, that Landlord shall in no case be liable for any damages directly or
indirectly resulting from nor shall the Rent or any monies owed Landlord under
this Lease herein reserved be abated by reason of: (a) the installation, use or
interruption of use of any equipment used in connection with the furnishing of
any such utilities or services, or any change in the character or means of
supplying or providing any such utilities or services or any supplier thereof;
(b) the failure to furnish or delay in furnishing any such utilities or services
when such failure or delay is caused by acts of God or the elements, labor
disturbances of any character, or otherwise or because of any interruption of
service due to Tenant's use of water, electric current or other resource in
excess of that being supplied or furnished for the use of the Premises as of the
date Tenant takes possession of the Premises; (c) the inadequacy, limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy or any other service or utility whatsoever serving the
Premises or Project, whether by Regulation or otherwise; or (d) the partial or
total unavailability of any such utilities or services to the Premises or the
Building or the diminution in the quality or quantity thereof, whether by
Regulation or otherwise; or (e) any interruption in Tenant's business operations
as a result of any such occurrence; nor shall any such occurrence constitute an
actual or constructive eviction of Tenant or a breach of an implied warranty by
Landlord. Landlord shall further have no obligation to protect or preserve any
apparatus, equipment or device installed by Tenant in the Premises, including
without limitation by providing additional or after-hours heating or air
conditioning. Landlord shall be entitled to cooperate voluntarily and in a
reasonable manner with the efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or other resource consumption.
The obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program. In addition, Landlord
reserves the right to change the supplier or provider of any such utility or
service from time to time. Tenant shall have the right to directly contract with
or otherwise obtain any electrical or janitorial service for or with respect to
the Premises or Tenant's operations therein from any supplier or provider of any
such service. Tenant shall cooperate with Landlord and any supplier or provider
of such services designated by Landlord from time to time to facilitate the
delivery of such services to Tenant at the Premises and to the Building and
Project, including without limitation allowing Landlord and Landlord's suppliers
or providers, and their respective agents and contractors, reasonable access to
the Premises for the purpose of installing, maintaining, repairing, replacing or
upgrading such service or any equipment or machinery associated therewith.

                                       12
<PAGE>   13

C. Tenant shall pay, upon demand, for all utilities furnished to the Premises,
or if not separately billed to or metered to Tenant, Tenant's Proportionate
Share of all charges jointly serving the Project in accordance with Paragraph 7.
All sums payable under this Paragraph 15 shall constitute Additional Rent
hereunder.

D. Tenant may contract separately with providers of telecommunications or
cellular products, systems or services for the Premises. Even though such
products, systems or services may be installed or provided by such providers in
the Building, in consideration for Landlord's permitting such providers to
provide such services to Tenant, Tenant agrees that Landlord and the Landlord
Indemnitees shall in no event be liable to Tenant or any Tenant Party for any
damages of any nature whatsoever arising out of or relating to the products,
systems or services provided by such providers (or any failure, interruption,
defect in or loss of the same) or any acts or omissions of such providers in
connection with the same or any interference in Tenant's business caused
thereby. Tenant waives and releases all rights and remedies against Landlord and
the Landlord Indemnitees that are inconsistent with the foregoing.

E. Tenant shall have the right to contract directly for, and pay all charges
for, janitorial services to the Premises. Prior to entering into any contract
with a provider of janitorial services, Tenant shall provide a copy of the
contract to Landlord and obtain Landlord's written approval of the contract and
the provider which approval Landlord shall not unreasonably withhold or delay.
Tenant agrees that the Landlord and the Landlord Indemnitees shall in no event
be liable to Tenant or any Tenant Party for any damages of any nature whatsoever
arising out of or relating to the services provided by such provider or any acts
or omissions of such provider in connection with the same or any interference in
Tenant's business caused thereby.

                                16. SUBORDINATION

    Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, this Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant's attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, in the form requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed of
trust, subject to such nondisturbance requirement. If requested in writing by
Tenant, Landlord shall use commercially reasonable efforts to obtain a
subordination, nondisturbance and attornment agreement for the benefit of Tenant
reflecting the foregoing from any ground landlord, mortgagee or beneficiary, at
Tenant's expense, subject to such other terms and conditions as the ground
landlord, mortgagee or beneficiary may require.

                            17. FINANCIAL STATEMENTS

        At the request of Landlord from time to time, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project. Unless required
by law or court order, Landlord shall not disclose, provide or make available
any confidential information revealed by Tenant's private financial information
to any person or entity (except for Landlord's financial consultants, partners,
lenders and counsel) without Tenant's prior written consent, which consent shall
not be unreasonably withheld.

                            18. ESTOPPEL CERTIFICATE

        Tenant agrees from time to time, within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this Lease
has not been modified (or stating all modifications, written or oral, to this
Lease), the date to which Rent has been paid, the unexpired portion of this
Lease, that there are no current defaults by Landlord or Tenant under this Lease
(or specifying any such defaults), that the leasehold estate granted by this
Lease is the sole interest of Tenant in the Premises and/or the land at which
the Premises are situated, and such other matters pertaining to this Lease as
may be reasonably requested by Landlord or any mortgagee, beneficiary, purchaser
or prospective purchaser of the Building or Project or any interest therein.
Failure by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day period,
Landlord may execute and deliver such certificate on Tenant's behalf and that
such certificate shall be binding on Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
Project or any interest therein. The parties agree that Tenant's obligation to
furnish such estoppel certificates in a timely fashion is a material inducement
for Landlord's execution of this Lease, and shall be an event of default
(without any cure period that might be provided under Paragraph 26.A(3) of this
Lease) if Tenant fails to fully comply or makes any material misstatement in any
such certificate.

                              19. SECURITY DEPOSIT

        Tenant agrees to deposit with Landlord upon execution of this Lease, a
security deposit as stated in the Basic Lease Information (the "SECURITY
DEPOSIT"), which sum shall be held and owned by Landlord, without obligation to
pay interest, as security for the performance of Tenant's covenants and
obligations under this Lease. The Security Deposit is not an advance rental
deposit or a measure of damages incurred by Landlord in case of Tenant's
default. Upon the occurrence of any event of default by Tenant, Landlord may
from time to time, without prejudice to any other remedy provided herein or by
law, use such fund as a credit to the extent necessary to credit against any
arrears of Rent or other payments due to Landlord hereunder, and any other
damage, injury, expense or liability caused by such event of default, and Tenant
shall pay to Landlord, on demand, the amount so applied in order to restore the
Security Deposit to its original amount. Although the Security Deposit shall be
deemed the property of Landlord, any remaining balance of such deposit shall be
promptly returned by Landlord to Tenant at such time after termination of this
Lease that all of Tenant's obligations under this Lease have been fulfilled to
Landlord's reasonable satisfaction, reduced by such amounts as may be required
by Landlord (i) to remedy defaults on the part of Tenant in the payment of Rent
or other obligations of Tenant under this Lease, (ii) to repair damage to the
Premises, Building or Project caused by Tenant or any Tenant's Parties, and
(iii) to clean the Premises to the extent Tenant fails to comply with Paragraph
36 hereof. Landlord may use and commingle the Security Deposit with other funds
of Landlord. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, and all other provisions of any Regulations, now or
hereinafter in force, which restricts the amount or types of claim that a
landlord may make upon a security deposit or imposes upon a landlord (or its
successors) any obligation with respect to the handling or return of security
deposits.

                       20. LIMITATION OF TENANT'S REMEDIES

        The obligations and liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease are not personal obligations of Landlord
or of the individual or other partners of Landlord or its or their partners,
directors, officers, or shareholders, and

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Tenant agrees to look solely to Landlord's interest in the Project for the
recovery of any amount from Landlord, and shall not look to other assets of
Landlord nor seek recourse against the assets of the individual or other
partners of Landlord or its or their partners, directors, officers or
shareholders. Any lien obtained to enforce any such judgment and any levy of
execution thereon shall be subject and subordinate to any lien, mortgage or deed
of trust on the Project. Under no circumstances shall Tenant have the right to
offset against or recoup Rent or other payments due and to become due to
Landlord hereunder except as expressly provided in this Lease, which Rent and
other payments shall be absolutely due and payable hereunder in accordance with
the terms hereof. In no case shall Landlord be liable to Tenant for any lost
profits, damage to business, or any form of special, indirect or consequential
damage on account of any breach of this Lease or otherwise, notwithstanding
anything to the contrary contained in this Lease.

                          21. ASSIGNMENT AND SUBLETTING

A.      (1) GENERAL. This Lease has been negotiated to be and is granted as an
        accommodation to Tenant. Accordingly, this Lease is personal to Tenant,
        and Tenant's rights granted hereunder do not include the right to assign
        this Lease or sublease the Premises, or to receive any excess, either in
        installments or lump sum, over the Rent which is expressly reserved by
        Landlord as hereinafter provided, except as otherwise expressly
        hereinafter provided. Tenant shall not assign or pledge this Lease or
        sublet the Premises or any part thereof, whether voluntarily or by
        operation of law, or permit the use or occupancy of the Premises or any
        part thereof by anyone other than Tenant, or suffer or permit any such
        assignment, pledge, subleasing or occupancy, without Landlord's prior
        written consent except as provided herein. If Tenant desires to assign
        this Lease or sublet any or all of the Premises in the case where
        Landlord's consent is required, Tenant shall give Landlord written
        notice (the "TRANSFER NOTICE") at least thirty (30) days prior to the
        anticipated effective date of the proposed assignment or sublease, which
        shall contain all of the information reasonably requested by Landlord to
        address Landlord's decision criteria specified hereinafter. Landlord
        shall then have a period of ten (10) business days following receipt of
        the Transfer Notice to notify Tenant in writing that Landlord elects
        either: (i) to terminate this Lease as to the space so affected as of
        the date so requested by Tenant; or (ii) to consent to the proposed
        assignment or sublease, subject, however, to Landlord's prior written
        consent of the proposed assignee or subtenant and of any related
        documents or agreements associated with the assignment or sublease. If
        Landlord should fail to notify Tenant in writing of such election within
        said period, Landlord shall be deemed to have waived option (i) above,
        but written consent by Landlord of the proposed assignee or subtenant
        shall still be required. If Landlord does not exercise option (i) above,
        Landlord's consent to a proposed assignment or sublease shall not be
        unreasonably withheld. Consent to any assignment or subletting shall not
        constitute consent to any subsequent transaction to which this Paragraph
        21 applies. Notwithstanding the foregoing, during the first one hundred
        twenty (120) months of the Term of this Lease only and with respect to
        the initial Premises described herein only, Landlord hereby waives its
        right to recapture a portion of the Premises as such right is described
        in clause (i) above, in the following circumstances only (any such
        conforming sublease, including a Large Recapture Sublease and a Small
        Recapture Sublease (each as defined below), hereinafter a "RECAPTURE
        WAIVER SUBLEASE"):

        (W)    with respect to a Recapture Waiver Sublease that covers a portion
               of the Premises greater than two (2) full floors, including any
               Recapture Waiver Sublease that expands the premises leased
               pursuant to any other Recapture Waiver Sublease by such subtenant
               or any entity related in any way to such subtenant, ("LARGE
               RECAPTURE SUBLEASE"), the term of all or any portion of a Large
               Recapture Sublease shall not exceed thirty-six (36) months and
               shall not be extended for any reason whatsoever; and

        (X)    with respect to a Recapture Waiver Sublease that covers a portion
               of the Premises less than or equal to two (2) full floors,
               including any Recapture Waiver Sublease that expands the premises
               leased pursuant to any other Recapture Waiver Sublease by such
               subtenant or any entity related in any way to such subtenant,
               ("SMALL RECAPTURE SUBLEASE"), the term of all or any portion of a
               Small Recapture Sublease shall not exceed forty-eight (48) months
               and shall not be extended for any reason whatsoever; and

        (Y)    Tenant shall not at any time during the first one hundred twenty
               (120) months of the Term sublease or assign more than four (4)
               full floors of the Building pursuant to Recapture Waiver
               Sublease(s); and

        (Z)    the rental charged in connection with any Recapture Waiver
               Sublease must be no less than the fair market rental
               then-currently charged for comparable first-class office building
               space located within the San Jose Airport geographic area as such
               fair market rental is reasonably determined by Landlord.

        Notwithstanding the provisions of Paragraph 21.A. (2) below to the
        contrary, with respect to any Recapture Waiver Sublease only, the
        standard of "sound financial condition" described as a condition to
        Landlord's consent shall be based upon a determination by Landlord, in
        its reasonable discretion, that such proposed transferee shall have a
        tangible net worth, evidenced by audited financial statements delivered
        to Landlord pursuant to the terms of this Lease, that is reasonably
        sufficient, taking into account all expected obligations of the
        transferee with respect to the proposed transfer and all of its other
        contingent and noncontingent obligations, to service when due the
        obligations of the transferee with respect to the proposed transfer.

        (2) CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other
        instances in which it may be reasonable for Landlord to withhold
        Landlord's consent to an assignment or subletting, Landlord and Tenant
        acknowledge that it shall be reasonable for Landlord to withhold
        Landlord's consent in the following instances: if the proposed assignee
        does not agree to be bound by and assume the obligations of Tenant under
        this Lease in form and substance reasonably satisfactory to Landlord;
        the use of the Premises by such proposed assignee or subtenant would not
        be a Permitted Use or would violate any exclusivity or other arrangement
        which Landlord has with any other tenant or occupant or any Regulation
        or would increase the Occupancy Density or Parking Density of the
        Building or Project, or would otherwise result in an undesirable tenant
        mix for the Project as determined by Landlord; the proposed assignee or
        subtenant is not of sound financial condition as determined by Landlord
        in Landlord's sole discretion; the proposed assignee or subtenant is a
        governmental agency; the proposed assignee or subtenant does not have a
        good reputation as a tenant of property or a good business reputation;
        the proposed assignee or subtenant is a person with whom Landlord is
        negotiating to lease space in the Project or is a present tenant of the
        Project; the assignment or subletting would entail any Alterations which
        would lessen the value of the leasehold improvements in the Premises or
        use of any Hazardous Materials (except as expressly approved in this
        Lease) or other noxious use or use which may unreasonably disturb other
        tenants of the Project; or Tenant is in default of any obligation of
        Tenant under this Lease, or Tenant has defaulted under this Lease on
        three (3) or more occasions during any twelve (12) months preceding the
        date that Tenant shall request consent. Failure by or refusal of
        Landlord to consent to a proposed assignee or subtenant shall not cause
        a termination of this Lease. Upon a termination under Paragraph
        21.A(1)(i), Landlord may lease the Premises to any party, including
        parties with whom Tenant has negotiated an assignment or sublease,
        without incurring any liability to Tenant. At the option of Landlord, a
        surrender and termination of this Lease shall operate as an assignment
        to Landlord of some or all subleases or subtenancies. Landlord shall
        exercise this option by giving notice of that assignment to such
        subtenants on or before the effective date of the surrender and
        termination. In connection with each request for assignment or
        subletting, Tenant shall pay to Landlord Landlord's standard fee (which
        amount shall not exceed $1,500.00) for approving such requests, as well
        as all costs reasonably incurred by Landlord and all costs incurred by
        any mortgagee or ground lessor in approving each such request and
        effecting any such transfer, including, without limitation, reasonable
        attorneys' fees.

        (3) PERMITTED TRANSFERS. An "Affiliate" means any entity that (i)
        controls, is controlled by, or is under common control with Tenant (ii)
        results from the transfer of all or substantially all of Tenant's assets
        or stock, or (iii) results from the merger or

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        consolidation of Tenant with another entity. "Control," as used in the
        previous sentence, means the direct or indirect ownership of more than
        fifty percent (50%) of the voting securities of an entity or possession
        of the right to vote more than fifty percent (50%) of the voting
        interest in the ordinary direction of the entity's affairs.
        Notwithstanding anything to the contrary contained in this Lease,
        Landlord's consent is not required for any assignment of this Lease or
        sublease of all or a portion of the Premises to an Affiliate so long as
        the following conditions are met: (a) at least five (5) days after any
        such assignment or sublease, Landlord receives written notice of such
        assignment or sublease (as well as any documents or information
        reasonably requested by Landlord regarding the transfer and the
        transferee in support of the requirements of this Paragraph 21.A(3));
        (b) Tenant is not then in default under this Lease; (c) if the transfer
        is an assignment or any other transfer to an Affiliate other than a
        sublease, the intended assignee assumes in writing all of Tenant's
        obligations under this Lease relating to the Premises in form
        satisfactory to Landlord or, if the transfer is a sublease, the intended
        sublessee accepts the sublease in form satisfactory to Landlord; (d) the
        intended transferee has a tangible net worth, as evidenced by financial
        statements delivered to Landlord and certified by an independent
        certified public accountant in accordance with generally accepted
        accounting principles that are consistently applied, at least equal to
        Tenant as of the date of this Lease; (e) the Premises shall continue to
        be operated solely for the use specified in the Basic Lease Information;
        and (f) Tenant shall pay to Landlord Landlord's standard fee (which
        amount shall not exceed $1,500.00) for approving assignments and
        subleases and all costs reasonably incurred by Landlord and all costs
        incurred by any mortgagee or ground lessor for such assignment or
        subletting, including, without limitation, reasonable attorneys' fees.
        No transfer to an Affiliate in accordance with this subparagraph shall
        relieve Tenant named herein of any obligation under this Lease or alter
        the liability of Tenant named herein for the payment of Rent or for the
        performance of any other obligation to be performed by Tenant, including
        the obligations contained in Paragraph 25 with respect to any Affiliate.

B. BONUS RENT. Any Rent or other consideration realized by Tenant under any such
sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission and reasonable attorneys' fees
incurred by Tenant solely in connection with the sublease or assignment,
reasonable, actual out of pocket costs of tenant improvements made solely in
connection with the sublease or assignment and paid for by Tenant, and
reasonable, out-of-pocket marketing costs, shall be divided and paid, thirty
percent (30%) to Tenant, seventy percent (70%) to Landlord. In any subletting or
assignment undertaken by Tenant, Tenant shall diligently seek to obtain the
then-fair market rental amount (as reasonably determined by Landlord) available
in the marketplace for comparable space available for leasing (using as a basis
for such determination other Landlord-owned Buildings and Projects of the same
stature and located in the same geographic area in which the Premises are
located).

C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease. Notwithstanding anything to the
contrary in this Lease, the transfer of outstanding capital stock or other
listed equity interests, or the purchase of outstanding capital stock or other
listed equity interests, or the purchase of equity interests issued in an
initial public offering of stock, by persons or parties other than "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, through
the "over-the-counter" market or any recognized national or international
securities exchange shall not be included in determining whether control has
been transferred.

D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or of the underlying beneficial interests of
said entity and/or a change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute an assignment for all
purposes of this Lease.

E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or any guarantor of this
Lease of any liability under its guaranty or alter the primary liability of the
Tenant named herein for the payment of Rent or for the performance of any other
obligations to be performed by Tenant, including obligations contained in
Paragraph 25 with respect to any assignee or subtenant. Landlord may collect
rent or other amounts or any portion thereof from any assignee, subtenant, or
other occupant of the Premises, permitted or otherwise, and apply the net rent
collected to the Rent payable hereunder, but no such collection shall be deemed
to be a waiver of this Paragraph 21, or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the further
performance by Tenant of the obligations of Tenant under this Lease or of any
guarantor. Any assignment or subletting which conflicts with the provisions
hereof shall be void.

                                  22. AUTHORITY

        Landlord represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder and
that all persons signing this Lease on its behalf are authorized to do. Tenant
and the person or persons, if any, signing on behalf of Tenant, jointly and
severally represent and warrant that Tenant has full right and authority to
enter into this Lease, and to perform all of Tenant's obligations hereunder, and
that all persons signing this Lease on its behalf are authorized to do so.

                                23. CONDEMNATION

A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the Permitted
Use of the Premises, either party shall have the right to terminate this Lease
at its option. If any material portion of the Building or Project is taken or
condemned for any public use under any Regulation, or by right of eminent
domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.

B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of this Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances, but only after giving Landlord credit for all sums received
or to be received by Tenant by the condemning authority, subject to the last
sentence of Paragraph 23.C of this Lease. Notwithstanding anything to the
contrary contained in this Paragraph, if the temporary use or occupancy of any
part of the Premises shall be taken or appropriated under power of eminent
domain during the Term, this Lease shall be and remain unaffected by such taking
or appropriation and Tenant shall continue to pay in full all Rent payable
hereunder by Tenant during the Term; in the event of any such temporary
appropriation or taking, Tenant shall be entitled to receive that portion of any
award which represents compensation for the use of or occupancy of the Premises
during the unexpired Term. In the event a portion or the whole of Tenant's
Premises shall be taken or appropriated under the power of eminent domain or
conveyed in lieu thereof and such restoration cannot be made, in Landlord's sole
opinion, within one hundred eight (180) days from the time of taking, Landlord
shall notify Tenant within sixty (60) days of such taking and Tenant shall have
the right to cancel this Lease by giving Landlord written notice of its
intention to cancel within thirty (30) days of the date of Landlord's notice.
If, however, within sixty (60) days after the date that the nature and extent of
the taking are finally determined, Landlord notifies Tenant that Landlord at its
cost will add on to the remaining Premises so that the area and the approximate
layout of the Premises will be substantially the same after the date of taking
as they were before the date of taking, and Landlord commences the

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<PAGE>   16

restoration immediately and completes the restoration within one hundred eighty
(180) days after Landlord so notifies Tenant, this Lease shall continue in full
force and effect without any reduction in Rent, except the abatement made
pursuant to this paragraph.

C. AWARD. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any and all payment, income, rent, award or any interest therein whatsoever
which may be paid or made in connection with such taking or conveyance and
Tenant shall have no claim against Landlord or otherwise for any sums paid by
virtue of such proceedings, whether or not attributable to the value of any
unexpired portion of this Lease, except as expressly provided in this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property and moving costs, shall be and
remain the property of Tenant.

D. WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.

                               24. CASUALTY DAMAGE

A. GENERAL. If the Premises or Building should be damaged or destroyed by fire,
tornado, or other casualty (collectively, "CASUALTY"), Tenant shall give
immediate written notice thereof to Landlord upon learning of the same. Within
thirty (30) days after Landlord's receipt of such notice, Landlord shall notify
Tenant whether in Landlord's good faith estimation material restoration of the
Premises can reasonably be made within one hundred eighty (180) days from the
date of such notice and receipt of required permits for such restoration.
Landlord's determination shall be binding on Tenant.

B. WITHIN 180 DAYS. If the Premises or Building should be damaged by Casualty to
such extent that material restoration can in Landlord's estimation be reasonably
completed within one hundred eighty (180) days after the date of such notice and
receipt of required permits for such restoration, this Lease shall not
terminate. Provided that insurance proceeds are received by Landlord to fully
repair the damage, Landlord shall proceed to rebuild and repair the Premises
diligently and in the manner determined by Landlord, except that Landlord shall
not be required to rebuild, repair or replace any part of any Alterations which
may have been placed on or about the Premises or paid for by Tenant. If the
Premises are untenantable in whole or in part following such damage, the Rent
payable hereunder during the period in which they are untenantable shall be
abated proportionately.

C. GREATER THAN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that material restoration cannot in Landlord's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such rebuilding or
repair, and such damage materially and adversely interferes with the conduct of
Tenant's business in the Premises, then either Party shall have the right to
cancel this Lease by giving the other party written notice within ten (10) days
from the date of Landlord's notice that material restoration cannot in
Landlord's estimation be reasonably completed within such one hundred eighty
(180) day period. Said cancellation shall be effective thirty (30) days from the
first day that either party gives its notice to cancel. If neither party elects
to so cancel this Lease, Landlord shall proceed to rebuild and repair the
Premises diligently and in the manner determined by Landlord, except that
Landlord shall not be required to rebuild, repair or replace any part of any
Alterations which may have been placed on or about the Premises by Tenant. If
the Premises are untenantable in whole or in part following such damage, the
Rent payable hereunder during the period in which they are untenantable shall be
abated proportionately during the time and to the extent the Premises are unfit
for occupancy.

D. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds; provided that Tenant
shall not be liable for that portion of the repair costs for which Landlord was
obligated under the terms of this Lease to carry insurance but failed to carry
such insurance.

E. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if the
Premises or Building are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then, Landlord shall
promptly notify Tenant of the same and, in either case, Landlord shall have the
right to terminate this Lease by delivering written notice of termination to
Tenant within thirty (30) days after the date of notice to Landlord that said
damage or destruction is not fully covered by insurance or such requirement is
made by any such holder, as the case may be, whereupon this Lease shall
terminate thirty (30) days after Landlord delivers such notice. In the event
that the Premises are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, and Landlord consequently
determines not to repair or restore the Premises, Tenant may terminate this
Lease by providing written notice of such termination to Landlord and such
termination shall be effective fifteen (15) days following Landlord's receipt of
such written notice from Tenant.

F. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in the
event of damage or destruction to the Premises or the Building. As a material
inducement to Landlord entering into this Lease, Tenant hereby waives any rights
it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil Code of
California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.

G. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of the
Premises or the Building, under no circumstances shall Landlord be required to
repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property.

                                25. HOLDING OVER

Unless Landlord expressly consents in writing to Tenant's holding over, Tenant
shall be unlawfully and illegally in possession of the Premises, whether or not
Landlord accepts any rent from Tenant or any other person while Tenant remains
in possession of the Premises without Landlord's written consent. If Tenant
shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such retention
the greater of the following: (i) one hundred seventy-five percent (175%) of the
amount of daily rental as of the last month prior to the date of expiration or
earlier termination, or (ii) the amount of the fair market rental as such amount
is reasonably determined by Landlord (Landlord shall use as a basis for its
determination other buildings and projects owned by Landlord, located in the
same geographic area as the Premises, and of the same class and stature as the
Building and Project). Tenant shall also indemnify, defend, protect and hold
Landlord harmless from any loss, liability or cost, including consequential and
incidental damages and reasonable attorneys' fees, incurred by Landlord
resulting from delay by Tenant in surrendering the Premises, including, without
limitation, any claims made by the succeeding tenant founded on such delay.
Acceptance of Rent by Landlord following expiration or earlier termination of
this Lease, or following demand by Landlord for possession of the Premises,
shall not constitute a renewal of this Lease, and nothing contained in this
Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, if upon expiration or earlier termination of this Lease, or
following demand by Landlord for possession of the Premises, Tenant has not
fulfilled its obligation with respect to repairs and cleanup of the Premises or
any other Tenant obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems necessary at Tenant's
sole cost and expense, and any time required by Landlord to complete such
obligations shall

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<PAGE>   17

be considered a period of holding over and the terms of this Paragraph 25 shall
apply. The provisions of this Paragraph 25 shall survive any expiration or
earlier termination of this Lease.

                                   26. DEFAULT

A.      EVENTS OF DEFAULT. The occurrence of any of the following shall
        constitute an event of default on the part of Tenant:

        (1) ABANDONMENT. Abandonment or vacation of the Premises for a
        continuous period in excess of five (5) days. Tenant waives any right to
        notice Tenant may have under Section 1951.3 of the Civil Code of the
        State of California, the terms of this Paragraph 26.A. being deemed such
        notice to Tenant as required by said Section 1951.3.

        (2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
        other amount due and payable hereunder when said payment is due, such
        failure continuing for three (3) days after written notice of such
        failure, as to which time is of the essence, provided that Landlord
        shall not be required to provide such notice more than once during the
        twelve (12) month period commencing with the date of such notice. The
        second failure to pay any such amount within three (3) days after said
        payment is due during such 12-month period shall be an event of default
        hereunder without notice. Such notice shall replace rather than
        supplement any statutory notice required under Code of Civil Procedure
        Section 1161 or any similar or successor statute.

        (3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
        covenant under this Lease other than those matters specified in
        subparagraphs (1) and (2) of this Paragraph 26.A., and in Paragraphs 8,
        16, 18 and 25, such failure continuing for thirty (30) days after
        written notice of such failure, as to which time is of the essence;
        provided, however, that in the event that any such cure cannot
        reasonably be completed within such thirty (30) day period and provided
        further that Tenant has commenced and is diligently pursuing such cure,
        Tenant shall have an additional period of fifteen (15) days to complete
        such cure. Notwithstanding anything to the contrary contained in this
        Lease, the following shall constitute an event of default under this
        Paragraph 26.A(3) without any such notice or lapse of time: (i) failure
        to provide an estoppel certificate when and as required under Paragraph
        18 hereof; (ii) failure to maintain insurance required under Paragraph 8
        hereof; (iii) failure to vacate the Premises upon the expiration or
        earlier termination of this Lease; (iv) failure to comply with any
        obligation under this Lease pertaining to Hazardous Materials; (v) any
        other matter provided for in another subparagraph of this Paragraph 26.A
        or for which another time limit is provided elsewhere in this Lease,
        including without limitation, under Exhibit C to this Lease.

        (4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit
        of creditors.

        (5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
        Tenant, or the filing of an involuntary petition by Tenant's creditors,
        which involuntary petition remains undischarged for a period of thirty
        (30) days. If under applicable law, the trustee in bankruptcy or Tenant
        has the right to affirm this Lease and continue to perform the
        obligations of Tenant hereunder, such trustee or Tenant shall, in such
        time period as may be permitted by the bankruptcy court having
        jurisdiction, cure all defaults of Tenant hereunder outstanding as of
        the date of the affirmance of this Lease and provide to Landlord such
        adequate assurances as may be necessary to ensure Landlord of the
        continued performance of Tenant's obligations under this Lease.

        (6) RECEIVERSHIP. The employment of a receiver to take possession of
        substantially all of Tenant's assets or Tenant's leasehold of the
        Premises, if such appointment remains undismissed or undischarged for a
        period of fifteen (15) days after the order therefor.

        (7) ATTACHMENT. The attachment, execution or other judicial seizure of
        all or substantially all of Tenant's assets or Tenant's leasehold of the
        Premises, if such attachment or other seizure remains undismissed or
        undischarged for a period of fifteen (15) days after the levy thereof.

        (8) INSOLVENCY. The admission by Tenant in writing of its inability to
        pay its debts as they become due.

B.      REMEDIES UPON DEFAULT.

        (1) TERMINATION. In the event of the occurrence of any event of default,
        Landlord shall have the right to give a written termination notice to
        Tenant, and on the date specified in such notice, Tenant's right to
        possession shall terminate, and this Lease shall terminate unless on or
        before such date all Rent in arrears and all costs and expenses incurred
        by or on behalf of Landlord hereunder shall have been paid by Tenant and
        all other events of default of this Lease by Tenant at the time existing
        shall have been fully remedied to the satisfaction of Landlord. At any
        time after such termination, Landlord may recover possession of the
        Premises or any part thereof and expel and remove therefrom Tenant and
        any other person occupying the same, including any subtenant or
        subtenants notwithstanding Landlord's consent to any sublease, by any
        lawful means, and again repossess and enjoy the Premises without
        prejudice to any of the remedies that Landlord may have under this
        Lease, or at law or equity by any reason of Tenant's default or of such
        termination. Landlord hereby reserves the right, but shall not have the
        obligation, to recognize the continued possession of any subtenant. The
        delivery or surrender to Landlord by or on behalf of Tenant of keys,
        entry codes, or other means to bypass security at the Premises shall not
        terminate this Lease.

        (2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
        occurred, this Lease shall continue in effect for so long as Landlord
        does not terminate Tenant's right to possession under Paragraph 26.B(1)
        hereof. Landlord shall have the remedy described in California Civil
        Code Section 1951.4 ("Landlord may continue this Lease in effect after
        Tenant's breach and abandonment and recover Rent as it becomes due, if
        Tenant has the right to sublet or assign, subject only to reasonable
        limitations"), or any successor code section. Accordingly, if Landlord
        does not elect to terminate this Lease on account of any event of
        default by Tenant, Landlord may enforce all of Landlord's rights and
        remedies under this Lease, including the right to recover Rent as it
        becomes due. Acts of maintenance, preservation or efforts to lease the
        Premises or the appointment of a receiver under application of Landlord
        to protect Landlord's interest under this Lease or other entry by
        Landlord upon the Premises shall not constitute an election to terminate
        Tenant's right to possession.

        (3) INCREASED SECURITY DEPOSIT. If Tenant is in default under Paragraph
        26.A(2) hereof and such default remains uncured for ten (10) days after
        such occurrence or such default occurs more than three times in any
        twelve (12) month period, Landlord may require that Tenant increase the
        Security Deposit to the amount of three times the current month's Rent
        at the time of the most recent default if the Security Deposit is less
        than the amount of three times the current month's Rent.

C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent and other amounts that would have
been earned after the date of termination until the time of award exceeds the
amount of such Rent loss that Tenant proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid Rent and
other amounts for the balance of the Term after the time of award exceeds the
amount of such Rent loss that the Tenant proves could be reasonably avoided; and
(4) any other amount and court costs necessary to compensate Landlord for all
detriment proximately caused by Tenant's

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<PAGE>   18

failure to perform Tenant's obligations under this Lease or which, in the
ordinary course of things, would be likely to result therefrom. The "worth at
the time of award" as used in (1) and (2) above shall be computed at the
Applicable Interest Rate (defined below). The "worth at the time of award" as
used in (3) above shall be computed by discounting such amount at the Federal
Discount Rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). If this Lease provides for any periods during the Term
during which Tenant is not required to pay Base Rent or if Tenant otherwise
receives a Rent concession, then upon the occurrence of an event of default,
Tenant shall owe to Landlord the full amount of such Base Rent or value of such
Rent concession, plus interest at the Applicable Interest Rate, calculated from
the date that such Base Rent or Rent concession would have been payable.

D. LATE CHARGE. In addition to its other remedies, Landlord shall have the right
without notice or demand to add to the amount of any payment required to be made
by Tenant hereunder, and which is not paid and received by Landlord on or before
the first day of each calendar month, an amount equal to an amount equal to five
percent (5%) of the delinquent amount, or $150.00, whichever amount is greater,
for each month or portion thereof that the delinquency remains outstanding to
compensate Landlord for the loss of the use of the amount not paid and the
administrative costs caused by the delinquency, the parties agreeing that
Landlord's damage by virtue of such delinquencies would be extremely difficult
and impracticable to compute and the amount stated herein represents a
reasonable estimate thereof. Any waiver by Landlord of any late charges or
failure to claim the same shall not constitute a waiver of other late charges or
any other remedies available to Landlord.

E. INTEREST. Interest shall accrue on all sums not paid when due hereunder at
the lesser of ten percent (10%) per annum or the maximum interest rate allowed
by law ("APPLICABLE INTEREST RATE") from the due date until paid.

F. REMEDIES CUMULATIVE. All of Landlord's rights, privileges and elections or
remedies are cumulative and not alternative, to the extent permitted by law and
except as otherwise provided herein.

G. REPLACEMENT OF STATUTORY NOTICE REQUIREMENTS. When this Lease requires
service of a notice, that notice shall replace rather than supplement any
equivalent or similar statutory notice, including any notice required by
California Code of Civil Procedure Section 1161 or any similar or successor
statute. When a statute requires service of a notice in a particular manner,
service of that notice (or a similar notice required by this Lease) in the
manner required by this Paragraph 26 shall replace and satisfy the statutory
service-of-notice procedures, including those required by California Code of
Civil Procedure Section 1162 or any similar or successor statute.

                                    27. LIENS

        Tenant shall at all times keep the Premises and the Project free from
liens arising out of or related to work or services performed, materials or
supplies furnished or obligations incurred by or on behalf of Tenant or in
connection with work made, suffered or done by or on behalf of Tenant in or on
the Premises or Project. If Tenant shall not, within ten (10) days following the
imposition of any such lien, cause the same to be released of record by payment
or posting of a proper bond, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to cause
the same to be released by such means as Landlord shall deem proper, including
payment of the claim giving rise to such lien. All sums paid by Landlord on
behalf of Tenant and all expenses incurred by Landlord in connection therefor
shall be payable to Landlord by Tenant on demand with interest at the Applicable
Interest Rate as Additional Rent. Landlord shall have the right at all times to
post and keep posted on the Premises any notices permitted or required by law,
or which Landlord shall deem proper, for the protection of Landlord, the
Premises, the Project and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give Landlord not less than
ten (10) business days prior written notice of the commencement of any work in
the Premises or Project which could lawfully give rise to a claim for mechanics'
or materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from time
to time provide, for which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by Landlord
without Landlord's consent, and in any event not before completion of the work
which could lawfully give rise to a claim for mechanics' or materialmen's liens.

                            28. INTENTIONALLY OMITTED

                            29. TRANSFERS BY LANDLORD

        In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after the
passing of title to Landlord's successor-in-interest. This Lease shall not be
affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee. Landlord's successor(s)-in-interest shall not have liability to Tenant
with respect to the failure to perform any of the obligations of "Landlord," to
the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.

               30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS

        All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Base Rent, required to be paid by Tenant hereunder or shall
fail to perform any other act on Tenant's part to be performed hereunder,
including Tenant's obligations under Paragraph 11 hereof, and such failure shall
continue for fifteen (15) days after notice thereof by Landlord, in addition to
the other rights and remedies of Landlord, Landlord may make any such payment
and perform any such act on Tenant's part. In the case of an emergency, no prior
notification by Landlord shall be required. Landlord may take such actions
without any obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.

                                   31. WAIVER

        If either Landlord or Tenant waives the performance of any term,
covenant or condition contained in this Lease, such waiver shall not be deemed
to be a waiver of any subsequent breach of the same or any other term, covenant
or condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord (including,
without limitation, through any "lockbox") shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time Landlord
accepted such Rent. Failure by Landlord to enforce any of the terms, covenants
or conditions of this Lease for any length of time shall not be deemed to waive
or decrease the right of Landlord to insist thereafter upon strict performance
by Tenant. Waiver by Landlord of any term, covenant or condition contained in
this Lease may only be made by a written document signed by Landlord, based upon
full knowledge of the circumstances.

                                       18
<PAGE>   19

                                   32. NOTICES

        Each provision of this Lease or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to sending,
mailing, or delivery of any notice or the making of any payment by Landlord or
Tenant to the other shall be deemed to be complied with when and if the
following steps are taken:

A. RENT. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.

B. OTHER. All notices, demands, consents and approvals which may or are required
to be given by either party to the other hereunder shall be in writing and
either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt or
refusal to accept delivery. Tenant appoints as its agent to receive the service
of all default notices and notice of commencement of unlawful detainer
proceedings the person in charge of or apparently in charge of occupying the
Premises at the time, and, if there is no such person, then such service may be
made by attaching the same on the main entrance of the Premises.

C. REQUIRED NOTICES. Upon learning of the following circumstances, Tenant shall
promptly notify Landlord in writing of any notice of a violation or a potential
or alleged violation of any Regulation that relates to the Premises or the
Project, or of any inquiry, investigation, enforcement or other action that is
instituted or threatened by any governmental or regulatory agency against Tenant
or any other occupant of the Premises, or any claim that is instituted or
threatened by any third party that relates to the Premises or the Project.

                               33. ATTORNEYS' FEES

        If Landlord places the enforcement of this Lease, or any part thereof,
or the collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Tenant brings to enforce its respective rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said costs
and attorneys' fees shall be a part of the judgment in said action.

                           34. SUCCESSORS AND ASSIGNS

        This Lease shall be binding upon and inure to the benefit of Landlord,
its successors and assigns, and shall be binding upon and inure to the benefit
of Tenant, its successors, and to the extent assignment is approved by Landlord
as provided hereunder, Tenant's assigns.

                                35. FORCE MAJEURE

        If performance by a party of any portion of this Lease is made
impossible by any prevention, delay, or stoppage caused by strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes for those items, government actions, civil commotions,
fire or other casualty, or other causes beyond the reasonable control of the
party obligated to perform (any such event shall be referred to herein as a
"Force Majeure Event"), performance by that party for a period equal to the
period of that prevention, delay, or stoppage is excused. Tenant's obligation to
pay Rent, however, is not excused by this Paragraph 35.

                            36. SURRENDER OF PREMISES

        Tenant shall, upon expiration or sooner termination of this Lease,
surrender the Premises to Landlord in the same condition as existed on the date
Tenant originally took possession thereof, reasonable wear and tear excepted,
including, but not limited to, all interior walls cleaned, all holes in walls
repaired and all floors cleaned, waxed, and free of any Tenant-introduced
marking or painting, all to the reasonable satisfaction of Landlord. Tenant
shall remove all of its debris from the Project. At or before the time of
surrender, Tenant shall comply with the terms of Paragraph 12.A. hereof with
respect to Alterations to the Premises and all other matters addressed in such
Paragraph. If the Premises are not so surrendered at the expiration or sooner
termination of this Lease, the provisions of Paragraph 25 hereof shall apply.
All keys to the Premises or any part thereof shall be surrendered to Landlord
upon expiration or sooner termination of the Term. Tenant shall give written
notice to Landlord at least thirty (30) days prior to vacating the Premises and
shall meet with Landlord for a joint inspection of the Premises at the time of
vacating at a mutually agreeable time, but nothing contained herein shall be
construed as an extension of the Term or as a consent by Landlord to any holding
over by Tenant. In the event of Tenant's failure to participate in such joint
inspection, Landlord's inspection at or after Tenant's vacating the Premises
shall conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration. Any delay caused by Tenant's failure
to carry out its obligations under this Paragraph 36 beyond the term hereof,
shall constitute unlawful and illegal possession of Premises under Paragraph 25
hereof.

                                   37. PARKING

        So long as Tenant is occupying the Premises, Tenant and Tenant's Parties
shall have the right to use up to the number of parking spaces, specified in the
Basic Lease Information on an unreserved, nonexclusive, first come, first served
basis, for passenger-size automobiles, in the parking areas in the Project
designated from time to time by Landlord for use in common by tenants of the
Building. The parking rights granted under this Paragraph 37 are personal to
Tenant and are not transferable except; (i) pursuant to the terms of a sublease
or assignment which expressly transfers such parking rights and which has been
approved in writing by Landlord in accordance with the terms of this Lease, (ii)
a Permitted Transfer, provided that Tenant notify Landlord in writing of such
transfer of parking privileges, or (iii) with the express written consent of
Landlord which consent shall be granted in Landlord's sole discretion.

        Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
subject to such parking charges as Landlord shall determine, and shall otherwise
be subject to such terms and conditions as Landlord may require.

        Tenant shall at all times comply and shall cause all Tenant's Parties
and visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.

        Landlord shall have no liability for any damage to property or other
items located in the parking areas of the Project, nor for any personal injuries
or death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.

                                       19
<PAGE>   20

        Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant's Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking; provided, however, Tenant shall not be
required to pay for parking validations for visitor parking during the initial
Term. Provided that Tenant's visitors park in the parking areas allocated to
Tenant or otherwise designated by Landlord for parking by Tenant's visitors,
Tenant's visitors shall not be required to pay for parking in such areas,
subject to the provisions of this Paragraph 37 below with respect to the monthly
parking charges payable by Tenant. Landlord also reserves the right to alter,
modify, relocate or close all or any portion of the parking areas in order to
make repairs or perform maintenance service, or to restripe or renovate the
parking areas, or if required by casualty, condemnation (subject to Tenant's
right of termination provided in Paragraph 23 hereof), act of God, Regulations
or for any other reason deemed reasonable by Landlord.

Subject to the terms and conditions of this Paragraph 37, commencing on the
first day of the thirty-seventh (37th) month of the initial Term hereof, and
only with respect to the initial Premises and Tenant's parking rights related
thereto, Tenant shall pay to Landlord (or Landlord's parking contractor, if so
directed in writing by Landlord), as Additional Rent hereunder, a monthly
parking charge for unreserved, nonexclusive, first come, first served basis
parking and for the Reserved Spaces (as defined below) equal to five cents
($.05) per rentable square foot of the Premises. Commencing on the first day of
the one hundred twenty-first (121st) month of the initial Term hereof, and only
with respect to the initial Premises and Tenant's parking rights related
thereto, Tenant shall pay to Landlord (or Landlord's parking contractor, if so
directed in writing by Landlord), as Additional Rent hereunder, a monthly
parking charge for unreserved, nonexclusive, first come, first served basis
parking and for the Reserved Spaces (as defined below) equal to ten cents ($.10)
per rentable square foot of the Premises. Tenant shall pay to Landlord as
Additional Rent hereunder, the monthly charge established by Landlord then in
effect for any reserved parking spaces requested by Tenant and granted by
Landlord, if any; provided, however, that Tenant shall have the right to convert
up to ten (10) of the unreserved, nonexclusive, first come, first served basis
parking spaces described in the preceding two (2) sentences to reserved parking
spaces (the "Reserved Spaces") without charge to Tenant in addition to the
parking charges described in the preceding two (2) sentences, provided further
that the location of such Reserved Spaces shall be subject to Landlord's prior
approval. Subject to the immediately preceding sentence, Landlord shall have no
obligation to provide such reserved parking to Tenant during the Term hereof or
any extension hereto. All parking charges shall be payable in advance with
Tenant's payment of Basic Rent. No deductions from the monthly parking charge
shall be made for days on which the Tenant does not use any of the parking
spaces entitled to be used by Tenant. If on the first day of the thirty-seventh
(37th) month of the initial Term hereof, Landlord does not charge for
unreserved, nonexclusive, first come, first served basis parking at a majority
of the first-class office properties owned by such entity and located within the
San Jose Airport geographic area ("LANDLORD'S LOCAL PROPERTIES"), then Landlord
shall waive the monthly parking charge stated above only during the period in
which Landlord is not collecting such monthly parking charge at a majority of
Landlord's Local Properties. If on the first day of the thirty-seventh (37th)
month of the Term hereof Landlord is charging monthly parking charges at a
majority of Landlord's Local Properties, Landlord shall charge Tenant and Tenant
shall be required to pay the monthly parking charges described herein throughout
the balance of the Term of this Lease and any parking charges expressly
applicable to extensions thereto, if any. Notwithstanding anything to the
contrary contained herein, the parking charges described above in this paragraph
are personal to the Tenant named herein and any Permitted Transferee. Any
subtenant or assignee or any other party with express legal rights to parking in
the Project in connection with this Lease shall pay to Landlord (or Landlord's
parking contractor, if so directed in writing by Landlord), as Additional Rent
hereunder, the monthly parking charge established from time to time by Landlord
for parking in such parking areas in lieu of Tenant paying to Landlord the
monthly parking charge payable by Tenant pursuant to this Lease for parking in
the parking areas utilized by such assignee or sublessee, subject, however, to
the provisions of Paragraph 21.E. of this Lease.

                                38. MISCELLANEOUS

A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.

B. TIME. Time is of the essence regarding this Lease and all of its provisions.

C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws of
the State of California.

D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.

E. MODIFICATION. This Lease may not be modified except by a written instrument
signed by the parties hereto. Tenant accepts the area of the Premises as
specified in the Basic Lease Information as the approximate area of the Premises
for all purposes under this Lease, and acknowledges and agrees that no other
definition of the area (rentable, usable or otherwise) of the Premises shall
apply. Tenant shall in no event be entitled to a recalculation of the square
footage of the Premises, rentable, usable or otherwise, and no recalculation, if
made, irrespective of its purpose, shall reduce Tenant's obligations under this
Lease in any manner, including without limitation the amount of Base Rent
payable by Tenant or Tenant's Proportionate Share of the Building and of the
Project.

F. SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.

G. RECORDATION. Tenant shall not record this Lease or a short form memorandum
hereof.

H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not constitute
an option or offer to lease and this Lease is not effective otherwise until
execution and delivery by both Landlord and Tenant.

I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies. All offers by
or on behalf of Tenant of accord and satisfaction are hereby rejected in
advance.

J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.

K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in this
Lease or requested of Landlord, Landlord's consent, determination or estimation
shall be given or made solely by Landlord in Landlord's good faith opinion,
whether or not objectively reasonable. If Landlord

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<PAGE>   21

fails to respond to any request for its consent within the time period, if any,
specified in this Lease, Landlord shall be deemed to have disapproved such
request, except as otherwise expressly provided in this Lease.

L. EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.

M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.

N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and Tenant
and nothing herein is intended to create any third party benefit.

O. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the observance
and performance of all of the other covenants, terms and conditions on Tenant's
part to be observed and performed, Tenant shall peaceably and quietly hold and
enjoy the Premises for the term hereby demised without hindrance or interruption
by Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to all of the other terms and
conditions of this Lease. Landlord shall not be liable for any hindrance,
interruption, interference or disturbance by other tenants or third persons, nor
shall Tenant be released from any obligations under this Lease because of such
hindrance, interruption, interference or disturbance.

P. COUNTERPARTS. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original.

Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.

R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant hereunder
for any fractional month shall be prorated based on a month of 30 days. As used
herein, the term "fiscal year" shall mean the calendar year or such other fiscal
year as Landlord may deem appropriate.

                            39. ADDITIONAL PROVISIONS

A. RENT.

Subject to the provisions of Paragraphs 2.B, Base Rent, net of Operating
Expenses per Paragraph 7 of this Lease, for the Premises shall be as follows:

From the Term Commencement Date
through the end of the twelfth
(12th) month following the Term
Commencement Date:                    $969,885.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.
                                      Operating Expenses for calendar year 2001
                                      are estimated to be $193,977.00 per month.

Month 13 following the Term
Commencement Date through Month 24:   $988,982.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 25 following the Term
Commencement Date through Month 36:   $1,028,951.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 37 following the Term
Commencement Date through Month 48:   $1,059,820.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 49 following the Term
Commencement Date through Month 60:   $1,091,614.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 61 following the Term
Commencement Date through Month 72:   $1,124,363.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 73 following the Term
Commencement Date through Month 84:   $1,158,093.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 84 following the Term
Commencement Date through Month 96:   $1,192,836.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 97 following the Term
Commencement Date through Month 108:  $1,228,621.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 109 following the Term
Commencement Date through Month 120:  $1,265,480.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 121 following the Term
Commencement Date through Month 132:  $1,303,444.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

Month 133 following the Term
Commencement Date through Month 144:  $1,342,548.00 per month plus operating
                                      expenses per Paragraph 7 of this Lease.

B. EARLY ACCESS. Provided that Tenant does not interfere whatsoever with the
construction of the Base Building Work (as described in EXHIBIT C hereto),
Landlord shall provide access to Tenant to the Premises on JULY 15, 2001, during
normal business hours after reasonable prior notice to Landlord for purposes of
installing furniture, fixtures and equipment (including network cabling and
telecommunications equipment to the extent such installation is approved by
Landlord in writing) and to commence construction of the Tenant Improvements in
the Premises, with all terms and conditions of this Lease in full force and
effect, excluding payment of Rent and Operating Expenses. Any interference by
Tenant or any of Tenant's Parties with the construction of the Base Building
Work shall constitute a delay by Tenant for purposes of Paragraph 2 hereof.
Landlord and Tenant shall each reasonably cooperate with the other to attempt to
reasonably coordinate their respective construction schedules to accommodate the
early access by Tenant contemplated by this Paragraph 39.B.

C. LETTER OF CREDIT.

        (1) DELIVERY OF LETTER OF CREDIT. In lieu of depositing a security
        deposit with Landlord, Tenant shall, on execution of this Lease, deliver
        to Landlord and cause to be in effect during the Lease Term an
        unconditional, irrevocable letter of credit ("LOC") in the amount
        specified for the Security Deposit in the Basic Lease Information, as it
        may be increased as provided in this Lease (the "LOC AMOUNT") for an
        initial term of the LOC of three (3) years and thereafter shall renew
        automatically from year to year through 30 days beyond the expiration
        date of this Lease or any extension thereto. The LOC shall be in a form
        acceptable to

                                       21
<PAGE>   22

        Landlord and shall be issued by an LOC bank selected by Tenant and
        acceptable to Landlord. The text of the LOC shall expressly state that
        the LOC shall survive the termination of this Lease. An LOC bank is a
        bank that accepts deposits, maintains accounts, has a local office that
        will negotiate a letter of credit, and the deposits of which are insured
        by the Federal Deposit Insurance Corporation. Tenant shall pay all
        expenses, points, or fees incurred by Tenant in obtaining the LOC. The
        LOC shall not be mortgaged, assigned or encumbered in any manner
        whatsoever by Tenant without the prior written consent of Landlord.
        Tenant acknowledges that Landlord has the right to transfer or mortgage
        its interest in the Project, the Building and in this Lease and Tenant
        agrees that in the event of any such transfer or mortgage, Landlord
        shall have the right to transfer or assign the LOC and/or the LOC
        Security Deposit (as defined below) to the transferee or mortgagee, and
        in the event of such transfer, Tenant shall look solely to such
        transferee or mortgagee for the return of the LOC and/or the LOC
        Security Deposit. The maximum amount of any transfer fee associated with
        such transfer shall not be in excess of reasonable transfer fees
        customarily required by issuing banks, which amount shall be expressly
        stated in the terms of the LOC, and shall be payable by Landlord. Tenant
        shall, within ten (10) business days of request by Landlord, execute
        such further instruments or assurances as Landlord may reasonably deem
        necessary to evidence or confirm Landlord's transfer or assignment of
        the LOC Security Deposit and/or the LOC to such transferee or mortgagee.

        (2) REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time,
        replace any existing LOC with a new LOC if the new LOC (a) becomes
        effective at least thirty (30) days before expiration of the LOC that it
        replaces; (b) is in the required LOC amount; (c) is issued by an LOC
        bank acceptable to Landlord; and (d) otherwise complies with the
        requirements of this Paragraph 39.C.

        (3) LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold
        the LOC as security for the performance of Tenant's obligations under
        this Lease. If, after notice and failure to cure within any applicable
        period provided in this Lease, Tenant is in default pursuant to this
        Lease, Landlord may, without prejudice to any other remedy it has, draw
        on all or any portion of the LOC necessary to (a) pay Rent or other sum
        in default; (b) pay or reimburse Landlord for any amount that Landlord
        may spend or become obligated to spend in exercising Landlord's rights
        under Paragraph 30 (Right of Landlord to Perform Tenant's Covenant);
        and/or (c) compensate Landlord for any expense, loss, or damage that
        Landlord may suffer because of Tenant's default. The use, application or
        retention of the LOC, or any portion thereof, by Landlord shall not
        prevent Landlord from exercising any other right or remedy provided by
        this Lease or by law, it being intended that Landlord shall not first be
        required to proceed against the LOC and shall not operate as a
        limitation on any recovery to which Landlord may otherwise be entitled.
        If Tenant fails to renew or replace the LOC at least thirty (30) days
        before its expiration, Landlord may, without prejudice to any other
        remedy it has, draw on the entire amount of the LOC.

        (4) LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
        Landlord but not applied by Landlord shall be held by Landlord as a
        security deposit (the "LOC SECURITY DEPOSIT") in accordance with
        Paragraph 19 of this Lease.

        (5) RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If
        Landlord draws on any portion of the LOC and/or applies all or any
        portion of such draw, Tenant shall, within five (5) business days after
        demand by Landlord, either (a) deposit cash with Landlord in an amount
        that, when added to the amount remaining under the LOC and the amount of
        any LOC Security Deposit, shall equal the LOC Amount then required under
        this Paragraph 39.C; or (b) reinstate the LOC to the full LOC Amount.

        (6) REDUCTION OF LETTER OF CREDIT. At least fifteen (15) business days
        prior to the dates specified in each of clauses a. through d. below,
        Tenant shall deliver to Landlord for review Tenant's financial
        statements prepared in accordance with generally accepted accounting
        principles and audited by a nationally recognized public accounting firm
        acceptable to Landlord, and any other financial information requested by
        Landlord ("TENANT'S FINANCIAL INFORMATION") If: (i) Tenant has a
        tangible net worth, which "tangible net worth" shall be determined by
        Landlord in its sole discretion and shall mean assets less intangible
        assets and total liabilities, with intangible asserts including
        nonmaterial benefits such as goodwill, patents, copyrights, and
        trademarks, in excess of Three Hundred Fifty Million and No/100 Dollars
        ($350,000,000.00) as reflected in Tenant's Financial Information, which
        amount shall be determined by Landlord to its satisfaction prior to any
        reduction in the LOC Amount; and (ii) Tenant's Financial Information
        reflects four (4) consecutive calendar quarters of profitability, as
        determined by Landlord, during the time period immediately preceding
        Tenant's request for reduction in the LOC Amount described in this
        subparagraph, then the following reductions in the LOC Amount may be
        made in accordance with the terms of this Paragraph 39.C(6):

               a.     At any time after the end of the forty-eighth (48th) month
                      following the Term Commencement Date, the LOC Amount may
                      be reduced to an amount equal to Eight Million Two Hundred
                      Eighty-Nine Thousand Four Hundred Eighty-Seven and No/100
                      Dollars ($8,289,487.00);

               b.     At any time after the end of the sixtieth (60th) month
                      following the Term Commencement Date, the LOC Amount may
                      be reduced to an amount equal to Six Million One Hundred
                      Seventy-Two Thousand Nine Hundred Ninety-Two and No/100
                      Dollars ($6,172,992.00);

               c.     At any time after the end of the seventy-second (72nd)
                      month following the Term Commencement Date, the LOC amount
                      may be reduced to an amount equal to Four Million
                      Fifty-Six Thousand Four Hundred Ninety-Six and No/100
                      Dollars ($4,056,496.00);

               d.     At any time after the end of the eighty-fourth (84th)
                      month following the Term Commencement Date, the LOC may be
                      returned by Landlord to the issuing bank for cancellation
                      provided that Tenant has, prior to such delivery by
                      Landlord, delivered a cash Security Deposit (to be held by
                      Landlord in accordance with the terms of Paragraph 19 of
                      this Lease) in an amount equal to One Million Nine Hundred
                      Forty Thousand and No/100 Dollars ($1,940,000.00).

        In the event that any of the above described reductions to the LOC
        Amount is made and, subsequently, Tenant fails to meet the corresponding
        profitability and tangible net worth condition precedent for a period of
        thirty (30) days following delivery by Landlord of written notice of any
        such failure, Tenant shall within two (2) business days, increase the
        face amount of the LOC to an amount equal to the LOC Amount existing
        prior to such reduction (including the reduction described in clause d.
        above). If Tenant fails to increase the LOC Amount as provided above,
        such failure shall constitute a default hereunder (which default shall
        not be subject to any cure rights afforded anywhere in this Lease) and
        Landlord shall be entitled to draw on the LOC for the full LOC Amount
        and hold such LOC Amount as a Security Deposit in accordance with the
        terms of this Lease, and enforce all other rights available to Landlord
        pursuant to the terms of this Lease or under applicable law.

D.      ROOF RIGHTS.

        1. During the Term and subject to the terms of this Lease, Tenant shall
        have the non-exclusive right to install on the roof of the Building
        satellite dish(es), which shall be enclosed by a screen and the
        non-exclusive right to run connecting lines or cables thereto from the
        Premises (such satellite dish/antennae and such connecting lines and
        related equipment herein referred to collectively as the "Equipment").
        Tenant shall not penetrate the roof in connection with any installation
        or reinstallation of the Equipment without Landlord's prior written
        consent, which may be withheld in Landlord's reasonable discretion. The
        plans and

                                       22
<PAGE>   23

        specifications for all the Equipment shall be delivered by Tenant to
        Landlord for Landlord's review and approval. Such plans and
        specifications, including, without limitation, the location of the
        Equipment, shall be approved by Landlord in writing prior to any
        installation. In no event shall the Equipment or any portion thereof be
        visible from street level. Prior to the commencement of any installation
        or other work performed on or about the Building, Landlord shall approve
        all contractors and subcontractors which shall perform such work. Tenant
        shall be responsible for any damage to the roof, conduit systems or
        other portions of the Building or Building systems as a result of
        Tenant's installation, maintenance and/or removal of the Equipment.

        2. Tenant shall pay to Landlord, as "additional rent", a monthly fee for
        the use of the roof and roof space to accommodate Tenant's Equipment,
        which shall be due and payable on the first day of each month with each
        installment of Base Rent hereunder. The actual monthly fee for the use
        of the roof and roof space will be determined by Landlord at the time
        that Tenant requests Landlord's approval for the Equipment installation;
        provided, however, that such fee shall be a commercially reasonable fee
        which shall not exceed $3000.00 per month for two (2) satellite dishes.

        3. Tenant, at Tenant's sole cost and expense, shall comply with all
        Regulations regarding the installation, construction, operation,
        maintenance and removal of the Equipment and shall be solely responsible
        for obtaining and maintaining in force all permits, licenses and
        approvals necessary for such operations.

        4. Tenant shall be responsible for and promptly shall pay all taxes,
        assessments, charges, fees and other governmental impositions levied or
        assessed on the Equipment or based on the operation thereof.

        5. Landlord may require Tenant, at Tenant's sole cost and expense, to
        relocate the Equipment during the Term to a location approved by Tenant,
        which approval shall not be unreasonably withheld, conditioned or
        delayed. Tenant shall not change the location of, or alter or install
        additional Equipment or paint any of the other Equipment without
        Landlord's prior written consent.

        6. Operation of the Equipment shall not interfere in any manner with
        equipment systems or utility systems of other tenants of the Project,
        including without limitation, telephones, dictation equipment, lighting,
        heat and air conditioning, computers, electrical systems and elevators.
        If operation of the Equipment causes such interference, as determined by
        Landlord in Landlord's reasonable discretion, Tenant immediately shall
        suspend operation of the Equipment until Tenant eliminates such
        interference.

        7. Tenant shall maintain the Equipment in good condition and repair, at
        Tenant's sole cost and expense. Landlord may from time to time require
        that Tenant repaint the satellite dishes at Tenant's expense to keep the
        same in an attractive condition. In the event that Tenant fails to
        repair and maintain the Equipment in accordance with this Lease,
        Landlord may, but shall not be obligated to, make any such repairs or
        perform any maintenance to the Equipment and Tenant shall reimburse
        Landlord upon demand for all costs and expenses incurred by Landlord in
        connection therewith, plus a reasonable administrative fee.

        8. Tenant may access the roof for repair and maintenance of the
        Equipment, only during normal business hours, after reasonable prior
        notice to Landlord. Tenant shall designate in writing to Landlord all
        persons whom Tenant authorizes to have access to the roof for such
        purposes. Upon such designation and prior identification to Landlords'
        building security personnel, such authorized persons shall be granted
        access to the roof by Landlord's building engineer. Tenant shall be
        responsible for all costs and expenses incurred by Landlord in
        connection with Tenant's access to the roof pursuant to this Paragraph.
        Landlord or Landlord's agent may accompany Tenant during such access.

        9. Tenant shall indemnify, defend, protect and hold harmless Landlord
        from and against any and all claims related to the Equipment or
        operation of the same as if the Equipment were located wholly within the
        Premises. Tenant shall provide evidence satisfactory to Landlord that
        Tenant's property and liability insurance policies required under this
        Lease include coverage for the Equipment and any claim, loss, damage, or
        liability relating to the Equipment.

        10. Landlord shall have no responsibility or liability whatsoever
        relating to (i) maintenance or repair of the Equipment; (ii) damage to
        the Equipment; (iii) damage to persons or property relating to the
        Equipment or the operation thereof; or (iv) interference with use of the
        Equipment arising out of utility interruption or any other cause; except
        for injury to persons or damage to property caused solely by the active
        negligence or intentional misconduct or Landlord, its agents or any
        other parties related to Landlord. In no event shall Landlord be
        responsible for consequential damages. Upon installation of the
        Equipment, Tenant shall accept the area where the Equipment is located
        in its "as-is" condition. Tenant acknowledges that the roof location of
        the Equipment is suitable for Tenant's needs, and acknowledges that
        Landlord shall have no obligation whatsoever to improve, maintain or
        repair the area in which the Equipment will be installed.

        11. Tenant shall use the Equipment solely for Tenant's operations
        associated with the Permitted Use and within Tenant's Premises and shall
        not use or allow use of the Equipment, for consideration or otherwise,
        for the benefit of other tenants in the Building or any other person or
        entity.

        12. Tenant shall, at Tenant's sole cost and expense, remove such
        portions of the Equipment as Landlord may designate upon the expiration
        or earlier termination of this Lease, and restore the affected areas to
        their condition prior to installation of the Equipment. If Tenant fails
        to so remove the Equipment, Landlord reserves the right to do so, and
        the expense of the same shall be immediately due and payable from Tenant
        to Landlord as additional rent, together with interest and late charges
        as provided in this Lease, plus a reasonable administrative fee.

        E. OFFER RIGHT REGARDING SKYPORT TOWER IV. In the event, Landlord
        determines, in its sole discretion to construct Skyport Tower IV (which
        shall be the first tower of three constructed in Phase II of Skyport)
        and Skyport Tower IV becomes available for lease, then, provided that
        Landlord determines in its sole discretion that it is satisfied with its
        rental portfolio vis a vis its exposure and risk profile with respect to
        Tenant, and provided Tenant is not and has not been in default under the
        terms and conditions of this Lease, Landlord shall provide Tenant with
        written notice of the availability of Skyport Tower IV for lease and the
        terms and conditions on which Landlord is willing to lease Skyport Tower
        IV to Tenant, including Landlord's reasonable opinion of the Fair Market
        Rental Value ("FMRV"), as herein defined, for Skyport Tower IV. The FMRV
        shall be the current fair market rental for comparable space in the
        Building or Project and in other similar buildings in the same rental
        market as of the commencement date of the Skyport Tower IV lease
        proposed by Landlord, taking into account the Building amenities,
        location, identity, quality, age, conditions, term of lease, tenant
        improvements, services provided, and other pertinent items. Tenant shall
        have ten (10) business days after receipt of such notification from
        Landlord to accept all of the terms and conditions set forth in
        Landlords' notice including the Base Rent for Skyport Tower IV. If
        Tenant does not accept all of the terms and conditions set forth in
        Landlords' notice including the Base Rent for Skyport Tower IV within
        such ten (10) business day period, Tenant shall have no further right
        title or interest in Skyport Tower IV and the right of Tenant set forth
        in this Paragraph 39.E. shall terminate, and Landlord shall have no
        further obligation to Tenant with respect to Skyport Tower IV and may
        enter into a lease for the Skyport Tower IV with any third party on such
        terms and conditions as Landlord may determine in its sole discretion.
        If, on the other hand, Tenant accepts all of the terms and conditions
        set forth in Landlords' notice including the Base Rent for Skyport Tower
        IV

                                       23
<PAGE>   24

        within such ten (10) business day period, Tenant shall immediately
        deliver to Landlord payment for the first month's rent for Skyport Tower
        IV (in the same manner as provided for in this Lease), and the lease for
        such building shall be consummated without delay in accordance with the
        terms and conditions set forth in Landlord's notice. Notwithstanding
        anything to the contrary herein contained, the right of Tenant set forth
        in this Paragraph 39.E. shall be conditioned upon the following: (i) at
        the time Tenant agrees to accept Skyport Tower IV and at the time of the
        commencement of the term for Skyport Tower IV, Tenant shall be in
        possession of at least fifty percent (50%) of the Premises leased by
        Tenant pursuant to this Lease for the conduct of its business therein
        and the same shall not be occupied by any assignee, subtenant or
        licensee, other than an Affiliate and, provided further, that the right
        of Tenant hereunder shall be applicable only if Skyport Tower IV will
        actually be occupied by Tenant and (ii) the agreement of acceptance
        shall constitute a representation by Tenant to Landlord, effective as of
        the date of the agreement of acceptance and as of the date of
        commencement of the lease for Skyport Tower IV, that Tenant does not
        intend to assign the lease for Skyport Tower IV, in whole or in part or
        sublet all or any portion of such premises, other than to an Affiliate,
        the election to expand being for the purpose of utilizing Skyport Tower
        IV for Tenant's purposes in the conduct of Tenant's business therein.

F.      OPTION TO RENEW. Tenant shall, provided this Lease is in full force and
        effect and Tenant is not and has not been in default under any of the
        terms and conditions of this Lease, and provided further that Tenant's
        then-current financial condition is satisfactory to Landlord in its
        reasonable discretion, have one (1) option to renew this Lease for a
        term of seven (7) years, for the Premises in "as-is" condition and on
        the same terms and conditions set forth in this Lease, except as
        modified by the terms, covenants and conditions set forth below:

        (1)    If Tenant elects to exercise such option, then Tenant shall
               provide Landlord with written notice no earlier than the date
               which is four hundred twenty-five (425) days prior to the
               expiration of the Term of this Lease, but no later than 5:00 p.m.
               (Pacific Standard Time) on the date which is three hundred
               sixty-five (365) days prior to the expiration of the Term of this
               Lease. Tenant shall include with such written notice Tenant's
               most recently publicly available audited financial statements and
               any other financial information requested by Landlord. If Tenant
               fails to provide such notice and financial information, Tenant
               shall have no further or additional right to extend or renew the
               Term of this Lease.

        (2)    The Base Rent in effect at the expiration of the Term of this
               Lease shall be increased to reflect the current fair market
               rental for comparable space in the Building or Project and in
               other similar buildings in the same rental market as of the date
               the renewal term is to commence, taking into account the specific
               provisions of this Lease which will remain constant, and the
               Building amenities, location, identity, quality, age, conditions,
               term of lease, tenant improvements, services provided, and other
               pertinent items. Landlord in its reasonable discretion may
               increase the Security Deposit in connection with Landlord's
               review of Tenant's financial information described above and
               then-current market conditions.

        (3)    Landlord shall advise Tenant of the new Base Rent and Security
               Deposit for the Premises for the renewal term which will be based
               on Landlord's determination of fair market rental value no later
               than fifteen (15) business days after receipt of notice of
               Tenant's exercise of its option to renew. Tenant shall have
               fifteen (15) business days after receipt of such notification
               from Landlord to accept the new Base Rent and Security Deposit.
               If Tenant does not accept Landlord's determination of the new
               Base Rent and Security Deposit within such fifteen (15) business
               day period, this option shall be null and void, and Landlord
               shall have no further obligation to Tenant and may enter into a
               lease for the Premises with a third party on such terms and
               conditions as Landlord may determine in its sole discretion.

        (4)    Notwithstanding anything to the contrary contained in this
               Paragraph, in no event shall the Base Rent or Security Deposit
               for any renewal term be less than the Base Rent and Security
               Deposit in effect at the expiration of the previous Term. In
               addition, Landlord shall have no obligation to provide or pay for
               any tenant improvements or brokerage commissions during any
               renewal term.

        (5)    Tenant's right to exercise any options to renew under this
               Paragraph shall be conditioned upon Tenant occupying the entire
               Premises and the same not being occupied by any assignee,
               subtenant or licensee other than Tenant or a Permitted Transferee
               at the time of exercise of any option and commencement of the
               renewal term. Tenant's exercise of any option to renew shall
               constitute a representation by Tenant to Landlord that as of the
               date of exercise of the option and the commencement of the
               applicable renewal term, Tenant does not intend to seek to assign
               this Lease in whole or in part, or sublet all or any portion of
               the Premises.

        (6)    Any exercise by Tenant of any option to renew under this
               Paragraph shall be irrevocable. If requested by Landlord, Tenant
               agrees to execute a lease amendment or, at Landlord's option, a
               new lease agreement on Landlord's then standard lease form for
               the Building reflecting the foregoing terms and conditions (which
               new lease form shall be reasonably acceptable to Tenant and shall
               provide to Tenant the benefit of its bargain contained herein),
               prior to the commencement of the renewal term. The options to
               renew granted under this Paragraph are not transferable; the
               parties hereto acknowledge and agree that they intend that each
               option to renew this Lease under this Paragraph shall be
               "personal" to the specific Tenant named in this Lease and that in
               no event will any assignee or sublessee have any rights to
               exercise such options to renew.

                              40. JURY TRIAL WAIVER

                                       24
<PAGE>   25

EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF THE
COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED ON THIS
LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE
PROVISIONS OF THIS PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.

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

                LANDLORD

                MV Golden State San Jose, LLC
                a Delaware limited liability company

                By: Spieker Properties, L.P.,
                    a California limited partnership,
                    its duly authorized agent for the
                    purpose of executing this Lease

                    By: Spieker Properties, Inc.,
                        a Maryland corporation,
                        its general partner

                       By: ________________________________________
                           John W. Petersen
                           Its: Senior Vice President

                Date:  DECEMBER 1, 2000

                TENANT

                Brocade Communications Systems, Inc.,
                a Delaware corporation

                By: __________________________________________________________
                    Michael J. Byrd
                    Its:  Vice President, Finance, and Chief Financial Officer

                Date:  DECEMBER 1, 2000

                By: _______________________________________________
                    Wendy Richardson
                    Its: Real Estate Facilities Director

                Date:  DECEMBER 1, 2000

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                                    EXHIBIT A
                              RULES AND REGULATIONS

1.   Driveways, sidewalks, halls, passages, exits, entrances, elevators,
     escalators and stairways shall not be obstructed by tenants or used by
     tenants for any purpose other than for ingress to and egress from their
     respective premises. The driveways, sidewalks, halls, passages, exits,
     entrances, elevators and stairways are not for the use of the general
     public and Landlord shall in all cases retain the right to control and
     prevent access thereto by all persons whose presence, in the judgment of
     Landlord, shall be prejudicial to the safety, character, reputation and
     interests of the Building, the Project and its tenants, provided that
     nothing herein contained shall be construed to prevent such access to
     persons with whom any tenant normally deals in the ordinary course of such
     tenant's business unless such persons are engaged in illegal activities. No
     tenant, and no employees or invitees of any tenant, shall go upon the roof
     of any Building, except as authorized by Landlord. No tenant, and no
     employees or invitees of any tenant shall move any common area furniture
     without Landlord's consent.

2.   No sign, placard, banner, picture, name, advertisement or notice, visible
     from the exterior of the Premises or the Building or the common areas of
     the Building shall be inscribed, painted, affixed, installed or otherwise
     displayed by Tenant either on its Premises or any part of the Building or
     Project without the prior written consent of Landlord in Landlord's sole
     and absolute discretion. Landlord shall have the right to remove any such
     sign, placard, banner, picture, name, advertisement, or notice without
     notice to and at the expense of Tenant, which were installed or displayed
     in violation of this rule. If Landlord shall have given such consent to
     Tenant at any time, whether before or after the execution of Tenant's
     Lease, such consent shall in no way operate as a waiver or release of any
     of the provisions hereof or of the Lease, and shall be deemed to relate
     only to the particular sign, placard, banner, picture, name, advertisement
     or notice so consented to by Landlord and shall not be construed as
     dispensing with the necessity of obtaining the specific written consent of
     Landlord with respect to any other such sign, placard, banner, picture,
     name, advertisement or notice.

     All approved signs or lettering on doors and walls shall be printed,
     painted, affixed or inscribed at the expense of Tenant by a person or
     vendor approved by Landlord and shall be removed by Tenant at the time of
     vacancy at Tenant's expense.

3.   The directory of the Building or Project will be provided exclusively for
     the display of the name and location of tenants only and Landlord reserves
     the right to charge for the use thereof and to exclude any other names
     therefrom.

4.   No curtains, draperies, blinds, shutters, shades, screens or other
     coverings, awnings, hangings or decorations shall be attached to, hung or
     placed in, or used in connection with, any window or door on the Premises
     without the prior written consent of Landlord. In any event with the prior
     written consent of Landlord, all such items shall be installed inboard of
     Landlord's standard window covering and shall in no way be visible from the
     exterior of the Building. All electrical ceiling fixtures hung in offices
     or spaces along the perimeter of the Building must be fluorescent or of a
     quality, type, design, and bulb color approved by Landlord. No articles
     shall be placed or kept on the window sills so as to be visible from the
     exterior of the Building. No articles shall be placed against glass
     partitions or doors which Landlord considers unsightly from outside
     Tenant's Premises.

5.   Landlord reserves the right to exclude from the Building and the Project,
     between the hours of 6 p.m. and 8 a.m. and at all hours on Saturdays,
     Sundays and legal holidays, all persons who are not tenants or their
     accompanied guests in the Building. Each tenant shall be responsible for
     all persons for whom it allows to enter the Building or the Project and
     shall be liable to Landlord for all acts of such persons.

     Landlord and its agents shall not be liable for damages for any error
     concerning the admission to, or exclusion from, the Building or the Project
     of any person.

     During the continuance of any invasion, mob, riot, public excitement or
     other circumstance rendering such action advisable in Landlord's opinion,
     Landlord reserves the right (but shall not be obligated) to prevent access
     to the Building and the Project during the continuance of that event by any
     means it considers appropriate for the safety of tenants and protection of
     the Building, property in the Building and the Project.

6.   All cleaning and janitorial services for the Building and the Premises
     shall be provided exclusively through Landlord. Except with the written
     consent of Landlord, no person or persons other than those approved by
     Landlord shall be permitted to enter the Building for the purpose of
     cleaning the same. Tenant shall not cause any unnecessary labor by reason
     of Tenant's carelessness or indifference in the preservation of good order
     and cleanliness of its Premises. Landlord shall in no way be responsible to
     Tenant for any loss of property on the Premises, however occurring, or for
     any damage done to Tenant's property by the janitor or any other employee
     or any other person.

7.   Tenant shall see that all doors of its Premises are closed and securely
     locked and must observe strict care and caution that all water faucets or
     water apparatus, coffee pots or other heat-generating devices are entirely
     shut off before Tenant or its employees leave the Premises, and that all
     utilities shall likewise be carefully shut off, so as to prevent waste or
     damage. Tenant shall be responsible for any damage or injuries sustained by
     other tenants or occupants of the Building or Project or by Landlord for
     noncompliance with this rule. On multiple-tenancy floors, all tenants shall
     keep the door or doors to the Building corridors closed at all times except
     for ingress and egress.

8.   Tenant shall not use any method of heating or air-conditioning other than
     that supplied by Landlord. As more specifically provided in Tenant's lease
     of the Premises, Tenant shall not waste electricity, water or
     air-conditioning and agrees to cooperate fully with Landlord to assure the
     most effective operation of the Building's heating and air-conditioning,
     and shall refrain from attempting to adjust any controls other than room
     thermostats installed for Tenant's use.

9.   Landlord will furnish Tenant free of charge with two keys to each door in
     the Premises. Landlord may make a reasonable charge for any additional
     keys, and Tenant shall not make or have made additional keys. Tenant shall
     not alter any lock or access device or install a new or additional lock or
     access device or bolt on any door of its Premises, without the prior
     written consent of Landlord. If Landlord shall give its consent, Tenant
     shall in each case furnish Landlord with a key for any such lock. Tenant,
     upon the termination of its tenancy, shall deliver to Landlord the keys for
     all doors which have been furnished to Tenant, and in the event of loss of
     any keys so furnished, shall pay Landlord therefor.

10.  The restrooms, toilets, urinals, wash bowls and other apparatus shall not
     be used for any purpose other than that for which they were constructed and
     no foreign substance of any kind whatsoever shall be thrown into them. The
     expense of any breakage, stoppage, or damage resulting from violation of
     this rule shall be borne by the tenant who, or whose employees or invitees,
     shall have caused the breakage, stoppage, or damage.

11.  Tenant shall not use or keep in or on the Premises, the Building or the
     Project any kerosene, gasoline, or inflammable or combustible fluid or
     material.

12.  Tenant shall not use, keep or permit to be used or kept in its Premises any
     foul or noxious gas or substance. Tenant shall not allow the Premises to be
     occupied or used in a manner offensive or objectionable to Landlord or
     other occupants of the Building by reason of

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     noise, odors and/or vibrations or interfere in any way with other tenants
     or those having business therein, nor shall any animals or birds be brought
     or kept in or about the Premises, the Building, or the Project.

13.  Unless otherwise approved in advance and in writing by Landlord, which
     approval shall not be unreasonably withheld, no cooking shall be done or
     permitted by any tenant on the Premises, except that use by the tenant of
     Underwriters' Laboratory (UL) approved equipment, refrigerators and
     microwave ovens may be used in the Premises for the preparation of coffee,
     tea, hot chocolate and similar beverages, storing and heating food for
     tenants and their employees shall be permitted. All uses must be in
     accordance with all applicable federal, state and city laws, codes,
     ordinances, rules and regulations and the Lease.

14.  Except with the prior written consent of Landlord, Tenant shall not sell,
     or permit the sale, at retail, of newspapers, magazines, periodicals,
     theater tickets or any other goods or merchandise in or on the Premises,
     nor shall Tenant carry on, or permit or allow any employee or other person
     to carry on, the business of stenography, typewriting or any similar
     business in or from the Premises for the service or accommodation of
     occupants of any other portion of the Building, nor shall the Premises be
     used for the storage of merchandise or for manufacturing of any kind, or
     the business of a public barber shop, beauty parlor, nor shall the Premises
     be used for any illegal, improper, immoral or objectionable purpose, or any
     business or activity other than that specifically provided for in such
     Tenant's Lease. Tenant shall not accept hairstyling, barbering, shoeshine,
     nail, massage or similar services in the Premises or common areas except as
     authorized by Landlord.

15.  If Tenant requires telegraphic, telephonic, telecommunications, data
     processing, burglar alarm or similar services, it shall first obtain, and
     comply with, Landlord's instructions in their installation. The cost of
     purchasing, installation and maintenance of such services shall be borne
     solely by Tenant.

16.  Landlord will direct electricians as to where and how telephone, telegraph
     and electrical wires are to be introduced or installed. No boring or
     cutting for wires will be allowed without the prior written consent of
     Landlord. The location of burglar alarms, telephones, call boxes and other
     office equipment affixed to the Premises shall be subject to the prior
     written approval of Landlord.

17.  Tenant shall not install any radio or television antenna, satellite dish,
     loudspeaker or any other device on the exterior walls or the roof of the
     Building, without Landlord's consent. Tenant shall not interfere with radio
     or television broadcasting or reception from or in the Building, the
     Project or elsewhere.

18.  Tenant shall not mark, or drive nails, screws or drill into the partitions,
     woodwork or drywall or in any way deface the Premises or any part thereof
     without Landlord's consent. Tenant may install nails and screws in areas of
     the Premises that have been identified for those purposes to Landlord by
     Tenant at the time those walls or partitions were installed in the
     Premises. Tenant shall not lay linoleum, tile, carpet or any other floor
     covering so that the same shall be affixed to the floor of its Premises in
     any manner except as approved in writing by Landlord. The expense of
     repairing any damage resulting from a violation of this rule or the removal
     of any floor covering shall be borne by the tenant by whom, or by whose
     contractors, employees or invitees, the damage shall have been caused.

19.  No furniture, freight, equipment, materials, supplies, packages,
     merchandise or other property will be received in the Building or carried
     up or down the elevators except between such hours and in such elevators as
     shall be designated by Landlord.

     Tenant shall not place a load upon any floor of its Premises which exceeds
     the load per square foot which such floor was designed to carry or which is
     allowed by law. Landlord shall have the right to prescribe the weight, size
     and position of all safes, furniture or other heavy equipment brought into
     the Building. Safes or other heavy objects shall, if considered necessary
     by Landlord, stand on wood strips of such thickness as determined by
     Landlord to be necessary to properly distribute the weight thereof.
     Landlord will not be responsible for loss of or damage to any such safe,
     equipment or property from any cause, and all damage done to the Building
     by moving or maintaining any such safe, equipment or other property shall
     be repaired at the expense of Tenant.

     Business machines and mechanical equipment belonging to Tenant which cause
     noise or vibration that may be transmitted to the structure of the Building
     or to any space therein to such a degree as to be objectionable to Landlord
     or to any tenants in the Building shall be placed and maintained by Tenant,
     at Tenant's expense, on vibration eliminators or other devices sufficient
     to eliminate noise or vibration. The persons employed to move such
     equipment in or out of the Building must be acceptable to Landlord.

20.  Tenant shall not install, maintain or operate upon its Premises any vending
     machine without the written consent of Landlord.

21.  There shall not be used in any space, or in the public areas of the Project
     either by Tenant or others, any hand trucks except those equipped with
     rubber tires and side guards or such other material handling equipment as
     Landlord may approve. TENANTS USING HAND TRUCKS SHALL BE REQUIRED TO USE
     THE FREIGHT ELEVATOR, or such elevator as Landlord shall designate. In
     addition, Tenant must use freight corridors for all internal hand truck
     deliveries. Failure to utilize the freight elevator or freight corridors
     will result in Landlord billing Tenant for any actual repairs that may
     occur, plus 8% management fee. No other vehicles of any kind shall be
     brought by Tenant into or kept in or about its Premises. All non-mail
     (FedEx, US Mail, Airborne, etc.) deliveries to the building shall be
     directed through the delivery or shipping/receiving areas, and not the main
     lobby entrances.

22.  Each tenant shall store all its trash and garbage within the interior of
     the Premises. Tenant shall not place in the trash boxes or receptacles any
     personal trash or any material that may not or cannot be disposed of in the
     ordinary and customary manner of removing and disposing of trash and
     garbage in the city, without violation of any law or ordinance governing
     such disposal. All trash, garbage and refuse disposal shall be made only
     through entry-ways and elevators provided for such purposes and at such
     times as Landlord shall designate. If the Building has implemented a
     building-wide recycling program for tenants, Tenant shall use good faith
     efforts to participate in said program.

23.  Canvassing, soliciting, distribution of handbills or any other written
     material and peddling in the Building and the Project are prohibited and
     each tenant shall cooperate to prevent the same. No tenant shall make
     room-to-room solicitation of business from other tenants in the Building or
     the Project, without the written consent of Landlord.

24.  Landlord shall have the right, exercisable without notice and without
     liability to any tenant, to change the name and address of the Building and
     the Project.

25.  Landlord reserves the right to exclude or expel from the Project any person
     who, in Landlord's judgment, is under the influence of alcohol or drugs or
     who commits any act in violation of any of these Rules and Regulations.
     TENANT FUNCTIONS (MONTHLY BEER BASH, ETC.) SHALL REMAIN WITHIN THE
     PREMISES, AND WILL NOT BE ALLOWED IN THE COMMON AREAS OF THE PROJECT. IN
     ADDITION, ALL ALCOHOLIC BEVERAGES SHALL REMAIN WITHIN THE PREMISES WHILE
     BEING CONSUMED. LANDLORD AND TENANT MAY AGREE TO RELOCATE TENANT FUNCTIONS
     TO ANOTHER AREA MUTUALLY AGREED UPON BETWEEN LANDLORD AND TENANT, THE EXACT
     LOCATION OF WHICH TO BE DETERMINED AFTER TENANT OCCUPIES THE PREMISES.

26.  Without the prior written consent of Landlord, Tenant shall not use the
     name of the Building or the Project or any photograph, videotaping, or
     other likeness of the Building or the Project in connection with, or in
     promoting or advertising, Tenant's business except that Tenant may include
     the Building's or Project's name in Tenant's address.

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27.  Tenant shall comply with all safety, fire protection and evacuation
     procedures and regulations established by Landlord or any governmental
     agency.

28.  Tenant assumes any and all responsibility for protecting its Premises from
     theft, robbery and pilferage, which includes keeping doors locked and other
     means of entry to the Premises closed.

29.  The requirements of Tenant will be attended to only upon appropriate
     application at the office of the Building by an authorized individual.
     Employees of Landlord shall not perform any work or do anything outside of
     their regular duties unless under special instructions from Landlord, and
     no employees of Landlord will admit any person (tenant or otherwise) to any
     office without specific instructions from Landlord.

30.  Landlord reserves the right to designate the use of the parking spaces on
     the Project. Tenant or Tenant's guests shall park between designated
     parking lines only, and shall not occupy two parking spaces with one car.
     Parking spaces shall be for passenger vehicles only; no boats, trucks,
     trailers, recreational vehicles or other types of vehicles may be parked in
     the parking areas (except that trucks may be loaded and unloaded in
     designated loading areas). Vehicles in violation of the above shall be
     subject to tow-away, at vehicle owner's expense. Vehicles parked on the
     Project overnight without prior written consent of the Landlord shall be
     deemed abandoned and shall be subject to tow-away at vehicle owner's
     expense. No tenant of the Building shall park in visitor or reserved
     parking areas. Any tenant found parking in such designated visitor or
     reserved parking areas or unauthorized areas shall be subject to tow-away
     at vehicle owner's expense. The parking areas shall not be used to provide
     car wash, oil changes, detailing, automotive repair or other services
     unless otherwise approved or furnished by Landlord. Tenant will from time
     to time, upon the request of Landlord, supply Landlord with a list of
     license plate numbers of vehicles owned or operated by its employees or
     agents.

31.  No smoking of any kind shall be permitted anywhere within the Building,
     including, without limitation, the Premises and those areas immediately
     adjacent to the entrances and exits to the Building, or any other area as
     Landlord elects. Smoking in the Project is only permitted in reasonably
     located smoking areas as identified by Landlord, which may be relocated
     from time to time.

32.  If the Building furnishes common area conferences rooms for tenant usage,
     Landlord shall have the right to control each tenant's usage of the
     conference rooms, including limiting tenant usage so that the rooms are
     equally available to all tenants in the Building. Any common area amenities
     or facilities shall be provided from time to time at Landlord's discretion.

33.  Tenant shall not swap or exchange building keys or cardkeys with other
     employees or tenants in the Building or the Project.

34.  Tenant shall be responsible for the observance of all of the foregoing
     Rules and Regulations by Tenant's employees, agents, clients, customers,
     invitees and guests.

35.  These Rules and Regulations are in addition to, and shall not be construed
     to in any way modify, alter or amend, in whole or in part, the terms,
     covenants, agreements and conditions of any lease of any premises in the
     Project.

36.  Landlord may waive any one or more of these Rules and Regulations for the
     benefit of any particular tenant or tenants, but no such waiver by Landlord
     shall be construed as a waiver of such Rules and Regulations in favor of
     any other tenant or tenants, nor prevent Landlord from thereafter enforcing
     any such Rules and Regulations against any or all tenants of the Building.

37.  Landlord reserves the right to make such other and reasonable rules and
     regulations as in its judgment may from time to time be needed for safety
     and security, for care and cleanliness of the Building and the Project and
     for the preservation of good order therein. Tenant agrees to abide by all
     such Rules and Regulations herein stated and any additional rules and
     regulations which are adopted.

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                                    EXHIBIT B

                                (TO BE ATTACHED)

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                                    EXHIBIT C

                           LEASE IMPROVEMENT AGREEMENT

            This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT") sets
forth the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease (the
"LEASE") to which this Improvement Agreement is attached and forms a part.

1.      Base Building Work. The "Base Building Work" described on SCHEDULE 1 to
        this EXHIBIT C, IF ANY, has been or will be performed by Landlord at
        Landlord's sole cost and expense and shall be constructed in a good and
        workman-like manner and the Premises shall be delivered to Tenant in
        compliance with Regulations as expressly stated in Paragraph 4.C. of
        this Lease.

2.      Plans and Specifications.

               2.1 Tenant shall retain the services of ArcTec (the "SPACE
        PLANNER") to prepare a detailed space plan (the "SPACE PLAN") mutually
        satisfactory to Landlord and Tenant for the construction of the Tenant
        Improvements in the Premises. Tenant shall submit the Space Plan and any
        proposed revisions thereto to Landlord for Landlord's approval.

               2.2 Based on the approved Space Plan, Tenant shall cause the
        Space Planner to prepare detailed plans, specifications and working
        drawings mutually satisfactory to Landlord and Tenant for the
        construction of the Tenant Improvements (the "PLANS"). Landlord and
        Tenant shall diligently pursue the preparation of the Plans. Tenant
        shall submit the Plans and any proposed revisions thereto, including the
        estimated cost of the Tenant Improvements. All necessary revisions to
        the Space Plan and the Plans shall be made within two (2) business days
        after Landlord's response thereto. This procedure shall be repeated
        until Landlord ultimately approves the Space Plan and Plans. Landlord
        shall approve or disapprove the Plans and any proposed revisions
        thereto, including the estimated cost of the Tenant Improvements, in
        writing within three (3) business days after receipt thereof. If
        Landlord fails to approve or disapprove the Space Plan or the Plans or
        any revisions thereto within the time limits specified herein, Landlord
        shall be deemed to have disapproved the same.

               2.3 Intentionally Omitted.

               2.4 Intentionally Omitted.

               2.5 Tenant shall be responsible for ensuring that the Plans are
        compatible with the design, construction and equipment of the Building,
        comply with applicable Regulations and the Standards (defined below),
        and contain all such information as may be required to show locations,
        types and requirements for all heat loads, people loads, floor loads,
        power and plumbing, regular and special HVAC needs, telephone
        communications, telephone and electrical outlets, lighting, light
        fixtures and related power, and electrical and telephone switches,
        B.T.U. calculations, electrical requirements and special receptacle
        requirements. The Plans shall also include mechanical, electrical,
        plumbing, structural and engineering drawings mutually satisfactory to
        Landlord and Tenant which shall be prepared by Approved Design
        Engineers. Notwithstanding Landlord's preparation, review and approval
        of the Space Plan and the Plans and any revisions thereto, Landlord
        shall have no responsibility or liability whatsoever for any errors or
        omissions contained in the Space Plan or Plans or any revisions thereto,
        or to verify dimensions or conditions, or for the quality, design or
        compliance with applicable Regulations of any improvements described
        therein or constructed in accordance therewith. Tenant hereby waives all
        claims against Landlord relating to, or arising out of the design or
        construction of, the Tenant Improvements.

               2.6 Landlord may approve or disapprove the Space Plan or Plans or
        any proposed revision thereto submitted to Landlord in Landlord's sole
        discretion. Landlord shall not be deemed to have approved the Space
        Plan, the Plans, or any proposed revisions thereto, unless approved by
        Landlord in writing. Landlord shall approve or disapprove any Space
        Plan, Plans or proposed revisions thereto submitted to Landlord for
        Landlord's approval within three (3) business days after Landlord's
        receipt thereof. If Landlord has not approved in writing any Space Plan,
        Plans, or proposed revisions thereto submitted to Landlord within three
        (3) business days after Landlord's receipt thereof, Landlord shall be
        deemed to have disapproved the same.

3.      Specifications for Standard Tenant Improvements.

               3.1 Specifications and quantities of standard building components
        which will comprise and be used in the construction of the Tenant
        Improvements ("STANDARDS") are set forth in SCHEDULE 2 to this EXHIBIT
        C. As used herein, "STANDARDS" or "BUILDING STANDARDS" shall mean the
        standards for a particular item selected from time to time by Landlord
        for the Building, including those set forth on SCHEDULE 2 of this
        EXHIBIT C, or such other standards of equal or better quality as may be
        mutually agreed between Landlord and Tenant in writing.

               3.2 No deviations from the Standards are permitted without
        Landlord's prior consent which shall not be unreasonably withheld. Any
        delay caused by such deviations shall extend Landlord's obligation to
        complete the Base Building Work and deliver possession of the Premises
        to Tenant in accordance with the Terms of this Lease.

4.      Tenant Improvement Cost.

               4.1 The cost of the Tenant Improvements shall be paid for by
        Tenant, including, without limitation, the cost of: Standards; space
        plans and studies; architectural and engineering fees; permits,
        approvals and other governmental fees; labor, material, equipment and
        supplies; construction fees and other amounts payable to contractors or
        subcontractors; taxes; off-site improvements; remediation and
        preparation of the Premises for construction of the Tenant Improvements;
        taxes; filing and recording fees; premiums for insurance and bonds;
        attorneys' fees; financing costs; and all other costs expended or to be
        expended in the construction of the Tenant Improvements, including those
        costs incurred for construction of elements of the Tenant Improvements
        in the Premises, which construction was performed by Landlord prior to
        the execution of the Lease or for materials comprising the Tenant
        Improvements which were purchased by Landlord prior to the execution of
        the Lease; and an administration fee of Twenty-Five Thousand and No/100
        Dollars ($25,000.00); provided, however, that in the event that the
        Lease is modified to provide for an increase in the rentable square feet
        of the Premises which results in an increase in the total cost of the
        Tenant Improvements, the aforementioned administration fee shall be
        increased by an amount equal to three percent (3%) of the amount of such
        increase.

               4.2 Provided Tenant is not in default under the Lease, including
        this Improvement Agreement, Landlord shall contribute a one-time tenant
        improvement allowance not to exceed Four Million Eight Hundred Fifty
        Thousand Dollars ($4,850,000.00) ("TENANT IMPROVEMENT ALLOWANCE") toward
        the cost of the initial Tenant Improvements, payable as provided herein.
        Provided Tenant is not then in default under the Lease, including this
        Improvement Agreement, during the construction of the Tenant
        Improvements, Landlord shall make monthly disbursements of the Tenant
        Improvement Allowance for the benefit of Tenant shall authorize the
        release of monies for the benefit of Tenant as follows:

               (a)    Monthly Disbursements. On or before the last day of the
                      calendar month, during the construction of the Tenant
                      Improvements (or such other date as Landlord may designate
                      in writing), Tenant shall deliver to Landlord: (i) a

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                      request for payment of Tenant's contractor, which request
                      shall be approved by Tenant, showing the schedule, by
                      trade, of percentage of completion of the Tenant
                      Improvements, detailing the portion of the work completed
                      and the portion not completed; (ii) invoices from any
                      subcontractor, laborer, materialmen, supplier and any
                      other party which performed work on Tenant's behalf
                      pursuant to this Improvement Agreement, including, but not
                      limited to, labor rendered and materials delivered to the
                      Premises; (iii) executed conditional mechanic's lien
                      releases from all of the parties submitting invoices with
                      respect to the work performed and for which payment is
                      requested to be made, which releases shall comply with the
                      appropriate provisions of California Civil Code 3262(d);
                      (iv) executed unconditional mechanic's lien releases from
                      all of the parties with respect to work performed and
                      included on prior pay requests, which releases shall
                      comply with the appropriate provisions of California Civil
                      Code; and (v) all other information reasonably requested
                      by Landlord. Tenant's request for payment shall be deemed
                      Tenant's acceptance and approval of the specific work
                      furnished and or the materials actually supplied as set
                      forth in Tenant's payment request. By the twentieth (20th)
                      day of the following month, Landlord shall deliver a check
                      (or transfer funds electronically) to Tenant made jointly
                      payable to Tenant's contractor and Tenant in payment of
                      the lesser of (A) Landlord's proportionate share of the
                      amount of such request for payment by Tenant's contractor,
                      as set forth in this paragraph, less a ten percent (10%)
                      retention (the aggregate amount of such retentions to be
                      known as the "FINAL RETENTION"), and (B) the balance of
                      any remaining available portion of the Tenant Improvement
                      Allowance (not including the Final Retention), provided
                      Landlord does not dispute any request for payment based
                      upon noncompliance with the Plans and or Standards, or due
                      to any substandard work, or for any other reasonable
                      cause. For purposes of this Improvement Agreement,
                      Landlord's proportionate share shall be the product of the
                      following: (X) the amount of the Tenant Improvement
                      Allowance over total cost of the Tenant Improvements, as
                      such total cost may from time to time increase as provided
                      herein, multiplied by (Y) the total amount approved by
                      Landlord in Tenant's written request for payment as
                      described above. Landlord's payment of such amounts shall
                      not be deemed Landlord's approval or acceptance of the
                      work furnished or materials supplied as set forth in
                      Tenant's payment request.

               (b)    Final Retention. Subject to the provisions of this
                      Improvement Agreement, a check for the Final Retention
                      payable jointly to Tenant's contractor and Tenant shall be
                      delivered by Landlord to Tenant following the completion
                      of the construction of the Tenant Improvements and
                      expiration of the time for filing of any mechanics' liens
                      claimed or which might be filed on account of any work
                      ordered by Tenant or its contractor or any subcontractor;
                      provided that (A) Tenant delivers to Landlord properly
                      executed and unconditional mechanics lien releases in
                      compliance with both California Civil Code Section
                      3262(d)(2) and with Section 3262(d)(3) or Section
                      3262(d)(4) (which mechanics' lien releases shall be
                      executed by the subcontractors, labor suppliers and
                      materialmen in addition to Tenant's contractor), and all
                      appropriate bills and supporting documentation for the
                      work ordered by Tenant or its contractor or any
                      subcontractor, (B) Landlord has determined that no
                      substantial work exists which adversely affects the
                      mechanical, electrical, plumbing, heating, ventilating and
                      air conditioning, life-safety or other systems of the
                      Building or Project, the structure or exterior appearance
                      of the Building or Project, and (C) Space Planner and
                      Tenant's contractor deliver to Landlord a certificate of
                      completion, in a form reasonably acceptable to Landlord
                      certifying that the construction of the Tenant
                      Improvements has been substantially completed.

               (c)    Other Terms. Landlord shall only be obligated to make
                      disbursements from the Tenant Improvement Allowance in
                      accordance with the terms of this Agreement.

               (d)    Notice to Tenant. At the time that Tenant has requested
                      approximately 80% of the total Tenant Improvement
                      Allowance, Landlord shall endeavor to notify Tenant of
                      Tenant's approximate remaining Tenant Improvement
                      Allowance.

               4.3 In the event the estimated cost of the design and
        construction of the Tenant Improvements exceeds the Tenant Improvement
        Allowance, Landlord's proportionate share pursuant to Paragraph 4.2.(a)
        above shall be adjusted accordingly. No credit shall be given to Tenant
        if the cost of the Tenant Improvements is less than the Tenant
        Improvement Allowance.

               4.4 If the cost of the Tenant Improvements increases after
        Landlord's approval of the Plans due to the requirements of any
        governmental agency or applicable Regulation, Landlord's proportionate
        share pursuant to Paragraph 4.2.(a) above shall be adjusted accordingly.

               4.5 If Tenant requests any change(s) in the Plans after approval
        of the estimate of the cost of the Tenant Improvements and any such
        requested changes are approved by Landlord in writing in Landlord's sole
        discretion, Tenant shall be solely responsible for the amount of any
        cost increases such approved change(s) will cause in the construction of
        the Tenant Improvements.

5.      Construction of Tenant Improvements.

               5.1 Within ten (10) days after Tenant's and Landlord's approval
        of the Plans including the estimate of the cost of the Tenant
        Improvements and Landlord's receipt of payment of any such estimated
        cost exceeding the amount of the Tenant Improvement Allowance, Tenant
        shall cause the contractor to proceed to secure a building permit and
        commence construction of the Tenant Improvements provided that the
        Building has in Landlord's discretion reached the stage of construction
        where it is appropriate to commence construction of the Tenant
        Improvements in the Premises.

               5.2 Tenant shall be responsible for obtaining all governmental
        approvals to the full extent necessary for the construction and
        installation of the Tenant Improvements and for Tenant's occupancy of
        the Premises, in compliance with all applicable Regulations. Tenant
        shall employ Devcon Construction, Inc. as the contractor to construct
        the Tenant Improvements in conformance with the approved Space Plan and
        Plans. The construction contracts between Tenant and the approved
        contractor shall be subject to Landlord's prior reasonable approval and
        shall provide for progress payments. The contractor shall be duly
        licensed.

               5.3 Without limiting the provisions of Paragraph 35 of the Lease,
        Landlord shall not be liable for any direct or indirect damages suffered
        by Tenant as a result of delays in construction beyond Landlord's
        reasonable control, including, but not limited to, delays due to strikes
        or unavailability of materials or labor, or delays caused by Tenant
        (including delays by the Space Planner, the contractor or anyone else
        performing services on behalf of Landlord or Tenant).

               5.4 All work to be performed on the Premises by Tenant or
        Tenant's contractor or agents shall be subject to the following
        conditions:

                    (a) Such work shall proceed upon Landlord's written approval
        of Tenant's contractor, and public liability and property damage
        insurance carried by Tenant's contractor, and shall further be subject
        to the provisions of Paragraphs 12 and 27 of the Lease.

                    (b) All work shall be done in conformity with a valid
        building permit when required, a copy of which shall be furnished to
        Landlord before such work is commenced, and in any case, all such work
        shall be performed in a good and workmanlike

                                       31
<PAGE>   32

        and first-class manner, and in accordance with all applicable
        Regulations and the requirements and standards of any insurance
        underwriting board, inspection bureau or insurance carrier insuring the
        Premises pursuant to the Lease. Notwithstanding any failure by Landlord
        to object to any such work, Landlord shall have no responsibility for
        Tenant's failure to comply with all applicable Regulations. Tenant shall
        be responsible for ensuring that construction and installation of the
        Tenant Improvements will not affect the structural integrity of the
        Building.

                    (c) If required by Landlord or any lender of Landlord, all
        work by Tenant or Tenant's contractor shall be done with union labor in
        accordance with all union labor agreements applicable to the trades
        being employed; provided, however, that in the event that any lender has
        no objection, the foregoing sentence shall not apply to work performed
        in connection with telecommunications, installation and provisions of
        artwork and security. If Tenant utilizes the services of any nonunion
        labor as provided in the foregoing sentence and consequently
        interference occurs in connection with any construction efforts on any
        building or project owned by Landlord, or any other interference with
        Landlord's business operations, Tenant shall immediately cease utilizing
        such nonunion services. The indemnity provisions of Paragraph 8 of the
        Lease shall apply to this Paragraph 5.4(c).

                    (d) Landlord or Landlord's agents shall have the right to
        inspect the construction of the Tenant Improvements by Tenant during the
        progress thereof. If Landlord shall give notice of faulty construction
        or any other deviation from the approved Space Plan or Plans, Tenant
        shall cause its contractor to make corrections promptly. However,
        neither the privilege herein granted to Landlord to make such
        inspections, nor the making of such inspections by Landlord, shall
        operate as a waiver of any right of Landlord to require good and
        workmanlike construction and improvements erected in accordance with the
        approved Space Plan or Plans.

                    (e) Tenant shall cause its contractor to complete the Tenant
        Improvements as soon as reasonably possible but in any event on or
        before the Scheduled Term Commencement Date.

                    (f) Tenant's construction of the Tenant Improvements shall
        comply with the following: (i) the Tenant Improvements shall be
        constructed in strict accordance with the approved Space Plan or Plans;
        (ii) Tenant's and its contractor shall submit schedules of all work
        relating to the Tenant Improvements to Landlord for Landlord's approval
        within two (2) business days following the selection of the contractor
        and the approval of the Plans. Landlord shall within five (5) business
        days after receipt thereof inform Tenant of any changes which are
        necessary and Tenant's contractor shall adhere to such corrected
        schedule; and (iii) Tenant shall abide by all rules made by Landlord
        with respect to the use of freight, loading dock, and service elevators,
        storage of materials, coordination of work with the contractors of other
        tenants, and any other matter in connection with this Improvement
        Agreement, including, without limitation, the construction of the Tenant
        Improvements.

                    (g) Tenant or Tenant's contractor or agents shall arrange
        for necessary utility, hoisting and elevator service with Landlord's
        contractor and shall pay such reasonable charges for such services as
        may be charged by Tenant's or Landlord's contractor.

                    (h) Tenant's entry to the Premises for any purpose,
        including, without limitation, inspection or performance of Tenant
        construction by Tenant's agents, prior to the date Tenant's obligation
        to pay rent commences shall be subject to all the terms and conditions
        of the Lease except the payment of Rent. Tenant's entry shall mean entry
        by Tenant, its officers, contractors, licensees, agents, servants,
        employees, guests, invitees, or visitors.

                    (i) Tenant shall promptly reimburse Landlord upon demand for
        any reasonable expense actually incurred by the Landlord by reason of
        faulty work done by Tenant or its contractors or by reason of any delays
        caused by such work, or by reason of inadequate clean-up.

                    (j) Tenant hereby indemnifies and holds Landlord harmless
        with respect to any and all costs, losses, damages, injuries and
        liabilities relating in any way to any act or omission of Tenant or
        Tenant's contractor or agents, or anyone directly or indirectly employed
        by any of them, in connection with the Tenant Improvements and any
        breach of Tenant's obligations under this Improvement Agreement, or in
        connection with Tenant's non-payment of any amount arising out of the
        Tenant Improvements. Such indemnity by Tenant, as set forth above, shall
        also apply with respect to any and all costs, losses, damages, injuries,
        and liabilities related in any way to Landlord's performance or any
        ministerial acts reasonably necessary (i) to permit Tenant to complete
        the Tenant Improvements, and (ii) to enable Tenant to obtain any
        building permit or certificate of occupancy for the Premises.

                    (k) Tenant's contractor and the subcontractors utilized by
        Tenant's contractor shall guarantee to Tenant and for the benefit of
        Landlord that the portion of the Tenant Improvements for which it is
        responsible shall be free from any defects in workmanship and materials
        for a period of not less than one (1) year from the date of completion
        thereof. Each of Tenant's contractor and the subcontractors utilized by
        Tenant's contractor shall be responsible for the replacement or repair,
        without additional charge, of all work done or furnished in accordance
        with its contract that shall become defective within one (1) year after
        the later to occur of (i) completion of the work performed by such
        contractor of subcontractors and (ii) the Term Commencement Date. The
        correction of such work shall include, without additional charge, all
        additional expenses and damages incurred in connection with such removal
        or replacement of all or any part of the Tenant Improvements, and/or the
        Building and/or common areas that may be damaged or disturbed thereby.
        All such warranties or guarantees as to materials or workmanship of or
        with respect to the Tenant Improvements shall be contained in the
        construction contract or subcontract and shall be written such that such
        guarantees or warranties shall inure to the benefit of both Landlord and
        Tenant, as their respective interests may appear, and can be directly
        enforced by either. Tenant covenants to give to Landlord any assignment
        or other assurances which may be necessary to effect such rights of
        direct enforcement.

                    (l) Commencing upon the start of construction of the Tenant
        Improvements, Tenant shall hold weekly meetings at a reasonable time
        with the Space Planner and the contractor regarding the progress of the
        preparation of the Plans and the construction of the Tenant
        Improvements, which meetings shall be held at a location designated by
        Tenant, and Landlord and/or its agents shall receive prior notice of,
        and shall have the right to attend, all such meetings, and upon
        Landlord's request, certain of Tenant's contractors shall attend such
        meetings. One such meeting each month shall include the review of
        contractor's current request for payment. Notwithstanding the foregoing,
        Landlord shall be provided with a copy of the design meeting minutes,
        which meetings Landlord will not be required to attend.

                    (m) Tenant and Tenant's contractors and all other parties
        performing work on the Premises on Tenant's behalf shall comply with the
        each of the Building rules and regulations as described in the Lease and
        with the contractor rules and regulations, attached hereto as SCHEDULE
        3. Tenant shall be liable for any violation of the Building or the
        contractor rules and regulations by Tenant's contractors or any other
        party performing work on the Premises on Tenant's behalf.

6.      Insurance Requirements.

               6.1 All of Tenant's contractors shall carry worker's compensation
        insurance covering all of their respective employees, and shall also
        carry public liability insurance, including property damage, all with
        limits, in form and with companies as are required to be carried by
        Tenant as set forth in Paragraph 8 of the Lease.

               6.2 Tenant shall carry "Builder's All Risk" insurance in an
        amount approved by Landlord covering the construction of the Tenant
        Improvements, and such other insurance as Landlord may require, it being
        understood and agreed that the Tenant

                                       32
<PAGE>   33

        Improvements shall be insured by Tenant pursuant to Paragraph 8 of the
        Lease immediately upon completion thereof. Such insurance shall be in
        amounts and shall include such extended coverage endorsements as may be
        reasonably required by Landlord including, but not limited to, the
        requirement that all of Tenant's contractors shall carry excess
        liability and Products and Completed Operation coverage insurance, each
        in amounts not less than $500,000 per incident, $1,000,000 in aggregate,
        and in form and with companies as are required to be carried by Tenant
        as set forth in Paragraph 8 of the Lease.

               6.3 Certificates for all insurance carried pursuant to this
        Improvement Agreement must comply with the requirements of Paragraph 8
        of the Lease and shall be delivered to Landlord before the commencement
        of construction of the Tenant Improvements and before the contractor's
        equipment is moved onto the site. In the event the Tenant Improvements
        are damaged by any cause during the course of the construction thereof,
        Tenant shall immediately repair the same at Tenant's sole cost and
        expense. Tenant's contractors shall maintain all of the foregoing
        insurance coverage in force until the Tenant Improvements are fully
        completed and accepted by Landlord, except for any Product and Completed
        Operation Coverage insurance required by Landlord, which is to be
        maintained for five (5) years following completion of the work and
        acceptance by Landlord and Tenant. All policies carried under this
        Paragraph 6 shall insure Landlord and Tenant, as their interests may
        appear, as well as the contractors. All insurance maintained by Tenant's
        contractors shall preclude subrogation claims by the insurer against
        anyone insured thereunder. Such insurance shall provide that it is
        primary insurance as respects the owner and that any other insurance
        maintained by owner is excess and noncontributing with the insurance
        required hereunder. Landlord may, in its discretion, require Tenant to
        obtain a lien and completion bond or some alternate form of security
        satisfactory to Landlord in an amount sufficient to ensure the lien-free
        completion of the Tenant Improvements and naming Landlord as a
        co-obligee.

7.      Completion and Rental Commencement Date.

               7.1 Intentionally Omitted.

               7.2 Within ten (10) days after completion of construction of the
        Tenant Improvements, Tenant shall cause a Notice of Completion to be
        recorded in the office of the Recorder of the county in which the
        Building is located in accordance with Section 3093 of the Civil Code of
        the State of California or any successor statute, and shall furnish a
        copy thereof to Landlord upon such recordation. If Tenant fails to do
        so, Landlord may execute and file the same on behalf of Tenant as
        Tenant's agent for such purpose, at Tenant's sole cost and expense. At
        the conclusion of construction, (i) Tenant shall cause the Space Planner
        and the contractor (i) to update the approved working drawings as
        necessary to reflect all changes made to the approved working drawings
        during the course of construction, (ii) to certify to the best of their
        knowledge that the "record-set" of as-built drawings are true and
        correct, which certification shall survive the expiration or termination
        of the Lease, and (c) to deliver to Landlord two (2) sets of copies of
        such record set of drawings within ninety (90) days following issuance
        of a certificate of occupancy for the Premises, and (iii) Tenant shall
        deliver to Landlord a copy of all warranties, guarantees, and operating
        manuals and information relating to the improvements, equipment, and
        systems in the Premises.

               7.3 A default under this Improvement Agreement shall constitute a
        default under the Lease, and the parties shall be entitled to all rights
        and remedies under the Lease in the event of a default hereunder by the
        other party (notwithstanding that the Term thereof has not commenced).

               7.4 Without limiting the "as-is" provisions of the Lease, except
        for the Base Building Work to be constructed by Landlord pursuant to
        this Improvement Agreement, Tenant accepts the Premises in its "as-is"
        condition and acknowledges that it has had an opportunity to inspect the
        Premises prior to signing the Lease.

               7.5 For purposes of the Lease and this Improvement Agreement,
        "SUBSTANTIAL COMPLETION" shall have occurred when (i) Landlord's
        architect states in writing that the Base Building Work (except for
        lobbies, penthouse and life safety testing) is substantially complete in
        accordance with the terms of the Lease and this Improvement Agreement,
        and (ii) services and utilities are made available to the Building. In
        the event that Tenant is able to take possession and occupy for the
        purpose of conducting Tenant's business operations in the Premises and
        Tenant's temporary certificate of occupancy is delayed beyond December
        1, 2001, subject to extension for delays in Landlord's completion of the
        lobbies, penthouse and life safety testing for the Base Building Work
        caused by Tenant or by Tenant's contractor or anyone else performing
        services on behalf of Tenant, (the "Base Building Work Date") solely as
        a result of Landlord's failure to complete the lobbies, penthouse, and
        life safety testing for Base Building Work, then for each day after the
        Base Building Work Date until the date Tenant receives a temporary
        certificate of occupancy, Tenant shall be entitled to a credit against
        Base Rent in an amount equal to the daily amount of Base Rent in effect
        for the first month of the Term of this Lease. The credit described in
        the preceding sentence shall be granted against Tenant's obligation to
        pay Base Rent commencing in the second month of the Term.

                                       33
<PAGE>   34

                                   SCHEDULE 1
                                  TO EXHIBIT C

            BASE BUILDING WORK -- 1600 TECHNOLOGY DRIVE, SAN JOSE, CA

A.      BASE BUILDING WORK TO BE PROVIDED BY LANDLORD, AT LANDLORD'S SOLE COST
        AND EXPENSE:

        I.     ARCHITECTURAL DESCRIPTION

               EXTERIOR WALLS:   The exterior wall material will include glass,
                                 aluminum, stone and pre-cast concrete.

               ACOUSTICAL:       The air shaft walls at each level will contain
                                 acoustical insulation. The main trunk ductwork
                                 at each level will be wrapped with acoustical
                                 insulation. Major equipment components will be
                                 mounted on sound and vibration isolating
                                 devices.

               ELEVATORS:        There will be four passenger elevators in the
                                 core, one of which will have a swing door for
                                 freight.

               INTERIOR          The Main Lobby floor will be mostly stone and
               FINISHES:         the walls will be a combination of stone, wood
                                 panels, and/or other materials.

                                 Typical floors will include drywall ready for
                                 tape on all core walls.

                                 Tenant elevator lobbies will include drywall
                                 and walls, fire taped only.

                                 Toilet Room wall and floor finishes will be
                                 ceramic tile and paint. Toilet partitions will
                                 be ceiling-mounted. The lavatory tops will be
                                 polished stone. Toilet Rooms shall include
                                 plumbing fixtures.

                                 Elevator cabs will be finished throughout.

               ADA COMPLIANCE:   The Project will be designed and constructed in
                                 compliance with the current Title 24 and
                                 American With Disabilities Act (ADA)
                                 requirements at the time of building permit
                                 issuance.

      II.      STRUCTURAL DESCRIPTION

                                 The foundations will be as required to support
                                 the structure.

                                 The ground floor slab will be five (5") thick
                                 concrete slab on grade with required
                                 reinforcing.

                                 The structural framing system is comprised of
                                 rolled steel beams, columns, and braced-framed
                                 steel construction with corrugated metal deck
                                 and concrete fill, all members fireproof as
                                 required by code. Upper floor systems will be
                                 concrete over metal deck and are designed for
                                 80 pound live load plus 20 pound partition
                                 load. A penthouse will be provided containing
                                 mechanical equipment and elevator machine room.

                                 Exterior building skin will be a combination of
                                 high performance glass and precast concrete
                                 panels with stone accent.

                                 Roofing will be four (4) ply built up roofing
                                 or equivalent over concrete on corrugated metal
                                 deck roofing system.

                                 Two (2) steel exit stairs will be provided with
                                 one extending to the roof.

      III.     MECHANICAL, PLUMBING, ELECTRICAL AND FIRE/SAFETY SYSTEMS
               DESCRIPTION

               MECHANICAL        The air conditioning system will consist of a
               SYSTEM:           variable air volume system with Equipment
                                 centrally located in the penthouse consisting
                                 of one cooling tower, two chillers, fans and
                                 required pumps. Base Building Work will consist
                                 of penthouse equipment and main supply and
                                 return ducts to each floor.

                                 A heating, ventilation and air-conditioning
                                 system capable of maintaining the Premises at
                                 seventy-two (72) degrees Fahrenheit (+/- three
                                 (3) degrees) after substantial completion of
                                 the Tenant Improvements.

                                 The heating system in the shell work will be
                                 limited to a hot water riser with valves to
                                 each floor supplied from a boiler on the roof.
                                 With respect to the Tenant Improvements, the
                                 exterior zones will have heat coils, the
                                 interior zones will not.

                                 The control system will include an electronic
                                 Direct Digital Temperature Control System. The
                                 sensing accuracy and component reliability of
                                 the Direct Digital Temperature Control System
                                 will allow heating and cooling systems to
                                 maintain consistently comfortable conditions
                                 throughout the tenant space.

               POWER SYSTEM:     The electrical service will be supplied through
                                 primary underground circuits from Pacific Gas &
                                 Electric Company. The incoming electric service
                                 will be 3,500 amps connected to the main
                                 switchgear located on the ground floor.
                                 Electric service to the typical floor will be
                                 fed from the main building switchgear to each
                                 floor's electrical closet.

               PLUMBING SYSTEM:  The plumbing system will consist of domestic
                                 hot and cold water supply, sanitary sewer and
                                 storm sewer piping systems. The system design
                                 will be in accordance with the City of San Jose
                                 Building Code and assures sufficient capacity
                                 to handle the occupancy of the Building.
                                 Plumbing fixtures, fittings and trim shall be
                                 high quality commercial type and will be
                                 coordinated with the architectural features of
                                 the Building.

                                 Cold water supply and wastewater return lines
                                 to two (2) points on each floor of the
                                 Building.

               TELEPHONE SYSTEM: Main telephone company lines and conduits to
                                 the building telephone room.

                                       34
<PAGE>   35

               FIRE PROTECTION
               SYSTEM:           Automatic sprinklers will be provided
                                 throughout the Building in accordance with NFPA
                                 #13, for light hazard occupancy design
                                 criteria. Sprinkler head drops, sprinkler head
                                 relocations and additional heads will be
                                 completed as part of tenant work. Firehose
                                 connections will be located in stairwells in
                                 accordance with code requirements.

               STAIR/ELEVATOR SHAFT
               PRESSURIZATION:   The emergency egress stairwells and elevator
                                 shafts in the Building will be served by
                                 pressurization systems. These systems will, in
                                 the event of an emergency condition, pressurize
                                 egress stairwells and elevator shafts to reduce
                                 the possibility of smoke entering the egress
                                 stairwell or elevator shaft.

               EMERGENCY POWER
               SYSTEM:           Emergency power shall be provided by a
                                 permanently installed diesel-powered electrical
                                 generator set and, as required by code, power
                                 will automatically be supplied to support all
                                 stairwell and elevator shaft pressurization
                                 equipment, emergency lighting, fire alarm and
                                 communications systems, emergency use of
                                 elevators, fire pumps and ancillary emergency
                                 fire/safety equipment in the unlikely event of
                                 normal power source loss.

               FIRE ALARM AND
               COMMUNICATION
               SYSTEMS           The fire alarm and communication systems will
                                 be an addressable alarm system with Title 24
                                 ADA provisions. Annunciation, control and
                                 communication equipment will be located in the
                                 Fire Control Center to the Building. The fire
                                 alarm system will have battery back-up and be
                                 UL listed as a system.

               ACCESS CONTROL:   All building entrances will be locked after
                                 hours. After hours access will be via proximity
                                 card reader. The elevators shall have card key
                                 access system to each floor.

B.      ADDITIONAL WORK TO BE ADDED TO BASE BUILDING WORK BY LANDLORD, AT
        TENANT'S SOLE COST AND EXPENSE (NOTWITHSTANDING ANYTHING TO THE CONTRARY
        CONTAINED IN THE LEASE OR THIS EXHIBIT C), PER LANDLORD AND TENANT
        APPROVAL ("ADDITIONAL BASE BUILDING WORK"):

           1.                    Increase the capacity of the two base building
                                 rooftop chillers from 250 tons to 400 tons
                                 each. Thus providing 300 tons of additional
                                 chilled water for lab cooling.

           2.                    Add a third cooling tower to the rooftop system
                                 to absorb the added chiller load.

           3.                    Provide and install two new process cooling
                                 water pumps with variable frequency drives.

           4.                    Provide a 6" -- 8" process cooling water supply
                                 and return vertical main throughout the
                                 building with taps at each floor.

           5.                    Rotate the main electric room 90 degrees and
                                 extend in length to accommodate additional
                                 panel sections.

           6.                    Remove a secondary access corridor to the
                                 shipping/receiving area and expand the
                                 stockroom/shipping/receiving area. Provide a
                                 pair of double doors leading directly from the
                                 stockroom to the service elevator entry.

           7.                    Subject to PG&E design and availability,
                                 provide pads for PG&E to install two
                                 transformers on the street side of the
                                 building. Provide underground conduit conductor
                                 feeds to the new switchboards (two at
                                 4,000-amps each with cross-connect tie
                                 breakers).

           8.                    Provide a cardkey access control at back door
                                 of service elevator.

           9.                    Provide a scissor lift in the truck bay/service
                                 enclosure.

           10.                   Tenant hereby acknowledges and agrees that
                                 Landlord's performance of the foregoing
                                 Additional Base Building Work described in this
                                 Exhibit C, Schedule 1, Section B shall in no
                                 event delay the Term Commencement Date beyond
                                 December 1, 2001, notwithstanding anything to
                                 the contrary contained in the Lease, including,
                                 but not limited to, delays in obtaining
                                 Tenant's temporary certificate of occupancy or
                                 any delays in completion of the Additional Base
                                 Building Work caused by Landlord.

                                       35
<PAGE>   36

                                   SCHEDULE 2
                                  TO EXHIBIT C

            BUILDING STANDARDS -- 1600 TECHNOLOGY DRIVE, SAN JOSE, CA

The following constitutes the Building Standard tenant improvements
("STANDARDS").

PARTITIONS

INTERIOR:                   3 5/8" metal studs with 5/8" gypsum board on each
                            side. Taped smooth and ready for finish.

DEMISING:                   3 5/8" metal studs with 5/8" gypsum board with sound
                            batt insulation. Taped smooth and ready for finish.

PERIMETER WAINSCOT:         5/8" layer of gypsum board. Taped smooth ready for
                            finish. Extruded aluminum sill to match exterior
                            mullions.

PAINT:                      1 of coat primer, 2 coats of interior latex paint in
                            eggshell finish, on each side of partitions.

DOOR ASSEMBLIES

DOORS:                      Corridor doors will be full height solid core
                            construction.

INTERIOR DOORS:             3'-0" x 8'-0" x 1-3/4" solid core door.

DOOR FRAMES:                Door frames will be clear anodized aluminum.

DOOR HARDWARE:              Tenant entry doors shall receive a lockset, surface
                            mounted closer, butt hinges, and door stop. Tenant
                            interior doors shall receive a latchset, butt hinges
                            and door stop. Entry door hardware to be Schlage "L"
                            series Mortise locks, or equal. Hager 3 knuckle
                            hinges, or equal. LCN#1460 Slimline series door
                            closer, or equal. (entry door only) Quality #432
                            door stop, or equal, where applicable.

CEILING SYSTEM

ACOUSTIC CEILINGS AND
SUSPENDED SYSTEMS:          Acoustical suspended ceilings will be 2' x 2' grid
                            Layout.

LIGHT FIXTURES:             Light fixtures will be Daylite or equal, lay-in
                            mounted 2' x 4' (2)-lamp parabolic with reflector,
                            Motorola rapid start electronic ballast or equal,
                            277 volt fixtures with ready connect sort wire
                            system. SP35 Super Saver II T-8 Fluorescent lamps.

LIGHT SWITCH ASSEMBLY:      Switches will be paired in double gang box to meet
                            Title 24 requirements.

ELECTRICAL AND TELEPHONE

RECEPTACLES:                Receptacles will be duplex 20 ampere, 125 volt AC.

TELEPHONE OUTLETS:          Outlets will be a standard telephone plate in
                            manufacturer's standard colors, mounted vertically
                            level with electrical receptacles.

EXIT SIGNAGE:               Light Emitting Diode (LED)

HEATING AND AIR CONDITIONING SYSTEM

HVAC SYSTEM:                Energy efficient high velocity variable air volume
                            system with conditioned space zoned on the average
                            of 1 zone per every 1,000 square feet. Perimeter
                            zones will have heating, interior zones have cooling
                            only.

FIRE PROTECTION             Per existing codes.

FIRE SPRINKLER HEADS:       Sprinkler head to be semi recessed in tenant space,
                            and concealed in lobbies.

FLOOR COVERING

CARPET:                     38 oz weight cut pile, Designweave, Sabre Classic,
                            or equal installed over pad or direct glue down. All
                            standard colors available.

TILE:                       Armstrong, Standard Excelon vinyl composition tile.
                            All standard colors available.

BASE:                       Burke, 4" rubber base, topset over VCT and straight
                            cut over carpet. All standard colors available.

                                       36
<PAGE>   37

                                   SCHEDULE 3
                                  TO EXHIBIT C

     CONTRACTOR RULES AND REGULATIONS -- 1600 TECHNOLOGY DRIVE, SAN JOSE, CA

               GENERAL REQUIREMENTS FOR BUILDING CONSTRUCTION WORK
--------------------------------------------------------------------------------

INTENT

               The intent of these General Requirements is to communicate
               Spieker Properties general performance expectations and
               requirements of contractors performing work in our projects.
               While these requirements may not cover all specific project
               requirements, or may not apply to all projects, they are intended
               to communicate a basic overall methodology for doing construction
               work in Spieker Properties projects.

                                   Preliminary

1.   All work performed shall be performed by union signatory general contractor
     utilizing all union labor and must comply with all applicable rules,
     regulations, and codes of the building, city, state, and federal
     governmental agencies having jurisdiction. The General Contractor will file
     drawings and secure all required permits prior to beginning work, unless
     circumstances require earlier construction commencement, as directed by the
     Owner's architect. All construction within the leased premises shall
     conform to applicable sections of California Title 24 Standards and the
     American with Disabilities Act (ADA).

2.   All work shall be performed during regular business hours (7:00 A.M. --
     6:00 P.M.), Monday through Friday, with the exception of work types listed
     below. All building system operations will be maintained in normal
     operation, and will not be adversely impacted by construction work, unless
     specifically authorized by a Project Management representative. The
     contractor shall communicate requests to the Management Office 24 hours in
     advance of any required interruption of any building services.

        EXCEPTIONS -- The following work is required to be performed on an
        overtime or off-hours basis: core drilling, nailing of tackless carpet
        stripping, spray painting of any lacquer or other volatile or odor
        creating substances, and any type of concrete chipping. Any scheduling
        requests for these types of off-hours work must be approved and
        authorized by the Management Office prior to performance any of work.

3.   All contractors must supply Certificate(s) of Insurance naming Spieker
     Properties, L.P. and MV Golden State San Jose, LLC as additionally insured
     prior to the start of any construction. Insurance certificates and copies
     of permits, as required, must be provided to Project Management prior to
     the commencement of any work.

4.   Contractors representative will meet with Project Management representative
     prior to beginning contracted work, to review the scope of construction
     work, construction methods, these general requirements, any additional
     project specific requirements, and any potential impact to the satisfactory
     on-going operation of building services.

5.   The contractor will coordinate proper parking locations for construction
     personnel with Project Management prior to starting construction, to avoid
     impacting our tenants parking availability.

PROJECT AREA ACCESS

1.   Access to project buildings, parking structures, suites, etc. will be
     coordinated in advance with Project Office. No installed access control or
     security system will be over ridden or bypassed for any reason, or at any
     time. All construction personnel will be limited to those areas for which
     they have been given specific access.

2.   Access to all electrical closets, telephone closets, mechanical rooms, and
     suites must be coordinated in advance through the Project Office.
     Electrical, telephone, and other equipment rooms will be kept closed and
     locked when they are not physically occupied.

DURING WORK PERFORMANCE

1.   Upon the start of construction, the contractor will provide walk-off mats
     at all entrances to the construction area(s) from stairwells (if used) and
     entrances to all elevators.

2.   Contractors shall maintain cleanliness throughout; do not clutter or block
     hallways, exits, elevator lobby, electrical or telephone rooms. Building
     fire rated doors will not be propped open, removed, or their door closures
     disconnected. Nor will elevator doors be propped or jammed open to prevent
     the automatic function of it's timed door actuators. CONTRACTORS ARE
     REQUIRED TO UTILIZE THE FREIGHT ELEVATOR ONLY! Where a freight elevator is
     not available, Project Management will designate the appropriate elevator
     for contractor use. Where available, elevator protective pads will be used
     whenever moving materials or equipment in the elevator. Contractors are
     responsible for all damage they cause and clean-up.

3.   Building electrical closets will not, at any time, or for any reason, be
     utilized for the storage of any construction project materials or trash, as
     such storage constitutes a violation of prevailing fire codes.

4.   All material deliveries, and debris removal, must be made as expeditiously
     as possible so as to not have these vehicles blocking accesses to/from
     the building. The contractor, at contractor expense must remove all
     construction debris from the building. Building trash dumpsters are not to
     be utilized for the disposal of construction project debris, as these are
     provided for tenant use. As may be required, Contractor will make
     arrangements for delivery of a debris box for his use. The Project Office
     will approve an appropriate location for the debris box while it is on the
     project. Delivery or removal of large amounts of material is to be done
     after normal business hours with 24-hr. prior approval of the Project
     Manager.

5.   The contractor is responsible for taking the following precautions/steps
     to protect the satisfactory on-going operation of all building systems and
     tenant operations:

                                       37
<PAGE>   38

        -   Covering HVAC supply and return duct openings to protect from
            construction dirt/dust being spread to other areas of the building
            or into the HVAC equipment/system. This can be accomplished by
            sealing off, covering with filtering media, or other Project
            Management approved method.

        -   Coordinate with Project Manager prior to construction to have fire
            sprinkler systems isolated, smoke detectors disabled, or alarm
            systems de-activated for periods as may be necessary. Contractor
            will protect those smoke detectors or fire sprinkler heads left
            installed in the area, after disabling, by covering them with
            plastic bags during construction.

        -   Where electrical components or circuits are removed, contractor will
            ensure full compliance with OSHA required lockout/tagout
            procedures to prevent personal injuries or system outages.

        -   Develop the best isolation possible of the construction area to
            contain any dirt, dust, noise or other potential tenant impact which
            may be generated by demo, construction work and clean-up.

6.   Any damage to any project area including but not limited to, parking areas,
     doors, freight elevators, and carpets will be reported to the Project
     Office and repaired by the contractor immediately. Spieker Properties
     reserves the right to remedy any damage at the Contractors expense if the
     damage is not repaired in a timely manner.

7.   No powder-actuated guns are to be used without the specific prior
     authorization of the Project Management Office.

8.   No foreign substances are to be poured down any restroom floor drains, or
     into other restroom fixtures.

9.   All firewall and floor penetrations shall be sleeved and sealed in
     accordance with applicable fire code, using only approved, UL listed, fire
     stop materials. All firestop installations must be reviewed and approved by
     the Project Manager prior to closing the associated area of work.

10.  All electrical panel and circuit breaker labeling will be performed in
     accordance with acceptable industry methods, or as may be directed by
     Project Management.

11.  Contractor will notify the Management Office at least 48 hours in advance
     of construction completion. A walk-through and punch list will be developed
     for each job.

12.  Smoking is prohibited in all buildings, and parking garages, at all times.

13.  The Contractor is responsible for ensuring, on an on-going basis, that
     common areas, work space, and construction use restrooms are thoroughly
     cleaned upon completion of work, including trash and material disposal,
     removal of all noise and dust shielding materials installed at beginning of
     project, windows cleaned, etc.

14.  THE PROJECT OFFICE IS TO BE NOTIFIED IMMEDIATELY SHOULD ANY EMERGENCY
     DEVELOP, ANY BUILDING SYSTEM OR OPERATION BE IMPACTED, OR ANY ASPECT OF THE
     CONSTRUCTION EFFORT IMPACT ANY TENANT.

SAFETY/COMPLIANCE

1.   General Contractor is responsible for ensuring jobsite safety compliance.
     This includes the work force as well as anyone entering the construction
     area. Protective barricades will be placed as required to ensure general
     area safety. Material Safety Data Sheets (MSDS) for all materials to be
     used on the jobsite must be provided to the Project Manager for review
     prior to bringing the materials into the project. The contractor will
     further ensure that a copy of each MSDS is available at the jobsite
     whenever a specific material is in use.

2.   No welding, burning, or cutting with an open flame will be performed
     without prior notification to the Project Office so that appropriate
     actions may be taken with fire alarm systems and fire sprinkler systems.
     Appropriate fire extinguishers will be immediately available at all times.

3.   The contractor is responsible for ensuring that all of their
     sub-contractors are aware, and in compliance, with these general
     requirements.

MATERIALS

1.   The contractor shall contact the Management Office at the start of
     construction for instructions on building keying, specific hardware and
     other standards, as may be applicable, unless this coordination is
     accomplished through hardware submittals. All permanent keying will be
     provided through the Management Office.

2.   All HVAC, electrical, plumbing, fire alarm system, fire sprinkler, building
     control and lighting components installed will be of Building Standard
     manufacture, unless noted as otherwise on the approved plans and
     specifications. This includes but is not limited to thermostats, controls,
     diffusers, lighting fixtures, switches, lamps, relays, smoke detectors,
     fire sprinkler heads, sprinkler flow switches, manual pull stations,
     indicator horns/strobes, etc.

                               Project Completion

1.   Upon completion of project, contractor will perform a full air balance of
     any installed or modified HVAC systems, providing one copy of each air
     balance report to the Management Office.

2.   Upon completion of project, a completed test report (witnessed by a Fire
     Department representative as required) will be provided to the Project
     Management Office for all fire sprinkler or fire alarm systems having been
     impacted by any aspect of the construction work.

3.   Upon completion of construction, one (1) set of as-built prints, and one
     (1) set of as-built sepias, are to be provided to the Management Office.

4.   Contractor will ensure that specific submittals, manufacturers operation
     and maintenance manuals, and applicable manufacturers cut sheets are
     delivered to the Project Office for all equipment or components installed
     in the course of their work. This includes, but is

                                       38
<PAGE>   39

     not limited to, mechanical equipment, fire alarm system components, fire
     sprinkler system components, HVAC system equipment or components, lighting
     system components, electrical distribution or control components, and any
     sensing or monitoring components.

5.   Upon completion of construction clean inside of all perimeter windows and
     the interior of all lighting fixtures and louvers. Thoroughly clean all
     work areas, common areas where impacted, construction use restrooms, and
     freight elevators. Coordinate construction clean-up schedule with
     Management Office.

                              Building Contact List

Any questions or concerns should be directed to:

        PROJECT DIRECTOR            --      CHEQUITA MCCULLOUGH
        BUILDING MANAGERS           --      CHEQUITA MCCULLOUGH
        CUSTOMER SERV. REP.         --      ______N/A_______
        BUILDING ENGINEER           --      DON DEL BONO
        MANAGEMENT OFFICE PHONE     --      (408) 467-7150
        MANAGEMENT OFFICE FAX       --      (408) 467-7160

                                       39<PAGE>   1
                                                                    EXHIBIT 10.2

                                 THIRD AMENDMENT
                               TO CREDIT AGREEMENT

            This THIRD AMENDMENT TO CREDIT AGREEMENT is entered into as of
January 22, 2001 (this "Amendment") by and between BROCADE COMMUNICATIONS, a
Delaware corporation, with its principal place of business at 1745 Technology
Drive, San Jose, California 95110 ("Borrower"), and COMERICA BANK-CALIFORNIA
("Bank"), a California banking corporation, with its principal place of business
at 333 West Santa Clara Street, San Jose, California 95113.

                                    RECITALS

            A. Borrower and Bank have previously entered into that certain
Credit Agreement dated as of January 5, 2000, as amended by the First Amendment
to Credit Agreement dated March 21, 2000, as amended by the Second Amendment to
Credit Agreement dated September 20, 2000 (the "Credit Agreement").

            B. Pursuant to the terms of the Credit Agreement, Borrower wishes to
obtain an additional standby letter of credit from Bank, and Bank desires to
issue such standby letter of credit.

            C. This Amendment sets forth the terms on which Bank will issue the
additional standby letter of credit to Borrower.

                                    AGREEMENT

            For good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as set forth below.

            1. Incorporation by Reference; Definitions. The foregoing Recitals
and the Credit Agreement are incorporated herein by this reference as though set
forth in full herein. Any terms not defined herein shall have the meanings given
in the Credit Agreement. As used herein, and unless otherwise defined herein,
the following terms shall have the following respective meanings except as the
context shall otherwise require:

                "Letter of Credit" means the standby letter of credit issued by
Bank for the account of Borrower, and for the benefit of Spieker Properties,
L.P. in the amount of Ten Million Four Hundred Five Thousand Nine Hundred Eighty
Three and 00/100 Dollars ($10,405,983.00), provided, however, that if Bank
approves extensions of the Maturity Date, then the amount of the Letter of
Credit shall be reduced as follows: the amount of the Letter of Credit shall be
reduced to Eight Million Two Hundred Eighty Nine Thousand Four Hundred Eighty
Seven and 00/100 Dollars ($8,289,487.00) commencing on the date forty eight (48)
months from the date hereof and continuing

<PAGE>   2

until sixty (60) months from the date hereof, which amount shall be reduced
further to Six Million One Hundred Seventy Two Thousand Nine Hundred Ninety Two
and 00/100 Dollars ($6,172,992.00) commencing on the date sixty one (61) months
from the date hereof and continuing until the date seventy two (72) months from
the date hereof, which amount shall be further reduced to Four Million Fifty Six
Thousand Four Hundred Ninety Six and 00/100 Dollars ($4,056,496.00) commencing
on the date seventy three (73) months from the date hereof and continuing until
the date eighty four (84) months from the date hereof, which amount shall be
further reduced to One Million Nine Hundred Forty Thousand and 00/100 Dollars
($1,940,000.00) commencing on the date eighty four (84) months from the date of
this hereof until the final Maturity Date.

                "Letter of Credit Agreement" means the Standby Letter of Credit
Application and Agreement dated the date hereof by and between Borrower and
Bank.

                "Letter of Credit Documents" means this Amendment, the Letter of
Credit, and the Letter of Credit Agreement.

                "Maturity Date" means December 1, 2003, provided however that
the Letter of Credit may be renewed annually, subject to Bank approval, which
annual renewals may be up to a final maturity date of November 30, 2013.

            2. Amendment to the Credit Agreement. The parties have agreed to the
amendments to the Credit Agreement set forth in this Section 2.

                2.1 Additional Letter of Credit. The Letter of Credit is issued
as an additional letter of credit under the Credit Agreement and is subject to
the terms and conditions of the Credit Agreement. The Letter of Credit Documents
are incorporated herein by this reference.

                2.2 Issuance of Letters of Credit. Subject to the terms and
conditions of the Letter of Credit Documents and the Credit Agreement, Bank
shall issue the Letter of Credit.

                2.3 Letter of Credit Fees. Borrower shall pay to Bank fees upon
the issuance of the Letter of Credit, and upon the payment by Bank of each draft
under the Letter of Credit, in accordance with Bank's standard fees and charges
in effect at the time the Letter of Credit is issued or amended or any draft is
paid. In addition, Borrower shall prepay to Bank an annual fee with respect to
the Letter of Credit in an amount equal to one-half of one percent (0.50%) per
annum of the original face amount of the Letter of Credit for the time period
equal to the date of issuance of the Letter of Credit to and including the
Maturity Date.

                2.4 Reimbursement by Borrower. Borrower shall immediately
reimburse Bank for all sums paid by Bank on account of the Letter of Credit in
accordance with the Letter of Credit Agreement.

                2.5 Indemnity. Borrower shall indemnify Bank as set forth in the
Letter of Credit Agreement.

<PAGE>   3

                2.6 Payment of Drafts. Bank shall pay drafts as set forth in the
Letter of Credit Agreement.

                2.7 Amendment to Section 8.2 of the Credit Agreement. Section
8.2 of the Credit Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:

                8.2 Tangible Effective Net Worth. Borrower shall maintain, as of
        the last day of each fiscal quarter, a Tangible Effective Net Worth of
        not less than Three Hundred Fifty Two Million and 00/100 Dollars
        ($352,000,000.00); which sum shall increase, on an annual basis as of
        Borrower's fiscal year end, by an amount equal to (a) fifty percent
        (50%) of Borrower's net profit; plus (b) ninety percent (90%) of
        additional equity raised by Borrower.

                8.3 Profitability. Borrower shall have a minimum net profit, on
        an operating and after tax basis, greater than Zero and 00/100 Dollars
        ($0.00) on a rolling two (2) quarter basis, provided however that Bank
        shall exclude from its profitability calculation for approved
        acquisitions, in process research and development charges and any other
        non-cash acquisition related write-offs.

            3. Conditions Precedent.

                3.1 Issuance of the Letter of Credit. As conditions precedent to
Bank's obligation to issue the Letter of Credit, Borrower shall deliver, or
cause to be delivered, to Bank:

                    3.1.1 A duly executed copy of this Amendment;

                    3.1.2 A duly executed copy of the Letter of Credit
Agreement;

                    3.1.3 All representations and warranties of Borrower to Bank
set forth in the Letter of Credit Documents shall be accurate and complete in
all respects; and

                    3.1.4 There shall not exist an Event of Default or an event
which with the giving of notice of passage of time, or both, would be an Event
of Default.

            4. No Modification of Other Obligations. Except as is otherwise
specifically set forth herein, the Credit Agreement shall remain unmodified and
in full force and effect, and is hereby ratified and confirmed.

            5. Conflicts. If a conflict exists between the provisions of the
Credit Agreement and the provisions of this Amendment, the provisions of this
Amendment shall control.

<PAGE>   4

            6. Further Assurances. Borrower agrees to make and execute such
other documents as may be necessary or required to effectuate the terms and
conditions of this Amendment.

            7. Future Modifications. This Amendment does not entitle, or imply
any consent or agreement to, any further or future modification of, amendment
to, waiver of, or consent with respect to any provision of the Credit Agreement.
Any amendments hereto shall be in writing and signed by the parties.

            8. Integration. This Amendment is an integrated agreement, and
supercedes all negotiations and agreement regarding the subject matter hereof,
and taken together with the Credit Agreement, constitutes the final agreement of
the parties with respect to the subject matter hereof and thereof.

            9. Fees and Costs. Borrower shall pay Bank's attorneys' fees and
costs incurred in the preparation of this Amendment.

            10. Severability. In the event any one or more of the provisions
contained in this Amendment is held to be invalid, illegal or unenforceable in
any respect, then such provision shall be ineffective only to the extent of such
prohibition or invalidity, and the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

            11. Interpretation. This Amendment and all agreements relating to
the subject matter hereof are the product of negotiation and preparation by and
among each party and its respective attorneys, and shall be construed
accordingly. The parties waive the provisions of California Civil Code Section
1654.

            12. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument. Delivery of an executed counterpart of
the signature page to this Amendment by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Amendment, and any party
delivering such an executed counterpart of the signature page to this Amendment
by telefacsimile to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Amendment to such other party, provided
that the failure to deliver such manually executed counterpart shall not affect
the validity, enforceability, or binding effect of this Amendment.

<PAGE>   5

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

BROCADE COMMUNICATIONS

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

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

COMERICA BANK-CALIFORNIA

By:     Sarah Lewis
Its:    Vice President

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