Document:

<PAGE>

                                                                    Exhibit 10.5

                                 LEASE AGREEMENT
                             BASIC LEASE INFORMATION

<TABLE>
<S>                      <C>
            Lease Date:  AUGUST 8, 2000

              Landlord:  LINCOLN MARINA BAY,
                         a California limited partnership

    Landlord's Address:  UBS Realty Advisors, LLC
                         455 Market Street, Suite 1540
                         San Francisco, California 94105

                         All notices sent to Landlord under this Lease shall be
                         sent to the above address, with copies to:
                         c/o Woodmont Real Estate Services
                         1050 Ralston Avenue
                         Belmont California 94002

                Tenant:  DICON FIBEROPTICS, INC.,
                         a California corporation

      Tenant's Contact.
                Person:  Gina Liang

   Tenant's Address and  1331 8th Street
      Telephone Number:  Berkeley, California 94710
                         (510) 528-0427

        Premises Square  Approximately Fifty-One Thousand Five Hundred Ninety-Two (51,592)
               Footage:  rentable square feet

      Premises Address:  1100 Marina Way South, Richmond, California

               Project:  The Marina Bay Business Park (warehouse portion) consisting of
                         approximately 103,624 rentable square feet, together with
                         the land on which the Project is situated and all Common Areas

              Building:  Building D

 Tenant's Proportionate
     Share of Building:  Forty-Nine and Eight Tenths Percent (49.8%)

 Tenant's Proportionate
      Share of Project:  Forty-Nine and Eight Tenths Percent (49.8%)

        Length of Term:  Six (60) months, with one (1) option to extend for sixty (60) months

              Estimated
     Commencement Date:  September 15, 2000

   Estimated Expiration
                  Date:  September 14, 2005

             Base Rent:
</TABLE>

<TABLE>
<CAPTION>
                                                               MONTHLY
                                                              BASE RENT
PERIOD                                       SQ. FT.            RATE        MONTHLY BASE RENT      ANNUAL BASE RENT
------                                       -------          ---------     -----------------      ----------------
<S>                                          <C>              <C>           <C>                    <C>
September 1, 2000
through August 31, 2001                      51,592             x $.40        = $20,636.80          = $247,641.60
September 1, 2001
through August 31, 2002                      51,592             x $.42        = $21,668.64          = $260,023.68
September 1, 2002
through August 31, 2003                      51,592             x $.44        = $22,700.48          = $272,405.76
September 1, 2003
through August 31, 2004                      51,592             x $.46        = $23,732.32          = $284,787.84
September 1, 2004
through August 31, 2005                      51,592             x $.48        = $24,764.16          = $297,169.92
</TABLE>

<TABLE>
<S>                      <C>
          Option Period  Fair Market Rent determined in accordance with Paragraph 56

     Prepaid Base Rent:  Twenty Thousand Six Hundred Thirty-Six and
                         80/100 Dollars ($20,636.80)

     Prepaid Additional
                  Rent:  Five Thousand One Hundred Fifty-Nine and 20/100 Dollars ($5,159.20)

 Month to which Prepaid
          Base Rent and
Additional Rent will be
               Applied:  The first month of the Term

      Security Deposit:  Twenty-Five Thousand Seven Hundred Ninety-Six Dollars ($25,796.00)
</TABLE>

<PAGE>

<TABLE>
<S>                      <C>
             Guarantor:  NONE

         Permitted Use:  General warehousing, machining of metal products, manufacture of
                         fiberoptic equipment and related office uses
       Reserved Parking
                Spaces:  NONE

     Unreserved Parking
                Spaces:  Fifty (50) non-exclusive and undesignated parking spaces

             Broker(s):  BT Commercial Real Estate Services (Tony Beatty and Jeff Leenhouts)
                         representing Landlord, and
                         Colliers International (Aileen Dolby) representing Tenant
</TABLE>

<PAGE>

                                 LEASE AGREEMENT

                                 BY AND BETWEEN

                               LINCOLN MARINA BAY,
                        a California Limited Partnership

                                   AS LANDLORD

                                       AND

                            DICON FIBEROPTICS, INC.,
                            a California corporation

                                    AS TENANT

                              DATED AUGUST 8, 2000

<PAGE>

<TABLE>
<CAPTION>
INDEX OF EXHIBITS
<S>                     <C>
        A               Diagram of the Premises

        B               INTENTIONALLY OMITTED

       B-1              INTENTIONALLY OMITTED

        C               INTENTIONALLY OMITTED

        D               Rules and Regulations

        E               Form of Estoppel

        F               Form of Subordination, Non-Disturbance and
                        Attornment Agreement

        G               Hazardous Materials Disclosure Certificate

        H               INTENTIONALLY OMITTED

        I               Signage Criteria
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
INDEX OF DEFINED TERMS                             PARAGRAPH #
<S>                                                <C>
ADA                                                9
ADDITIONAL RENT                                    4
ALTERATIONS                                        12
BANK                                               7
BASE INSURANCE EXPENSES                            4
BASE OPERATING EXPENSES                            4
BASE RENT                                          4
BUILDING                                           2
CASUALTY DISCOVERY DATE                            21
CERCLA                                             32
COMMENCEMENT DATE                                  3
COMMON AREAS                                       2
COMPUTATION YEAR                                   4
CONDEMNATION                                       22
CPA                                                4
DEFAULT                                            24
DISH                                               9
DISPUTE NOTICE                                     4
ELECTRIC SERVICE PROVIDER                          5
ENVIRONMENTAL LAWS                                 32
EXPIRATION DATE                                    3
FORCE MAJEURE                                      54
GUARANTOR                                          24
HAZARDOUS MATERIALS                                32
HOLDER                                             42
INITIAL DISCLOSURE CERTIFICATE                     32
INSURANCE EXPENSES                                 4
LANDLORD PARTIES                                   39
LANDLORD'S AGENTS                                  8
LANDLORD'S INVESTMENT ADVISORS                     15
LAWS                                               9
LEASE                                              INTRODUCTION
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                <C>
LEASE GUARANTOR                                    7
LETTER OF CREDIT                                   7
OPERATING EXPENSES                                 4
OPTION PERIOD                                      56
PARKING AREAS                                      2
PAYMENT OF ADDITIONAL RENT                         4
PREMISES                                           1
PRIVATE RESTRICTIONS                               9
PROJECT                                            2
PROPORTIONATE SHARE                                4
RELATED CORPORATION                                23
RENT                                               4
RULES AND REGULATIONS                              41
SUCCESSOR LANDLORD                                 31
SUPERIOR LEASE(S)                                  31
SUPERIOR LESSOR                                    31
SUPERIOR MORTGAGE(S)                               31
SUPERIOR MORTGAGEE                                 31
SYSTEMS                                            4
TAXES                                              4
TENANT'S AGENTS                                    9
TENANT IMPROVEMENTS                                EXHIBIT B
TENANT'S PROPERTY                                  15
TERM                                               3
TERMINATION NOTICE                                 59
TSCA                                               32
UPDATED DISCLOSURE CERTIFICATE                     32
UTILITIES                                          5
UTILITY EXPENSES                                   4
VISITOR PARKING FEES                               45
VISITORS                                           45
YEAR 2000 COMPLIANT                                4
</TABLE>

                                      iii

<PAGE>

TABLE OE CONTENTS

<TABLE>
<CAPTION>
                                                                    Page
                                                                    ----
<S>                                                                 <C>
1. Demise .........................................................   1
2. Premises .......................................................   1
3. Term ...........................................................   2
4. Rent ...........................................................   2
5. Utility Expenses ...............................................   7
6. Late Charge ....................................................   8
7. Security Deposit ...............................................   8
8. Possession .....................................................   9
9. Use Of Premises ................................................   9
10. Acceptance Of Premises ........................................  10
11. Surrender......................................................  10
12. Alterations And Additions .....................................  11
13. Maintenance and Repairs Of Premises ...........................  13
14. Landlord's Insurance ..........................................  13
15. Tenant's Insurance ............................................  14
16. Indemnification ...............................................  15
17. Subrogation ...................................................  15
18. Signs..........................................................  15
19. Free From Liens ...............................................  16
20. Entry By Landlord .............................................  16
21. Destruction And Damage ........................................  16
22. Condemnation ..................................................  18
23. Assignment And Subletting .....................................  19
24. Tenant's Default ..............................................  21
25. Landlords Remedies ............................................  23
26. Landlords Right to Perform Tenants Obligations ................  25
27. Attorney's Fees ...............................................  25
28. Taxes .........................................................  25
29. Effect Of Conveyance ..........................................  25
30. Tenants Estoppel Certificate ..................................  26
31. Subordination .................................................  26
32. Environmental Covenants .......................................  27
33. Notices .......................................................  29
34. Waiver ........................................................  30
35. Holding Over ..................................................  30
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                       <C>
36. Successors And Assigns ..............................................  30
37. Time ................................................................  30
38. Brokers .............................................................  30
39. Limitation Of Liability .............................................  31
40. Financial Statements ................................................  31
41. Rules And Regulations ...............................................  31
42. Mortgagee Protection ................................................  32
43. Relocation ..........................................................  32
44. Parking .............................................................  32
45. Entire Agreement ....................................................  33
46. Interest ............................................................  33
47. Construction ........................................................  33
48. Representations And Warranties Of Tenant ............................  34
49. Name of Building ....................................................  34
50. Security ............................................................  34
51. Jury Trial Waiver ...................................................  35
52. Recordation..........................................................  35
53. Right to Lease ......................................................  35
54. Force Majeure .......................................................  35
55. Acceptance ..........................................................  35
56. Renewal Option (With FMV Rent) ......................................  34
57. Provisions Specific To The State In Which The Premises Are Located ..  36
</TABLE>

                                       ii
<PAGE>

                                 LEASE AGREEMENT

      THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are defined
in the Basic Lease Information attached to this Lease Agreement ("BASIC LEASE
INFORMATION") shall have the meaning and definition given them in the Basic
Lease Information. The Basic Lease Information, the exhibits, the addendum or
addenda described in the Basic Lease Information, and this Lease Agreement are
and shall be construed as a single instrument and are referred to herein as the
"LEASE".

      1. DEMISE

      In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"PREMISES"), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.

      2. PREMISES

      The Premises demised by this Lease is located in that certain building
(the "BUILDING") specified in the Basic Lease Information, which Building is
located in that certain real estate development (the "PROJECT") specified in the
Basic Lease Information. The Premises has the address and contains the square
footage specified in the Basic Lease Information; provided, however, that any
statement of square footage set forth in this Lease, or that may have been used
in calculating any of the economic terms hereof, is an approximation which
Landlord and Tenant agree is reasonable and, except as expressly set forth in
Paragraphs 4(c)(3) and 4(c)(5) below, no economic terms based thereon shall be
subject to revision whether or not the actual square footage is more or less.
The location and dimensions of the Premises are depicted on EXHIBIT A, which is
attached hereto and incorporated herein by this reference. Tenant shall have the
non-exclusive right (in common with the other tenants, Landlord and any other
person granted use by Landlord) to use the Common Areas (as hereinafter
defined), except that, with respect to the Project's parking areas (the "PARKING
AREAS"), Tenant shall have only the rights, if any, set forth in Paragraph 44
below. For purposes of this Lease, the term "COMMON AREAS" shall mean all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are, from time to time, provided and designated by Landlord for the
non-exclusive use of Landlord, Tenant and other tenants of the Project and their
respective employees, guests and invitees.

      Tenant understands and agrees that the Premises shall be leased by Tenant
in its as-is condition without any improvements or alterations by Landlord
unless Landlord has expressly agreed to make such improvements or alterations in
a tenant improvement work agreement attached hereto, if at all, as EXHIBIT B. If
Landlord has agreed to make any such improvements or alterations, then the
Premises demised by this Lease shall include any Tenant Improvements (as that
term is defined in the aforesaid tenant improvement work agreement) to be
constructed by Landlord within the interior of the Premises. Landlord shall
construct any Tenant Improvements on the terms and conditions set forth in
EXHIBIT B, if attached hereto. Landlord and Tenant agree to and shall be bound
by the terms and conditions of EXHIBIT B, if any.

      Landlord has the right, in its sole discretion, from time to time, to: (a)
make changes to the Common Areas, the Building and/or the Project, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, hallways, parking spaces, parking areas, ingress, egress,
direction of driveways, entrances, corridors, lobby areas and walkways; (b)
close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c) add additional
buildings and improvements to the Common Areas or remove existing buildings or
improvements therefrom; (d) use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Project or any portion
thereof; and (e) do and perform any other acts alter or expand or make any other
changes

                                       1
<PAGE>

in, to or with respect to the Common Areas, the Building and/or the Project as
Landlord may, in its sole discretion, deem to be appropriate, provided that such
activities do not prevent access to the Premises or materially impair Tenant's
use of the Parking Areas as permitted in Paragraph 44.

      Without limiting the foregoing, Landlord reserves the right from time to
time to install, use, maintain, repair, relocate and replace pipes, ducts,
conduits, wires, and appurtenant meters and equipment for service to the
Premises or to other parts of the Building which are above the ceiling surfaces,
below the floor surfaces, within the walls and in the central core areas of the
Building which are located within the Premises or located elsewhere in the
Building. In connection with any of the foregoing activities of Landlord,
Landlord shall use reasonable efforts while conducting such activities to
minimize any interference with Tenant's use of the Premises and shall comply
with Tenant's reasonable security requirements relating to entry upon the
Premises.

      No rights to any view or to light or air over any property, whether
belonging to Landlord or any other person, are granted to Tenant by this Lease.
If at any time any windows of the Premises are temporarily darkened or the light
or view therefrom is obstructed by reason of any repairs, improvements,
maintenance or cleaning in or about the Building, the same shall be without
liability to Landlord and without any reduction or diminution of Tenant's
obligations under this Lease.

      3. TERM

      The term of this Lease (the "TERM") shall commence on September 15, 2000
(the "COMMENCEMENT DATE") and, subject to exercise of the Option set forth in
Paragraph 56, shall terminate on September 14, 2005 (the "EXPIRATION DATE").

      4. RENT

      (a) BASE RENT. Tenant shall pay to Landlord, in advance on the first day
of each month, without further notice or demand and without abatement, offset,
rebate, credit or deduction for any reason whatsoever, the monthly installments
of rent specified in the Basic Lease Information (the "BASE RENT").

      Upon execution of this Lease, Tenant shall pay to Landlord the Security
Deposit, Prepaid Rent and the first monthly installment of estimated Additional
Rent (as hereinafter defined) specified in the Basic Lease Information to be
applied toward Base Rent and Additional Rent for the month(s) of the Term
specified in the Basic Lease Information.

      As used in this Lease, the term "ADDITIONAL RENT" shall mean all sums of
money, other than Base Rent, that shall become due from and payable by Tenant
pursuant to this Lease.

      (b) ADDITIONAL RENT. (1) This Lease is intended to be a triple-net lease
with respect to Landlord and subject to the provisions of Section 13(b) of this
Lease, the Base Rent owing hereunder is (x) to be paid by Tenant absolutely net
of all costs and expenses relating to Landlord's ownership and operation of the
Project and the Building, and (y) not to be reduced, offset or diminished,
directly or indirectly, by any cost, charge or expense payable hereunder by
Tenant or by others in connection with the Premises, the Building and/or the
Project, or any part thereof. The provisions of this Paragraph 4(b) for the
payment of Tenant's Proportionate Share(s) of Expenses (as hereinafter defined)
are intended to pass on to Tenant, Tenant's share of all costs and expenses
relating to Landlord's ownership and operation of the Premises, the Building
and/or the Project. During the Term, in addition to the Base Rent, Tenant shall
pay to Landlord as Additional Rent, in accordance with this Paragraph 4, (i)
Tenant's Proportionate Share(s) of Operating Expenses (as defined below)
attributable to each Computation Year (as defined below), (ii) Tenant's
Proportionate Share(s) of Insurance Expenses (as defined below) attributable to
each Computation Year, (iii) Tenant's Proportionate Share(s) of Utility Expenses
(as defined below) attributable to each Computation Year, and (iv) Tenant's

                                       2
<PAGE>

Proportionate Share(s) of Taxes (as defined below) attributable to each
Computation Year.

      (2) As used in this Lease, the following terms shall have the meanings
specified:

            (A) "OPERATING EXPENSES" means the total costs and expenses paid or
incurred by Landlord in connection with the ownership, operation, maintenance,
management and repair of the Premises, the Building and/or the Project or any
part thereof, including the cost of capital improvements, but only to the extent
permitted in Paragraph 4(b)(2)(vi) below, and including, without limitation, all
the following items:

                  (i) Common Area Operating Expenses. All costs to operate,
maintain, repair, replace, supervise, insure and administer the Common Areas,
including, without limitation, any Parking Areas owned by Landlord for the use
of tenants, and further including, without limitation, supplies, materials,
labor and equipment used in or related to the operation and maintenance of the
Common Areas, including Parking Areas (including, without limitation, all costs
of resurfacing and restriping Parking Areas), signs and directories on the
Building and/or the Project, landscaping (including, without limitation,
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.

                  (ii) Parking Charges; Public Transportation Expenses. Any
parking charges or other costs levied, assessed or imposed by, or at the
direction of, or resulting from statutes or regulations, or interpretations
thereof, promulgated by any governmental authority or insurer in connection with
the use or occupancy of the Building or the Project, and the cost of maintaining
any public transit system, vanpool, or other public or semi-public
transportation imposed upon Landlord's ownership and operation of the Building
and/or the Project.

                  (iii) Maintenance and Repair Costs. Except for costs which are
the responsibility of Landlord pursuant to Paragraph 13(b) below, all costs to
maintain, repair, and replace the Premises, the Building and/or the Project or
any part thereof and the personal property used in conjunction therewith,
including without limitation, (a) all costs paid under maintenance, management
and service agreements such as contracts for janitorial, security and refuse
removal, (b) all costs to maintain, repair and replace the roof coverings of the
Building or the Project or any part thereof, (c) all costs to maintain, repair
and replace the heating, ventilating, air conditioning, plumbing, sewer,
drainage, electrical, fire protection, elevator, escalator, life safety and
security systems and other mechanical, electrical and communications systems and
equipment serving the Premises, the Building and/or the Project or any part
thereof (collectively, the "SYSTEMS"), (d) the cost of all cleaning and
janitorial services and supplies, the cost of window glass replacement and
repair, and (e) the cost of maintenance, depreciation and replacement of
machinery, tools and equipment (if owned by Landlord) and for rental paid for
such machinery, tools and equipment (if rented) used in connection with the
operation or maintenance of the Building, and (f) all costs and expenses
incurred in causing the Project to be Year 2000 Compliant (as defined below).
"YEAR 2000 COMPLIANT" shall mean that all Systems containing or using computers
or other information technology will function without material error or
interruption resulting from the date change from year 1999 to year 2000, to the
extent that information technology of third parties properly communicates
date/time data with the Systems.

                  (iv) Life Safety Costs. All costs to install, maintain, repair
and replace all life safety systems, including, without limitation, all fire
alarm systems, serving the Premises, the Building and/or the Project or any part
thereof (including all maintenance contracts and fees payable to life safety
consultants) whether such systems are or shall be required by Landlord's
insurance carriers, Laws (as hereinafter defined) or otherwise.

                  (v) Management and Administration. All costs for management
and administration of the Premises, the Building and/or the Project or any part
thereof,

                                       3
<PAGE>

including, without limitation, a property management fee, accounting, auditing,
billing, postage, salaries and benefits for all on-site employees at or below
the level of building manager and contractors engaged in the management,
operation, maintenance, repair and protection of the Building and the Project,
payroll taxes and legal and accounting costs, fees for licenses and permits
related to the ownership and operation of the Project, and office rent for the
Building and/or Project management office or the rental value of such office if
it is located within the Building and/or Project.

                  (vi) Capital Improvements. The cost of capital improvements or
other costs incurred in connection with the Project (A) which are intended to
effect economies in the operation or maintenance of the Project, or any portion
thereof, (B) that are required to comply with present or anticipated
conservation programs, (C) which are replacements or modifications of structural
or nonstructural items located in the Common Areas of the warehousing portion of
the Project required to keep such Common Areas in good order or condition, or
(D) that are required under any governmental law or regulation. The cost of
capital improvements shall be amortized with interest over the useful life of
the improvement as determined by Landlord.

            Notwithstanding anything in this Paragraph 4(b) to the contrary,
Insurance Expenses, Utility Expenses and Taxes shall not be deemed to constitute
"Operating Expenses" for purposes of this Paragraph 4(b)(2)(A).

            (B) "INSURANCE EXPENSES" means the total costs and expenses paid or
incurred by Landlord in connection with the obtaining of insurance on the
Premises, the Building and/or the Project or any part thereof or interest
therein, including, without limitation, premiums for "all risk" fire and
extended coverage insurance, commercial general liability insurance, rent loss
or abatement insurance, earthquake insurance, flood or surface water, coverage,
and other insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of any such insurance. The foregoing shall not
be deemed an agreement by Landlord to carry any particular insurance relating to
the Premises, Building, or Project.

            (C) "UTILITY EXPENSES" means the cost of all electricity, water,
gas, sewers, oil and other utilities (collectively, "Utilities"), including any
surcharges imposed, serving the Premises, the Building and the Project or any
part thereof that are not separately metered and billed to Tenant or any other
tenant, and any amounts, taxes, charges, surcharges, assessments or impositions
levied, assessed or imposed upon the Premises, the Building or the Project or
any part thereof, or upon Tenant's use and occupancy thereof, as a result of any
rationing of Utility services or restriction on Utility use affecting the
Premises, the Building and/or the Project, as contemplated in Paragraph 5 below.

            (D) "TAXES" means all real estate taxes and assessments, which shall
include any form of tax, assessment (including any special or general
assessments and any assessments or charges for Utilities or similar purposes
included within any tax bill for the Building or the Project or any part
thereof, including, without limitation, entitlement fees, allocation unit fees
and/or any similar fees or charges), fee, license fee, business license fee,
levy, penalty (if a result of Tenant's delinquency), sales tax, rent tax,
occupancy tax or other tax (other than net income, estate, succession,
inheritance, transfer or franchise taxes), imposed by any authority having the
direct or indirect power to tax, or by any city, county, state or federal
government or any improvement or other district or division thereof, whether
such tax is determined by the area of the Premises, the Building and/or the
Project or any part thereof, or the Rent and other sums payable hereunder by
Tenant or by other tenants, including, but not limited to, (i) any gross income
or excise tax levied by any of the foregoing authorities, with respect to
receipt of Rent and/or other sums due under this Lease; (ii) upon any legal or
equitable interest of Landlord in the Premises, the Building and/or the Project
or any part thereof, (iii) upon this transaction or any document to which Tenant
is a party creating or transferring any interest in the Premises, the Building
and/or the Project; (iv) levied or assessed in lieu of, in substitution for, or
in addition to, existing or additional taxes against the Premises, the Building
and/or the Project, whether or not now customary or within the contemplation of
the

                                       4
<PAGE>

parties; or surcharged against the Parking Areas. "Taxes" shall also include
legal and consultants' fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce taxes, Landlord specifically
reserving the right, but not the obligation, to contest by appropriate legal
proceedings the amount or validity of any taxes. :.

            (E) "COMPUTATION YEAR" shall mean each twelve (12) consecutive month
period commencing January 1 of each year during the Term, provided that
Landlord, upon notice to Tenant, may change the Computation Year from time to
time to any other twelve (12) consecutive month period, and, in the event of any
such change, Tenant's Proportionate Share(s) of Operating Expenses, Insurance
Expenses, Utility Expenses and Taxes shall be equitably adjusted for the
Computation Years involved in any such change.

      (c) PAYMENT OF ADDITIONAL RENT. (1) Upon commencement of this Lease,
Landlord shall submit to Tenant an estimate of monthly Additional Rent for the
period between the Commencement Date and the following December 31 and Tenant
shall pay such estimated Additional Rent on a monthly basis, in advance, on the
first day of each month. Tenant shall continue to make said monthly payments
until notified by Landlord of a change therein. Thereafter, within Ninety (90)
days of the end of each Computation Year or as soon thereafter practicable,
Landlord shall give to Tenant Notice of Landlord's estimate of the total amounts
that will be payable by Tenant under Paragraph 4(b) for the following
Computation Year. If at any time or times Landlord determines that the amounts
payable under Paragraph 4(b) for the current Computation Year will vary from
Landlord's estimate given to Tenant, Landlord, by notice to Tenant, may revise
the estimate for such Computation Year, and subsequent payments by Tenant for
such Computation Year shall be based upon such revised estimate. By April 1 of
each Computation Year, Landlord shall endeavor to provide to Tenant a statement
showing the actual Additional Rent due to Landlord for the prior Computation
Year, to be prorated for partial Computation Years during the Term. If the total
of the monthly payments of Additional Rent that Tenant has made for the prior
Computation Year is less than the actual Additional Rent chargeable to Tenant
for such prior Computation Year, then Tenant shall pay the difference in a lump
sum within thirty (30) days after receipt of such statement from Landlord. Any
overpayment by Tenant of Additional Rent for the prior Computation Year shall,
at Landlord's option, be credited towards the Additional Rent next due or
returned to Tenant in a lump sum payment within thirty (30) days after delivery
of such statement.

            (2) Landlord's then-current annual operating and capital budgets for
the Building and the Project or the pertinent part thereof shall be used for
purposes of calculating Tenant's monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the year in which this Lease
terminates as soon as possible after termination of such year. Even though the
Term has expired and Tenant has vacated the Premises, with respect to the year
in which this Lease expires or terminates, Tenant shall remain liable for
payment of any amount due to Landlord in excess of the estimated Additional Rent
previously paid by Tenant, and, conversely, Landlord shall promptly return to
Tenant any overpayment. Failure of Landlord to submit statements as called for
herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided.

            (3) With respect to Operating Expenses, Insurance Expenses, Utility
Expenses or Taxes which Landlord allocates to the Building, Tenant's
"Proportionate Share" shall be the percentage set forth in the Basic Lease
Information as Tenant's Proportionate Share of the Building, as adjusted by
Landlord from time to time for a remeasurement of or changes in the physical
size of the Premises or the Building, whether such changes in size are due to an
addition to or a scale or conveyance of a portion of the Building or otherwise.
With respect to Operating Expenses, Insurance Expenses, Utility Expenses or
Taxes which Landlord allocates to the Project as a whole or to only a portion of
the Project, Tenant's "Proportionate Share" shall be, with respect to Operating
Expenses Insurance Expenses, Utility Expenses or Taxes which Landlord allocates
to the Project as a whole, the percentage set forth in the Basic Lease
Information as Tenant's Proportionate

                                       5
<PAGE>
Share of the Project and, with respect to Expenses which Landlord allocates to
only a portion of the Project, a percentage calculated by Landlord from time to
time in its sole discretion and furnished to Tenant in writing, in either case
as adjusted by Landlord from time to time for a remeasurement of or changes in
the physical size of the Premises or the Project, whether such changes in size
are due to an addition to or a sale or conveyance of a portion of the Project or
otherwise. Notwithstanding the foregoing, Landlord may equitably adjust Tenant's
Proportionate Share(s) for all or part of any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Building and/or the Project
or that varies with the occupancy of the Building and/or the Project. Without
limiting the generality of the foregoing, Tenant understands and agrees that if
some or all Utilities serving the Premises are not separately metered Landlord
shall have the right to adjust Tenant's Proportionate Share(s) of any Utility
Expenses based upon Tenant's use of the Utilities or similar services as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such Utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such Utilities and similar services. If Tenant disputes any such estimate
or determination of Utility Expenses, then Tenant shall either pay the estimated
amount or, with the prior written approval of Landlord, which approval may be
given or withheld in Landlord's sole and absolute discretion, cause the Premises
to be separately metered at Tenant's sole expense.

            (4) In the event the average occupancy level of the Building or the
Project for any Computation Year is not ninety-five percent (95%) or more of
full occupancy, then the Operating Expenses for such year shall be apportioned
among the tenants by the Landlord to reflect those costs which would have
occurred had the Building or the Project, as applicable, been ninety-five
percent (95%) occupied during such year.

      (d) GENERAL PAYMENT TERMS. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, any late charges assessed pursuant
to Paragraph 6 below and any interest assessed pursuant to Paragraph 46 below,
are referred to as "RENT". All Rent shall be paid without deduction, offset or
abatement in lawful money of the United States of America. Checks are to be made
payable to Lincoln Marina Bay and shall be mailed to: Lincoln Marina Bay, c/o
Woodmont Real Estate Services, 1050 Ralston Avenue, Belmont, California 94002 or
to such other person or place as Landlord may, from time to time, designate to
Tenant in writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Term shall be a prorated amount of the Rent
for a full calendar month based upon a thirty (30) day month.

      (e) STATEMENTS BINDING. Every statement given by Landlord pursuant to
paragraph (c) of this Paragraph 4 shall be conclusive and binding upon Tenant
unless within one hundred eighty (180) days after the receipt of such statement
Tenant shall notify Landlord (a "DISPUTE NOTICE") that it disputes the
correctness thereof, specifying, subject to Tenant's audit rights set forth in
paragraph (f) below, the particular respects in which the statement is claimed
to be incorrect. Following Landlord's receipt of a Dispute Notice, Landlord and
Tenant shall have a period of forty-five (45) days in which to discuss the
matters raised in such Dispute Notice and reach agreement on a resolution
thereof. If Landlord and Tenant are not able to resolve such dispute within such
forty-five (45) day period, then Tenant shall submit the dispute to arbitration
within forty-five (45) days after the end of such forty-five (45) day discussion
period. Pending the determination of such dispute by agreement or arbitration
as aforesaid, Tenant shall, within ten (10) days after receipt of such
statement, pay Additional Rent in accordance with Landlord's statement and such
payment shall be without prejudice to Tenant's position. If the dispute shall be
determined in Tenant's favor, Landlord shall within thirty (30) days pay Tenant
the amount of Tenant's overpayment of Additional Rent resulting from compliance
with Landlord's statement.

      (f) AUDIT RIGHTS. Provided Tenant notifies Landlord in accordance with the
terms of paragraph (e) above that Tenant disputes a statement received from
Landlord, Tenant or its CPA (as defined below) shall have the right, at Tenant's
sole cost and expense, provided Tenant utilizes a Certified Public Accountant
(the "CPA") compensated on an

                                       6
<PAGE>

hourly basis; upon at least fifteen (15) days prior notice to Landlord at any
time during regular business hours to audit, review and photocopy Landlord's
records pertaining to Operating Expenses for the calendar year to which the
Dispute Notice given by Tenant relates. Any such audit shall be conducted within
one hundred eighty (180) days after the giving of the Dispute Notice by Tenant.
Tenant agrees to keep all information thereby obtained by Tenant confidential.

      5. UTILITY EXPENSES

      (a) Tenant shall pay the cost of all water, sewer use, sewer discharge
fees and permit costs and sewer connection fees, gas, heat, electricity, refuse
pick-up, janitorial service, telephone and all materials and services or other
utilities of any kind or nature (collectively, "UTILITIES") billed or metered
separately to the Premises and/or Tenant, together with all taxes, assessments,
charges and penalties added to or included within such cost. Tenant acknowledges
that the Premises, the Building and/or the Project may become subject to the
rationing of Utility services or restrictions on Utility use as required by a
utility company, governmental agency or other similar entity having jurisdiction
thereof. Tenant acknowledges and agrees that its tenancy and occupancy hereunder
shall be subject to such rationing or restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building and/or the Project, and Tenant
shall in no event be excused or relieved from any covenant or obligation to be
kept or performed by Tenant by reason of any such rationing or restrictions.
Tenant agrees to comply with energy conservation programs implemented by
Landlord by reason of rationing, restrictions or Laws.

      (b) Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance. No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder. In no event
shall Landlord be liable to Tenant for any damage to the Premises or for any
loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes
(including, without limitation, water, steam, and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or washstands, or other similar
cause in, above, upon or about the Premises, the Building, or the Project.

      (c) Without limiting the terms of Paragraph 5(a) above, Tenant
acknowledges that Landlord has contracted with Pacific Gas & Electric Company to
provide electricity for the Building, and that Landlord reserves the right to
change the provider of such service at any time and from time to time in
Landlord's sole discretion (any such provider being referred to herein as the
"ELECTRIC SERVICE PROVIDER"). Tenant shall obtain and accept electrical service
for the Premises only from and through Landlord, in the manner and to the extent
expressly provided in this Lease, at all times during the Term of this Lease,
and Tenant shall have no right (and hereby waives any right Tenant may otherwise
have) (i) to contract with or otherwise obtain any electrical service for or
with respect to the Premises or Tenant's operations therein from any provider
of electrical service other than the Electric Service Provider, or (ii) to enter
into any separate or direct contract or other similar arrangement with the
Electric Service Provider for the provision of electrical service to Tenant at
the Premises. Tenant shall cooperate with Landlord and the Electric Service
Provider at all times to facilitate the delivery of electrical service to Tenant
at the Premises and to the Building, including without limitation allowing
Landlord and the Electric Service Provider, and their respective agents and
contractors, (a) to install, repair, replace, improve and remove any and all
electric lines, feeders, risers, junction boxes, wiring, and other electrical
equipment, machinery and facilities now or hereafter located within the Building
or the Premises for the purpose of providing electrical service to or within the
Premises or the Building, and (b) reasonable access for the purpose of
maintaining, repairing, replacing or upgrading such electrical service from time
to time. Tenant shall provide such information and specifications regarding
Tenant's use or projected use of electricity at the Premises as shall be
required from time to time by Landlord or the Electric Service Provider :to
efficiently provide electrical service to the

                                       7
<PAGE>

Premises or the Building. In no event shall Landlord be liable or responsible
for any loss, damage, expense or liability, including without limitation loss of
business or any consequential damages, arising from any failure or inadequacy of
the electrical service being provided to the Premises or the Building, whether
resulting from any change, failure, interference, disruption, or defect in the
supply or character of the electrical service furnished to the Premises or the
Building, or arising from the partial or total unavailability of electrical
service to the Premises or the Building, from any cause whatsoever, or
otherwise, nor shall any such failure, inadequacy, change, interference,
disruption, defect or unavailability constitute an actual or constructive
eviction of Tenant, or entitle Tenant to any abatement or diminution of Rent or
otherwise relieve Tenant from any of its obligations under this Lease.
Notwithstanding anything to the contrary contained in this Paragraph 5(c), if
the Premises are separately metered for electrical service and Tenant is
permitted under applicable Laws (as hereinafter defined) to select a electric
service provider to provide electrical service to the Premises, then Tenant
shall not be required to obtain electrical service from Landlord's Electric
Service Provider and Tenant may select any qualified electric service provider
to provide electrical service to the Premises. Tenant shall be solely
responsible for the maintenance, repair and replacement of equipment and
facilities required by Tenant's electrical service provider.

      6. LATE CHARGE

      Notwithstanding any other provision of this Lease to the contrary, Tenant
hereby acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within ten (10) days after their due date, then Tenant shall
pay to Landlord a late charge equal to ten percent (10%) of such overdue amount,
plus any costs and attorneys' fees incurred by Landlord by reason of Tenant's
failure to pay Rent and/or other charges when due hereunder. Landlord and Tenant
hereby agree that such late charges represent a fair and reasonable estimate of
the cost that Landlord will incur by reason of Tenant's late payment and shall
not be construed as a penalty. Landlord's acceptance of such late charges shall
not constitute a waiver of Tenant's default with respect to such overdue amount
or estop Landlord from exercising any of the other rights and remedies granted
under this Lease.

                      Initials: Landlord _____ Tenant _____

      7. SECURITY DEPOSIT

      Concurrently with Tenant's execution of the Lease, Tenant shall deposit
with Landlord the Security Deposit specified in the Basic Lease Information as
security for the full and faithful performance of each and every term, covenant
and condition of this Lease. Landlord may use, apply or retain the whole or any
part of the Security Deposit as may be reasonably necessary (a) to remedy any
Default by Tenant under this Lease, (b) to repair damage (but not reasonable
wear and tear) to the Premises caused by Tenant, (c) to clean the Premises upon
termination of this Lease, (d) to reimburse Landlord for the payment of any
amount which Landlord may reasonably spend or be required to spend by reason of
Tenant's Default, and (e) to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant's Default. Should Tenant
faithfully and fully comply with all of the terms, covenants and conditions of
this Lease, within thirty (30) days following the expiration of the Term, the
Security Deposit or any balance thereof shall be returned to Tenant or, at the
option of Landlord, to the last assignee of Tenant's interest in this Lease.
Landlord shall not be required to keep the Security Deposit separate from its
general funds and Tenant shall not be entitled to any interest on such deposit.
If Landlord so uses or applies all or any portion of said deposit, within five
(5) days after written demand therefor Tenant shall deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to the full extent of
the above amount, and Tenant's failure to do so shall be a default under this
Lease. In the event Landlord transfers its interest in this Lease, Landlord
shall transfer the then remaining amount of the Security Deposit to Landlord's
successor in interest, and thereafter Landlord shall have no further liability
to Tenant with respect to such Security Deposit.

                                       8
<PAGE>

      8. POSSESSION

      (a) TENANT'S RIGHT OF POSSESSION. Subject to Paragraph 8(b), Tenant shall
be entitled to possession of the Premises upon commencement of the Term.

      (b) DELAY IN DELIVERING POSSESSION. If for any reason whatsoever, Landlord
cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord,
or Landlord's agents, advisors, employees, partners, shareholders, directors,
invitees, independent contractors or Landlord's Investment Advisors (as
hereinafter defined) (collectively, "LANDLORD'S AGENTS"), be liable to Tenant
for any loss or damage resulting therefrom. Tenant shall not be liable for Rent
until Landlord delivers possession of the Premises to Tenant. The Expiration
Date shall be extended by the same number of days that Tenant's possession of
the Premises was delayed beyond the Estimated Commencement Date.

      9. USE OF PREMISES

      (a) PERMITTED USE. The use of the Premises by Tenant and Tenant's agents,
advisors, employees, partners, shareholders, directors, customers, invitees and
independent contractors (collectively, "TENANT'S AGENTS") shall be solely for
the Permitted Use specified in the Basic Lease Information and for no other use.
Tenant shall not permit any objectionable or unpleasant odor, smoke, dust, gas,
noise or vibration to emanate from or near the Premises. The Premises shall not
be used to create any nuisance or trespass, for any illegal purpose, for any
purpose not permitted by Laws (as herein defined), for any purpose that would
invalidate the insurance or increase the premiums for insurance on the Premises,
the Building or the Project or for any purpose or in any manner that would
interfere with other tenants' use or occupancy of the Project. If any of
Tenant's office machines or equipment disturb any other tenant in the Building,
then Tenant shall provide adequate insulation or take such other action as may
be necessary to eliminate the noise or disturbance. Tenant agrees to pay to
Landlord, as Additional Rent, any increases in premiums on policies resulting
from Tenant's Permitted Use or any other use or action by Tenant or Tenant's
Agents which increases Landlord's premiums or requires additional coverage by
Landlord to insure the Premises. Tenant agrees not to overload the floor(s) of
the Building.

      (b) COMPLIANCE WITH GOVERNMENTAL REGULATIONS AND PRIVATE RESTRICTIONS.
Tenant and Tenant's Agents shall, at Tenant's expense, faithfully observe and
comply with (1) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, "LAWS"), now in
force or which may hereafter be in force pertaining to the Premises or Tenant's
use of the Premises, the Building or the Project, including without limitation,
any Laws requiring installation of fire sprinkler systems, seismic reinforcement
and related alterations, and removal of asbestos, whether substantial in cost or
otherwise, provided, however, that except as provided in Paragraph 9(c) below,
Tenant shall not be required to make or, except as provided in Paragraph 4
above, pay for, alterations, improvements or structural changes to the Premises
or the Building not related to Tenant's specific use of the Premises unless the
requirement for such alterations, improvements or changes is imposed as a result
of any improvements or additions made or proposed to be made at Tenant's
request; (2) all recorded covenants, conditions and restrictions affecting the
Project ("PRIVATE RESTRICTIONS") now in force or which may hereafter be in
force; and (3) the Rules and Regulations (as defined in Paragraph 41 of this
Lease). Without limiting the generality of the foregoing, to the extent Landlord
is required by the city or county in which the Building is located to maintain
carpooling and public transit programs, Tenant shall cooperate in the
implementation and use of those programs by and among Tenant's employees. The
judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any Laws or Private Restrictions, shall be
conclusive of that fact as between Landlord and Tenant.

      (c) COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. Landlord and; Tenant
hereby agree and acknowledge that the Premises, the Building; and/or the Project
may be

                                       9
<PAGE>

subject to, among other Laws, the requirements of the Americans with
Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq., including,
but not limited to Title III thereof, and all regulations and guidelines related
thereto, together with any and all laws, rules, regulations, ordinances, codes
and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, as the same may be in effect on the date of this Lease and
may be hereafter modified, amended or supplemented (collectively, the "ADA").
Any Tenant Improvements to be constructed hereunder shall be in compliance with
the requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly complies with all requirements of the ADA. If any
barrier removal work or other work is required to the Building, the Common Areas
or the Project under the ADA, then such work shall be the responsibility of
Landlord. Except as otherwise expressly provided in this provision, Tenant shall
be responsible at its sole cost and expense for fully and faithfully complying
with all applicable requirements of the ADA with respect to the Premises and
Tenant's use and occupancy of the Premises. Within ten (10) days after receipt,
Tenant shall advise Landlord in writing, and provide Landlord with copies of (as
applicable), any notices alleging violation of the ADA relating to any portion
of the Premises, the Building or the Project; any claims made or threatened
orally or in writing regarding noncompliance with the ADA and relating to any
portion of the Premises, the Building, or the Project; or any governmental or
regulatory actions or investigations instituted or threatened regarding
noncompliance with the ADA and relating to any portion of the Premises, the
Building or the Project. Tenant shall and hereby agrees to protect, defend (with
counsel acceptable to Landlord) and hold Landlord and Landlord's Agents harmless
and indemnify Landlord and Landlord's Agents from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
attorneys' fees, costs of court and expenses necessary in the prosecution or
defense of any litigation including the enforcement of this provision) arising
from or in any way related to, directly or indirectly, Tenant's or Tenant's
Agents' violation or alleged violation of the ADA. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease

      (d) NO ROOF ACCESS. At no time during the Term shall Tenant have access to
the roof of the Building or have the right to install, operate or maintain a
satellite-earth communications station (antenna and associated equipment),
microwave equipment and/or an FM antenna on the Building or the Project without
first notifying Landlord and obtaining the prior consent of Landlord. Landlord
may impose such restrictions on access to and use of the roof area as Landlord
deems necessary to protect the safety of individuals and to preserve the
integrity of the roof membrane.

      10. ACCEPTANCE OF PREMISES

      By entry hereunder, Tenant accepts the Premises as suitable for Tenant's
intended use and as being in good and sanitary operating order, condition and
repair, AS IS, and without representation or warranty by Landlord as to the
condition, use or occupancy which may be made thereof. Any exceptions to the
foregoing must be by written agreement executed by Landlord and Tenant.

      11. SURRENDER

      Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord (a)
in good condition and repair (damage by acts of Cod, fire, and normal wear and
tear excepted), but with all interior walls repaired and cleaned, any carpets
and all floors vacuumed, all non-working light bulbs and ballasts replaced and
all roll-up doors, docks, dock levelers and plumbing fixtures in good condition
and working order, and (b) otherwise in accordance with Paragraph 32(h) of this
Lease. Normal wear and tear shall not include any damage or deterioration to the
floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains on any portion of
the floors), and any damage or deterioration that would have been prevented by
proper

                                       10
<PAGE>

maintenance by Tenant, or Tenant otherwise performing all of its obligations
under this Lease. On or before the expiration or sooner termination of this
Lease, (i) Tenant shall remove all of Tenant's Property (as hereinafter defined)
and Tenant's signage from the Premises, the Building and the Project and repair
any damage caused by such removal, and (ii) Landlord may, by notice to Tenant
given not later than ninety (90) days prior to the Expiration Date (except in
the event of a termination of this Lease prior to the scheduled Expiration Date,
in which event no advance notice shall be required), require Tenant at Tenant's
expense to remove any or all Alterations and to repair any damage caused by such
removal. Any of Tenant's Property not so removed by Tenant as required herein
shall be deemed abandoned and may be stored, removed, and disposed of by
Landlord at Tenant's expense, and Tenant waives all claims against Landlord for
any damages resulting from Landlord's retention and disposition of such
property; provided, however, that Tenant shall remain liable to Landlord for all
costs incurred in storing and disposing of such abandoned property of Tenant.
All Tenant Improvements and Alterations except those which Landlord requires
Tenant to remove shall remain in the Premises as the property of Landlord.

      12. ALTERATIONS AND ADDITIONS

      (a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an "Alteration" and
collectively as the "ALTERATIONS") to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the structural portions of the Premises, the Building or the
Project or the Systems serving the Premises, the Building and/or the Project or
any portion thereof. If Landlord fails to given notice granting or denying
consent to any such Alteration within five (5) business days following receipt
by Landlord of Tenant's written request, Landlord shall be deemed to have
consented to such Alteration. Landlord shall notify Tenant at the time of
Landlord's approval of any Alteration whether Landlord will require the removal
of such Alteration upon the expiration of the Term.

      Notwithstanding any provision of this Section 12(a) to the contrary,
Tenant may make Alterations to the interior of the Premises which are
non-structural and do not modify or alter the mechanical (including heating,
ventilating and air conditioning), electrical or plumbing systems of the
Premises if the cost of such Alterations, either individually or in the
aggregate, does not exceed Twenty-Five Thousand Dollars ($25,000.00) during any
calendar year.

      (b) Any Alteration to the Premises shall be at Tenant's sole cost and
expense, in compliance with all applicable Laws and all requirements requested
by Landlord, including, without limitation, the requirements of any insurer
providing coverage for the Premises or the Project or any part thereof, and in
accordance with plans and specifications approved in writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord. In connection with any Alterations, Tenant shall deliver plans and
specifications therefor to Landlord. As a further condition to giving consent,
Landlord may require Tenant to provide Landlord, at Tenant's sole cost and
expense, a payment and performance bond in form acceptable to Landlord, in a
principal amount not less than one and one-half times the estimated costs of
such Alterations, to ensure Landlord against any liability for mechanic's and
materialmen's liens and to ensure completion of work. Before Alterations may
begin, valid building permits or other permits or licenses required must be
furnished to Landlord, and, once the Alterations begin, Tenant will diligently
and continuously pursue their completion. Landlord may monitor construction of
the Alterations and Tenant shall reimburse Landlord for its costs (including,
without limitation, the costs of any construction manager retained by Landlord)
in reviewing plans and documents and in monitoring construction. Tenant shall
maintain during the course of construction, at its sole cost and expense,
builders' risk insurance for the amount of the completed value of the
Alterations on an all-risk non-reporting form covering all improvements under
construction, including building materials, and other insurance in amounts and
against such risks as

                                       11
<PAGE>

Landlord shall reasonably require in connection with the Alterations. In
addition to and without limitation on the generality of the foregoing, Tenant
shall ensure, that its contractor(s) procure and maintain in full force and
effect during the course of construction a "broad form" commercial general
liability and property damage policy of insurance naming Landlord, Tenant
Landlord's Investment Advisors, any property manager designated by Landlord and
Landlord's lenders as additional insureds. The minimum limit of coverage of the
aforesaid policy shall be in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of more than one person in any one accident
or occurrence, and shall contain a severability of interest clause or a cross
liability endorsement. Such insurance shall further insure Landlord and Tenant
against liability for property damage of at least One Million Dollars
($1,000,000.00).

      (c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, window coverings, wall
covering and paneling, built-in cabinet work and carpeting installations made by
Tenant, together with all property that has become an integral part of the
Premises or the Building, shall at once be and become the property of Landlord,
and shall not be deemed trade fixtures or Tenant's Property. If requested by
Landlord, Tenant will pay, prior to the commencement of construction, an amount
determined by Landlord necessary to cover the costs of demolishing any
Alterations approved by Landlord the removal of which is required by Landlord
pursuant to Paragraph 12(a) and/or the cost of returning the Premises and the
Building to its condition prior to such Alterations.

      (d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's prior
written consent, which consent shall not be unreasonably withheld. If Landlord
fails to give notice granting or denying consent to any such installation within
five (5) business days following receipt by Landlord of Tenant's written
request, Landlord shall be deemed to have consented to such request. If
Landlord gives such consent, all equipment must be installed within the Premises
and, at the request of Landlord made at any time prior to the expiration of the
Term, removed upon the expiration or sooner termination of this Lease and the
Premises restored to the same condition as before such installation. The
foregoing restriction shall not apply to Tenant's manufacture and testing of
fiberoptic and other communications equipment in the Premises.

      (e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the written permission of Landlord. Landlord may refuse to grant
such permission unless Tenant agrees to pay the costs to Landlord for
installation of supplementary air conditioning capacity or electrical systems
necessitated by such equipment.

      (f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.

      (g) Tenant shall not, at any time prior to or during the Term, directly or
indirectly employ, or permit the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
if it is reasonably foreseeable that such employment will materially interfere
or cause any material conflict with other contractors, mechanics, or laborers
engaged in the construction, maintenance or operation of the Project by
Landlord, Tenant or others. In the event of any such interference or conflict,
Tenant, upon demand of Landlord, shall cause all contractors, mechanics or
laborers causing such interference or conflict to leave the Project immediately.

                                       12
<PAGE>

      13. MAINTENANCE AND REPAIRS OF PREMISES

      (a) MAINTENANCE BY TENANT. Throughout the Term, Tenant shall, at its sole
expense, (1) keep and maintain in good order and condition the Premises, and
repair and replace every part thereof, including glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers; interior lighting (including, without limitation, light bulbs and
ballasts), those portions of the plumbing and electrical systems exclusively
serving the Premises located within the Premises, all communications systems
serving the Premises, Tenant's signage, interior demising walls and partitions,
equipment, interior painting and interior walls and floors, and the roll-up
doors, ramps and dock equipment, including, without limitation, dock bumpers,
dock plates, dock seals, dock levelers and dock lights located in or on the
Premises (excepting only those portions of the Building or the Project to be
maintained by Landlord, as provided in Paragraph 13(b) below), (2) furnish all
expendables, including light bulbs, paper goods and soaps, used in the Premises,
and (3) keep and maintain in good order and condition, repair and replace all of
Tenant's security systems in or about or serving the Premises and, except to the
extent that Landlord notifies Tenant in writing of its intention to arrange for
such monitoring, cause the fire alarm systems serving the Premises to be
monitored by a monitoring or protective services firm approved by Landlord in
writing. Tenant shall not do nor shall Tenant allow Tenant's Agents to do
anything to cause any damage, deterioration or unsightliness to the Premises,
the Building or the Project.

      (b) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs 5(c),
13(a), 21 and 22, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's
Proportionate Share(s) of the cost and expense of the following items, Landlord
agrees to repair and maintain the following items: the roof coverings (provided
that Tenant installs no additional air conditioning or other equipment on the
roof that damages the roof coverings, in which event Tenant shall pay all costs
resulting from the presence of such additional equipment); the Systems serving
the Premises and the Building, excluding those portions of the plumbing and
electrical systems exclusively serving the Premises located within the Premises;
and the Parking Areas, pavement, landscaping, sprinkler systems, sidewalks,
driveways, curbs, and lighting systems in the Common Areas. Subject to the
provisions of Paragraphs 13(a), 21 and 22, Landlord, at its own cost and
expense, agrees to repair and maintain the following items: the structural
portions of the roof (specifically excluding the roof coverings), the
foundation, the footings, the floor slab, and the load bearing walls and
exterior walls of the Building (excluding any glass and any routine maintenance,
including, without limitation, any painting, sealing, patching and waterproofing
of such walls). Notwithstanding anything in this Paragraph 13 to the contrary,
Landlord shall have the right to either repair or to require Tenant to repair
any damage to any portion of the Premises, the Building and/or the Project
caused by or created due to any act, omission, negligence or willful misconduct
of Tenant or Tenant's Agents and to restore the Premises, the Building and/or
the Project, as applicable, to the condition existing prior to the occurrence of
such damage; provided, however, that in the event Landlord elects to perform
such repair and restoration work, Tenant shall reimburse Landlord upon demand
for all costs and expenses incurred by Landlord in connection therewith.
Landlord's obligation hereunder to repair and maintain is subject to the
condition precedent that Landlord shall have received written notice of the need
for such repairs and maintenance and a reasonable time to perform such repair
and maintenance. Tenant shall promptly report in writing to Landlord any
defective condition known to it which Landlord is required to repair, and
failure to so report such defects shall make Tenant responsible to Landlord for
any liability incurred by Landlord by reason of such condition.

      14. LANDLORD'S INSURANCE

      Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project. Tenant shall, at its sole
cost and expense, comply with any and all reasonable requirements pertaining to
the Premises, the Building and the Project of any insurer necessary for the
maintenance of reasonable fire and commercial general liability insurance,
covering the Building and the Project. Landlord may maintain "Loss of Rents"
insurance, insuring that the Rent will be paid in a

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<PAGE>

timely manner to Landlord for a period of at least twelve (12) months if the
Premises, the Building or the Project or any portion thereof are destroyed or
rendered unusable or inaccessible by any cause insured against under this Lease.

      15. TENANT'S INSURANCE

      (a) COMMERCIAL GENERAL LIABILITY INSURANCE. Tenant shall, at Tenant's
expense, secure and keep in force a "broad form" commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord, Landlord's investment advisors and agents from time to time,
including, without limitation, UBS Brinson Realty Investors LLC (collectively,
"LANDLORD'S INVESTMENT ADVISORS"), and Landlord's lenders as additional
insureds, against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises. The minimum limit of coverage of such policy shall
be in the amount of not less than Three Million Dollars ($3,000,000.00) for
injury or death of one person in any one accident or occurrence and in the
amount of not less than Three Million Dollars ($3,000,000.00) for injury or
death of more than one person in any one accident or occurrence, shall include
an extended liability endorsement providing contractual liability coverage
(which shall include coverage for Tenant's indemnification obligations in this
Lease), and shall contain a severability of interest clause or a cross liability
endorsement. Such insurance shall further insure Landlord and Tenant against
liability for property damage of at least Three Million Dollars ($3,000,000.00).
Landlord may from time to time require reasonable increases in any such limits
if Landlord believes that additional coverage is necessary or desirable. The
limit of any insurance shall not limit the liability of Tenant hereunder. No
policy maintained by Tenant under this Paragraph 15(a) shall contain a
deductible greater than ten thousand dollars ($10,000.00). No policy shall be
cancelable or subject to reduction of coverage without thirty (30) days prior
written notice to Landlord. Such policies of insurance shall be issued as
primary policies and not contributing with or in excess of coverage that
Landlord may carry, by an insurance company authorized to do business in the
state/commonwealth in which the Premises are located for the issuance of such
type of insurance coverage and rated B+:XIII or better in Best's Key Rating
Guide.

      (b) PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnishings, trade or
business fixtures and equipment (collectively, "TENANT'S PROPERTY") on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than two thousand
five hundred dollars ($2,500.00). During the term of this Lease the proceeds
from any such policy or policies of insurance shall be used for the repair or
replacement of the fixtures and equipment so insured. Landlord shall have no
interest in the insurance upon Tenant's equipment and fixtures and will sign
all documents reasonably necessary in connection with the settlement of any
claim or loss by Tenant. Landlord will not carry insurance on Tenant's
possessions.

      (c) WORKER'S COMPENSATION INSURANCE; EMPLOYER'S LIABILITY INSURANCE.
Tenant shall, at Tenant's expense, maintain in full force and effect worker's
compensation insurance with not less than the minimum limits required by law,
and employer's liability insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000).

      (d) EVIDENCE OF COVERAGE. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least thirty (30)
days prior to expiration of each policy, furnish Landlord with certificates of
renewal thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to Landlord and the other parties named as
additional insureds as required in this Lease (except for cancellation for
nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days notice has been given to Landlord).

                                       14
<PAGE>
        16. INDEMNIFICATION

     (a) OF LANDLORD. Tenant shall defend, protect, indemnify and hold, harmless
Landlord and Landlord's Agents against and from any and all claims, suits,
liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees, costs and
disbursements) arising from (1) the use of the Premises, the Building or the
Project by Tenant or Tenant's Agents, or from any activity done, permitted or
suffered by Tenant or Tenant's Agents in or about the Premises, the Building or
the Project, and (2) any act, neglect, fault, willful misconduct or omission of
Tenant or Tenant's Agents, or from any breach or default in the terms of this
Lease by Tenant or Tenant's Agents, and (3) any action or proceeding brought on
account of any matter in items (1) or (2). If any action or proceeding is
brought against Landlord by reason of any such claim, upon notice from Landlord,
Tenant shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. As a material part of the consideration to Landlord,
Tenant hereby releases Landlord and Landlord's Agents from responsibility for,
waives its entire claim of recovery for and assumes all risk of (i) damage to
property or injury to persons in or about the Premises, the Building or the
Project from any cause whatsoever (except that which is caused by the sole
active gross negligence or willful misconduct of Landlord or Landlord's Agents
or by the failure of Landlord to observe any of the terms and conditions of this
Lease, if such failure has persisted for an unreasonable period of time after
written notice of such failure), or (ii) loss resulting from business
interruption or loss of income at the Premises. The obligations of Tenant under
this Paragraph 16 shall survive any termination of this Lease.

     (b) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.

     (c) OF TENANT. Landlord shall indemnify and hold harmless Tenant and
Tenant's Agents against and from any and all claims, suits, liabilities,
judgments, costs, demands, causes of action and expenses (including, without
limitation, reasonable attorney's fees) arising from the gross negligence or
willful misconduct of Landlord or Landlord's Agents.

        17. SUBROGATION

     Landlord and Tenant hereby mutually waive any claim against the other and
its Agents for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
now agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and shall have their insurance policies endorsed to prevent
the invalidation of the insurance coverage because of these waivers. Nothing in
this Paragraph 17 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.

        18. SIGNS

     Tenant shall not place or permit to be placed in, upon, or about the
Premises, the Building or the Project any exterior lights, decorations,
balloons, flags, pennants, banners, advertisements or notices, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior the Premises
(including without limitation, being viewed from any of the interior Common
Areas) without obtaining Landlord's prior written consent. Tenant shall remove
any sign, advertisement or notice placed on the Premises, the Building or the

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<PAGE>

Project by Tenant upon the expiration of the Term or sooner termination of this
Lease, and Tenant shall repair any damage or injury to the Premises, the
Building or the Project caused thereby, all at Tenant's expense. If any signs
are not removed, or necessary repairs not made, Landlord shall have the right to
remove the signs and repair any damage or injury to the Premises, the Building
or the Project at Tenant's sole cost and expense. In addition to any other
rights or remedies available to Landlord, in the event that Tenant erects or
installs any sign in violation of this Paragraph 18, and Tenant fails to remove
same within three (3) business days after notice from Landlord or erects or
installs a similar sign in the future, Landlord shall have the right to charge
Tenant a signage fee equal to $100.00 per day for each day thereafter that such
sign is not removed or a similar sign is installed or erected in the future.
Landlord's election to charge such fee shall not be deemed to be a consent by
Landlord to such sign and Tenant shall remain obligated to remove such sign in
accordance with Landlord's notice. All signage must comply with the criteria set
forth on EXHIBIT I attached hereto and made a part hereof.

        19. FREE FROM LIENS

     Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the lien to be released of
record by payment or posting of a proper bond, Landlord shall have in addition
to all other remedies provided herein and by law the right but not the
obligation to cause same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, attorneys' fees) shall be payable to Landlord by Tenant upon
demand. Landlord shall have the right, at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises, the Building and the
Project, from mechanics' and materialmen's liens. Tenant shall give to Landlord
at least five (5) business days' prior written notice of commencement of any
repair or construction on the Premises.

        20. ENTRY BY LANDLORD

     Tenant shall permit Landlord and Landlord's Agents to enter into and upon
the Premises at all reasonable times, upon reasonable notice (except in the case
of an emergency, for which no notice shall be required), and subject to Tenant's
reasonable security arrangements which require escort by a Tenant employee, for
the purpose of inspecting the same or showing the Premises to prospective
purchasers, lenders or tenants or to alter, improve, maintain and repair the
Premises or the Building as required or permitted of Landlord under the terms
hereof, or for any other business purpose, without any rebate of Rent and
without any liability to Tenant for any loss of occupation or quiet enjoyment of
the Premises thereby occasioned (except for actual damages resulting from the
sole active gross negligence or willful misconduct of Landlord); and Tenant
shall permit Landlord to post notices of non-responsibility and ordinary "for
sale" or "for lease" signs. No such entry shall be construed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction or
constructive eviction of Tenant from the Premises. Landlord may temporarily
close entrances, doors, corridors, elevators or other facilities without
liability to Tenant by reason of such closure in the case of an emergency and
when Landlord otherwise deems such closure necessary.

        21. DESTRUCTION AND DAMAGE

     (a) If the Premises are damaged by fire or other perils covered by extended
coverage insurance, Tenant shall give Landlord immediate notice thereof and
Landlord shall, at Landlord's option:

           (1) In the event of total destruction (which shall mean destruction
or damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full

                                       16
<PAGE>

force and effect; or not to repair or restore the Premises, in which event this
Lease shall terminate. Landlord shall give Tenant written notice of its
intention within sixty (60) days after the date (the "CASUALTY DISCOVERY DATE")
Landlord obtains actual knowledge of such destruction. If Landlord elects not to
restore the Premises, this Lease shall be deemed to have terminated as of the
Casualty Discovery Date.

           (2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction (less deductibles) and, if the damage thereto is such
that the Premises may be substantially repaired or restored to its condition
existing immediately prior to such damage or destruction within two hundred
seventy (270) days from the Casualty Discovery Date, Landlord shall commence and
proceed diligently with the work of repair and restoration, in which event the
Lease shall continue in full force and effect. If such repair and restoration
requires longer than two hundred seventy (270) days or if the insurance proceeds
therefor (plus any amounts Tenant may elect or is obligated to contribute) are
not sufficient to cover the cost of such repair and restoration, Landlord may
elect either to so repair and restore, in which event the Lease shall continue
in full force and effect, or not to repair or restore, in which event the Lease
shall terminate. In either case, Landlord shall give written notice to Tenant of
its intention within sixty (60) days after the Casualty Discovery Date. If
Landlord elects not to restore the Premises, this Lease shall be deemed to have
terminated as of the Casualty Discovery Date.

           (3) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord may elect to terminate this Lease by
written notice of such election given to Tenant within thirty (30) days after
the Casualty Discovery Date.

     (b) If the Premises are damaged by any peril not covered by fire and
extended coverage insurance, or if the Premises are damaged by earthquake and
Landlord either does not maintain earthquake insurance or the dollar amount of
the deductible on any earthquake insurance maintained by Landlord exceeds
$250,000, then Landlord may elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
Casualty Discovery Date. If Landlord elects not to restore the Premises, this
Lease shall be deemed to have terminated as of the date on which Tenant
surrenders possession of the Premises to Landlord, except that if the damage to
the Premises materially impairs Tenant's ability to continue its business
operations in the Premises, then this Lease shall be deemed to have terminated
as of the date such damage occurred.

     (c) Notwithstanding anything to the contrary in this Paragraph 21, Landlord
shall have the option to terminate this Lease, exercisable by notice to Tenant
within sixty (60) days after the Casualty Discovery Date, in each of the
following instances:

           (1) If more than twenty-five percent (25%) of the full insurable
value of the Building or the Project is damaged or destroyed, regardless of
whether or not the Premises is destroyed.

           (2) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
one hundred eighty (180) days from the Casualty Discovery Date, regardless of
whether or not the Premises is destroyed.

           (3) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration, regardless of whether or not the Premises is
destroyed.

                                       17
<PAGE>

           (4) If the Building or the Project or any portion thereof is damaged
or destroyed during the last twelve (12) months of the Term regardless of
whether or not the Premises is destroyed.

     (d) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration, but only to the extent of rental abatement insurance proceeds
received by Landlord; provided, however, that Tenant shall not be entitled to
such abatement to the extent that such damage or destruction resulted from the
acts or inaction of Tenant or Tenant's Agents. Except as expressly provided in
the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any damage to or destruction of the Premises, the Building or the
Project or the repair or restoration thereof, including, without limitation, any
cost, loss or expense resulting from any loss of use of the whole or any part of
the Premises, the Building or the Project and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.

     (e) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial tenant improvements,
if any, constructed by Landlord in the Premises pursuant to the terms of this
Lease, substantially: to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant's expense, Tenant's Alterations which were not constructed by
Landlord.

        22. CONDEMNATION

     (a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the parking areas for the Building or the Project is
taken for any public or quasi-public purpose by any lawful governmental power or
authority, by exercise of the right of appropriation, inverse condemnation,
condemnation or eminent domain, or sold to prevent such taking (each such event
being referred to as a "CONDEMNATION"), Landlord may, at its option, terminate
this Lease as of the date title vests in the condemning party. If twenty-five
percent (25%) or more of the Premises is taken and if the Premises remaining
after such Condemnation and any repairs by Landlord would be untenantable for
the conduct of Tenant's business operations, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. If
either party elects to terminate this Lease as provided herein, such election
shall be made by written notice to the other party given within thirty (30) days
after the nature and extent of such Condemnation have been finally determined.
If neither Landlord nor Tenant, elects to terminate this Lease to the extent
permitted above, Landlord shall promptly proceed to restore the Premises, to the
extent of any Condemnation award received by Landlord, to substantially the same
condition as existed prior to such Condemnation, allowing for the reasonable
effects of such Condemnation, and a proportionate abatement shall be made to the
Base Rent corresponding to the time during which, and to the portion of the
floor area of the Premises (adjusted for any increase thereto resulting from any
reconstruction) of which, Tenant is deprived on account of such Condemnation and
restoration, as reasonably determined by Landlord. Except as expressly provided
in the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any Condemnation or the repair or restoration of the Premises, the
Building or the Project or the parking areas for the Building or the Project
following such Condemnation, including, without limitation, any cost, loss or
expense resulting from any loss of use of the whole or any part of the Premises,
the Building, the Project or the parking areas and/or any inconvenience or
annoyance occasioned by such Condemnation, repair or restoration.

     (b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with

                                       18
<PAGE>
any Condemnation, and Tenant shall have no claim against Landlord for the value
of any unexpired term of this Lease or otherwise; provided, however, that Tenant
shall be entitled to receive any award separately allocated by the condemning
authority to Tenant for Tenant's relocation expenses or the value of Tenant's
Property (specifically excluding fixtures, Alterations and other components of
the Premises which under this Lease or by law are or at the expiration of the
Term will become the property of Landlord), provided that such award does not
reduce any award otherwise allocable or payable to Landlord.

        23. ASSIGNMENT AND SUBLETTING

     (a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (2) assign or
transfer this Lease or any interest herein, sublease the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of
Landlord, which consent shall not be withheld unreasonably as set forth below in
this Paragraph 23 provided that Tenant is not then in Default under this Lease
nor is any event then occurring which with the giving of notice or the passage
of time, or both, would constitute a Default hereunder. A transfer of greater
than a fifty percent (50%) interest (whether stock, partnership interest,
membership interest or otherwise) of Tenant, either in one (1) transaction or a
series of transactions shall be deemed to be an assignment under this Lease if
such transfer results in a change in the management of Tenant or the business
conducted by Tenant on the Premises. When Tenant requests Landlord's consent to
such assignment or subletting, it shall notify Landlord in writing of the name
and address of the proposed assignee or subtenant and the nature and character
of the business of the proposed assignee or subtenant and shall provide current
and prior financial statements for the proposed assignee or subtenant, which
financial statements shall be audited to the extent available and shall in any
event be prepared in accordance with generally accepted accounting principles.
Tenant shall also provide Landlord with a copy of the proposed sublease or
assignment agreement, including all material terms and conditions thereof.
Landlord shall have the option, to be exercised within thirty (30) days of
receipt of the foregoing, to (1) terminate this Lease as of the commencement
date stated in the proposed sublease or assignment, (2) sublease or take an
assignment, as the case may be, from Tenant of the interest, or any portion
thereof, in this Lease and/or the Premises that Tenant proposes to assign or
sublease, on the same terms and conditions as stated in the proposed sublet or
assignment agreement, (3) consent to the proposed assignment or sublease, or (4)
refuse its consent to the proposed assignment or sublease, providing that such
consent shall not be unreasonably withheld so long as Tenant is not then in
Default under this Lease nor is any event then occurring which with the giving
of notice or the passage of time, or both, would constitute a Default hereunder.
In the event Landlord elects to terminate this Lease or sublease or take an
assignment from Tenant of the interest, or portion thereof, in the Lease and/or
the Premises that Tenant proposes to assign or sublease as provided in the
foregoing clauses (1) and (2), respectively, then Landlord shall have the
additional right to negotiate directly with Tenant's proposed assignee or
subtenant and to enter into a direct lease or occupancy agreement with such
party on such terms as shall be acceptable to Landlord in its sole and absolute
discretion, and Tenant hereby waives any claims against Landlord related
thereto, including, without limitation, any claims for any compensation or
profit related to such lease or occupancy agreement.

     (b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable
criteria including, but not limited to, the following: (1) whether or not the
proposed subtenant or assignee is engaged in a business which, and the use of
the Premises will be in an manner which, is in keeping with the then character
and nature of all other tenancies in the Project, (2) whether the use to be made
of the Premises by the proposed subtenant or assignee will conflict with any
so-called "exclusive" use then in favor of any other tenant of the Building or
the Project, and whether such use would be prohibited by any other portion of
this Lease, including, but not limited to, any rules and regulations then in
effect, or under applicable Laws, and whether such use imposes a greater load
upon the Premises and the Building and Project services then imposed by Tenant,
(3) the business reputation of the

                                       19
<PAGE>

proposed individuals who will be managing and operating the business operations
of the assignee or subtenant, and the long-term financial and competitive
business prospects of the proposed assignee or subtenant, and (4) the
creditworthiness and financial stability of the proposed assignee or subtenant
in light of the responsibilities involved. In any event, Landlord may withhold
its consent to any assignment or sublease, if (i) the actual use proposed to be
conducted in the Premises or portion thereof conflicts with the provisions of
Paragraph 9(a) or (b) above or with any other lease which restricts the use to
which any space in the Building or the Project may be put, (ii) the proposed
assignment or sublease requires alterations, improvements or additions to the
Premises or portions thereof, (iii) the portion of the Premises proposed to be
sublet is irregular in shape and/or does not permit safe or otherwise
appropriate means of ingress and egress, or does not comply with governmental
safety and other codes, (iv) the proposed sublessee or assignee is either a
governmental agency or instrumentality thereof; (v) the proposed sublessee or
assignee, or any person or entity which directly or indirectly, controls, is
controlled by, or is under common control with, the proposed sublessee or
assignee, either (x) occupies space in the Project at the time of the request
for consent, or (y) is negotiating with Landlord or has negotiated with Landlord
during the six (6) month period immediately preceding the date Landlord receives
Tenant's request for consent, to lease space in the Project. As a further
condition to any rights Tenant may have under this Lease to sublet all or any
portion of the Premises, Tenant shall offer space for sublease at a starting
base rental rate no lower than Landlord's then current highest asking base
rental rate for comparable space in the Project which is then on the market for
direct lease. If there is no comparable space in the Project then currently on
the market for direct lease, Tenant shall offer the space for sublease at a
starting base rental rate no lower than the fair market rental rate for such
space.

     (c) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, seventy-five percent (75%) of
the excess, if any, rent and any additional rent or other concessions payable by
the assignee or sublessee to Tenant, less reasonable and customary market-based
leasing commissions and transaction costs (excluding tenant improvement costs),
if any, incurred by Tenant in connection with such assignment or sublease, which
commissions shall, for purposes of the aforesaid calculation, be amortized on a
straight-line basis over the term of such assignment or sublease, minus (2) Base
Rent plus Additional Rent allocable to that part of the Premises affected by
such assignment or sublease pursuant to the provisions of this Lease. The
assignment or sublease agreement, as the case may be, after approval by
Landlord, shall not be amended without Landlord's prior written consent, and
shall contain a provision directing the assignee or subtenant to pay the rent
and other sums due thereunder directly to Landlord upon receiving written notice
from Landlord that Tenant is in default under this Lease with respect to the
payment of Rent. In the event that, notwithstanding the giving of such notice,
Tenant collects any rent or other sums from the assignee or subtenant, then
Tenant shall hold such sums in trust for the benefit of Landlord and shall
immediately forward the same to Landlord. Landlord's collection of such rent and
other sums shall not constitute an acceptance by Landlord of attornment by such
assignee or subtenant. A consent to one assignment, subletting, occupation or
use shall not be deemed to be a consent to any other or subsequent assignment,
subletting, occupation or use, and consent to any assignment or subletting shall
in no way relieve Tenant of any liability under this Lease. Any assignment or
subletting without Landlord's consent shall be void, and shall, at the option of
Landlord, constitute a Default under this Lease.

     (d) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain
fully and primarily responsible and liable for the payment of the Rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignment or
subletting).

     (e) Tenant shall pay Landlord's reasonable out-of-pocket costs (including,
without limitation, the fees of Landlord's counsel), incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.

                                       20
<PAGE>

     (f)

     (g) If this Lease is assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect Rent from the assignee. If the
Premises or any part thereof is sublet or used or occupied by anyone other than
Tenant, whether or not in violation of this Lease, Landlord may, after an Event
of Default by Tenant, collect Rent from the subtenant or occupant. In either
event, Landlord may apply the net amount collected to Rent, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of any
of the provisions of this Paragraph 23, or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the further
performance by Tenant of Tenant's obligations under this Lease. The consent by
Landlord to an assignment, mortgaging, pledging, encumbering, transfer, use,
occupancy or subletting pursuant to any provision of this Lease shall not,
except as otherwise provided herein, in any way be considered to relieve Tenant
from obtaining the express consent of Landlord to any other or further
assignment, mortgaging, pledging, encumbering, transfer, use, occupancy or
subletting. References in this Lease to use or occupancy by anyone other than
Tenant shall not be construed as limited to subtenants and those claiming under
or through subtenants but as including also licensees or others claiming under
or through Tenant, immediately or remotely. The listing of any name other than
that of Tenant on any door of the Premises or on any directory or in any
elevator in the Building, or otherwise, shall not, except as otherwise provided
herein, operate to vest in the person so named any right or interest in this
Lease or in the Premises, or be deemed to constitute, or serve as a substitute
for, or any waiver of, any prior consent of Landlord required under this
Paragraph 23.

     (h) Each subletting and/or assignment pursuant to this Paragraph shall be
subject to all of the covenants, agreements, terms, provision and conditions
contained in this Lease and each of the covenants, agreements, terms, provisions
and conditions of this Lease shall be automatically incorporated therein. If
Landlord shall consent to, or reasonably withhold its consent to, any proposed
assignment or sublease, Tenant shall indemnify, defend and hold harmless
Landlord against and from any and all loss, liability, damages, costs and
expenses (including reasonable counsel fees) resulting from any claims that may
be made against Landlord by the proposed assignee or sublessee or by any brokers
or other persons claiming a commission or similar in connection with the
proposed assignment or sublease.

     (i) Notwithstanding anything to the contrary contained in this Paragraph
23, Tenant, upon written notice to Landlord, but without Landlord's consent, may
sublet all or any part of the Premises to one or more corporations or other
business entities (each herein called a "RELATED CORPORATION") which shall
control, be controlled by, or be under common control with, Tenant. Concurrently
with providing notice to Landlord of the making of a sublease to a Related
Corporation, Tenant shall be required to submit reasonably satisfactory evidence
that the sublessee is a Related Corporation, together with an executed
counterpart of the sublease. As used herein in defining Related Corporation,
control must include over fifty percent (50%) of the stock or other voting
interest of the controlled corporation or other business entity. Similar
evidence that such sublessee continues to be a Related Corporation shall be
furnished by Tenant to Landlord within fifteen (15) days after request therefor,
provided such request is not made more often than annually. Any sublease to a
Related Corporation shall not relieve Tenant from liability under this Lease.

        24. TENANT'S DEFAULT

     The occurrence of any one of the following events shall constitute an event
of default on the part of Tenant ("DEFAULT"):

     (a) The abandonment of the Premises by Tenant or any vacation or
abandonment of the Premises by Tenant which would cause any insurance policy to
be invalidated or otherwise lapse, in each of the foregoing cases irrespective
of whether or not Tenant is

                                       21
<PAGE>

then in monetary default under this Lease. Tenant agrees to notice and service
of notice as provided for in this Lease and waives any right to any other or
further notice or service of notice which Tenant may have under any statute or
law now or hereafter in effect;

     (b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of five (5) days after
the same is due;

     (c) A general assignment by Tenant or any guarantor or surety of Tenant's
obligations hereunder, including, without limitation, Lease Guarantor, if any,
(collectively, "GUARANTOR") for the benefit of creditors;

     (d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged, for a period of sixty (60) days;

     (e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;

     (f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person, or the failure by Tenant or any Guarantor to
maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;

     (g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 30 or 31 or 42, and/or failure by
Tenant to deliver to Landlord any financial statement within the time period and
in the manner required by Paragraph 40;

     (h) An assignment or sublease, or attempted assignment or sublease, of this
Lease or the Premises by Tenant contrary to the provision of Paragraph 23,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;

     (i) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;

     (j) Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
subparagraphs (b), (i) (1) or (m) herein or any other subparagraphs of this
Paragraph 24, which shall be governed by the notice and cure periods set forth
in such other subparagraphs), which failure continues for thirty (30) days after
written notice thereof from Landlord to Tenant, provided that, if Tenant has
exercised reasonable diligence to cure such failure and such failure cannot be
cured within such thirty (30) day period despite reasonable diligence, Tenant
shall not be in default under this subparagraph so long as Tenant thereafter
diligently and continuously prosecutes the cure to completion and actually
completes such cure within sixty (60) days after the giving of the aforesaid
written notice;

     (k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within three (3) days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any period of twelve (12) months;

     (l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. "Chronic
overuse" shall mean use by Tenant or Tenant's Agents of a number of parking
spaces greater than the number

                                       22
<PAGE>

of parking spaces set forth in the Basic Lease Information more than three (3)
times during the Term after written notice by Landlord;

     (m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and

     (n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within ten (10) days
after the date such lien or encumbrance is filed or recorded against the Project
or any part thereof.

        25. LANDLORD'S REMEDIES

     (a) TERMINATION. In the event of any Default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:

           (1) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus

           (2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus

           (3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus

           (4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, (A) any costs or expenses incurred by
Landlord (1) in retaking possession of the Premises; (2) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering, remodeling or
rehabilitating the Premises or any affected portions of the Building or the
Project, including such actions undertaken in connection with the reletting or
attempted reletting of the Premises to a new tenant or tenants; (3) for leasing
commissions, advertising costs and other expenses of reletting the Premises; or
(4) in carrying the Premises, including taxes, insurance premiums, utilities and
security precautions; (B) any unearned brokerage commissions paid in connection
with this Lease; (C) reimbursement of any previously waived or abated Base Rent
or Additional Rent or any free rent or reduced rental rate granted hereunder;
and (D) any concession made or paid by Landlord to the benefit of Tenant in
consideration of this Lease including, but not limited to, any moving
allowances, contributions, payments or loans by Landlord for tenant improvements
or build-out allowances (including without limitation, any unamortized portion
of the Tenant Improvement Allowance, such Tenant Improvement Allowance to be
amortized over the Term in the manner reasonably determined by Landlord), if
any, and any outstanding balance (principal and accrued interest) of the Tenant
Improvement Loan, if any), or assumptions by Landlord of any of Tenant's
previous lease obligations; plus

           (5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus

           (6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.

As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the

                                       23
<PAGE>

maximum rate permitted by law, whichever is less. As used in subparagraph (3)
above, the "worth at the time of award" is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of
award, plus one percent (1%). Tenant hereby waives for Tenant and all those
claiming under Tenant all right now or hereafter existing to redeem by order or
judgment of any court or by any legal process or writ, Tenant's right of
occupancy of the Premises after any termination of this Lease.

     (b) RE-ENTRY. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to reenter the Premises, by force if necessary, and remove all
persons and property from the Premises; such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of Tenant.

     (c) RELETTING. In the event of the abandonment of the Premises by Tenant or
in the event that Landlord shall elect to re-enter as provided in Paragraph
25(b) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph 25(a), Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord's sole discretion.
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (1) to
reasonable attorneys' fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (2) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (3) to the payment of any costs of such reletting; (4) to the payment
of the costs of any alterations and repairs to the Premises; (5) to the payment
of Rent due and unpaid hereunder; and (6) the residue, if any, shall be held by
Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder. Should that portion
of such rentals received from such reletting during any month, which is applied
to the payment of Rent hereunder, be less than the Rent payable during the month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.

     (d) TERMINATION. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.

     (e) CUMULATIVE REMEDIES. The remedies herein provided are not exclusive and
Landlord shall have any and all other remedies provided herein or by law or in
equity.

     (f) NO SURRENDER. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.

                                       24
<PAGE>

        26. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS

     (a) Without limiting the rights and remedies of Landlord contained in
Paragraph 25 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord's option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant's Agents.

     (b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord's option, without any obligation to do
so, to perform any of Tenant's covenants or obligations under this Lease (i)
without notice to Tenant in the case of an emergency, as determined by Landlord
in its sole and absolute judgment, or (ii) with notice to Tenant for
non-emergency circumstances, if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.

     (c) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the date of payment by Landlord at the lower of (1) twelve percent
(12%) per annum, or (2) the highest rate permitted by applicable law.

        27. ATTORNEY'S FEES

     (a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees and
disbursements. Any such attorneys' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
judgment.

     (b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant or in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys' fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.

        28. TAXES

     Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant or any
of Tenant's Property pursuant to Paragraph 12 is assessed and taxed with the
Project or Building, Tenant shall pay such taxes to Landlord within ten (10)
days after delivery to Tenant of a statement therefor.

        29. EFFECT OF CONVEYANCE

     The term "Landlord" as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and

                                       25
<PAGE>

relieved of all covenants and obligations of Landlord hereunder, and it shall be
deemed and construed, without further agreement between the parties and the
purchaser at any such sale, that the purchaser of the Building or the Project
has assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder.

        30. TENANT'S ESTOPPEL CERTIFICATE

     From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee an Estoppel Certificate in
substantially the form attached hereto as EXHIBIT E and with any other
statements reasonably requested by Landlord or its designee. Any such Estoppel
Certificate delivered pursuant to this Paragraph 30 may be relied upon by a
prospective purchaser of Landlord's interest or a mortgagee of Landlord's
interest or assignee of any mortgage upon Landlord's interest in the Premises.
If Tenant shall fail to provide such certificate within ten (10) days of receipt
by Tenant of a written request by Landlord as herein provided, such failure
shall, at Landlord's election, constitute a Default under this Lease, and Tenant
shall be deemed to have given such certificate as above provided without
modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee.

        31. SUBORDINATION

     This Lease, and all rights of Tenant hereunder, are and shall be subject
and subordinate to all ground leases, overriding leases and underlying leases
affecting the Building or the Project now or hereafter existing and each of the
terms, covenants and conditions thereto (the "SUPERIOR LEASE(S)"), and to all
mortgages which may now or hereafter affect the Building, the Property or any
of such leases and each of the terms, covenants and conditions thereto (the
"SUPERIOR MORTGAGE(S)"), whether or not such mortgages shall also cover other
lands, buildings or leases, to each and every advance made or hereafter to be
made under such mortgages, and to all renewals, modifications, replacements and
extensions of such leases and such mortgages and spreaders and consolidations of
such mortgages. This Paragraph shall be self-operative and no further instrument
of subordination shall be required. Tenant shall promptly execute, acknowledge
and deliver any reasonable instrument that Landlord, the lessor under any such
lease or the holder of any such mortgage or any of their respective successors
in interest may reasonably request to evidence such subordination; if Tenant
fails to execute, acknowledge or deliver any such instrument within ten (10)
business days after request therefor, Tenant hereby irrevocably constitutes and
appoints Landlord as Tenant's attorney-in-fact, coupled with an interest, to
execute and deliver any such instrument for and on behalf of Tenant. As used
herein the lessor of a Superior Lease or its successor in interest is herein
called "SUPERIOR LESSOR"; and the holder of a Superior Mortgage is herein called
"SUPERIOR MORTGAGEE".

     Notwithstanding the foregoing terms of this Paragraph 31, if a Superior
Lease or Superior Mortgage is hereafter placed against or affecting any or all
of the Building or the Premises or any or all of the Building and improvements
now or at any time hereafter constituting a part of or adjoining the Building,
Landlord shall use reasonable efforts to obtain an agreement from the holder
thereof in recordable form and substantially in the form attached hereto as
EXHIBIT F or otherwise in form and substance reasonably acceptable to Tenant,
whereby the holder of such Superior Lease or Superior Mortgage agrees that the
Tenant, upon paying the Base Rent and all of the Additional Rent and other
charges herein provided for, and observing and complying with the covenants,
agreements and conditions of this Lease on its part to be observed and complied
with, shall lawfully and quietly hold, occupy and enjoy the Premises during the
Term of this Lease (including any exercised renewal term), without hindrance or
interference from anyone claiming by or through said Superior Mortgagee or
Superior Lessor and that said Superior Mortgagee or Superior Lessor shall
respect Tenant's rights under the Lease and, upon succeeding to Landlord's
interest in the Building and Lease, shall observe and comply with all of
Landlord's duties under the Lease.

                                       26
<PAGE>

     If any Superior Lessor or Superior Mortgagee shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed (such party so succeeding to Landlord's rights
herein called "SUCCESSOR LANDLORD"), then Tenant shall attorn to and recognize
such Successor Landlord as Tenant's landlord under this Lease (without the need
for further agreement) and shall promptly execute and deliver any reasonable
instrument that such Successor Landlord may reasonably request to evidence such
attornment. This Lease shall continue in full force and effect as a direct lease
between the Successor Landlord and Tenant upon all of the terms, conditions and
covenants as are set forth in this Lease, except that the Successor Landlord
shall not (a) be liable for any previous act or omission of Landlord under this
Lease, except to the extent such act or omission shall constitute a continuing
Landlord default hereunder; (b) be subject to any offset, not expressly provided
for in this Lease; or (c) be bound by any previous modification of this Lease or
by any previous prepayment of more than one month's Base Rent, unless such
modification or prepayment shall have been expressly approved in writing by the
Successor Landlord (or predecessor in interest).

        32. ENVIRONMENTAL COVENANTS

     (a) Prior to executing this Lease, Tenant has completed, executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("INITIAL
DISCLOSURE CERTIFICATE"), a fully completed copy of which is attached hereto as
EXHIBIT G and incorporated herein by this reference. Tenant covenants,
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes the
Hazardous Materials which will be manufactured, treated, used or stored on or
about the Premises by Tenant or Tenant's Agents. Tenant shall, upon the request
of Landlord and at such other times as Tenant desires to manufacture, treat, use
or store on or about the Premises new or additional Hazardous Materials which
were not listed on the Initial Disclosure Certificate, complete, execute and
deliver to Landlord an updated Disclosure Certificate (each, an "UPDATED
DISCLOSURE CERTIFICATE") describing Tenant's then current and proposed future
uses of Hazardous Materials on or about the Premises, which Updated Disclosure
Certificates shall be in the same format as that which is set forth in EXHIBIT G
or in such updated format as Landlord may require from time to time. Tenant
shall deliver an Updated Disclosure Certificate to Landlord not less than thirty
(30) days prior to the date Tenant intends to commence the manufacture,
treatment, use or storage of new or additional Hazardous Materials on or about
the Premises, and Landlord shall have the right to approve or disapprove such
new or additional Hazardous Materials in its sole and absolute discretion.
Tenant shall make no use of Hazardous Materials on or about the Premises except
as described in the Initial Disclosure Certificate or as otherwise approved by
Landlord in writing in accordance with this Paragraph 32(a).

     (b) As used in this Lease, the term "HAZARDOUS MATERIALS" shall mean and
include any substance that is or contains (1) any "hazardous substance" as now
or hereafter defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA") (42
U.S.C. Section 9601 et seq.) or any regulations promulgated under CERCLA; (2)
any "hazardous waste" as now or hereafter defined in the Resource Conservation
and Recovery Act, as amended ("RCRA") (42 U.S.C. Section 6901 et seq.) or any
regulations promulgated under RCRA; (3) any substance now or hereafter regulated
by the Toxic Substances Control Act, as amended ("TSCA") (15 U.S.C. Section 2601
et seq.) or any regulations promulgated under TSCA; (4) petroleum, petroleum
by-products, gasoline, diesel fuel, or other petroleum hydrocarbons; (5)
asbestos and asbestos-containing material, in any form, whether friable or
non-friable; (6) polychlorinated biphenyls; (7) lead and lead-containing
materials; or (8) any additional substance, material or waste (A) the presence
of which on or about the Premises (i) requires reporting, investigation or
remediation under any Environmental Laws (as hereinafter defined), (ii) causes
or threatens to cause a nuisance on the Premises or any adjacent area or
property or poses or threatens to pose a hazard to the health or safety of
persons on the Premises or any adjacent area or property, or (iii) which, if it
emanated or migrated from the Premises, could constitute a trespass, or (B)
which is now or is hereafter classified or considered to be hazardous or toxic
under any Environmental Laws.

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<PAGE>

     (c) As used in this Lease, the term "ENVIRONMENTAL LAWS" shall mean and
include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or
regulation of human health, natural resources or the environment, (C) the
treatment, storage or disposal of Hazardous Materials, or (D) the emission,
discharge, release or threatened release of Hazardous Materials into the
environment.

     (d) Tenant agrees that during its use and occupancy of the Premises it will
(1) not (A) permit Hazardous Materials to be present on or about the Premises
except in a manner and quantity necessary for the ordinary performance of
Tenant's business or (B) release, discharge or dispose of any Hazardous
Materials on, in, at, under, or emanating from, the Premises, the Building or
the Project; (2) comply with all Environmental Laws relating to the Premises and
the use of Hazardous Materials on or about the Premises and not engage in or
permit others to engage in any activity at the Premises in violation of any
Environmental Laws; and (3) immediately notify Landlord of (A) any inquiry,
test, investigation or enforcement proceeding by any governmental agency or
authority against Tenant, Landlord or the Premises, Building or Project relating
to any Hazardous Materials or under any Environmental Laws or (B) the occurrence
of any event or existence of any condition that would cause a breach of any of
the covenants set forth in this Paragraph 32.

     (e) If Tenant's use of Hazardous Materials on or about the Premises results
in a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises, the Building or the Project, Tenant agrees to
investigate, clean up, remove or remediate such Hazardous Materials in full
compliance with (1) the requirements of (A) all Environmental Laws and (B) any
governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (2) any additional requirements of Landlord that are
necessary, in Landlord's sole discretion, to protect the value of the Premises,
the Building or the Project.

     (f) Upon reasonable notice to Tenant, Landlord may inspect the Premises and
surrounding areas for the purpose of determining whether there exists on or
about the Premises any Hazardous Material or other condition or activity that is
in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or
adjacent property with drill rigs or other machinery for the purpose of
obtaining laboratory samples. Landlord shall not be limited in the number of
such inspections during the Term of this Lease. In the event (1) such
inspections reveal the presence of any such Hazardous Material or other
condition or activity in violation of the requirements of this Lease or of any
Environmental Laws, or (2) Tenant or its Agents contribute or knowingly consent
to the presence of any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project or exacerbate the condition of or the
conditions caused by any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project, Tenant shall reimburse Landlord for the
cost of such inspections within ten (10) days of receipt of a written statement
therefor. Tenant will supply to Landlord such historical and operational
information regarding the Premises and surrounding areas as may be reasonably
requested to facilitate any such inspection and will make available for meetings
appropriate personnel having knowledge of such matters. Tenant agrees to give
Landlord at least sixty (60) days' prior notice of its intention to vacate the
Premises so that Landlord will have an opportunity to perform such an inspection
prior to such vacation. The right granted to Landlord herein to perform
inspections shall not create a duty on Landlord's part to inspect the Premises,
or liability on the part of Landlord for Tenant's use, storage, treatment or
disposal of Hazardous Materials, it being understood that Tenant shall be solely
responsible for all liability in connection therewith.

     (g) Landlord shall have the right, but not the obligation, prior or
subsequent to a Default, without in any way limiting Landlord's other rights and
remedies under this Lease, to enter upon the Premises, or to take such other
actions as it deems necessary or advisable, to investigate, clean up, remove or
remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the

                                       28
<PAGE>

Premises, the Building or the Project in violation of Tenant's obligations under
this Lease or under any Environmental Laws. Notwithstanding any other provision
of this Lease, Landlord shall also have the right, at its election, in its own
name or as Tenant's agent, to negotiate, defend, approve and appeal, at Tenant's
expense, any action taken or order issued by any governmental agency or
authority with regard to any such Hazardous Materials or contamination by
Hazardous Materials. All costs and expenses paid or incurred by Landlord in the
exercise of the rights set forth in this Paragraph 32 shall be payable by Tenant
upon demand.

    (h) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on, about or near the Premises by Tenant or Tenant's Agents, and shall
obtain any closure permits or other governmental permits or approvals related to
Tenant's use of Hazardous Materials in or about the Premises. Tenant's
obligations and liabilities pursuant to the provisions of this Paragraph 32
shall be in addition to any other surrender requirement in this Lease and shall
survive the expiration or earlier termination of this Lease. If it is determined
by Landlord that the condition of all or any portion of the Premises, the
Building, and/or the Project is not in compliance with the provisions of this
Lease with respect to Hazardous Materials, including, without limitation, all
Environmental Laws, at the expiration or earlier termination of this Lease as
the result of Tenant's breach of its obligations under this Lease, then at
Landlord's sole option, Landlord may require Tenant to hold over possession of
the Premises until Tenant can surrender the Premises to Landlord in the
condition in which the Premises existed as of the Commencement Date and prior to
the appearance of such Hazardous Materials except for normal wear and tear,
including, without limitation, the conduct or performance of any closures as
required by any Environmental Laws. The burden of proof hereunder shall be upon
Tenant. For purposes hereof, the term "normal wear and tear" shall not include
any deterioration in the condition or diminution of the value of any portion of
the Premises, the Building, and/or the Project in any manner whatsoever related
to directly, or indirectly, Hazardous Materials resulting from Tenant's breach
of its obligations under this Lease. Any such holdover by Tenant will be with
Landlord's consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Paragraph 35 of
this Lease.

    (i) Tenant agrees to indemnify and hold harmless Landlord from and against
any and all claims, damages, fines, judgments, penalties, costs, losses
(including, without limitation, loss in value of the Premises, the Building or
the Project, damages due to loss or restriction of rentable or useable space, or
any damages due to any adverse impact on marketing of the space and any and all
sums paid for settlement of claims, liabilities and expenses (including, without
limitation, attorney's fees, consultants' fees and expert's fees)) sustained by
Landlord during or after the term of this Lease and attributable to (1) any
Hazardous Materials placed on or about the Premises, the Building or the Project
by Tenant or Tenant's Agents, or (2) Tenant's breach of any provision of this
Paragraph 32.

    (j) The provisions of this Paragraph 32 shall survive the expiration or
earlier termination of this Lease.

        33. NOTICES

    All notices and demands which are required or may be permitted to be given
to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
nationally recognized overnight courier, addressed to the addressee at Tenant's
Address or Landlord's Address as specified in the Basic Lease Information, or to
such other place as either party may from time to time designate in a notice to
the other party given as provided herein. Copies of all notices and demands
given to Landlord shall additionally be sent to Landlord's property manager at
the address specified in the Basic Lease Information or at such other address as
Landlord may specify in writing from time to time. Notice shall be deemed given
upon actual receipt (or attempted delivery if delivery is refused), if
personally delivered, or one (1) business day following deposit with a reputable
overnight

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<PAGE>

courier that provides a receipt, or on the third (3rd) day following deposit in
the United States mail in the manner described above.

        34. WAIVER

    The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provisions of
this Lease.

        35. HOLDING OVER

    Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this Lease, such holding over shall be construed
to. be a tenancy at sufferance, at a rental rate equal to two hundred percent
(200%) of the Base Rent last due in this Lease, plus Additional Rent, and shall
otherwise be on the terms and conditions herein specified, so far as applicable;
provided, however, in no event shall any renewal or expansion option or other
similar right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance. If the Premises are not surrendered at the end of the
Term or sooner termination of this Lease, and in accordance with the provisions
of Paragraphs 11 and 32(h), Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by
Tenant in so surrendering the Premises including, without limitation, any loss
or liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorneys' fees and costs.

        36. SUCCESSORS AND ASSIGNS

    The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist
of more than one entity or person, the obligations of Tenant under this Lease
shall be joint and several.

        37. TIME

    Time is of the essence of this Lease and each and every term, condition and
provision herein.

        38. BROKERS

    Landlord and Tenant each represents and warrants to the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys' fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.

                                       30
<PAGE>

        39. LIMITATION OF LIABILITY

     Tenant agrees that, in the event of any default or breach by Landlord under
this Lease or arising in connection herewith or with Landlord's operation,
management, leasing, repair, renovation, alteration or any other matter relating
to the Project or the Premises Tenant's remedies shall be limited solely and
exclusively to an amount which is equal to the lesser of (a) the interest in the
Building of the then current Landlord or (b) the equity interest Landlord would
have in the Building if the Building were encumbered by third party debt in an
amount equal to eighty percent (80%) of the value of the Building (as such value
is determined by Landlord) provided that in no event shall such liability extend
to any sales or insurance proceeds received by Landlord or the "Landlord
Parties" in connection with the Project, Building or Premises. For purposes of
this Lease, "LANDLORD PARTIES" shall mean, collectively Landlord, its partners,
shareholders, officers, directors, employees, investment advisors, or any
successor in interest of any of them. Neither Landlord, nor any of the Landlord
Parties shall have any personal liability therefor, and Tenant hereby expressly
waives and releases such personal liability on behalf of itself and all persons
claiming by, through or under Tenant. The limitations of liability contained in
this Paragraph 39 shall inure to the benefit of Landlord's and the Landlord
Parties' present and future partners, beneficiaries, officers, directors,
trustees, shareholders, agents and employees, and their respective partners,
heirs, successors and assigns. Under no circumstances shall any present or
future partner of Landlord (if Landlord is a partnership), future member in
Landlord (if Landlord is a limited liability company) or trustee or beneficiary
(if Landlord or any partner or member of Landlord is a trust), have any
liability for the performance of Landlord's obligations under this Lease.
Notwithstanding any contrary provision herein, neither Landlord nor the Landlord
Parties shall be liable under any circumstances for injury or damage to, or
interference with Tenant's business, including but not limited to, loss or
profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring. The provisions of this
section shall apply only to the Landlord and the parties herein described, and
shall not be for the benefit of any insurer nor any other third party.

        40. FINANCIAL STATEMENTS

     Within ten (10) days after Landlord's request, and subject to any
restrictions imposed under any applicable securities laws, Tenant shall deliver
to Landlord the then current financial statements of Tenant (audited if
available, and including interim periods following the end of the last fiscal
year for which annual statements are available), prepared or compiled by a
certified public accountant, including a balance sheet and profit and loss
statement for the most recent prior year, all prepared in accordance with
generally accepted accounting principles consistently applied. Notwithstanding
any provision of this Paragraph 40 to the contrary, except in connection with
any proposed sale or refinancing of the Project by Landlord, Landlord shall not
request financial information from Tenant more than once per calendar year.

        41. RULES AND REGULATIONS

     Tenant agrees to comply with the rules and regulations attached hereto as
EXHIBIT D, along with any modifications, amendments and supplements thereto, and
such reasonable rules and regulations as Landlord may adopt in the future from
time to time for the orderly and proper operation of the Building and the
Project (collectively, the "RULES AND REGULATIONS"). The Rules and Regulations
may include, but shall not be limited to the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant's refuse and other rubbish at the
sole cost and expense of Tenant. The then current Rules and Regulations shall be
binding upon Tenant upon delivery of a copy of them to Tenant. Landlord shall
not be responsible to Tenant for the failure of any other person to observe and
abide by any of said Rules and Regulations.

                                       31
<PAGE>

        42. MORTGAGEE PROTECTION

    (a) MODIFICATIONS FOR LENDER. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.

    (b) RIGHTS TO CURE. Tenant agrees to give to any trust deed or mortgage
holder ("HOLDER"), by a method provided for in Paragraph 33 above, at the same
time as it is given to Landlord, a copy of any notice of default given to
Landlord, provided that prior to such notice Tenant has been notified, in
writing, (by way of notice of assignment of rents and leases, or otherwise) of
the address of such Holder. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then the
Holder shall have an additional reasonable period within which to cure such
default or if such default cannot be cured without Holder pursuing its remedies
against Landlord, then such additional time as may be necessary to commence and
complete a foreclosure proceeding, provided Holder commences and thereafter
diligently pursues the remedies necessary to cure such default (including but
not limited to commencement of foreclosure proceedings, if necessary to effect
such cure), in which event this Lease shall not be terminated.

        43. RELOCATION INTENTIONALLY OMITTED

        44. PARKING

     (a) Provided that Tenant shall not then be in Default under the terms and
conditions of the Lease, and provided further, that Tenant shall comply with and
abide by Landlord's parking rules and regulations from time to time in effect,
(i) Tenant shall have a license to use for the parking of standard size
passenger automobiles the number of exclusive and designated and non-exclusive
and undesignated parking spaces, if any, set forth in the Basic Lease
Information in the Parking Areas, and (ii) Tenant shall have the license to use,
on a non-exclusive basis, for the parking of Tenant's trucks and trailers, the
areas designated from time to time by Landlord as truck and trailer parking
areas; provided, however, that Landlord shall not be required to enforce
Tenant's right to use such parking spaces and parking areas; and, provided
further, that the number of parking spaces and parking areas allocated to Tenant
hereunder shall be reduced on a proportionate basis in the event any of the
parking spaces or other areas in the Parking Areas are taken or otherwise
eliminated as a result of any Condemnation (as hereinafter defined) or casualty
event affecting such Parking Areas or any modifications made by Landlord to such
Parking Areas. All unreserved spaces and other areas will be on a first-come,
first-served basis in common with other tenants of and visitors to the Project
in parking spaces or other areas provided by Landlord from time to time in the
Project's Parking Areas. In the event Tenant is granted the use of exclusive and
designated parking spaces, as indicated in the Basic Lease Information, then
such spaces shall be located in the area(s) designated by Landlord from time to
time. Tenant's license to use the parking spaces or other areas provided for
herein shall be subject to such terms, conditions, rules and regulations as
Landlord or the operator of the Parking Area may impose from time to time,
excluding the imposition of a parking charge except as required by any Laws.

     (b) Each automobile, truck or trailer shall, at Landlord's option to be
exercised from time to time, bear a permanently affixed and visible
identification sticker to be provided by Landlord. Tenant shall not and shall
not permit its Agents to park any vehicles in locations other than those
specifically designated by Landlord as being for Tenant's use, including,
without limitation, the parking of trucks and trailers only in areas so
designated by Landlord and in no other areas. The license granted hereunder is
for self-service parking only and does not include additional rights or
services. Neither Landlord nor its Agents shall be liable for: (i) loss or
damage to any vehicle or other personal property parked or located upon or
within such parking spaces or any Parking Areas whether pursuant to this license
or otherwise and whether caused by fire, theft, explosion, strikes, riots or any
other, cause whatsoever; or (ii) injury to or death of any

                                       32
<PAGE>

person in, about or around such parking spaces or any Parking Areas or any
vehicles parking therein or in proximity thereto whether caused by fire, theft,
assault, explosion, riot or any other cause whatsoever and Tenant hereby waives
any claim for or in respect to the above and against all claims or liabilities
arising out of loss or damage to property or injury to or death of persons, or
both, relating to any of the foregoing. Tenant shall not assign any of its
rights hereunder and in the event an attempted assignment is made, it shall be
void.

     (c) Tenant recognizes and agrees that visitors, clients and/or customers
(collectively the "VISITORS") to the Project and the Premises must park
automobiles or other vehicles only in areas designated by Landlord from time to
time as being for the use of such Visitors and Tenant hereby agrees to ask its
Visitors to park only in the areas designated by Landlord from time to time for
the use of Tenant's Visitors. Further, parking for Visitors may be subject to
the payment of fees ("VISITOR PARKING FEES") at rates set and to be set by
Landlord from time to time in its sole discretion if required by any Laws.
Tenant hereby covenants and agrees to pay or ask its Visitors to pay the Visitor
Parking Fees, plus tax thereon, as shall be set by Landlord from time to time
and to comply with and abide by Landlord's or Landlord's parking operator's
rules and regulations governing the use of such Visitor's parking as may be in
existence from time to time.

     (d) In the event any tax, surcharge or regulatory fee is at any time
imposed by any governmental authority upon or with respect to parking or
vehicles parking in the parking spaces referred to herein, Tenant shall pay such
tax, surcharge or regulatory fee as Additional Rent under this Lease, such
payments to be made in advance and from time to time as required by Landlord
(except that they shall be paid monthly with Base Rent payments if permitted by
the governmental authority).

     (e) In addition to any other rights or remedies available to Landlord, in
the event Tenant violates the restrictions on parking contained in this
Paragraph 45, including, without limitation, failure to park vehicles in the
designated areas, then Landlord shall have the right to charge to Tenant a fee
equal to $100.00 for each such violation, provided, however, Landlord agrees to
waive such fee for the first such violation during each calendar year. The
charging of any such fee by Landlord shall not be deemed to be a consent by
Landlord to the violation for which any such fee is charged and Tenant shall
remain obligated with respect to the parking of vehicles as provided in this
Paragraph 44.

        45. ENTIRE AGREEMENT

     This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect. If there is more than one Tenant, the
obligations hereunder imposed shall be joint and several.

        46. INTEREST

     Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within three (3) days from when the same is
due shall bear interest from the date such payment was originally due under this
Lease until paid at the greater of (a) an annual rate equal to the maximum rate
of interest permitted by law or (b) twelve percent (12%) per annum. Payment of
such interest shall not excuse or cure any Default by Tenant. In addition,
Tenant shall pay all costs and attorneys' fees incurred by Landlord in
collection of such amounts.

        47. CONSTRUCTION

     This Lease shall be construed and interpreted in accordance with the laws
of the state in which the Premises is located. The parties acknowledge and agree
that no rule of

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<PAGE>

construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease, including
the Exhibits and any Addenda attached hereto. All captions in this Lease are for
reference only and shall not be used in the interpretation of this Lease.
Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any
provision of this Lease shall be determined to be illegal or unenforceable, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect.

        48. REPRESENTATIONS AND WARRANTIES OF TENANT

     Tenant hereby makes the following representations and warranties, each of
which is material and being relied upon by Landlord, is true in all respects as
of the date of this Lease, and shall survive the expiration or termination of
the Lease.

     (a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization and is
qualified to do business in the state in which the Premises is located and the
persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and to bind Tenant without
the consent or approval of any other person or entity. Tenant has full power,
capacity, authority and legal right to execute and deliver this Lease and to
perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Tenant, enforceable in accordance with its terms.

     (b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.

        49. NAME OF BUILDING

     In the event Landlord chooses to change the name or address of the Building
and/or the Project, Tenant agrees that such change shall not affect in any way
its obligations under this Lease, and that, except for the name or address
change, all terms and conditions of this Lease shall remain in full force and
effect. Tenant agrees further that such name or address change shall not require
a formal amendment to this Lease, but shall be effective upon Tenant's receipt
of written notification from Landlord of said change.

        50. SECURITY

     (a) Tenant acknowledges and agrees that, while Landlord, in its sole and
absolute discretion, may engage security personnel to patrol the Building or the
Project, Landlord is not providing any security services with respect to the
Premises, the Building or the Project and that Landlord shall not be liable to
Tenant for, and Tenant waives any claim against Landlord with respect to, any
loss by theft or any other damage suffered or incurred by Tenant in connection
with any unauthorized entry into the Premises or any other breach of security
with respect to the Premises, the Building or the Project.

     (b) Tenant hereby agrees to the exercise by Landlord and Landlord's Agents,
within their sole discretion, of such security measures as, but not limited to,
the evacuation of the Premises, the Building or the Project for cause, suspected
cause or for drill purposes, the denial of any access to the Premises, the
Building or the Project and other similarly related actions that it deems
necessary to prevent any threat of property damage or bodily injury. The
exercise of such security measures by Landlord and Landlord's Agents, and the
resulting interruption of service and cessation of Tenant's business, if any,
shall not be deemed an eviction or disturbance of Tenant's use and possession
of the Premises, or

                                       34
<PAGE>

any part thereof, or render Landlord or Landlord's Agents liable to Tenant for
any resulting damages or relieve Tenant from Tenant's obligations under this
Lease.

        51. JURY TRIAL WAIVER

     Tenant hereby waives any right to trial by jury with respect to any action
or proceeding (i) brought by Landlord, Tenant or any other party, relating to
(A) this Lease and/or any understandings or prior dealings between the parties
hereto, or (B) the Premises, the Building or the Project or any part thereof, or
(ii) to which Landlord is a party.

        52. RECORDATION

     Neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant or by any one acting through, under
or on behalf of Tenant, and the recording thereof in violation of this provision
shall make this Lease null and void at Landlord's election.

        53. RIGHT TO LEASE

     Landlord reserves the absolute right to effect such other tenancies in the
Project as Landlord in the exercise of its sole business judgment shall
determine to best promote the interest of the Project. Tenant does not rely on
the fact, nor does Landlord represent, that any specific tenant or type or
number of tenants shall, during the Lease Term, occupy any space in the Project.

        54. FORCE MAJEURE

     Any prevention, delay or stoppage due to strikes, lockouts, labor disputes,
acts of God, inability to obtain services, labor, or materials or reasonable
substitutes therefor, governmental actions, civil commotions, fire or other
casualty, and other causes beyond the reasonable control of the party obligated
to perform, except with respect to the obligations imposed with regard to Rent
and other charges to be paid by Tenant pursuant to this Lease (collectively, the
"FORCE MAJEURE"), notwithstanding anything to the contrary contained in this
Lease, shall excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall
be extended by the period of any delay in such party's performance cause by a
Force Majeure.

        55. ACCEPTANCE

     This Lease shall only become effective and binding upon full execution
hereof by Landlord and delivery of a signed copy to Tenant.

        56. RENEWAL OPTION (WITH FMV RENT)

     (a) EXERCISE OF OPTION. Provided Tenant is not in default (beyond
applicable notice and grace periods) pursuant to any of the terms and conditions
of this Lease, Tenant shall have the option (the "OPTION") to renew this Lease
for one additional period of sixty (60) months (the "OPTION PERIOD") for the
period commencing on the date following the Expiration Date upon the terms and
conditions contained in this Lease, except, as provided in this Paragraph 56. To
exercise the Option, Tenant shall give Landlord notice (the "EXTENSION NOTICE")
of the intent to exercise said Option not less than nine (9) months or more than
twelve (12) months prior to the date on which the Option Period which is the
subject of the notice will commence. The notice shall be given as provided in
Paragraph 33 hereof. In the event Tenant shall exercise the Option, this Lease
will terminate in its entirety at the end of the Option Period and Tenant will
have no further option or right to renew or extend the Term of this Lease.

                                       35
<PAGE>

     (b) DETERMINATION OF BASE RENT. The Base Rent for the Option Period shall
be determined as follows:

     (i) Landlord and Tenant will have thirty (30) days after landlord receives
the Extension Notice within which to agree on the fair market rental value of
the Premises as of the commencement date of the Option Period, as defined in
subsection (ii) below. If they agree on the Base Rent within thirty (30) days,
they will amend this Lease by stating the Base Rent.

     (ii) If Landlord and Tenant are unable to agree on the Base Rent for the
Option Period within thirty (30) days, the Base Rent for the Option Period will
be the greater of (i) the-fair market rental value of the Premises as of the
commencement date of the Option Period as determined in accordance with
subsection (iii) hereof, and (ii) the last Base Rent set forth in the Basic
Lease Information. As used in this Lease, the "fair market rental value of the
Premises" means what a landlord under no compulsion to lease the Premises, and a
tenant under no compulsion to lease the Premises, would determine as Base Rent
(including initial monthly rent and rental increases) for the Option Period, as
of the commencement of the Option Period, taking into consideration the uses
permitted under this Lease, the quality, size, design, location and amenities of
the Premises and the Project, and the rent for premises and buildings located in
the vicinity of the Project which have comparable permitted uses as those
permitted under this Lease and which are comparable in quality, size, design,
location and amenities to the Premises and the Project.

     (iii) Within thirty (30) days after the expiration of the thirty (30) day
period set forth in subparagraph (ii) above, Landlord and Tenant shall each
appoint one licensed real estate appraiser or real estate broker (such broker to
have no less than ten (10) years of relevant experience relating to the rental
of space comparable to the Premises in the applicable submarket in which the
Project is located) (collectively, the "APPRAISERS") (Landlord and Tenant to
each pay the cost of their own Appraiser), and the Appraisers so appointed shall
jointly attempt to determine and agree upon the then fair market rental value of
the Premises. If they are unable to agree, then each Appraiser so appointed
shall set one value, and notify the other Appraiser, of the value set by him or
her, concurrently with such Appraiser's receipt of the value set by the other
Appraiser. The two Appraisers then shall, together, select a third licensed
appraiser or broker (such broker to have no less than ten (10) years of relevant
experience relating to the rental of space comparable to the Premises in the
applicable submarket in which the Project is located) (the cost of such third
appraiser or broker shall be shared equally by Landlord and Tenant), who shall
make a determination of the then fair market rental value, after reviewing the
reports of the first two Appraisers appointed by the parties, and after doing
such independent research as he/she deems appropriate. The value determined by
the third appraiser or broker shall be the then fair market rental value of the
Premises.

        57. PROVISIONS SPECIFIC TO THE STATE IN WHICH THE PREMISES ARE LOCATED

     Certain provisions which are specific to the state in which the Premises
are located are set forth in the Addendum to this Lease attached hereto and made
a part hereof.

                                       36
<PAGE>

     Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.

LANDLORD:                                         TENANT:

LINCOLN MARINA BAY,                               DICON FIBEROPTICS, INC.,
a California Limited Partnership                  a California corporation

By: Aetna Real Estate Associates Limited
    Partnership                                   By: /s/ GINA LIANG
    a Delaware limited partnership                Print Name: Gina Liang
Its: General Partner                                          8-9-00
                                                  Its: Manager, General Affairs
By: AETNA/AREA Corporation
    a Connecticut corporation                     By:
Its: General Partner                                 ---------------------------
                                                  Print Name:
                                                             -------------------
                                                  Its:
                                                      --------------------------
By: /s/ THOMAS ENGER
Print Name: Thomas Enger
Its: Vice President

                                       37<PAGE>

                                                                    Exhibit 10.6

                    MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE

                        Effective Date: December 3, 1999
                 (the date set forth below Landlord's signature)

                             BASIC LEASE INFORMATION

Landlord:                     CATELLUS DEVELOPMENT CORPORATION,
                              a Delaware corporation

Landlord's Address For        201 Mission Street
     Notice:                  San Francisco, California 94105
                              Attn: Asset Management
                              Telephone: (415) 974-4500
                              Fax: (415) 974-4687

Landlord's Address            File #1918
     For Payment of Rent:     P.O. Box 61000
                              San Francisco, California 94161-1918

Tenant:                       DICON FIBEROPTICS, INC., a California corporation

Tenant's Address              Dicon Fiberoptics, Inc.
     For Notice:              1331 Eighth Street
                              Berkeley, California 94710
                              Attn: Gina Liang
                              Telephone: (510) 528-0427
                              Fax: (51) 528-1519

Project:                      Regatta Business Park

Building:                     Building I, consisting of approximately 42,500
                              rentable square feet

Premises:                     Approximately 29,812 rentable square feet as shown
                              in Exhibit A.

Parking:                      3.25 unreserved spaces per each 1,000 rentable
                              square feet of the Premises

Premises Address:             938 Marina Way South
     Street:                  [ADDRESS SUBJECT TO CHANGE BY CITY OF RICHMOND]
     City and State:          Richmond, California

Term:                         Sixty (60) months

Estimated Commencement        March 1, 2000
     Date:

<PAGE>

<TABLE>
<CAPTION>

Base Rent:                      Months                            Monthly Base Rent
                                ------                            -----------------
<S>                             <C>                               <C>
                                  1-12                               $31,302.60
                                 13-24                               $32,241.68
                                 25-36                               $33,208.93
                                 37-48                               $34,205.20
                                 49-60                               $35,231.35
</TABLE>

Tenant's Share:               70.14%

Security Deposit:             $35,231.35

Broker:                       Landlord's Broker:    Colliers International
                              Tenant's Broker:      Colliers International

Lease Year:                   Shall refer to each twelve month period during the
                              Term commencing on the Commencement Date.

Permitted Uses:               Manufacturing, testing and assembly of fiberoptic
                              equipment and products, general office and other
                              related activities and no other uses shall be
                              permitted without the prior written consent of
                              Landlord in its sole and absolute discretion.

Options:                      Tenant has one (1) five (5) year option to extend
                              the Term.

ADDENDUM

EXHIBITS

A    Premises
B    Work Letter
C    Commencement Date Memorandum
D    [INTENTIONALLY LEFT BLANK]
E    Prohibited Uses
F    Rules and Regulations
G    Requirements for Improvements or Alterations by Tenant
H    Estoppel Certificate

     The Basic Lease Information set forth above and the Addendum and Exhibits
attached hereto are incorporated into and made a part of the following 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 provisions of the Lease, the later shall control.

                      LANDLORD (___)     AND TENANT    (___)  AGREE.
                              initial                 initial

                                      (ii)
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
  1.  PREMISES ..............................................................1
      1.1   Premises ........................................................1
      1.2   Common Area .....................................................1
      1.3   Reserved Rights .................................................1
      1.4   Condition of the Premises .......................................1

  2.  TERM ..................................................................1
      2.1   Commencement Date ...............................................1
      2.2   Possession ......................................................2
      2.3   Early Entry .....................................................2

  3.  RENT ..................................................................2
      3.1   Rent ............................................................2
      3.2   Late Charge and Interest ........................................3
      3.3   Security Deposit ................................................3

  4.  UTILITIES .............................................................3

  5.  TAXES .................................................................3
      5.1   Real Property Taxes .............................................3
      5.2   Definition of Real Property Taxes ...............................4
      5.3   Personal Property Taxes .........................................4
      5.4   Enterprise Zone .................................................4

  6.  OPERATING EXPENSES ....................................................4
      6.1   Operating Expenses ..............................................4
      6.2   Definition of Operating Expenses ................................4

  7.  ESTIMATED EXPENSES ....................................................5
      7.1   Payment .........................................................5
      7.2   Adjustment ......................................................5

  8.  INSURANCE .............................................................5
      8.1   Landlord ........................................................5
      8.2   Tenant ..........................................................6
      8.3   General .........................................................6
      8.4   Indemnity .......................................................7
      8.5   Exemption of Landlord from Liability ............................7
      8.6   Landlord's Indemnity ............................................7

  9.  REPAIRS AND MAINTENANCE ...............................................8
      9.1   Tenant ..........................................................8
      9.2   Landlord ........................................................8

 10.  ALTERATIONS ...........................................................9
      10.1  Trade Fixtures; Alterations .....................................9
      10.2  Damage; Removal .................................................9
      10.3  Liens ...........................................................9
      10.4  Standard of Work ................................................9

 11.  USE ..................................................................10

 12.  ENVIRONMENTAL MATTERS ................................................10
      12.1  Hazardous Materials ............................................10
      12.2  Indemnification ................................................11

 13.  DAMAGE AND DESTRUCTION ...............................................11
      13.1  Casualty .......................................................11
</TABLE>

                                      (iii)
<PAGE>

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
     13.2  Tenant's Fault ..................................................12
     13.3  Uninsured Casualty ..............................................13
     13.4  Waiver ..........................................................13

 14. EMINENT DOMAIN ........................................................13
     14.1  Total Condemnation ..............................................13
     14.2  Partial Condemnation ............................................13
     14.3  Award ...........................................................13
     14.4  Temporary Condemnation ..........................................13

 15. DEFAULT ...............................................................14
     15.1  Events of Defaults ..............................................14
     15.2  Remedies ........................................................14
     15.3  Cumulative ......................................................15

 16. ASSIGNMENT AND SUBLETTING .............................................15
     16.1  Landlord's Consent ..............................................15
     16.2  Permitted Assignments and Subleases .............................16
     16.3  Assign to Joint Venture .........................................16

 17. ESTOPPEL, ATTORNMENT AND SUBORDINATION ................................17
     17.1  Estoppel ........................................................17
     17.2  Subordination ...................................................17
     17.3  Attornment ......................................................17

 18. [INTENTIONALLY DELETED] ...............................................17

 19. MISCELLANEOUS .........................................................17
     19.1  General .........................................................17
     19.2  Signs ...........................................................18
     19.3  Waiver ..........................................................18
     19.4  Financial Statements ............................................19
     19.5  Limitation of Liability .........................................19
     19.6  Notices .........................................................19
     19.7  Brokerage Commission ............................................19
     19.8  Authorization ...................................................19
     19.9  Holding Over; Surrender .........................................19
     19.10 Joint and Several ...............................................20
     19.11 Covenants and Conditions ........................................20
     19.12 Auctions ........................................................20
     19.13 Consents ........................................................20
     19.14 Force Majeure ...................................................20
     19.15 Mortgagee Protection ............................................20
     19.16 Guarantors ......................................................21
     19.17 Hazardous Substance Disclosure ..................................21
     19.18 Year 2000 Compliance ............................................21
     19.19 Parking .........................................................21
     19.20 Addenda .........................................................21
</TABLE>

                                      (iv)
<PAGE>

1. PREMISES

        1.1 Premises. Landlord hereby leases to Tenant the Premises as shown on
Exhibit A attached hereto, but excluding the Common Area (defined below) and any
other portion of the Project. Tenant has determined that the Premises are
acceptable for Tenant's use and Tenant acknowledges that, except as set forth in
the Work Letter, if any, neither Landlord nor any broker or agent has made any
representations or warranties in connection with the physical condition of the
Premises or their fitness for Tenant's use upon which Tenant has relied directly
or indirectly for any purpose. By taking possession of the Premises, Tenant
accepts the Premises "AS-IS" and waives all claims of defect in the Premises,
except as set forth in the Work Letter.

        1.2 Common Area. Tenant may, subject to rules made by Landlord, use the
following areas ("Common Area") in common with Landlord and other tenants of the
Project: refuse facilities, landscaped areas, driveways necessary for access to
the Premises, parking spaces and other common facilities designated by Landlord
from time to time for the common use of all tenants of the Project.

        1.3 Reserved Rights. Landlord reserves the right to enter the Premises
for any reason upon reasonable notice to Tenant (or without notice in case of an
emergency) and/or to undertake the following all without abatement of rent or
liability to Tenant (provided, however, that in exercising Landlord's rights
under this sentence Landlord shall use reasonable efforts to minimize
interference with Tenant's use of the Premises): inspect the Premises and/or the
performance by Tenant of the terms and conditions hereof; make such alterations,
repairs, improvements or additions to the Premises as required or permitted
hereunder; change boundary lines of the Common Areas; install, use, maintain,
repair, alter, relocate or replace any pipes, ducts, conduits, wires, equipment
and other facilities in the Common Area or the Building; grant easements on the
Project, dedicate for public use portions thereof and record covenants,
conditions and restrictions ("CC&Rs") affecting the Project and/or amendments to
existing CC&Rs which do not unreasonably interfere with Tenant's use of the
Premises or impose additional material monetary obligations on Tenant; change
the name of the Project; affix reasonable signs and displays; and, during the
last nine (9) months of the Term, place signs for the rental of, and show the
Premises to prospective tenants.

        1.4 Condition of the Premises. Landlord shall, at its sole cost and
expense, be responsible for the Premises' compliance with any law, ordinance,
regulation or code (collectively, "Laws") applicable to any condition of the
Premises existing as of the Commencement Date, irrespective of the time when
the Premises' non-compliance is discovered, cited or brought to the attention of
Landlord by Tenant or a third party; provided, however, Landlord shall not be
required to make any improvements or alterations to the Premises (or any portion
thereof) to bring the Premises (or any portion thereof) in compliance with any
Law (i) which are required as a result of the specific business being conducted
by Tenant on or at the Premises or a change of use of the Premises, (ii) which
are made by or at the request of Tenant, including, without limitation, the
Tenant Improvements, or (iii) which are required in order for the Premises (or
any portion thereof) to comply with the Americans with Disabilities Act
(42 U.S.C. Section 12101 et seq.) ("ADA"), as amended or recodified from
time-to-time, as a result of Tenant's status as an employer of employees or as a
result of the Tenant Improvements requested by Tenant. Tenant shall, at its sole
cost and expense, be responsible for the compliance with all Laws for
improvements to the Premises (a) which are required as a result of the specific
business being conducted by Tenant on or at the Premises, or a change of use of
the Premises, (b) made by or at the direction of Tenant, including, without
limitation, the Tenant Improvements, and (c) which are required in order for the
Premises (or any portion thereof) to comply with the ADA as a result of Tenant's
status as an employer of employees or as a result of the Tenant Improvements
requested by Tenant.

2. TERM

        2.1 Commencement Date. The Term of the Lease shall commence
("Commencement Date") on the first day of the first full month following the
date on which Landlord delivers to Tenant the Premises Substantially Complete
(as hereinafter defined) except that if Landlord delivers the Premises to Tenant
on the first day of a month, that date shall be the Commencement Date, and the
Lease shall continue in full force and effect for the period of time specified
as the Term or until this Lease is terminated as otherwise provided herein. The
Premises shall be deemed to be "Substantially Complete" on the earliest of the
date on which: (1) Landlord files or causes to be filed with the City in which
the Premises are located (if required) and delivers to Tenant an architect's
notice of substantial completion, or similar written notice that the Premises
are substantially complete or (2) Tenant

<PAGE>

commences business operations in the Premises. Landlord shall arrange for the
construction of certain Tenant Improvements (as defined in the Work Letter), if
any, in accordance with and subject to the terms of the Work Letter attached
hereto as Exhibit B. Tenant shall, upon demand after delivery of the Premises to
Tenant, execute and deliver to Landlord a Commencement Date Memorandum in the
form attached hereto as Exhibit C acknowledging (i) the Commencement Date, (ii)
the final square footage of the Premises and (iii) Tenant's acceptance of the
Premises. If the Premises are not Substantially Complete on the Estimated
Commencement Date as extended by Force Majeure events and Tenant Delays (as
defined in the Lease or Work Letter, if any), this Lease shall remain in effect,
Landlord shall not be subject to any liability, and the Commencement Date shall
be delayed until the date the Premises are Substantially Complete.

        2.2 Possession. Tenant's possession of the Premises during the period of
time, if any, from the date on which Landlord delivers possession of the
Premises to Tenant Substantially Complete (the "Possession Date") to the
Commencement Date, shall be subject to all the provisions of this Lease and
shall not advance the expiration date. Rent shall be paid for such period at the
rate stated in the Basic Lease Information, prorated on the basis of a thirty
(30) day month, and shall be due and payable to Landlord on or before the
Commencement Date. Tenant shall upon demand acknowledge in writing the
Possession Date in the form attached hereto as Exhibit C.

        2.3 Early Entry. Notwithstanding anything to the contrary contained in
Section 2.2 above, or elsewhere in this Lease, Tenant shall have the right to
enter the Premises no earlier than forty-five (45) days prior to the
Commencement Date to install phone systems, furniture, fixtures and equipment,
etc. and such early entry for such purposes shall not constitute occupancy for
operation of Tenant's business and shall not trigger the Commencement Date.
Tenant agrees (i) any such early entry by Tenant shall be at Tenant's sole risk;
(ii) Tenant shall not interfere with Landlord or Landlord's contractors
completing work within the Premises (such interference to be determined in the
exercise of Landlord's sole discretion) or cause any labor difficulties; Tenant,
together with its employees, agents and independent contractors will be subject
to and will work under the direction of Landlord's contractor, (iii) Tenant
shall comply with and be bound by all provisions of this Lease during the period
of any such early entry except for the payment of Rent, (iv) prior to entry upon
the Premises by Tenant, Tenant agrees to pay for and provide to Landlord
certificates evidencing the existence and amounts of liability insurance carried
by Tenant, which coverage must comply with the provisions of this Lease relating
to insurance, (v) Tenant and its agent and contractors agree to comply with all
applicable laws, regulations, permits and other approvals required to perform
its work during the early entry on the Premises, and (vi) except in cases of
Landlord's gross negligence or willful acts, Tenant agrees to indemnify,
protect, defend and save Landlord and the Premises harmless from and against any
and all liens, liabilities, losses, damages, costs, expenses, demands, actions,
causes of action and claims (including, without limitation, attorneys' fees and
legal costs) arising out of the early entry, use, construction, or occupancy of
the Premises by Tenant or its agents, employees or contractors.

3. RENT

        3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for
Payment of Rent designated in the Basic Lease Information, or at such other
address as Landlord may from time to time designate in writing to Tenant for the
payment of Rent, the Base Rent, without notice, demand, offset or deduction, in
advance, on the first day of each calendar month. Landlord shall have no
obligation to notify Tenant of any increase in Rent and Tenant's obligation to
pay all Rent (and any increases) when due shall not be modified or altered by
such lack of notice from Landlord. It is intended that this Lease be a "triple
net lease," and that the Rent to be paid hereunder by Tenant will be received by
Landlord without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable, except as otherwise expressly provided in this Lease. Except as
expressly provided to the contrary in this Lease, Landlord shall not be required
to make any expenditure, incur any obligation, or incur any liability of any
kind whatsoever in connection with this Lease or the ownership, construction,
maintenance, operation or repair of the Premises or the Project. If the Term
commences (or ends) on a date other than the first (or last) day of a month,
Base Rent shall be prorated on the basis of a thirty (30) day month. All sums
other than Base Rent which Tenant is obligated to pay under this Lease shall be
deemed to be additional rent due hereunder ("Additional Rent"), whether or not
such sums are designated Additional Rent and, together with the Base Rent, shall
be due and payable to Landlord commencing on the Possession Date. The term
"Rent" means the Base Rent and all Additional Rent payable hereunder.

                                       -2-
<PAGE>

        3.2 Late Charge and Interest. The late payment of any Rent will cause
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within five (5) days after such amount is due, Tenant shall pay a late charge of
ten percent (10%) of the delinquent amount, which is agreed to represent a
reasonable estimate of the Delinquency Costs incurred by Landlord. In addition,
all such delinquent amounts shall bear interest from the date such amount was
due until paid in full at a rate per annum ("Applicable Interest Rate") equal to
the lesser of (a) the maximum interest rate permitted by law or (b) five percent
(5%) above the rate publicly announced by Bank of America, N.A. (or if Bank of
America, N.A. ceases to exist, the largest bank then headquartered in the State
of California) ("Bank") as its "Reference Rate". If the use of the announced
Reference Rate is discontinued by the Bank, then the term Reference Rate shall
mean the announced rate charged by the Bank which is, from time to time,
substituted for the Reference Rate. Landlord and Tenant recognize that the
damage which Landlord shall suffer as a result of Tenant's failure to pay such
amounts is difficult to ascertain and said late charge and interest are the best
estimate of the damage which Landlord shall suffer in the event of late payment.
If a late charge becomes payable for any three (3) installments of Rent within
any twelve (12) month period, then the Rent shall automatically become due and
payable quarterly in advance.

        3.3 Security Deposit. Upon the execution of this Lease, Tenant shall
pay to Landlord the Security Deposit. The Security Deposit shall secure the full
and faithful performance of each provision of this Lease to be performed by
Tenant. Landlord shall not be required to pay interest on the Security Deposit
or to keep the Security Deposit separate from Landlord's own funds. If Tenant
fails to perform fully and timely all or any of Tenant's covenants and
obligations hereunder, Landlord may, but without obligation, apply all or any
portion of the Security Deposit toward fulfillment of Tenant's unperformed
covenants and/or obligations. If Landlord does so apply any portion of the
Security Deposit, Tenant shall immediately pay Landlord sufficient cash to
restore the Security Deposit to the amount of the then current Base Rent per
month. Upon any increase in Base Rent, Landlord may require the Security Deposit
to be increased by the amount of the increase in Base Rent per month. After
Tenant vacates the Premises, upon the expiration or sooner termination of this
Lease, if Tenant is not then in default, Landlord shall return to Tenant any
unapplied balance of the Security Deposit. Should the Permitted Use be amended
(in Landlord's sole and absolute discretion) to accommodate a change in the
business of Tenant or to accommodate a subtenant or assignee approved by
Landlord, Landlord shall have the right to increase the Security Deposit to the
extent necessary, in Landlord's reasonable judgment, to account for any
increased risk to the Premises or increased wear and tear that the Premises may
suffer as a result thereof. If a change in control of Tenant occurs during this
Lease and following such change the financial condition of Tenant is, in
Landlord's reasonable judgment, reduced, Tenant shall deposit such additional
monies with Landlord as shall be sufficient to cause the Security Deposit to be
at a commercially reasonable level based on said change in financial condition.

4. UTILITIES. Tenant shall pay all charges for heat, water, gas, electricity,
telephone and any other utilities used on or provided to the Premises. Landlord
shall not be liable to Tenant for interruption in or curtailment of any utility
service, nor shall any such interruption or curtailment constitute constructive
eviction or grounds for rental abatement; provided, however, if as a result of
Landlord's negligence or willful misconduct there exists an interruption of
essential utilities or building services, such as electricity,
telephone/telecommunication service, fire protection or water such that the
Premises (or a material portion thereof) are unfit for occupancy and not
occupied by Tenant for its ordinary business operations during any five (5)
consecutive business days following written notice to Landlord of such
interruption in services, then Tenant's Base Rent shall thereafter be abated
until the Premises are again usable by Tenant in proportion to the extent to
which Tenant's use of the Premises is interfered with. The foregoing provision
regarding interruption of utility services shall not apply in case of damage to,
or destruction of, the Premises, which shall be governed by Section 13 of this
Lease. In the event the Premises is not separately metered, Tenant shall have
the option, subject to Landlord's prior written consent and the terms of this
Lease, to cause the Premises to be separately metered at Tenant's cost and
expense. If Tenant does not elect to cause the Premises to be separately
metered, Tenant shall pay a reasonable proration of utilities, as determined by
Landlord.

5. TAXES

        5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of
the Real Property Taxes for each full or partial calendar year during the Lease
Term; provided, however, that Landlord shall reimburse Tenant for any refund of
Real Property Taxes received by Landlord for Real Property Taxes paid by Tenant
during the Term of the Lease.

                                       -3-
<PAGE>

        5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be
the sum of the following: all real property taxes, possessory-interest taxes,
business or license taxes or fees, service payments in lieu of such taxes or
fees, annual or periodic license or use fees, excises, transit and traffic
charges, housing fund assessments, open space charges, childcare fees, school,
sewer and parking fees or any other assessments, levies, fees, exactions or
charges, general and special, ordinary and extraordinary, unforeseen as well as
foreseen (including fees "in-lieu" of any such tax or assessment) which are
assessed, levied, charged, conferred or imposed by any public authority upon the
Project (or any real property comprising any portion thereof) or its operations,
together with all taxes, assessments or other fees imposed by any public
authority upon or measured by any Rent or other charges payable hereunder,
including any gross receipts tax or excise tax levied by any governmental
authority with respect to receipt of rental income, or upon, with respect to or
by reason of the development, possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof, or documentary transfer taxes upon this transaction or any
document to which Tenant is a party creating or transferring an interest in the
Premises, together with any tax imposed in substitution, partially or totally,
of any tax previously included within the aforesaid definition or any additional
tax the nature of which was previously included within the aforesaid definition,
together with any and all costs and expenses (including, without limitation,
attorneys, administrative and expert witness fees and costs) of challenging any
of the foregoing or seeking the reduction in or abatement, redemption or return
of any of the foregoing, but only to the extent of any such reduction,
abatement, redemption or return. All references to Real Property Taxes during a
particular year shall be deemed to refer to taxes accrued during such year,
including supplemental tax bills regardless of when they are actually assessed
and without regard to when such taxes are payable. The obligation of Tenant to
pay for supplemental taxes shall survive the expiration or early termination of
this Lease. In no event shall Tenant or any Tenant Party (as defined in Section
12.1) be entitled to file any property tax assessment appeal. Nothing contained
in this Lease shall require Tenant to pay any franchise, corporate, estate or
inheritance tax of Landlord, or any income, profits or revenue tax or charge
upon the net income of Landlord, nor shall Tenant be obligated to pay for any
increase in Real Property Taxes resulting solely from the reassessment of the
Project caused by the installation of any additional improvements on or to the
Project after the Commencement Date that are made expressly for the benefit of
other tenants of the Project and do not benefit the Project as a whole or the
Common Areas. Real Property Taxes for partial years, if any, falling within the
Term shall be prorated. Tenant's obligations for Real Property Taxes for the
last full and/or partial year(s) of the Term shall survive the expiration or
early termination of the Lease.

        5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the amount
thereof as invoiced by Landlord.

        5.4 Enterprise Zone. To the extent that an "enterprise zone" is created
with respect to the Project (and Landlord shall have no obligations to effect
the creation of such enterprise zone), Landlord shall not have any rights with
respect to any tax credits resulting therefrom.

6. OPERATING EXPENSES

        6.l Operating Expenses. Tenant shall pay to Landlord Tenant's Share of
the Operating Expenses for each full or partial calendar year during the Lease
Term.

        6.2 Definition of Operating Expenses. "Operating Expenses" means the
total costs and expenses incurred by Landlord in the ownership, operation,
maintenance, repair and management of the Project, the Common Area and the
Building, including, but not limited to, (a) repair, maintenance, utility costs
and landscaping of the Common Area, including, but not limited to, any and all
costs of maintenance, repair and replacement of all parking areas (including
sweeping, striping and slurry coating), common driveways, outdoor lighting,
walkways, landscaping, and other costs which are allocable to the Project or the
real property of which the Premises are a part including any costs under the
terms of any CC&Rs affecting the real property, (b) non-structural repairs to
and maintenance of the roof (and roof membrane), skylights and exterior walls of
the Premises (including painting); (c) insurance deductibles and the costs
relating to the insurance maintained by Landlord with respect to the Project,
including, without limitation, Landlord's cost of any self insurance deductible
or retention; (d) maintenance contracts for, and the repair and replacement of,
the heating, ventilation and air-conditioning (HVAC) system and elevators,

                                       -4-
<PAGE>

if any, and maintenance, repair, replacement, monitoring and operation of the
fire/life safety system; (e) trash collection; (f) capital improvements made to
or capital assets acquired for the Project after the Commencement Date that are
intended to reduce Operating Expenses (to the extent of the savings reasonably
estimated by Landlord to result therefrom) or are reasonably necessary for the
health and safety of the occupants of the Project or are required under any
governmental law or regulation, which capital costs, or an allocable portion
thereof, shall be amortized over the useful life of the applicable capital
improvement or capital asset, together with interest on the unamortized balance
at the Applicable Interest Rate; and (g) any other costs incurred by Landlord
related to the Project as a whole. Operating Expenses shall also include all
actual costs and fees incurred by Landlord in connection with the management of
this Lease and the Premises including the cost of those services which are
customarily performed by a property management services company (in an amount
equal to three percent [3%] of Rent), whether performed internally or through an
outside management company. Operating Expenses shall not include (i) replacement
of or structural repairs to the roof or the exterior walls; (ii) repairs to the
extent covered by insurance proceeds, or paid by Tenant or other third parties;
(iii) alterations and repairs solely attributable to tenants of the Project
other than Tenant; or (iv) marketing expenses.

7. ESTIMATED EXPENSES

        7.1 Payment. "Estimated Expenses" for any particular year shall mean
Landlord's estimate of Operating Expenses and Real Property Taxes for a calendar
year. Tenant shall pay Tenant's Share of the Estimated Expenses with
installments of Base Rent in monthly installments of one-twelfth (1/12th)
thereof on the first day of each calendar month during such year. If at any time
Landlord determines that Operating Expenses and Real Property Taxes are
projected to vary from the then Estimated Expenses, Landlord may, by notice to
Tenant, revise such Estimated Expenses, and Tenant's monthly installments for
the remainder of such year shall be adjusted so that by the end of such
calendar year Tenant has paid to Landlord Tenant's Share of the revised
Estimated Expenses for such year.

        7.2 Adjustment. "Operating Expenses and Real Property Taxes Adjustment"
(or "Adjustment") shall mean the difference between Tenant's Share of Estimated
Expenses and Tenant's Share of Operating Expenses and Real Property Taxes for
any calendar year. After the end of each calendar year, Landlord shall deliver
to Tenant a statement of Tenant's Share of Operating Expenses and Real Property
Taxes for such calendar year, accompanied by a computation of the Adjustment. If
Tenant's payments are less than Tenant's Share, then Tenant shall pay the
difference within twenty (20) days after receipt of such statement. Tenant's
obligation to pay such amount shall survive the expiration or termination of
this Lease. If Tenant's payments exceed Tenant's Share, then (provided that
Tenant is not in default), Landlord shall credit such excess amount to future
installments of Tenant's Share for the next calendar year. If Tenant is in
default, Landlord may, but shall not be required to, credit such amount to Rent
arrearages. Within 45 days after Tenant's receipt of Landlord's statement,
Tenant, at Tenant's expense, may audit the tax and expense records for the
Project, the Common Area and the Building upon reasonable prior notice to
Landlord during normal business hours. If such audit is by a certified public
accountant reasonably acceptable to Landlord then (i) if such audit discloses
that Tenant has overpaid either Real Property Taxes or Operating Expenses,
Landlord will reimburse Tenant for any such excess Operating Expenses or Real
Property Taxes paid by Tenant, and (ii) if such audit discloses that such
overpayment was more than five percent, Landlord will reimburse Tenant for the
actual reasonable cost of the audit. If during any calendar year the Building is
not at least 95% occupied, Operating Expenses for such year shall be calculated
based on a 95% occupancy rate for the Building.

8. INSURANCE

        8.1. Landlord. Landlord shall maintain insurance through individual or
blanket policies insuring the Building against fire and extended coverage
(including, if Landlord elects, "all risk" coverage, earthquake/volcanic action,
flood and/or surface water insurance) for the full replacement cost of the
Building, with deductibles and the form and endorsements of such coverage as
selected by Landlord, together with rental abatement insurance against loss of
Rent in an amount equal to the amount of Rent for a period of at least twelve
(12) months commencing on the date of loss. Landlord may also carry such other
insurance as Landlord may deem prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as Landlord
shall determine. Tenant shall pay to Landlord, as a portion of the Operating
Expenses, the costs of the insurance coverages described herein, including,
without limitation, Landlord's cost of any self-insurance deductible or
retention.

                                       -5-
<PAGE>

        8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force
at all times the following insurance:

            8.2.1 Commercial General Liability Insurance (Occurrence Form). A
policy of commercial general liability insurance (occurrence form) having a
combined single limit of not less than Two Million Dollars ($2,000,000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability, premises, products/completed operations with an
"Additional Insured-Managers or Lessors of Premises Endorsement" and containing
the "Amendment of the Pollution Exclusion Endorsement" for damage caused by
heat, smoke or fumes from a hostile fire, and personal and advertising injury
coverage, with deletion of (a) the exclusion for operations within fifty (50)
feet of a railroad track (railroad protective liability), if applicable, and (b)
the exclusion for explosion, collapse or underground hazard, if applicable, and,
if necessary, Tenant shall provide for restoration of the aggregate limit, and
provided that the policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "insured contract" for the performance
of Tenant's indemnity obligations under this Lease;

            8.2.2 Automobile Liability Insurance. Business automobile liability
insurance having a combined single limit of not less than Two Million Dollars
($2,000,000) per occurrence and insuring Tenant against liability for claims
arising out of ownership, maintenance, or use of any owned, hired or non-owned
automobiles;

            8.2.3 Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance having limits not less than those required by
state statute and federal statute, if applicable, and covering all persons
employed by Tenant in the conduct of its operations on the Premises (including
the all states endorsement and, if applicable, the volunteers endorsement),
together with employer's liability insurance coverage in the amount of at least
One Million Dollars ($1,000,000); and

            8.2.4 Property Insurance. "All risk" property insurance including
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant's personal property, fixtures, equipment and alterations,
including electronic data processing equipment (collectively "Tenant's
Property") (and coverage for the full replacement cost thereof including
business interruption of Tenant), together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises; and

            8.2.5 Business Interruption. Loss of income and extra expense
insurance in amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all peril commonly insured against by prudent lessees
in the business of Tenant or attributable to prevention of access to the
Premises as a result of such perils.

        8.3 General

            8.3.1 Insurance Companies. Insurance required to be maintained by
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least "A - VIII" (or such higher rating as may be required by a lender having a
lien on the Premises) as set forth in the most current issue of "Best's
Insurance Guide."

            8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to be maintained by Tenant
in a form acceptable to Landlord in its reasonable discretion, no later than
seven (7) days prior to the date of possession of the Premises. Tenant shall, at
least ten (10) days prior to expiration of the policy, furnish Landlord with
certificates of renewal or "binders" thereof. Each certificate shall expressly
provide that such policies shall not be cancelable or otherwise subject to
modification except after sixty (60) days prior written notice to the parties
named as additional insureds in this Lease (except in the case of cancellation
for nonpayment of premium in which case cancellation shall not take effect until
at least ten (10) days' notice has been given to Landlord). If Tenant fails to
maintain any insurance required in this Lease, Tenant shall be liable for all
losses and costs suffered or incurred by Landlord (including litigation costs
and attorneys' fees and expenses) resulting from said failure.

                                       -6-
<PAGE>

            8.3.3 Additional Insureds. Landlord, Landlord's lender, if any, and
any property management company of Landlord for the Premises shall be named as
additional insureds on a form approved by Landlord under all of the policies
required by section 8.2.1. The policies required under Section 8.2.1 shall
provide for severability of interest.

            8.3.4 Primary Coverage. All insurance to be maintained by Tenant
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of Landlord. Any umbrella
liability policy or excess liability policy (which shall be in "following form")
shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by
Tenant shall not limit Tenant's liability under this Lease.

            8.3.5 Waiver of Subrogation. Landlord and Tenant each waive any
right to recover against the other party for claims for damages to that party's
property arising from any risk covered by the insurance that party is required
to maintain under Section 8 above. This provision is intended to waive fully,
and for the benefit of each party, any rights and/or claims which might give
rise to a right of subrogation in favor of any insurance carrier. The coverages
obtained by Tenant and Landlord pursuant to this Lease shall include, without
limitation, a waiver of subrogation endorsement attached to the certificate of
insurance.

            8.3.6 Notification of Incidents. Tenant shall notify Landlord within
twenty-four (24) hours after Tenant obtains knowledge of the occurrence of any
accidents or incidents in the Premises, the Building, Common Areas or the
Project which could give rise to a claim under any of the insurance policies
required under this Section 8, except Worker's Compensation or Employer's
Liability, unless Tenant has knowledge that a claim under such Worker's
Compensation or Employer's Liability policy may result in a claim against
Landlord.

        8.4 Indemnity. Tenant shall indemnify, protect, defend (by counsel
acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated
entities, and each of their respective members, managers, partners, directors,
officers, employees, shareholders, lenders, agents, contractors, successors and
assigns from and against any and all claims, judgments, causes of action,
damages, penalties, costs, liabilities, and expenses, including all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon, arising at any time during
or after the Term as a result (directly or indirectly) of or in connection with
(i) any default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or (ii) Tenant's use of the Premises,
the conduct of Tenant's business or any activity, work or things done, permitted
or suffered by Tenant or any Tenant Party in or about the Premises, the
Building, the Common Area or other portions of the Project, except for claims
caused solely by Landlord's, its employees', contractors' or agents' gross
negligence or willful misconduct. The obligations of Tenant under this Section
8.4 shall survive the termination of this Lease with respect to any claims or
liability arising prior to such termination.

        8.5 Exemption of Landlord from Liability. Tenant, as a material part of
the consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or illness or injury to persons in, upon or about the Premises, the
Building, the Common Area or other portions of the Project arising from any
cause, and Tenant hereby expressly releases Landlord and waives all claims in
respect thereof against Landlord, except only such claims are caused solely by
Landlord's gross negligence or willful misconduct. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the property of Tenant, or injury to or
illness or death of Tenant or any Tenant Party or any other person in or about
the Premises, the Building, the Common Area or the Project, whether such damage,
illness or injury is caused by fire, steam, electricity, gas, water or rain, or
from the breakage, leakage or other defects of sprinklers, wires, appliances,
ventilation, plumbing, air conditioning or lighting fixtures, or from any other
cause, and whether said damage, illness or injury results from conditions
arising upon the Premises, upon other portions of the Building or from other
sources or places, and regardless of whether the cause of such damage, illness
or injury or the means of repairing the same is inaccessible to Tenant, except
only damage, illness or injury caused solely by Landlord's, its employees',
contractors' or agents' gross negligence or willful misconduct. Landlord shall
not be liable for any damages arising from any act or neglect of any contractor
or other tenant, if any, of the Building or the Project or Landlord's failure to
enforce the terms of any agreements with parties other than Tenant.

        8.6 Landlord's Indemnity. Landlord shall indemnify, protect, defend
and hold Tenant harmless from and against any and all claims, judgments, causes
of action, damages, penalties, costs, liabilities, and expenses,

                                       -7-
<PAGE>

including all costs, reasonable attorneys' fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon, arising at any time during or after the Term as a result (directly or
indirectly) of or in connection with (collectively, "liabilities"), but only to
the extent of, Landlord's, its employees', contractors' or agents' grossly
negligent acts or willful misconduct. Landlord's agreement to indemnify and hold
Tenant harmless as provided above is not intended to and shall not relieve any
insurance carrier of its obligations under policies required to be carried by
Tenant pursuant to the provisions of this Lease to the extent that such policies
cover (or, if such policies would have been carried as required, would have
covered) Liabilities incurred as a result of negligent acts or omissions or the
willful misconduct of Landlord or those of its employees or agents.

9. REPAIRS AND MAINTENANCE

        9.1 Tenant. Tenant, at Tenant's sole cost and expense, shall keep and
maintain the Premises (interior and exterior, excluding roofing and painting),
including, without limitation, loading docks, roll up doors and ramps, floors,
subfloors and floor coverings, walls and wall coverings, doors, windows, glass,
plate glass, locks, ceilings, skylights, lighting systems, interior plumbing,
electrical and mechanical systems and wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
clean and safe condition, in good order, condition and repair. Without limiting
the foregoing, Tenant shall, at Tenant's sole expense, immediately replace all
broken glass in the Premises with glass equal to or in excess of the
specification and quality of the original glass; and repair any area damaged by
Tenant, Tenant's agents, employees, invitees and visitors, including any damage
caused by any roof penetration, whether or not such roof penetration was
approved by Landlord. All repairs and replacements by Tenant shall be made and
performed: (a) at Tenant's cost and expense and at such time and in such manner
as Landlord may designate, (b) by contractors or mechanics approved by Landlord,
(c) so that same shall be at least equal in quality, value and utility to the
original work or installation, (d) in a manner and using equipment and materials
that will not interfere with or impair the operations, use or occupation of the
Building or any of the mechanical, electrical, plumbing or other systems in the
Building or the Project, and (e) in accordance with the Rules and Regulations
and all Applicable Laws (as defined in Section 11). In the event Tenant fails,
in the reasonable judgment of Landlord, to maintain the Premises in accordance
with the obligations under the Lease, which failure continues at the end of a
reasonable period of time (but no longer than 30 days to commence repair)
following Tenant's receipt of written notice from Landlord stating the nature
of the failure, Landlord shall have the right to enter the Premises and perform
such maintenance, repairs or refurbishing at Tenant's sole cost and expense
(including a sum for overhead to Landlord equal to ten percent (10%) of
the costs of maintenance, repairs or refurbishing). Tenant shall maintain
written records of maintenance and repairs, as required by any Applicable Law,
and shall use certified technicians to perform such maintenance and repairs, as
so required. Tenant shall deliver full and complete copies of all service or
maintenance contracts entered into by Tenant for the Premises to Landlord within
one hundred twenty (120) days after the Commencement Date.

        9.2 Landlord. Landlord shall, subject to the following limitations,
repair damage to structural portions of the roof, foundation and load-bearing
portions of walls (excluding wall coverings, painting, glass and doors) of the
Building; provided, if such damage is caused by an act or omission of Tenant, or
any Tenant Party, then such repairs shall be at Tenant's sole expense. Landlord
shall not be required to make any repair resulting from (i) any alteration or
modification to the Building or to mechanical equipment within the Building
performed by, for or because of Tenant or to special equipment or systems
installed by, for or because of Tenant, (ii) the installation, use or operation
of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's
property in or out of the Building or in and about the Premises, (iv) Tenant's
use or occupancy of the Premises in violation of Section 11 of this Lease or in
the manner not contemplated by the parties at the time of the execution of this
Lease, (v) the acts or omissions of Tenant or any Tenant Party, (vi) fire and
other casualty, except as provided by Section 13 of this Lease or (vii)
condemnation, except as provided in Section 14 of this Lease. Landlord shall
have no obligation to make repairs under this Section 9.2 until a reasonable
time (but no longer than 30 days to commence repair) after receipt of written
notice from Tenant of the need for such repairs. There shall be no abatement of
Rent during the performance of such work. Landlord shall not be liable to Tenant
for injury or damage that may result from any defect in the construction or
condition of the Premises, nor for any damage that may result from interruption
of Tenant's use of the Premises during any repairs by Landlord. Tenant waives
any right to repair the Premises, the Building and/or the Common Area at the
expense of Landlord under any Applicable Laws, including, without limitation,
Sections 1941 and 1942 of the California Civil Code.

                                       -8-
<PAGE>

10. ALTERATIONS

        10.1 Trade Fixtures; Alterations. Tenant may install necessary trade
fixtures, equipment and furniture in the Premises, provided that such items are
installed and are removable without structural or material damage to the
Premises, the Building, the Common Area or the Project. Tenant shall not
construct, nor allow to be constructed, any alterations or physical additions
in, about or to the Premises without obtaining the prior written consent of
Landlord, which request for consent shall be directed by Tenant to the specific
attention of Don Little and Lisa Hooton, and which consent by Landlord shall not
be unreasonably withheld or delayed but shall be conditioned upon Tenant's
compliance with the provisions of Exhibit G and any other applicable
requirements of Landlord regarding construction of improvements and alterations;
provided, however, notwithstanding the contrary provisions of Exhibit G and this
Section 10, Tenant shall have the right, without Landlord's consent, to make any
non-structural alteration or physical addition to the Premises which, for any
single project or for any series of projects, does not cost more than Five
Thousand Dollars ($5,000) during each twelve (12) month period during the Term
of the Lease so long as (a) Tenant provides Landlord with ten (10) days prior
written notice of the commencement of any such alteration and shall furnish to
Landlord a copy of Tenant's proposed plans for such alteration, (b) such
alteration does not affect the Building's electrical, mechanical or HVAC systems
or any other structural part of the Building or the Premises, (c) the materials
used by or for Tenant are of the same or better quality than those comprising
the Premises at the tine of the Lease and shall be performed in a workmanlike
manner and in accordance with all applicable laws and regulations, and (d) upon
completion of any such alteration, Tenant shall provide Landlord with a copy of
Tenant's "as built" plans for such alteration. Except as expressly specified
above, Tenant shall submit plans and specifications to Landlord with Tenant's
request for approval and shall reimburse Landlord for all actual costs which
Landlord may incur in connection with granting approval to Tenant for any such
alterations and additions, including any costs or expenses which Landlord may
incur in electing to have outside architects and engineers review said matters.
If Landlord does not respond to a written request from Tenant within ten (10)
business days, then Landlord shall be deemed to disapprove such request;
provided, however, that such deemed disapproval by Landlord shall not prevent
Tenant from resubmitting such request to Landlord (and to the specific attention
of Don Little and Lisa Hooton). In the event that Tenant resubmits such request
(after not receiving a response from Landlord to the first request), and
Landlord does not respond to such second written request from Tenant within ten
(10) business days, Landlord shall be deemed to approve such request. In the
event Tenant makes any alterations to the Premises that trigger or give rise to
a requirement that the Building or the Premises come into compliance with any
governmental laws, ordinances, statutes, orders and/or regulations (such as ADA
requirements), Tenant shall be fully responsible for complying, at its sole cost
and expense, with same. Tenant shall file a notice of completion after
completion of such work and provide Landlord with a copy thereof. Tenant shall
provide Landlord with a set of "as-built" drawings for any such work.

        10.2 Damage; Removal. Tenant shall repair all damage to the Premises,
the Building, the Common Area or the Project caused by the installation or
removal of Tenant's fixtures, equipment, furniture or alterations. Upon the
termination of this Lease, Tenant shall remove any or all trade fixtures,
alterations, additions, improvements and partitions made or installed by Tenant
and restore the Premises to its condition existing prior to the construction of
any such items; provided, however, Landlord has the absolute right to require
Tenant to have all or any portion of such items, except movable trade fixtures,
designated by Landlord to remain on the Premises, in which event they shall be
and become the property of Landlord upon the termination of this Lease. All such
removals and restoration shall be accomplished in a good and workmanlike manner
and so as not to cause any damage to the Premises, the Building, the Common Area
or the Project whatsoever.

        10.3 Liens. Tenant shall promptly pay and discharge all claims for labor
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics' and materialmen's liens in
connection therewith. Tenant shall provide at least ten (10) days prior written
notice to Landlord before any labor is performed, supplies furnished or services
rendered on or at the Premises and Landlord shall have the right to post on the
Premises notices of non-responsibility. If any lien is filed, Tenant shall cause
such lien to be released and removed within ten (10) days after the date of
filing, and if Tenant fails to do so, Landlord may take such action as may be
necessary to remove such lien and Tenant shall pay Landlord such amounts
expended by Landlord together with interest thereon at the Applicable Interest
Rate from the date of expenditure.

        10.4 Standard of Work. All work to be performed by or for Tenant
pursuant hereto shall be performed diligently and in a first class,
workmanlike manner, and in compliance with all Applicable Laws, and/or Tenant
and

                                       -9-
<PAGE>

Landlord's insurance carriers. Landlord shall have the right, but not the
obligation, to inspect periodically the work on the Premises and Landlord may
require changes in the method or quality of the work.

11. USE. The Premises shall be used only for the Permitted Uses set forth in the
Basic Lease Information and for no other uses. Tenant's use of the Premises
shall be in compliance with and subject to all applicable laws, statutes, codes,
ordinances, orders, rules, regulations, conditions of approval and requirements
of all federal, state, county, municipal and governmental authorities and all
administrative or judicial orders or decrees and all permits, licenses,
approvals and other entitlements issued by governmental entities, and rules of
common law, relating to or affecting the Project, the Premises or the Building
or the use or operation thereof, whether now existing or hereafter enacted,
including, without limitation, the Americans with Disabilities Act of 1990, 42
USC 12111 et seq. (the "ADA") as the same may be amended from time to time, all
Environmental Laws (as defined in Section 12.1), and any CC&Rs or any supplement
thereto recorded in any official or public records with respect to the Project
or any portion thereof ("Applicable Laws"). Tenant shall be responsible for
obtaining any permit, business license, or other permits or licenses required by
any governmental agency permitting Tenant's use or occupancy of the Premises. In
no event shall the Premises be used for any of the Prohibited Uses set forth on
Exhibit E attached hereto. Tenant shall comply with the rules and regulations
attached hereto as Exhibit F, together with such reasonable additional rules and
regulations as Landlord may from time to time prescribe. Tenant shall not commit
waste, overload the floors or structure of the Building, subject the Premises,
the Building, the Common Area or the Project to any use which would damage the
same or violate any insurance coverage, permit any unreasonable odors, smoke,
dust, gas, substances, noise or vibrations to emanate from the Premises, take
any action which would constitute a nuisance or would disturb, obstruct or
endanger any other tenants, take any action which would abrogate any warranties,
or use or allow the Premises to be used for any unlawful purpose. Tenant shall
have the right in common with other tenants of Landlord to use the parking
facilities of the Project. Tenant agrees not to overburden the parking
facilities and agrees to cooperate with Landlord and other tenants in the use of
parking facilities. Landlord shall not be responsible for non-compliance by any
other tenant or occupant of the Project with, or Landlord's failure to enforce,
any of the rules or regulations or CC&Rs or any other terms or provisions of
such tenant's or occupant's lease. Tenant shall promptly comply with the
reasonable requirements of any board of fire insurance underwriters or other
similar body now or hereafter constituted. Tenant shall not do any act which
shall in any way encumber the title of Landlord in and to the Premises, the
Building or the Project.

12. ENVIRONMENTAL MATTERS

        12.1 Hazardous Materials. Tenant shall not cause nor permit, nor allow
any of Tenant's employees, agents, customers, visitors, invitees, licensees,
contractors, assignees or subtenants (individually, a "Tenant Party" and
collectively, "Tenant's Parties") to cause or permit, any Hazardous Materials to
be brought upon, stored, manufactured, generated, blended, handled, recycled,
treated, disposed or used on, under or about the Premises, the Building, the
Common Area or the Project, except (i) for routine office and janitorial
supplies in usual and customary quantities stored, used and disposed of in
accordance with all applicable Environmental Laws and (ii) for such Hazardous
Materials as are normally used in Tenant's business operations on the Premises,
and then only in compliance with all Environmental Laws and provided such
materials are disposed of off the Premises in a properly licensed disposal site.
Tenant shall provide Landlord with a list of the Hazardous Materials used in
Tenant's normal business operations at the Premises on the Commencement Date,
and Tenant shall thereafter update said Hazardous Material list semi-annually,
commencing with the first day of the sixth (6th) month following the
Commencement Date. As used herein, "Hazardous Materials" means any chemical,
substance, material, controlled substance, object, condition, waste, living
organism or combination thereof, whether solid, semi-solid, liquid or gaseous,
which is or may be hazardous to human health or safety or to the environment due
to its radioactivity, ignitability, corrosivity, reactivity, explosivity,
toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other
harmful or potentially harmful properties or effects, including, without
limitation, tobacco smoke, petroleum and petroleum products, asbestos, radon,
polychlorinated biphenyls (PCBs), refrigerants (including those substances
defined in the Environmental Protection Agency's "Refrigerant Recycling Rule,"
as amended from time to time) and all of those chemicals, substances, materials,
controlled substances, objects, conditions, wastes, living organisms or
combinations thereof which are now or become in the future listed, defined or
regulated in any manner by any Environmental Law based upon, directly or
indirectly, such properties or effects. As used herein, "Environmental Laws"
means any and all federal, state or local environmental, health and/or
safety-related laws, regulations, standards, decisions of courts, ordinances,
rules, codes, orders, decrees, directives, guidelines, permits or permit
conditions, currently existing and as amended, enacted, issued or adopted in the
future which are or become

                                      -10-
<PAGE>

applicable to Tenant, the Premises, the Building, the Common Area or the
Project. Tenant and Tenant's Parties shall comply with all Environmental Laws
and promptly notify Landlord in writing of the violation of any Environmental
Law or presence of any Hazardous Materials, other than as expressly permitted
above, in, on, under or about the Premises or the improvements or the soil or
groundwater thereunder. Landlord shall have the right to enter upon and inspect
the Premises and to conduct tests, monitoring and investigations. If such tests
indicate the presence of any environmental condition caused or exacerbated by
Tenant or any Tenant Party or arising during Tenant's or any Tenant Party's
occupancy, Tenant shall reimburse Landlord for the cost of conducting such
tests. The phrase "environmental condition" shall mean any adverse condition
relating to any Hazardous Materials or the environment, including surface water,
groundwater, drinking water supply, land, surface or subsurface strata or the
ambient air and includes air, land and water pollutants, noise, vibration, light
and odors. In the event of any such environmental condition, Tenant shall
promptly take any and all steps necessary to rectify the same to the
satisfaction of the applicable agencies and Landlord, or shall, at Landlord's
election, reimburse Landlord, upon demand, for the cost to Landlord of
performing rectifying work. The reimbursement shall be paid to Landlord in
advance of Landlord's performing such work, based upon Landlord's reasonable
estimate of the cost thereof; and upon completion of such work by Landlord,
Tenant shall pay to Landlord any shortfall promptly after receipt of Landlord's
bills therefor or Landlord shall promptly refund to Tenant any excess deposit,
as the case may be.

        12.2 Indemnification. Tenant shall indemnify, protect, defend (by
counsel acceptable to Landlord) and hold harmless Landlord and Landlord's
affiliated entities, and each of their respective members, managers, partners,
directors, officers, employees, shareholders, lenders, agents, contractors,
successors and assigns (individually and collectively, "Indemnitees") (a) from
and against any and all claims, judgments, causes of action, damages, penalties,
fines, taxes, costs, liabilities, losses and expenses arising at any time during
or after the Term as a result (directly or indirectly) of the presence of
Hazardous Materials caused by Tenant and/or Tenant's Parties and (b) from and
against any and all actual costs of redemption, orders, penalties, fines, costs,
liabilities, losses, administrative actions or other proceedings (collectively,
a "Compliance Obligation") commenced by any governmental agency including,
without limitation, the United States Environmental Protection Agency, arising
at any tine during or after the Term as a result of or in connection with
Tenant's and/or Tenant's Parties' breach of any prohibition or provision
contained in Paragraph 12.1 hereof. This indemnity shall include, without
limitation, the cost of any required or necessary repair, cleanup or
detoxification, and the preparation and implementation of any closure,
monitoring or other required plans, whether such action is required or necessary
prior to or following the termination of this Lease. Neither the written consent
by Landlord to the presence of Hazardous Materials on, under or about the
Premises, nor the strict compliance by Tenant with all Environmental Laws, shall
excuse Tenant from Tenant's obligation of indemnification pursuant hereto.
Tenant's obligations pursuant to the foregoing indemnity shall survive the
expiration or termination of this Lease.

13. DAMAGE AND DESTRUCTION

        13.1 Casualty. If the Premises or Building should be damaged or
destroyed by fire or other casualty, Tenant shall give immediate written notice
to Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord shall notify Tenant whether the necessary repairs can
reasonably be made: (a) within ninety (90) days; (b) in more than ninety (90)
days but in less than one hundred eighty (180) days; or (c) in more than one
hundred eighty (180) days, in each case after the date of the issuance of
permits for the necessary repair or reconstruction of the portion of the
Building or Premises which was damaged or destroyed.

            13.1.1 Less Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed within ninety (90) days after the issuance of permits for the
necessary repair or reconstruction of the portion of the Building or Premises
which was damaged or destroyed and provided that insurance proceeds are
available to fully repair the damage, this Lease shall not terminate, and
Landlord shall repair the Premises, commencing such repairs as soon as
reasonable possible and thereafter prosecuting such repairs until completion,
except that Landlord shall not be required to rebuild, repair or replace
Tenant's Property which may have been placed in, on or about the Premises by or
for the benefit of Tenant. If Tenant is required to vacate all or a portion of
the Premises during Landlord's repair thereof, the Base Rent payable hereunder
shall be abated proportionately on the basis of the size of the area of the
Premises that is damaged (i.e., the number of square feet of floor area of the
Premises that is damaged compared to the total square footage of the floor area
of the Premises) from the date Tenant vacates all or a portion of the Premises
that was damaged only to

                                      -11-
<PAGE>

the extent rental abatement insurance proceeds are received by Landlord and only
during the period the Premises are unfit for occupancy.

            13.1.2 Greater Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed in more than ninety (90) days but in less than one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, then Landlord shall have the option of: (a) terminating the Lease
effective upon the occurrence of such damage, in which event the Base Rent shall
be abated from the date Tenant vacates the Premises; or (b) electing to repair
the Premises, provided insurance proceeds are available to fully repair the
damage, commencing such repairs as soon as reasonable possible and thereafter
prosecuting such repairs until completion (except that Landlord shall not be
required to rebuild, repair or replace Tenant's Property which may have been
placed in, on or about the Premises by or for the benefit of Tenant). If Tenant
is required to vacate all or a portion of the Premises during Landlord's repair
thereof, the Base Rent payable hereunder shall be abated proportionately on the
basis of the size of the area of the Premises that is damaged (i.e., the number
of square feet of floor area of the Premises that is damaged compared to the
total square footage of the floor area of the Premises) from the date Tenant
vacates all or a portion of the Premises that was damaged only to the extent
rental abatement insurance proceeds are received by Landlord and only during the
period the Premises are unfit for occupancy. In the event that Landlord should
fail to substantially complete such repairs within one hundred eighty (180) days
after the issuance of permits for the necessary repair or reconstruction of the
portion of the Building or Premises which was damaged or destroyed, (such period
to be extended for delays caused by Tenant or because of any items of Force
Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises,
Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days
after the expiration of such one hundred eighty (180) day period, and provided
that such repairs have not been substantially completed within such ten (10) day
period, to terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights hereunder shall cease and
terminate thirty (30) days after Landlord's receipt of such notice.

            13.1.3 Greater Than 180 Days. If the Premises or Building should be
so damaged that rebuilding or repairs cannot be completed within one hundred
eighty (180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Building or Premises, provided
insurance proceeds are available to repair the damage (except that Landlord
shall not be required to rebuild, repair or replace Tenant's Property which may
have been placed in, on or about the Premises by or for the benefit of Tenant).
If Tenant is required to vacate all or a portion of the Premises during
Landlord's repair thereof, the Base Rent payable hereunder shall be abated
proportionately on the basis of the size of the area of the Premises that is
damaged (i.e., the number of square feet of floor area of the Premises that is
damaged compared to the total square footage of the floor area of the Premises),
from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
and only during the period that the Premises are unfit for occupancy.

            13.1.4 Casualty During the Last Year of the Lease Term.
Notwithstanding any other provisions hereof, if the Premises or the Building
shall be damaged within the last year of the Lease Term, and if the cost to
repair or reconstruct the portion of the Building or the Premises which was
damaged or destroyed shall exceed $10,000, then, irrespective of the time
necessary to complete such repair or reconstruction, Landlord shall have the
right, in its sole discretion, to terminate the Lease effective upon the
occurrence of such damage, in which event the Rent shall be abated from the
date Tenant vacates the Premises. The foregoing right shall be in addition to
any other right and option of Landlord under this Section 13.

        13.2 Tenant's Fault. If the Premises or any portion of the Building is
damaged resulting from the negligence or breach of this Lease by Tenant or any
of Tenant's Parties, Rent shall not be reduced during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair caused thereby
to the extent such cost is not covered by insurance proceeds received by
Landlord.

                                      -12-
<PAGE>

        13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay
to Landlord Tenant's Share of any deductible or retention amount payable under
the property insurance for the Building. In the event that the Premises or any
portion of the Building is damaged to the extent Tenant is unable to use the
Premises and such damage is not covered by insurance proceeds received by
Landlord or in the event that the holder of any indebtedness secured by the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right at Landlord's option either (i) to repair
such damage as soon as reasonably possible at Landlord's expense, or (ii) to
give written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to terminate this Lease as of
the date of the occurrence of such damage. In the event Landlord elects to
terminate this Lease, Tenant shall have the right within ten (10) days after
receipt of such notice to give written notice to Landlord of Tenant's commitment
to pay the cost of repair of such damage, in which event this Lease shall
continue in full force and effect, and Landlord shall make such repairs as soon
as reasonably possible subject to the following conditions: Tenant shall deposit
with Landlord Landlord's estimated cost of such repairs not later than ten (10)
days prior to Landlord's commencement of the repair work. If the cost of such
repairs exceeds the amount deposited, Tenant shall reimburse Landlord for such
excess cost within fifteen (15) days after receipt of an invoice from Landlord.
Any amount deposited by Tenant in excess of the cost of such repairs shall be
refunded within thirty (30) days of Landlord's final payment to Landlord's
contractor. If Tenant does not give such notice within the ten (10) day period,
or fails to make such deposit as required, this Lease shall terminate
automatically as of the date of the occurrence of the damage.

        13.4 Waiver. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by law, including without limitation any rights granted under Section
1932, subdivision 2, and Section 1933 of the California Civil Code.

14. EMINENT DOMAIN

        14.1 Total Condemnation. If all of the Premises is condemned by eminent
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.

        14.2 Partial Condemnation. If any portion of the Premises or the
Building is Condemned and such partial condemnation materially impairs Tenant's
ability to use the Premises for Tenant's business as reasonably determined by
Landlord, Landlord shall have the option of either (i) relocating Tenant to
comparable space within the Project or (ii) terminating this Lease as of the
earlier of the date title vests in the condemning authority or as of the date an
order of immediate possession is issued and Rent shall be adjusted to the date
of termination. If such partial condemnation does not materially impair Tenant's
ability to use the Premises for the business of Tenant, Landlord shall promptly
restore the Premises to the extent of any condemnation proceeds recovered by
Landlord, excluding the portion thereof lost in such condemnation, and this
Lease shall continue in full force and effect except that after the date of such
title vesting or order of immediate possession Rent shall be adjusted as
reasonably determined by Landlord.

        14.3 Award. If the Premises are wholly or partially Condemned, Landlord
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from the
condemning authority such compensation as may be separately awarded to Tenant in
connection with costs in removing Tenant's merchandise, furniture, fixtures,
leasehold improvements and equipment to a new location. No condemnation of any
kind shall be construed to constitute an actual or constructive eviction of
Tenant or a breach of any express or implied covenant of quiet enjoyment. Tenant
hereby waives the effect of Sections 1265.120 and 1265.130 of the California
Code of Civil Procedure and any successor statutes.

        14.4 Temporary Condemnation. In the event of a temporary condemnation
not extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section. If
a temporary

                                      -13-
<PAGE>

condemnation remains in effect at the expiration or earlier termination of this
Lease, Tenant shall pay Landlord the reasonable cost of performing any
obligations required of Tenant with respect to the surrender of the Premises.

15. DEFAULT

        15.1 Events of Defaults. The occurrence of any of the following events
shall, at Landlord's option, constitute an "Event of Default":

            15.1.1 Vacation or abandonment of the Premises for a period of
thirty (30) consecutive days;

            15.1.2 Failure to pay Rent on the date when due and the failure
continuing for a period of five (5) days after such payment is due;

            15.1.3 Failure to perform Tenant's covenants and obligations
hereunder (except default in the payment of Rent) where such failure continues
for a period of thirty (30) days after written notice from Landlord; provided,
however, if the nature of the default is such that more than thirty (30) days
are reasonably required for its cure, Tenant shall not be deemed to be in
default if Tenant commences the cure within ten (10) days after written notice
from Landlord and diligently and continuously prosecutes such cure to
completion;

            15.1.4 The making of a general assignment by Tenant for the benefit
of creditors; the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing; the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold; Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due; any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking
any action toward the dissolution or winding up of Tenant's affairs; the
cessation or suspension of Tenant's use Of the Premises; or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

            15.1.5 The making of any material misrepresentation or omission by
Tenant or any successor in interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or

            15.1.6 The occurrence of an Event of Default set forth in Section
15.1.4 or 15.1.5 with respect to any guarantor of this Lease, if applicable.

        15.2 Remedies

            15.2.1 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 (which notice may be the notice given under Section 15.1 above, if
applicable, and which notice shall be in lieu of any notice required by
California Code of Civil Procedure Section 1161, et seq.) and, on the date
specified in such notice, this Lease shall terminate unless on or before such
date all arrears of Rent and all other sums payable by Tenant under this Lease
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 at the time existing
shall have been fully remedied to the satisfaction of Landlord.

                    15.2.1.1 Repossession. Following termination, without
prejudice to other remedies Landlord may have, Landlord may (i) peaceably
re-enter the Premises upon voluntary surrender by Tenant or remove Tenant
therefrom and any other persons occupying the Premises, using such legal
proceedings as may be available; (ii) repossess the Premises or relet the
Premises or any part thereof for such term (which may be for a term extending
beyond the Term), at such rental and upon such other terms and conditions as
Landlord in Landlord's sole discretion shall determine, with the right to make
reasonable alterations and repairs to the Premises; and (iii) remove all
personal property therefrom.

                                      -14-
<PAGE>

                    15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) the worth, at
the time of award, of the amount by which the unpaid Rent for the balance of the
Term after the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

            15.2.2 Continuation. 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; and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the remedy described
in California Civil Code Section 1951.4 ("lessor" may continue the Lease in
effect after "lessee's" breach and abandonment and recover Rent as it becomes
due, if "lessee" has the right to sublet or assign, subject only to reasonable
limitations) to recover Rent as it becomes due. Landlord, without terminating
this Lease, may, during the period Tenant is in default, enter the Premises and
relet the same, or any portion thereof, to third parties for Tenant's account
and Tenant shall be liable to Landlord for all costs Landlord incurs in
reletting the Premises, including, without limitation, brokers' commissions,
expenses of remodeling the Premises and like costs. Reletting may be for a
period shorter or longer than the remaining Term. Tenant shall continue to pay
the Rent on the date the same is due. No act by Landlord hereunder, including
acts of maintenance, preservation or efforts to lease the Premises or the
appointment of a receiver upon application of Landlord to protect Landlord's
interest under this Lease, shall terminate this Lease unless Landlord notifies
Tenant that Landlord elects to terminate this Lease. In the event that Landlord
elects to relet the Premises, the rent that Landlord receives from reletting
shall be applied to the payment of, first; any indebtedness from Tenant to
Landlord other than Base Rent and Tenant's Share of Operating Expenses and Real
Property Taxes; second, all costs, including maintenance, incurred by Landlord
in reletting; and, third, Base Rent and Tenant's Share of Operating Expenses and
Real Property Taxes under this Lease. After deducting the payments referred to
above, any sum remaining from the rental Landlord receives from reletting shall
be held by Landlord and applied in payment of future Rent as Rent becomes due
under this Lease. In no event, and notwithstanding anything in Section 16 to the
contrary, shall Tenant be entitled to any excess rent received by Landlord. If,
on the date Rent is due under this Lease, the rent received from the reletting
is less than the Rent due on that date, Tenant shall pay to Landlord, in
addition to the remaining Rent due, all costs, including maintenance, which
Landlord incurred in reletting the Premises that remain after applying the rent
received from reletting as provided hereinabove. So long as this Lease is not
terminated, Landlord shall have the right to remedy any default of Tenant, to
maintain or improve the Premises, to cause a receiver to be appointed to
administer the Premises and new or existing subleases and to add to the Rent
payable hereunder all of Landlord's reasonable costs in so doing, with interest
at the Applicable Interest Rate from the date of such expenditure. Landlord
shall have no duty to relet the Premises so long as it has other unleased space
available in the Project.

        15.3 Cumulative. Each right and remedy of Landlord provided for herein
or now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or otherwise. No payment by Tenant of a lesser amount than
the Rent nor any endorsement on any check or letter accompanying any check or
payment as 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.

16. ASSIGNMENT AND SUBLETTING.

        16.1 Landlord's Consent. Tenant shall not assign, sublet or otherwise
transfer, whether voluntarily or involuntarily or by operation of law, the
Premises or any part thereof without Landlord's prior written approval, which
request for approval shall be directed by Tenant to the specific attention of
Don Little, Ralph Pickett and Lisa Hooton, and which shall not be unreasonably
withheld or delayed; provided, however, Tenant agrees it shall be reasonable for
Landlord to disapprove of a requested sublease or assignment, if, in Landlord's
reasonable

                                      -15-
<PAGE>

determination, the proposed subtenant or assignee does not have a tangible net
worth (as determined in accordance with generally accepted accounting principles
consistently applied) sufficient to permit the proposed subtenant or assignee to
meet the obligations imposed on Tenant under this Lease, or if the proposed
subtenant or assignee is currently a tenant in any other space leased by
Landlord or if such proposed subtenant or assignee is in the process of
negotiation with Landlord to lease other space owned or managed by Landlord. The
merger of Tenant with any other entity or the transfer of any controlling or
managing ownership or beneficial interest in Tenant, or the assignment of a
substantial portion of the assets of Tenant, whether or not located at the
Premises, shall constitute an assignment hereunder. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give Landlord
written notice thereof with copies of all related documents and agreements
associated with the assignment or sublease, including without limitation, the
financial statements of any proposed assignee or subtenant, thirty (30) days
prior to the anticipated effective date of the assignment or sublease. Tenant
shall pay Landlord's reasonable attorneys' fees incurred in the review of such
documentation plus an administrative fee of Five Hundred Dollars ($500.00) for
each proposed transfer. Landlord shall have a period of thirty (30) days
following receipt of such notice and all related documents and agreements to
notify Tenant in writing of Landlord's approval or disapproval of the proposed
assignment or sublease. If Landlord fails to notify Tenant in writing of such
election, Landlord shall be deemed to have approved such assignment or
subletting. This Lease may not be assigned by operation of law. Any purported
assignment or subletting contrary to the provisions hereof shall be void and
shall constitute an Event of Default hereunder. If Tenant receives rent or other
consideration for any such transfer in excess of the Rent, or in case of the
sublease of a portion of the Premises, in excess of such Rent that is fairly
allocable to such portion, after appropriate adjustments to assure that all
other payments required hereunder are appropriately taken into account, Tenant
shall pay Landlord fifty percent (50%) of the difference (deducting only those
costs incurred by Tenant for leasing commissions and reasonable attorneys' fees
incurred by Tenant and the costs for tenant improvements paid for by Tenant)
between each such payment of rent or other consideration and the Rent required
hereunder. Landlord may, without waiving any rights or remedies, collect rent
from the assignee, subtenant or occupant and apply the net amount collected to
the Rent herein reserved and apportion any excess rent so collected in
accordance with the terms of the preceding sentence. Such acceptance of Rent
shall in no event be deemed to imply that Landlord is approving a subtenant or
assignee which Landlord has not approved in writing pursuant to the requirements
of this Section 16. Tenant shall continue to be liable as a principal and not as
a guarantor or surety to the sane extent as though no assignment or subletting
had been made. Landlord may consent to subsequent assignments or subletting of
this Lease or amendments or modifications to the Lease by assignees of Tenant
without notifying Tenant or any successor of Tenant and without obtaining their
consent. No permitted transfer shall be effective until there has been delivered
to Landlord a counterpart of the transfer instrument in which the transferee
agrees to be and remain jointly and severally liable with Tenant for the payment
of Rent pertaining to the Premises and for the performance of all the terms and
provisions of this Lease relating thereto arising on or after the date of the
transfer.

        16.2 Permitted Assignments and Subleases. Notwithstanding the above,
Tenant may, without the consent of, but with written notice to, Landlord, assign
the Lease, or any part thereof, or sublease the Premises, in whole or in part,
to any of the following (collectively, "Permitted Affiliates"): (i) any entity
which has the power to direct Tenant's management and operation, or any entity
whose management and operation is controlled by Tenant, or (ii) any entity a
majority of whose voting interest is owned by Tenant; or (iii) any entity in
which or with which Tenant, its successor or assigns, is merged or consolidated,
in accordance with applicable statutory provisions for merger or consolidation,
so long as the liabilities of the entities participating in such merger or
consolidation are assumed by the entity surviving such merger or created by such
consolidation; or (iv) any entity acquiring this Lease and all or substantially
all of Tenant's assets; or (v) any successor to a successor becoming such by
either of the methods described in subsections (iii) or (iv); or (vi) any entity
(or member of a group of affiliated entities) which is acquiring Tenant's
business services division or any other division of Tenant then occupying the
Premises, provided, however, that in such event, Tenant shall notify Landlord in
writing and the assignment or subletting shall not become effective until Tenant
has provided Landlord with such resolutions and/or documentation evidencing the
existence of, the authority of and the assumption of lease obligations by such
assignee or subtenant.

        16.3 Assignment to Joint Venture. Notwithstanding anything to the
contrary set forth in this Section 16, Tenant may without the consent of, but
with written notice to, Landlord, assign this Lease, or any part

                                      -16-
<PAGE>

thereof, or sublease the Premises in whole or in part to a joint venture (the
"Joint Venture") the two partners or owners of which are (a) Tenant or a
subsidiary of Tenant and (b) a major national telecommunications company, or
subsidiary of such company, provided that such entity has a credit rating equal
to or better than Tenant's (as determined in the exercise of Landlord's
reasonable discretion).

17. ESTOPPEL, ATTORNMENT AND SUBORDINATION

        17.1 Estoppel. Within ten (10) business days after written request by
Landlord, Tenant shall deliver an estoppel certificate duly executed (and
acknowledged if required by any lender), in the form attached hereto as Exhibit
H, or in such other form as may be acceptable to the lender, which form may
include some or all of the provisions contained in Exhibit H, to any proposed
mortgagee, purchaser or Landlord. Tenant's failure to deliver said statement in
such time period shall be an Event of Default hereunder and shall be conclusive
upon Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's performance and Tenant has no right of offset,
counterclaim or deduction against Rent hereunder; and (c) no more than one
month's Base Rent has been paid in advance. If any financier should require that
this Lease be amended (other than in the description of the Premises, the Term,
the Permitted Use, the Rent or as will substantially, materially or adversely
affect the rights of Tenant), Landlord shall give written notice thereof to
Tenant, which notice shall be accompanied by a Lease supplement embodying such
amendments. Tenant shall, within ten (10) business days after the receipt of
Landlord's notice, execute and deliver to Landlord the tendered Lease
supplement. If Tenant fails to deliver to Landlord either a written notice that
such supplement will substantially, materially or adversely affect the rights of
Tenant, or the tendered Lease supplement within ten (10) business days after
receipt of Landlord's notice, Tenant shall be deemed to have given Landlord a
power of attorney to execute such supplement on behalf of Tenant.

        17.2 Subordination. Subject to Tenant receiving a duly executed
commercially reasonable nondisturbance and attornment agreement, this Lease
shall be subject and subordinate to all ground leases, master leases and the
lien of all mortgages and deeds of trust which now or hereafter affect the
Premises or the Project or Landlord's interest therein, and all amendments
thereto, all without the necessity of Tenant's executing further instruments to
effect such subordination. If requested, Tenant shall execute and deliver to
Landlord within ten (10) days after Landlord's request whatever documentation
that may reasonably be required to further effect the provisions of this
paragraph including a Subordination, Nondisturbance and Attornment Agreement in
the form required by the applicable lender, ground Lessor and/or master lessor.

        17.3 Attornment. Subject to the limitations specified in Section 17.2,
Tenant hereby agrees that Tenant will recognize as its landlord under this Lease
and shall attorn to any person succeeding to the interest of Landlord in respect
of the land and the buildings governed by this Lease upon any foreclosure of any
mortgage upon such land or buildings or upon the execution of any deed in lieu
of foreclosure in respect to such deed of trust. If requested, Tenant shall
execute and deliver an instrument or instruments confirming its attornment as
provided for herein; provided, however, that no such beneficiary or successor-
in-interest shall be bound by any payment of Base Rent for more than one (1)
month in advance, or any amendment or modification of this Lease made without
the express written consent of such beneficiary where such consent is required
under applicable loan documents.

18. [INTENTIONALLY DELETED].

19. MISCELLANEOUS

        19.1 General

            19.1.1 Entire Agreement. This Lease sets forth all the agreements
between Landlord and Tenant concerning the Premises; and there are no agreements
either oral or written other than as set forth herein.

            19.1.2 Time of Essence. Time is of the essence of this Lease.

                                      -17-
<PAGE>

            19.1.3 Attorneys' Fees. In any action or proceeding which either
party brings against the other to enforce its rights hereunder, the
nonprevailing party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.

            19.1.4 Severability. If any provision of this Lease or the
application of any such provision shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable to any extent, the remaining
provisions of this Lease and the application thereof shall remain in full force
and effect and shall not be affected, impaired or invalidated.

            19.1.5 Law. This Lease shall be construed and enforced in accordance
with the laws of the state in which the Premises are located.

            19.1.6 No Option. Submission of this Lease to Tenant for
examination or negotiation does not constitute an option to lease, offer to
lease or a reservation of, or option for, the Premises; and this document shall
become effective and binding only upon the execution and delivery hereof by
Landlord and Tenant.

            19.1.7 Successors and Assigns. This Lease shall be binding upon and
inure to the benefit of the successors and assigns of Landlord and, subject to
compliance with the terms of Section 16, Tenant.

            19.1.8 Third Party Beneficiaries. Nothing herein is intended to
create any third party benefit.

            19.1.9 Memorandum of Lease. Tenant shall not record this Lease or a
short form memorandum hereof without Landlord's prior written consent which
Landlord may withhold in its sole discretion.

            19.1.10 Agency, Partnership or Joint Venture. Nothing contained
herein nor any acts of the parties hereto shall be deemed or construed by the
parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture by the parties hereto
or any relationship other than the relationship of landlord and tenant.

            19.1.11 Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation thereof or a termination by Landlord shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

            19.1.12 Headings. Section headings have been inserted solely as a
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.

            19.1.13 Security Measures. Tenant hereby acknowledges that Landlord
shall have no obligation to provide a guard service or other security measures
whatsoever. Tenant assumes all responsibility for the protection of the
Premises, Tenant, its agents and invitees and their property from the acts of
third parties.

        19.2 Signs. All signs and graphics of every kind visible in or from
public view or corridors, the Common Areas or the exterior of the Premises
(whether located inside or outside of the Premises) shall be subject to
Landlord's prior written approval and shall be subject to any applicable
governmental laws, ordinances, and regulations and in compliance with Landlord's
signage program. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in such
manner as to avoid injury or defacement of the Premises; and Tenant shall repair
any injury or defacement, including without limitation, discoloration caused by
such installation or removal.

        19.3 Waiver. No waiver of any default or breach hereunder shall be
implied from any omission to take action on account thereof, notwithstanding any
custom and practice or course of dealing. No waiver by either party of any
provision under this Lease shall be effective unless in writing and signed by
such party. No waiver shall affect any default other than the default specified
in the waiver and then such waiver shall be operative only for the time and to
the extent therein stated. Waivers of any covenant shall not be construed as a
waiver of any subsequent breach of the same.

                                      -18-
<PAGE>

        19.4 Financial Statements. Tenant shall provide, and cause each
Guarantor, if applicable, to provide to any lender, purchaser or Landlord;
within ten (10) days after request, a current, accurate, audited financial
statement for Tenant and Tenant's business and financial statements for Tenant
and Tenant's business for each of the three (3) years prior to the current
financial statement year prepared under generally accepted accounting principles
consistently applied. Tenant shall also provide within said 10-day period such
other financial information or tax returns as may be reasonably required by
Landlord, purchaser or any lender of either.

        19.5 Limitation of Liability. The obligations of Landlord under this
Lease are not personal obligations of the individual partners, members,
managers, directors, officers, shareholders, agents or employees of Landlord;
and Tenant shall look solely to the Building for satisfaction of any liability
of Landlord and shall not look to other assets of Landlord nor seek recourse
against the assets of the individual partners, directors, officers,
shareholders, agents or employees of Landlord. Whenever Landlord transfers its
interest, Landlord shall be automatically released from further performance
under this Lease and from all further liabilities and expenses hereunder and the
transferee of Landlord's interest shall assume all liabilities and obligations
of Landlord hereunder from the date of such transfer.

        19.6 Notices. All notices to be given hereunder shall be in writing and
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after
5 p.m., on the next business day.

        19.7 Brokerage Commission. Landlord shall pay a brokerage commission to
Landlord's Broker specified in the Basic Lease Information in accordance with a
separate agreement between Landlord and Landlord's Broker. Landlord shall have
no further or separate obligation for payment of any commissions or fees to any
other broker or finder. Tenant warrants to Landlord that Tenant's sole contact
with Landlord or with the Premises in connection with this transaction has been
directly with Landlord, Landlord's Broker and Tenant's Broker specified in the
Basic Lease Information, and that no other broker or finder can properly claim
a right to a commission or a finder's fee based upon contacts between the
claimant and Tenant. Any commissions or fees payable to Tenant's Broker with
respect to this transaction shall be paid by Landlord's Broker, and Landlord
shall have no obligation with respect thereto. Subject to the foregoing, Tenant
agrees to indemnify and hold Landlord harmless from any claims or liability,
including reasonable attorneys' fees, in connection with a claim by any person
for a real estate broker's commission, finder's fee or other compensation based
upon any statement, representation or agreement of Tenant, and Landlord agrees
to indemnify and hold Tenant harmless from any such claims or liability,
including reasonable attorneys' fees, based upon any statement, representation
or agreement of Landlord.

        19.8 Authorization. Each individual executing this Lease on behalf of
Tenant represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of Tenant and that such execution is binding upon
Tenant.

        19.9 Holding Over; Surrender

            19.9.1 Holding Over. If Tenant holds over the Premises or any part
thereof after expiration of the Term, such holding over shall, at Landlord's
option, constitute a month-to-month tenancy, at a rent equal to one hundred
twenty-five percent (125%) of the Base Rent in effect immediately prior to such
holding over for the first month of such holding over and thereafter at a rent
equal to two hundred percent (200%) of the Base Rent in effect immediately prior
to such holding over, and shall otherwise be on all the other terns and
conditions of this Lease. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Rent by Landlord following
expiration or termination shall not constitute a renewal of this Lease or
extension of the Term except as specifically set forth above. If Tenant fails
to surrender the Premises upon expiration or earlier termination of this Lease,
Tenant shall indemnify and hold Landlord harmless from and against all loss or
liability resulting from or arising out of Tenant's failure to surrender the
Premises, including, but not limited to, any amounts required to be paid to any
tenant or prospective tenant who was to have occupied the Premises after the
expiration or earlier termination of this Lease and any related attorneys' fees
and brokerage commissions.

                                      -19-
<PAGE>

            19.9.2 Surrender. Upon the termination of this Lease or Tenant's
right to possession of the Premises, Tenant will surrender the Premises broom
clean, together with all keys, in good condition and repair, reasonable wear and
tear excepted. Tenant shall patch and fill all holes within the Premises and all
penetrations of the roof shall be resealed to a watertight condition. In no
event may Tenant remove from the Premises any mechanical or electrical systems
or any wiring or any other aspect of any systems within the Premises. Conditions
existing because of Tenant's failure to perform maintenance, repairs or
replacements shall not be deemed "reasonable wear and tear."

        19.10 Joint and Several. If Tenant consists of more than one person, the
obligation of all such persons shall be joint and several.

        19.11 Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.

        19.12 Auctions. Tenant shall not conduct, nor permit to be conducted,
any auction upon the Premises without Landlord's prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.

        19.13 Consents. Except as otherwise provided elsewhere in this Lease,
Landlord's actual reasonable costs and expenses (including, but not limited to,
architects', attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor. Landlord's consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Event of
Default or breach by Tenant of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Event of Default or breach, except as may
be otherwise specifically stated in writing by Landlord at the time of such
consent. Except as otherwise set forth herein, the failure to specify herein any
particular condition to Landlord's consent shall not preclude the imposition by
Landlord at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.

        19.14 Force Majeure. "Force Majeure" as used herein means delays
resulting from causes beyond the reasonable control of the other party,
including, without limitation, any delay caused by any action, inaction, order,
ruling, moratorium, regulation, statute, condition or other decision of any
private party or governmental agency having jurisdiction over any portion of the
Project, over the construction anticipated to occur thereon or over any uses
thereof, or by delays in inspections or in issuing approvals by private parties
or permits by governmental agencies, or by fire, flood, inclement weather,
strikes, lockouts or other labor or industrial disturbance (whether or not on
the part of agents or employees of either party hereto engaged in the
construction of the Premises), civil disturbance, order of any government, court
or regulatory body claiming jurisdiction or otherwise, act of public enemy, war,
riot, sabotage, blockage, embargo, failure or inability to secure materials,
supplies or labor through ordinary sources by reason of shortages or priority,
discovery of hazardous or toxic materials, earthquake, or other natural
disaster, delays caused by any dispute resolution process, or any cause
whatsoever beyond the reasonable control (excluding financial inability) of the
party whose performance is required, or any of its contractors or other
representatives, whether or not similar to any of the causes hereinabove stated.

        19.15 Mortgagee Protection. Tenant agrees to give any holder of any
mortgage or deed of trust secured by the Real Property, by registered or
certified mail or nationally recognized overnight delivery service, a copy of
any notice of default served upon the Landlord by Tenant, provided that, prior
to such notice, Tenant has been notified in writing (by way of service on Tenant
of a copy of assignment of rents and leases or otherwise) of the address of such
holder of a mortgage or deed of trust. Tenant further agrees that if Landlord
shall have failed to cure such default within thirty (30) days after such notice
to Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such thirty (30) day period and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the holder of any mortgage or
deed of trust shall have an additional sixty (60) days within which to cure or
correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if such holder of any
mortgage or deed of trust has commenced within such sixty (60) day period and is
diligently

                                      -20-
<PAGE>

pursuing the remedies or steps necessary to cure or correct such default).
Notwithstanding the foregoing, in no event shall any holder of any mortgage or
deed of trust have any obligation to cure any default of the Landlord.

        19.16 Guarantors. The Guarantors, if any, shall each execute a guaranty
in a form provided by Landlord. It shall constitute an Event of Default of the
Tenant if any Guarantor fails or refuses, upon request to provide: (a) evidence
of the execution and continued enforceability of the guaranty, including the
authority of the party signing on Guarantor's behalf to obligate Guarantor, and
in the case of a corporate Guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, (b) current
financial statements, (c) an estoppel certificate, or (d) written confirmation
that the guaranty is still in effect as a valid binding obligation.

        19.17 Hazardous Substance Disclosure. California law requires landlords
to disclose to tenants the existence of certain Hazardous Materials.
Accordingly, the existence of gasoline and other automotive fluids, asbestos
containing materials, maintenance fluids, copying fluids and other office
supplies and equipment, certain construction and finish materials, tobacco
smoke, cosmetics and other personal items mast be disclosed. Gasoline and other
automotive fluids are found in the garage and parking areas of the Project.
Cleaning. lubricating and hydraulic fluids used in the operation and maintenance
of the Building are found in the utility areas of the Building not generally
accessible to Building occupants or the public. Many Building occupants use copy
machines and printers with associated fluids and toners, and pens, markers,
inks, and office equipment that may contain Hazardous Materials. Certain
adhesives, paints and other construction materials and finishes used in portions
of the Building may contain Hazardous Materials. The Building may from time to
time be exposed to tobacco smoke. Building occupants and other persons entering
the Building from time to time may use or carry prescription and non-
prescription drugs, perfumes, cosmetics and other toiletries, and foods and
beverages, some of which may contain Hazardous Materials. By its execution of
this Lease, Tenant acknowledges that the notice set forth hereinabove shall
constitute the notice required under California Health and Safety Code Section
25915.5.

        19.18 Year 2000 Compliance. Tenant represents and warrants that (i)
Tenant has developed or is developing and has budgeted for a comprehensive
program to address the "Year 2000 problem" (that is, the inability of some
computers, as well as embedded microchips in non-computing devices, to properly
perform date-sensitive functions with respect to certain dates prior to and
after December 31, 1999); and (ii) Tenant has implemented or will implement that
program substantially in accordance with its timetable and budget, and
reasonably anticipates that it will substantially avoid the Year 2000 problem as
to all computers, as well as embedded microchips in non-computing devices that
are material to Tenant's business, properties or operations.

        19.19 Parking. Tenant shall have the right, at no cost or expense to
Tenant, to use in common with the other tenants of the Project the number of
parking spaces designated for Tenant's use in the Basic Lease Information in the
parking facilities of the Project throughout the term of this Lease. Tenant's
continued right to use the parking spaces is conditioned upon Tenant abiding by
all rules and regulations which are prescribed from time to time for the orderly
operation and use of the parking facility and upon Tenant's cooperation in
seeing that Tenant's employees and visitors also comply with such rules and
regulations. Tenant agrees not to overburden the parking facilities and agrees
to cooperate with Landlord and other tenants in the use of parking facilities.
Tenant further agrees that Landlord shall not be responsible for enforcing any
parking rights in the Project. Landlord specifically reserves the right to
change the size, configuration, design, layout, location and all other aspects
of the Project's parking facility and Tenant acknowledges and agrees that
Landlord may, without incurring any liability to Tenant and without any
abatement of Rent under this Lease, from time to time, close-off or restrict
access to the Project's parking facility. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord.

        19.20 Addenda. The Addenda attached hereto, if any, and identified with
this Lease are incorporated herein by this reference as if fully set forth
herein.

                                      -21-
<PAGE>

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

"Landlord"                                       "Tenant"

CATELLUS DEVELOPMENT CORPORATION, a              DICON FIBEROPTICS, INC.,
Delaware corporation                             a California corporation

By: /s/ DON D. LITTLE                            By: /s/ HO-SHANG LEE
Name: Don D. Little                              Name: /s/ Ho-Shang Lee, Ph.D.
Its: Senior Vice President                       Its: President
     Northwest Industrial Development
Date: 12/3/99                                    Date: 12-3-99

                                                 By: /s/ DAVID POLINSKY
                                                 Name: David Polinsky
                                                 Its: Vice-President
                                                 Date: 12-3-99

                                      -22-

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