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                                                                    EXHIBIT 10.1

           STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

THIS LEASE AGREEMENT SUPERCEDES AND REPLACES ANY AND ALL PREVIOUS LEASE
AGREEMENTS, i.e., THE DOWNSTAIRS AREA LEASE AND THE UPSTAIRS FLOOR LEASE
AGREEMENT.

1.    Basic Provisions ("Basic Provisions").

      1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
JUNE 22 1999, is made by and between GREAT OAKS PROPERTIES (G.O.P.) ("Lessor")
                                     ------------------------------
and SUNRISE TELECOM, INC. ("Lessee")
    ---------------------
(collectively the "Parties," or individually a "Party").

      1.2(a)  Premises: That certain portion of the Building, Including all
Improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 22 GREAT OAKS BLVD., located in the
                                        -------------------
City of SAN JOSE, County of SANTA CLARA, State of CA, with zip code 95119,
        --------            -----------           --                -----
as outlined on Exhibit attached hereto ("Premises"). The "Building" is that
certain building containing the Premises and generally described as (describe
briefly the nature of the Building):
                                    -------

      57,600 SQUARE FEET, WHICH IS THE ENTIRE BUILDING. LESSEE AGREES TO
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             LEASE THIS BUILDING IN ITS CURRENT "AS-IS" CONDITION.
             -----------------------------------------------------

In addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the "Industrial
Center." (Also see Paragraph 2.)

      1.2(b) Parking: PER ADDENDUM #1 unreserved vehicle parking spaces
                      ---------------
("Unreserved Parking Spaces"); and
                                   ------------------------------------------
reserved vehicle parking spaces ("Reserved Parking Spaces"). (Also see
Paragraph 2.6.)

      1.3  Term: 5 years and 0 months ("Original Term") commencing When Critical
                                                                   -------------
Clean vacates the area, on or about November 1, 1999.
----------------------------------
("Commencement Date") and ending OCTOBER 31, 2004 ("Expiration Date").
(Also see Paragraph 3.)

      1.4  Early Possession:  TO BE PRORATED  ("Early Possession Date").
(Also see Paragraphs 3.2 and 3.3.)

      1.5 Base Rent: $ PER ADDENDUM #2 per month ("Base Rent"), payable on the
FIRST day of each month commencing ON OR ABOUT NOVEMBER 1, 1999 (Also see
Paragraph 4.)

[   ] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum #2, attached hereto.

      1.6(a) Base Rent Paid Upon Execution: $10,049.00 as Base Rent for
             the period
      1.6(b) Lessee's Share of Common Area Operating Expenses: ONE HUNDRED
             percent (100%) ("Lessee's Share") as determined by

[   ] prorata square footage of the Premises as compared to the total square
      footage of the Building or[ ] other criteria as described in Addendum:

      1.7    Security Deposit: $ PER ADDENDUM #3 ("Security Deposit").
             (Also see Paragraph 5.)

      1.8    Permitted Use: MARKETING, ENGINEERING, ASSEMBLY, GENERAL OFFICE &
 WAREHOUSE AS REQUIRED BY SUNRISE TELECOM, INC. NO TOXIC WASTE CHEMICALS WITHOUT
 G.O.P. APPROVAL

          ("Permitted Use") (Also see Paragraph 6.)

      1.9    Insuring Party. Lessor is the "Insuring Party."
             (Also see Paragraph 8.)

      1.10(a) Real Estate Brokers. The following real estate broker(s)
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):

[     ]    N/A   represents Lessor exclusively ("Lessor's Broker");
        --------
[     ]          represents Lessee exclusively ("Lessee's Broker"); or
        --------
[     ]          represents both Lessor and Lessee ("Dual Agency"). (Also see
        --------
Paragraph 15.)

      1.10(b)  Payment to Brokers. Upon the execution of this Lease by both
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate shares
as they may mutually designate in writing, a fee as set forth in a separate
written agreement between Lessor and said Broker(s) (or in the event there is no
separate written agreement between Lessor and said Broker(s), the sum of $ N/A )
for brokerage services rendered by said Broker(s) in connection with this
transaction.

      1.11    Guarantor. The obligations of the Lessee tinder this Lease are to
be guaranteed by ("Guarantor"). (Also see Paragraph 37.)

      1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of Paragraphs  1  through  5, and Exhibits       through
                         ---         ---              -----         -------

all of which constitute a part of this Lease.

2.  Premises, Parking and Common Areas.

     2.1  Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental and/or Common Area Operating Expenses, is
an approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.

  2.2  Condition. Lessor shall deliver the Premises to Lessee clean and free of
debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at Lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
thirty (30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.

  2.3  Compliance with Covenants, Restrictions and Building Code. Lessor
warrants that any Improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth with specificity the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be reasonable
or appropriate to rectify the non-compliance. Lessor makes no warranty that the
Permitted Use in Paragraph 1.8 is permitted for the Premises under Applicable
Laws (as defined in Paragraph 2.4).

  2.4  Acceptance of Premises. Lessee hereby acknowledges: (a) that it has been
advised by the Broker(s) to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and any
covenants or restrictions of record (collectively, "Applicable Laws") and the
present and future suitability of the Premises for Lessee's intended use; (b)
that Lessee has made such investigation as it deems necessary with reference to
such matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.

  2.5  Lessee as Prior Owner/Occupant. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any non-
compliance of the Premises with said warranties.
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  2.6  Vehicle Parking. Lessee shall be entitled to use the number of Unreserved
Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on
those portions of the Common Areas designated from time to time by Lessor for
parking. Lessee shall not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger
automobiles or pick-up trucks, herein called "Permitted Size Vehicles." Vehicles
other than Permitted Size Vehicles shall be parked and loaded or unloaded as
directed by Lessor in the Rules and Regulations (as defined in Paragraph 40)
issued by Lessor. (Also see Paragraph 2.9.)

     (a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.

     (b) If Lessee permits or allows any of the prohibited activities described
in this Paragraph 2.6, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

     (c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.

  2.7  Common Areas--Definition. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Industrial Center and interior utility raceways within the Premises that are
provided and designated by the Lessor from time to time for the general non-
exclusive use of Lessor, Lessee and other lessees of the Industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.

  2.8  Common Areas--Lessee's Rights. Lessor hereby grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no circumstances
shall the right herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the Common Areas.
Any such storage shall be permitted only by the prior written consent of Lessor
or Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the Cost to Lessee, which cost shall be
Immediately payable upon demand by Lessor.

  2.9  Common Areas--Rules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable Rules and Regulations with respect thereto in accordance
with Paragraph 40. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees of the Industrial Center.

  2.10  Common Areas--Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
     (a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways;
     (b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
     (c) To designate other land outside the boundaries of the Industrial Center
to be a part of the Common Areas;
     (d) To add additional buildings and Improvements to the Common Areas;
     (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
     (f) To do and perform such other acts and make such other changes in, to or
with respect to the Common Areas and Industrial Center as Lessor may, in the
exercise of sound business judgment, deem to be appropriate.

3.  Term.

  3.1  Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

  3.2  Early Possession. If an Early Possession Date is specified in Paragraph
1.4 and if Lessee totally or partially occupies the Premises after the Early
Possession Date but prior to the Commencement Date, the obligation to pay Base
Rent shall be abated for the period of such early occupancy. All other terms of
this Lease, however, (including but not limited to the obligations to pay
Lessee's Share of Common Area Operating Expenses and to carry the insurance
required by Paragraph 8) shall be in effect during such period. Any such early
possession shall not affect nor advance the Expiration Date of the Original
Term.

  3.3  Delay in Possession. If for any reason Lessor cannot deliver possession
of the Premises to Lessee by the Early Possession Date, if one is specified in
Paragraph 1.4, or if no Early Possession Date is specified, by the Commencement
Date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease, or the obligations of Lessee
hereunder, or extend the term hereof, but in such case, Lessee shall not, except
as otherwise provided herein, be obligated to pay rent or perform any other
obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days after
the end of said sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall
terminate and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the Original term actually commences, if
possession is not tendered to Lessee when required by this Lease and Lessee does
not terminate this Lease, as aforesaid, the period free of the obligation to pay
Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the
date of delivery of possession and continue for a period equal to the period
during which the Lessee would have otherwise enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee.

4.  Rent.

  4.1  Base Rent. Lessee shall pay Base Rent and other rent or charges, as the
same may be adjusted from time to time, to Lessor in lawful money of the United
States, without offset or deduction, on or before the day on which it is due
under the terms of this Lease. Base Rent and all other rent and charges for any
period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.

  4.2  Common Area Operating Expenses. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:
       (a) "Common Area Operating Expenses" are defined, for purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and operation
of the Industrial Center, including, but not limited to, the following:

           (i)  The operation, repair and maintenance, in neat, clean, good
                order and condition, of the following:
                (aa) The Common Areas, including parking areas, loading and
                     unloading areas, trash areas, roadways, sidewalks,
                     walkways, parkways, driveways, landscaped areas, striping,
                     bumpers, irrigation systems, Common Area lighting
                     facilities, fences and gales, elevators and roof.
                (bb) Exterior signs and any tenant directories.
                (cc) Fire detection and sprinkler systems.
           (ii) The cost of water, gas, electricity and telephone to service the
                Common Areas.
          (iii) Trash disposal, property manage services and the costs of any
                environmental inspections.
           (iv) Reserves set aside for maintenance and repair of Common Areas.
            (v) Any increase above the Base Real Properly Taxes (as defined in
                Paragraph 10.2(b)) for the Building and the Common Areas.
           (vi) Any "Insurance Cost Increase" (as defined in Paragraph 8.1).
          (vii) The cost of insurance carried by Lessor with respect to the
                Common Areas.
         (viii) Any deductible portion of an insured loss concerning the
                Building or the Common Areas.
           (ix) Any other services to be provided by Lessor that are stated
                elsewhere in this Lease to be a Common Area Operating Expense.

     (b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Building or to any other building in the
Industrial Center or to the operation, repair and maintenance thereof, shall be
allocated entirely to the Building or to such other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.

     (c) The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to
either have said improvements or facilities or to provide those services unless
the Industrial Center already has the same, Lessor already provides the
services, or Lessor has agreed elsewhere in this Lease to provide the same or
some of them.

     (d) Lessee's Share of Common Area Operating Expenses shall be payable by
Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time of Lessee's Share of annual
Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be credited the amount of such over-

                                      -2-
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payment against Lessee's Share of Common Area Operating Expenses next becoming
due. If Lessee's payments under this Paragraph 4.2(d) during said preceding year
were less than Lessee's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within ten (10) days after delivery by
Lessor to Lessee of said statement.

5.  Security Deposit. Lessee shall deposit with Lessor upon Lessee's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee falls
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for, any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefore
deposit monies with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Any time the Base Rent Increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor as an addition to the Security Deposit so that the
total amount of the Security Deposit shall at all times bear the same proportion
to the then current Base Rent as the initial Security Deposit bears to the
initial Base Rent set forth in Paragraph 1.5. Lessor shall not be required to
keep all or any part of the Security Deposit separate from its general accounts.
Lessor shall, at the expiration or earlier termination of the term hereof and
after Lessee has vacated the Premises, return to Lessee (or, at Lessor's option,
to the last assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no pad of the Security Deposit shall be considered
to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease.

6.  Use.

     6.1  Permitted Use.

     (a) Lessee shall use and occupy the Premises only for the Permitted Use set
forth in Paragraph 1.8, or any other legal use which is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the use of the
Premises in a manner that is unlawful, creates waste or a nuisance, or that
disturbs owners and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.
     (b) Lessor hereby agrees to not unreasonably withhold or delay its consent
to any written request by Lessee, Lessee's assignees or subtenants, and by
prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair
the structural integrity of the improvements on the Premises or in the Building
or the mechanical or electrical systems therein, does not conflict with uses by
other lessees, is not significantly more burdensome to the Premises or the
Building and the improvements thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days after such request give a written notification of same,
which notice shall include an explanation of Lessor's reasonable objections to
the change in use.

     6.2  Hazardous Substances.

     (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used
in this Lease shall mean any product, substance, chemical, material or waste
whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any governmental
authority; or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof. Lessee
shall not engage in any activity in or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). "Reportable Use" shall mean (i) the installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may, without Lessor's prior consent, but upon notice to Lessor and in compliance
with all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the Permitted
Use, so long as such use is not a Reportable Use and does not expose the
Premises or neighboring properties to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may (but
without any obligation to do so) condition its consent to any Reportable Use of
any Hazardous Substance by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Lessor's option, removal on or before Lease expiration
or earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
     (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or the Building, other than as previously consented to by
Lessor, Lessee shall immediately give Lessor written notice thereof, together
with a copy of any statement, report, notice, registration, application, permit,
business plan, license, claim, action, or proceeding given to, or received from,
any governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under or about the Premises (including,
without limitation; through the plumbing or sanitary sewer system).
     (c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time of such agreement.

  6.3  Lessee's Compliance with Requirements. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect. Lessee shall, within five (5) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information, including
but not limited to permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.

  6.4  Inspection; Compliance with Law. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lenders") shall have the right
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any such
Inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.

7.  Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations.

  7.1  Lessee's Obligations.

     (a) Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance
with Covenants, Restrictions and Building Code), 7.2 (Lessor's Obligations), 9
(Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole
cost and expense and at all times, keep the Premises and every part thereof in
good order, condition and repair (whether or not such portion of the Premises
requiring repair, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, without limiting the generality of the foregoing,
all equipment or facilities specifically Serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire hose connections it within the
Premises, fixtures, interior walls, interior surfaces of exterior walls,
ceilings, floors, windows, doors, plate glass, and skylights, but excluding any
items which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations shall
include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.
     (b) Lessee shall, at Lessee's sole cost and expense, procure and maintain a
contract, with copies to Lessor, in customary form and substance for and with a
contractor specializing and experienced in the inspection, maintenance and
service of the heating, air conditioning and ventilation system for the
Premises. However, Lessor reserves the right, upon notice to Lessee, to procure
and maintain the contract for the heating, air conditioning and ventilating
systems, and if Lessor so elects, Lessee shall reimburse Lessor, upon demand,
for the cost thereof.
     (c) If Lessee fails to perform Lessee's obligations under this Paragraph
7.1, Lessor may enter upon the Premises after ten (10) days' prior written
notice to Lessee (except in the case of an emergency, in which case no notice
shall be required), perform such obligations on Lessee's behalf, and put the
Premises in good order, condition and repair, in accordance with Paragraph 13.2
below.

  7.2  Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the
foundations, exterior walls, structural condition of Interior bearing walls,
exterior roof, life sprinkler and/or standpipe and hose (if located in the
Common Areas) or other automatic fire extinguishing system Including fire alarm
and/or smoke detection

                                      -3-
<PAGE>

systems and equipment, fire hydrants, parking lots, walkways, parkways,
driveways, landscaping, fences, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing the services for which there
is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not
be obligated to paint the exterior or interior surfaces of exterior walls nor
shall Lessor be obligated to maintain, repair or replace windows, doors or plate
glass of the Premises. Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminals this Lease because of Lessor's
failure to keep the Building, Industrial Center or Common Areas in good order,
condition and repair.

  7.3  Utility Installations, Trade Fixtures, Alterations.

     (a) Definitions; Consent Required. The term "Utility Installations" is used
in this Lease to refer to all air lines, power panels, electrical distribution,
security, fire protection systems, communications systems, lighting fixtures,
heating, ventilating and air conditioning equipment, plumbing, and fencing in,
on or about the Premises. The term "Trade Fixtures" shall mean Lessee's
machinery and equipment which can be removed without doing material damage to
the Premises. The term "Alterations" shall mean any modification of the
improvements on the Premises which are provided by Lessor under the terms of
this Lease, other than Utility Installations or Trade Fixtures. "Lessee-Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by LESSEE that are not yet owned by Lessor pursuant
to Paragraph 7.4(a). Lessee shall not make nor cause to be made any Alterations
or Utility Installations in, on, under or about the Premises without Lessor's
prior written consent. Lessee may, however, make non-structural Utility
Installations to the Interior of the Premises (excluding the roof) without
Lessor's consent but upon notice to Lessor, so long as they are not visible from
the outside of the Premises, do not involve puncturing, relocation or removing
the roof or any existing walls, or changing or interfering with the fire
sprinkler or fire detection systems and the cumulative cost thereof during the
term of this Lease as extended does not exceed $2,500.00.
     (b) Consent. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with detailed plans. All consents given by Lessor,
whether by virtue of Paragraph 7.3(a) or by subsequent specific consent, shall
be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and be in compliance with all Applicable
Requirements. Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor. Lessor may, (but without obligation
to do so) condition its consent to any requested Alteration or Utility
Installation that costs $2,500.00 or more upon Lessee's providing Lessor with a
lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation.
     (c) Lien Protection. Lessee shall pay when due all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on, or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense, defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one-half
times the amount of such contested lien claim or demand, indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorneys' fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.

     7.4  Ownership, Removal, Surrender, and Restoration.

     (a) Ownership. Subject to Lessor's right to require their removal and to
cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations made to the Premises by
Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Lessor may, at any time and at its option, elect in writing to
Lessee to be the owner of all or any specified part of the Lessee-Owned
Alterations and Utility Installations. Unless otherwise instructed per
Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility
Installations shall, at the expiration or earlier termination of this Lease,
become the property of Lessor and remain upon the Premises and be surrendered
with the Premises by Lessee.
     (b) Removal. Unless otherwise agreed in writing, Lessor may require that
any or all Lessee-Owned Alterations or Utility Installations be removed by the
expiration or earlier termination of this Lease, notwithstanding that their
installation may have been consented to by Lessor, Lessor may require the
removal at any time of all or any part of any Alterations or Utility
Installations made without the required consent of Lessor.
     (c) Surrender/Restoration. Lessee shall surrender the Premises by the end
of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. Ordinary wear and tear shall not include any
damage or deterioration that would have been prevented by good maintenance
practice or by Lessee performing all of its obligations, under this Lease.
Except as otherwise agreed or specified herein, the Premises, as surrendered,
shall include the Alterations and Utility Installations. The obligation of
Lessee shall include the repair of any damage occasioned by the Installation,
maintenance or removal of Lessee's Trade Fixtures, furnishings, equipment, and
Lessee-Owned Alterations and Utility Installations, as well as the removal of
any storage tank Installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee, all as
may then be required by Applicable Requirements and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.

8.  Insurance; Indemnity.

     8.1  Payment of Premium Increases.

     (a) As used herein, the term "Insurance Cost Increase" is defined as any
increase in the actual cost of the Insurance applicable to the Building and
required to be carried by Lessor pursuant to Paragraphs 8.2(b), 8.3(a) and
8.3(b), ("Required Insurance"), over and above the Base Premium, as hereinafter
defined, calculated on an annual basis. "Insurance Cost Increase" shall include,
but not be limited to, requirements of the holder of a mortgage or deed of trust
covering the Premises, increased valuation of the Premises, and/or a general
premium rate increase. The term "Insurance Cost Increase" shall not, however,
include any premium increases resulting from the nature of the occupancy of any
other lessee of the Building. If the parties insert a dollar amount in Paragraph
1.9, such amount shall be considered the "Base Premium." If a dollar amount has
not been inserted in Paragraph 1.9 and if the Building has been previously
occupied during the twelve (12) month period immediately preceding the
Commencement Date, the "Base Premium" shall be the annual premium applicable to
such twelve (12) month period. If the Building was not fully occupied during
such twelve (12) month period, the "Base Premium" shall be the lowest annual
premium reasonably obtainable for the Required Insurance as of the Commencement
Date, assuming the most nominal use possible of the Building. In no event,
however, shall Lessee be responsible for any portion of the premium cost
attributable to liability insurance coverage in excess of $1,000,000 procured
under Paragraph 8.2(b).
     (b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to
Paragraph 4.2. Premiums for policy periods commencing prior to, or extending
beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement Date or Expiration Date.

  8.2  Liability Insurance.

     (a) Carried by Lessee. Lessee shall obtain and keep in force during the
term of this Lease a Commercial General Liability policy of insurance protecting
Lessee, Lessor and any Lender(s) whose names have been provided to Lessee in
writing (as additional insureds) against claims for bodily injury, personal
injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000 per occurrence with
an "Additional Insured-Managers or Lessors of Premises" endorsement and contain
the "Amendment of the Pollution Exclusion" endorsement for damage caused by
heat, smoke or fumes from a hostile fire. 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 Lessee's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by Lessee shall
not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All Insurance to be carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
     (b) Carried by Lessor. Lessor shall also maintain liability insurance
described in Paragraph 8.2(a) above, in addition to and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named as an
additional insured therein.

  8.3  Property Insurance-Building, Improvements and Rental Value.
     (a) Building and Improvements. Lessor shall obtain and keep in force during
the term of this Lease a policy or policies in the name of Lessor, with loss
payable to Lessor and to any Lender(s), insuring against loss or damage to the
Premises. Such insurance shall be for full replacement cost, as the same shall
exist from time to time, or the amount required by any Lender(s), but in no
event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved,
such latter amount is less than full replacement cost. Lessee-Owned Alterations
and Utility Installations, Trade Fixtures and Lessee's personal property shall
be insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and
commercially appropriate, Lessor's policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender or included in the Base Premium),
including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any undamaged sections of the
Building required to be demolished or removed by reason of the enforcement of
any building, zoning, safety or land use laws as the result of a covered loss,
but not including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any co-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located.
     (b) Rental Value. Lessor shall also obtain and keep in force during the
term of this Lease a policy or policies in the name of Lessor, with loss payable
to Lessor and any Lender(s), insuring the loss of the full rental and other
charges payable by all lessees of the Building to Lessor for one year (including
all Real Property Taxes, insurance costs, all Common Area Operating Expenses and
any scheduled rental increases). Said insurance may provide that in the event
the Lease is terminated by reason of an insured loss, the period of indemnity
for such coverage shall be extended beyond the date of the completion of repairs
or replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any co-insurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income, Real
Property Taxes, insurance premium costs and other expenses, if any, otherwise
payable, for the next 12-month period. Common Area Operating Expenses shall
include any deductible amount in the event of such loss.
     (c) Adjacent Premises. Lessee shall pay for any increase in the premiums
for the property insurance of the Building and for the Common Areas of other
buildings in the Industrial Center if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.

                                      -4-
<PAGE>

     (d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall
not be required to insure Lessee-Owned Alterations and Utility Installations
unless the item in question has become the property of Lessor under the terms of
this Lease.

  8.4  Lessee's Property Insurance. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Trade Fixtures and Lessee-Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by Lessor as the Insuring Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for
the replacement of personal property and the restoration of Trade Fixtures and
Lessee-Owned Alterations and Utility Installations. Upon request from Lessor,
Lessee shall provide Lessor with written evidence that such insurance is in
force.

  8.5  Insurance Policies. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least B+, V, or such other rating as may be required by a Lender, as set forth
in the most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except after thirty (30)
days' prior written notice to Lessor. Lessee shall at least thirty (30) days
prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.

  8.6  Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages (whether in contract or in tort) against the
other, for loss or damage to their property arising out of or incident to the
perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.

  8.7  Indemnity. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in connection
with, the occupancy of the Premises by Lessee, the conduct of Lessee's business,
any act, omission or neglect of Lessee, its agents, contractors, employees or
Invitees, and out of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part lobe performed under this
Lease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Lessor) litigated and/or reduced to
Judgment. In case any action or proceeding be brought against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified.

  8.8  Exemption of Lessor from Liability. Lessor shall not be liable for injury
or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.

9.  Damage or Destruction.

  9.1  Definitions.

     (a) "Premises Partial Damage" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
     (b) "Premises Total Destruction" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is fifty percent (50%) or more of the
then Replacement Cost of the Premises (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction. In addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any
lessees of the Building, the cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost (excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures of any lessees of the
Building) of the Building shall, at the option of Lessor, be deemed to be
Premises Total Destruction.
     (c) "Insured Loss" shall mean damage or destruction to the Premises, other
than Lessee-Owned Alterations and Utility Installations and Trade Fixtures,
which was caused by an event required to be covered by the insurance described
in Paragraph 8.3(a) irrespective of any deductible amounts or coverage limits
involved.
     (d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
     (e) "Hazardous Substance Condition" shall mean the occurrence or discovery
of a condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.

  9.2  Premises Partial Damage--Insured Loss. If Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. In the event, however, that there is a shortage of
insurance proceeds and such shortage is due to the fact that, by reason of the
unique nature of the improvements in the Premises, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within said ten (10)
day period, Lessor shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If Lessor does not receive such
funds or assurance within said period, Lessor may nevertheless elect by written
notice to Lessee within ten (10) days thereafter to make such restoration and
repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within such ten (10) day period,
and if Lessor does not so elect to restore and repair, then this Lease shall
terminate sixty (60) days following this occurrence of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.

  9.3  Partial Damage--Uninsured Loss. If Premises Partial Damage that is not an
Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in
which event Lessee shall make the repairs at Lessee's expense and this Lease
shall continue in full force and effect), Lessor may at Lessor's option, either
(i) repair such damage as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such damage of Lessor's desire to terminate this
Lease as of the date sixty (60) days following the date of such notice. In the
event Lessor elects to give such notice of Lessor's intention to terminate this
Lease, Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's commitment to pay for
the repair of such damage totally at Lessee's expense and without reimbursement
from Lessor. Lessee shall provide Lessor with the required funds or satisfactory
assurance thereof within thirty (30) days following such commitment from Lessee.
In such event this Lease shall continue in full force and effect, and Lessor
shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice and provide
the funds or assurance thereof within the times specified above, this Lease
shall terminate as of the date specified in Lessor's notice of termination.

  9.4  Total Destruction. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 9.7.

  9.5  Damage Near End of Term. If at any time during the last six (6) months of
the term of this Lease there is damage for which the cost to repair exceeds one
month's Base Rent, whether or not an Insured Loss, Lessor may, at Lessor's
option, terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, it Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by (a) exercising such option, and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds:(or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this
Paragraph 9.5.

  9.6 Abatement of Rent; Lessee's Remedies.

     (a) in the event of (i) Premises Partial Damage or (ii) Hazardous Substance
Condition for which Lessee is not legally responsible, the Base Rent, Common
Area Operating Expenses and other charges, if any, payable by Lessee hereunder
for the period during which such damage or condition, its repair, remediation or
restoration continues, shall be abated in proportion to the degree to which
Lessee's use of the Premises is impaired, but not in excess of proceeds from
insurance required to be carried under Paragraph 8.3(b). Except for abatement of
Base Rent, Common Area Operating Expenses and other charges, if any, as
aforesaid, all other obligations of Lessee hereunder shall be performed by
Lessee, and Lessee shall have no claim against Lessor for any damage suffered by
reason of any such damage, destruction, repair, remediation or restoration.

                                      -5-
<PAGE>

     (b) If Lessor shall be obligated to repair or restore the Premises under
the provisions of this Paragraph 9 and shall not commence, in a substantial and
meaningful way, the repair or restoration of the Premises within ninety (90)
days after such obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any Lenders of which Lessee has actual notice of Lessee's election to terminate
this Lease on a date not less than sixty (60) days following the giving of such
notice. If Lessee gives such notice to. Lessor and such Lenders and such repair
or restoration is not commenced within thirty (30) days after receipt of such
notice, this Lease shall terminate as of the date specified in said notice. If
Lessor or a Lender commences the repair or restoration of the Premises within
thirty (30) days after the receipt of such notice, this Lease shall continue in
full force and effect. "Commence" as used in this Paragraph 9.6 shall mean
either the unconditional authorization of the preparation of the required plans,
or the beginning of the actual work on the Premises, whichever occurs first.

  9.7  Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000 whichever is greater, give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of
the occurrence of such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the excess costs of (a) investigation and remediation of such
Hazardous Substance Condition to the extent required by Applicable Requirements,
over (b) an amount equal to twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater. Lessee shall provide Lessor, with the funds
required of Lessee or satisfactory assurance thereof within thirty (30) days
following said commitment by Lessee. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

  9.8  Termination--Advance Payments. Upon termination of this Lease pursuant to
this Paragraph 9, Lessor shall return to Lessee any advance payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms of this Lease.

  9.9  Waiver of Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises and the
Building with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent it is inconsistent
herewith.

10.  Real Property Taxes.

  10.1  Payment of Taxes. Lessor shall pay the Real Property Taxes, as defined
in Paragraph 10.2(a), applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any increases in such amounts over the
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.

  10.2  Real Property Tax Definitions.

     (a) As used herein, the term "Real Property Taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax (other than inheritance, personal income or estate taxes) imposed upon the
Industrial Center by any authority having the direct or indirect power to tax,
including any city, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, levied
against any legal or equitable interest of Lessor in the Industrial Center or
any portion thereof, Lessor's right to rent or other income therefrom, and/or
Lessor's business of leasing the Premises. The term "Real Property Taxes" shall
also include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in Applicable Law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Industrial Center or in the improvements thereon, the
execution of this Lease, or any modification, amendment or transfer thereof, and
whether or not contemplated by the Parties.
     (b) As used herein, the term "Base Real Property Taxes" shall be the amount
of Real Property Taxes, which are assessed against the Premises, Building or
Common Areas in the calendar year during which the Lease is executed. In
calculating Real Property Taxes for any calendar year, the Real Property Taxes
for any real estate tax year shall be included in the calculation of Real
Property Taxes for such calendar year based upon the number of days which Such
calendar year and tax year have in common.

  10.3  Additional Improvements. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Operating Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.

  10.4  Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.

  10.5  Lessee's Property Taxes. Lessee shall pay prior to delinquency all taxes
assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center. When
possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.

11.  Utilities. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. If
any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a reasonable
proportion to be determined by Lessor of all such charges jointly metered or
billed with other premises in the Building, in the manner and within the time
periods set forth in Paragraph 4.2(d).

12.  Assignment and Subletting.

  12.1  Lessor's Consent Required.
     (a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or otherwise transfer or encumber (collectively, "assign") or sublet
all or any part of Lessee's interest in this Lease or in the Premises without
Lessor's prior written consent given under and subject to the terms of Paragraph
36.
     (b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
     (c) The involvement of Lessee or its assets in any transaction, or series
of transactions (by way of merger, sale, acquisition; financing, refinancing,
transfer, leveraged buy-out or otherwise), whether or not formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee, as hereinafter defined, by an
amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Lessee as it was represented to Lessor at the time of full execution and
delivery of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net Worth of
Lessee was or is greater, shall be considered an assignment of this Lease by
Lessee to which Lessor may reasonably withhold its consent. "Net Worth of
Lessee" for purposes of this Lease shall be the net worth of Lessee (excluding
any Guarantors) established under generally accepted accounting principles
consistently applied.
     (d) An assignment or subletting of Lessee's interest in this Lease without
Lessor's specific prior written consent shall, at Lessor's option, be a Default
curable after notice per Paragraph 13.1, or a non-curable Breach without the
necessity of any notice and grace period. If Lessor elects to treat such
unconsented to assignment or subletting as a non-curable Breach, Lessor shall
have the right to either: (i) terminate this Lease, or (ii) upon thirty (30)
days written notice ("Lessor's Notice"), increase the monthly Base Rent for the
Premises to the greater of the then fair market rental value of the Premises, as
reasonably determined by Lessor, or one hundred ten percent (110%) of the Base
Rent then in effect. Pending determination of the new fair market rental value,
if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's Notice,
with any overpayment credited against the next installment(s) of Base Rent
coming due, and any underpayment for the period retroactively to the effective
date of the adjustment being due and payable immediately upon the determination
thereof. Further, in the event of such Breach and rental adjustment, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to the then fair market value as reasonably
determined by Lessor (without the Lease being considered an encumbrance or any
deduction for depreciation or obsolescence, and considering the Premises at its
highest and best use and in good condition) or one hundred ten percent (110%) of
the price previously in effect, (ii) any index oriented rental or price
adjustment formulas contained in this Lease shall be adjusted to require that
the base index be determined with reference in to the index applicable to the
time of such adjustments, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased in the same ratio as
the new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.
     (e) Lessee's remedy for any Breach of this Paragraph 12.1 by Lessor shall
be limited to compensatory damages and or injunctive relief.

  12.2  Terms and Conditions Applicable to Assignment and Subletting.

     (a) Regardless of Lessor's consent, any assignment or subletting shall not
(i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, nor (iii) after the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.

     (b) Lessor may accept any rent or performance of Lessee's obligations from
any person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of any rent for performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for the Default or Breach by Lessee of
any of the terms, covenants or conditions of this Lease.

     (c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the assignee or
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable under this Lease or the sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.

                                      -6-
<PAGE>

     (d) In the event of any Default or Breach of Lessee's obligation under this
Lease, Lessor may proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of the Lessee's obligations under this Lease,
including any sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefor to Lessor, or any security held by
Lessor.
     (e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the monthly Base Rent applicable to
the portion of the Premises which is the subject of the proposed assignment or
sublease, whichever is greater, as reasonable consideration for Lessor's
considering and processing the request for consent. Lessee agrees to provide
Lessor with such other or additional information and/or documentation as may be
reasonably requested by Lessor.
     (f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
     (g) The occurrence of a transaction described in Paragraph 12.2(c) shall
give Lessor the right (but not the obligation) to require that the Security
Deposit be increased by an amount equal to six (6) times the then monthly Base
Rent, and Lessor may make the actual receipt by Lessor of the Security Deposit
Increase a condition to Lessor's consent to such transaction.
     (h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment schedule of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment schedule for property similar to the Premises as then constituted, as
determined by Lessor.

  12.3  Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:
     (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all rentals and income arising from any sublease of all or a portion of the
Premises heretofore or hereafter made by Lessee, and Lessor may collect such
rent and income and apply same toward Lessee's obligations under this Lease;
provided, however, that until a Breach (as defined in Paragraph 13.1) shall
occur in the performance of Lessee's obligations under this Lease, Lessee may,
except as otherwise provided in this Lease, receive, collect and enjoy the rents
accruing under such sublease. Lessor shall not, by reason of the foregoing
provision or any other assignment of such sublease to Lessor, nor by reason of
the collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Lessee to perform and comply with any of Lessee's obligations
to such sublessee under such Sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor stating
that a Breach exists in the performance of Lessee's obligations under this
Lease, to pay to Lessor the rents and other charges due and to become due under
the sublease. Sublessee shall rely upon any such statement and request from
Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against such sublessee, or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.
     (b) in the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior defaults
or breaches of such sublessor under such sublease.
     (c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
     (d) No sublessee under a sublease approved by Lessor shall further assign
or sublet all or any part of the Premises without Lessor's prior written
consent.
     (e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.

13.  Default; Breach; Remedies.

  13.1  Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:
     (a) The vacating of the Premises without the intention to reoccupy same, or
the abandonment of the Premises.
     (b) Except as expressly otherwise provided in this Lease, the failure by
Lessee to make any payment of Base Rent, Lessee's Share of Common Area Operating
Expenses, or any other monetary payment required to be made by Lessee hereunder
as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required under this Lease, or the failure
of Lessee to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.
     (c) Except as expressly otherwise provided in this Lease, the failure by
Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Requirements per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or
subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37,
(v) the subordination or nonsubordination of this Lease per Paragraph 30, (vi)
the guaranty of the performance of Lessee's obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this lease, where any such failure continues tot a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
     (d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that
are to be observed, complied with or performed by Lessee, other than those
described in Subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease by Lessee if
Lessee commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
     (e) The occurrence of any of the following events: (i) the making by Lessee
of any general arrangement or assignment for the benefit of creditors; (ii)
Lessee's becoming a "debtor" as defined in 11 U.S. Code Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this Subparagraph 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.
     (f) The discovery by Lessor that any financial statement of Lessee or of
any Guarantor, given to Lessor by Lessee or any Guarantor, was materially false.
     (g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure, within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurances of security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the Guarantors that existed at the time of execution of this Lease.

  13.2  Remedies. If Lessee falls to perform any affirmative duty or obligation
of Lessee under this Lease, within ten (10) days after written notice to Lessee
(or in case of an emergency, without notice), Lessor may at its option (but
without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental, licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its own
option, may require all future payments to be made under this Lease by Lessee to
be made only by cashier's check. In the event of a Breach of this Lease by
Lessee (as defined in Paragraph 13.1), with or without further notice or demand,
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:
     (a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee: (i) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco or the Federal Reserve Bank District in which the Premises
are located at the time of award plus one percent (1%). Efforts by Lessor to
mitigate damages caused by Lessee's Default or Breach of this Lease shall not
waive Lessor's right to recover damages under this Paragraph 13.2. If
termination of this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such pro-

                                      -7-
<PAGE>

ceding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit for
such rent and/or damages. If a notice and grace period required under
Subparagraph 13.1(b), (c) or (d) was not previously given, a notice to pay rent
or quit, or to perform or quit, as the case may be, given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
Subparagraph 13.1(b),(c) or (d). In such case, the applicable grace period under
the unlawful detainer statue shall run concurrently after the one such statutory
notice, and the failure of Lessee to cure the Default within the greater of the
two (2) such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in this Lease
and/or by said statute.
     (b) Continue the lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
recover the rent as it becomes due, provided Lessee has the right to sublet or
assign, subject only to reasonable limitations. Lessor and Lessee agree that the
limitations on assignment and subletting in this Lease are reasonable. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Lessor's interest under this Lease, shall not
constitute a termination of the Lessee's right to possession.
     (c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
     (d) The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.

  13.3  Inducement Recapture in event of Breach. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach (as defined in Paragraph 13.1) of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted front this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initialed the operation of this
Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions of this
Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of
such acceptance.

  13.4  Late Charges. Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then,
notwithstanding Paragraph 4.1 or any other provision of this Lease to contrary,
Base Rent shall, at Lessor's option, become due and payable quarterly in
advance.

  13.5  Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by any Lender(s) whose name and address shall have been furnished to Lessee
in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in
breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.

14.  Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the portion of
the Common Areas designated for Lessee's parking, is taken by condemnation,
Lessee may, at Lessee's option, to be exercised in writing within ten (10) days
after Lessor shall have given Lessee within notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises taken
bears to the total rentable floor area of the Premises. No reduction of Base
Rent shall occur if the condemnation does not apply to any portion of the
Premises. Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of such
power shall be the property of Lessor, whether such award shall be made as
compensation for diminution of value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any compensation, separately awarded to Lessee for Lessee's relocation
expenses and/or loss of Lessee's Trade Fixtures. In the event that this Lease is
not terminated by reason of such condemnation, Lessor shall to the extent of its
net severance damages received, over and above Lessee's Share of the legal and
other expenses incurred by Lessor in the condemnation matter, repair any damage
to the Premises caused by such condemnation authority. Lessee shall be
responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.

15.  Brokers' Fees.

  15.1  Procuring Cause. The Broker(s) named in Paragraph 1.10 is/are the
procuring cause of this Lease.

  15.2  Additional Terms. Unless Lessor and Broker(s) have otherwise agreed in
writing, Lessor agrees that: (a) if Lessee exercises any Option (as defined in
Paragraph 39.1) granted under this Lease or any Option subsequently granted, or
(b) if Lessee acquires any rights to the Premises or other premises in which
Lessor has an interest, or (c) If Lessee remains in possession of the Premises
with the consent of Lessor after the expiration of the term of this Lease after
having failed to exercise an Option, or (d) if said Brokers are the procuring
cause of any other lease or sale entered into between the Parties pertaining to
the Premises and/or any adjacent property in which Lessor has an interest; or
(e) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then as to any of said transactions, Lessor shall pay
said Broker(s) a fee in accordance with the schedule of said Broker(s) in effect
at the time of the execution of this Lease.

  15.3  Assumption of Obligations. Any buyer or transferee of Lessor's interest
in this Lease, whether such transfer is by agreement or by operation of law,
shall be deemed to have assumed Lessor's obligation under this Paragraph 15.
Each Broker shall be an intended third party beneficiary of the provisions of
Paragraph 1.10 and of this Paragraph 15 to the extent of its interest in any
commission arising from this Lease and may enforce that right directly against
Lessor and its successors.

  15.4  Representations and Warranties. Lessee and Lessor each represent and
warrant to the other that it has had no dealings with any person, firm, broker
or finder other than as named in Paragraph 1.10(a) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other
than said named Broker(s) is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the indemnifying Party, including any costs, expenses, and/or attorneys' fees
reasonably incurred with respect thereto.

16.  Tenancy and Financial Statements.

  16.1  Tenancy Statement. Each Party (as "Responding Party")shall within ten
(10) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in a form similar to the then most current "Tenancy Statement" form published by
the American Industrial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.

  16.2  Financial Statement. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor such
financial statements of Lessee and such Guarantors as may be reasonably required
by such lender or purchaser, including but not limited to Lessee's financial
statements for the past three (3) years. All such financial statements shall be
received by Lessor and such lender or purchaser in confidence and shall be used
only for the purposes herein set forth.

17.  Lessor's Liability. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises. In the event
of a transfer of Lessor's title or interest in the Premises or in this Lease,
lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.

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

19.  Interest on Past-Due Obligations. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10) days
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.4

20.  Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

21.  Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22.  No Prior or other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.

                                      -8-
<PAGE>

23.  Notices.

  23.1  Notice Requirements. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission
during normal business hours, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notice purposes. Either Party may by written notice to the other
specify a different address for notice purposes, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for the purpose of mailing or delivering notices to Lessee. A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.

  23.2  Date of Notice. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown, the postmark thereon. If sent by
regular mail, the notice shall be deemed given forty-eight (48) hours after the
same if addressed as required herein and mailed with postage prepaid. Notices
delivered by United States Express Mail or overnight courier that guarantees
next day delivery shall be deemed given twenty-four (24) hours after delivery of
the same to the United States Postal Service or courier. If any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone or facsimile confirmation of receipt of the
transmission thereof, provided a copy is also delivered via delivery or mail. If
notice is received on a Saturday or a Sunday or a legal holiday, it shall be
deemed received on the next business day.

24.  Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.

25.  Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.

26.  No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be Increased to two hundred percent
(200%) of the Base Rent applicable during the month immediately preceding such
expiration or earlier termination. Nothing contained herein shall be construed
as a consent by Lessor to any holding over by Lessee.

27.  Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28.  Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

29.  Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.

30.  Subordination; Attornment; Non-Disturbance.

  30.1  Subordination. This Lease and any Option granted hereby shall be subject
and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor Under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default pursuant
to Paragraph 13.5. If any Lender shall elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device and shall give
written notice thereof to Lessee, this Lease and such Options shall be deemed
prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.

  30.2  Attornment. Subject to the non-disturbance provisions of Paragraph 30.3,
Lessee agrees to attorn to a Lender or any other party who acquires ownership of
the Premises by reason of a  foreclosure of a Security Device, and that in the
event of such foreclosure, such new owner shall not: (i) be liable for any act
or omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership, (ii) be subject to any offsets or defenses which
Lessee might have against any prior lessor, or (iii) be bound by prepayment of
more than one month's rent.

  30.3  Non-Disturbance. With respect to Security Devices entered into by Lessor
after the execution of this lease, Lessee's subordination of this Lease shall be
subject to receiving assurance (a "non-disturbance agreement") from the Lender
that Lessee's possession and this Lease, including any options to extend the
term hereof, will not be disturbed so long as Lessee is not in Breach hereof and
attorns to the record owner of the Premises.

  30.4  Self-Executing. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.

31.  Attorneys' Fees. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall be
entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term "Prevailing Party" shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
Incurred. Lessor shall be entitled to attorneys' fees, costs and expenses
Incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach. Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.

32.  Lessor's Access; Showing Premises; Repair's. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, as Lessor
may reasonably deem necessary. Lessor may at any time place on or about the
Premises or Building any ordinary "For Sale" signs and Lessor may at any time
during the last one hundred eighty (180) days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee.

33.  Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or Involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34.  Signs. Lessee shall not place any sign upon the exterior of the Premises or
the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the roof) such signs as are reasonably required to advertise
Lessee's own business so long as such signs are in a location designated by
Lessor and comply with Applicable Requirements and the signage criteria
established for the Industrial Center by Lessor. The installation of any sign on
the Premises by or for Lessee shall be subject to the provisions of Paragraph 7
(Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations).
Unless otherwise expressly agreed herein, Lessor reserves all rights to the use
of the roof of the Building; and the right to install advertising signs on the
Building, including the roof, which do not unreasonably interfere with the
conduct of Lessee's business; Lessor shall be entitled to all revenues from such
advertising signs.

35.  Termination; Merger. Unless specifically stated otherwise in writing by
Lessor the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.

36.  Consents.

     (a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor'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 Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor an amount of
money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will Incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.

     (b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the impositions by
Lessor 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.

37.  Guarantor.

  37.1  Form of Guaranty. If there are to be any Guarantors of this Lease per
Paragraph 1.11, the form of the guaranty to be executed by each such Guarantor
shall be in the form most recently published by the American Industrial Real
Estate Association, and each such Guarantor shall have the same Obligations as
Lessee under this lease, including but not limited to the obligation to provide
the Tenancy Statement and Information required in Paragraph 16.

                                      -9-
<PAGE>

  37.2  Additional Obligations of Guarantor. It shall constitute a Default of
the Lessee under this Lease if any such Guarantor fails or refuses, upon
reasonable request by Lessor to give: (a) evidence of the due execution of the
guaranty called for by this Lease, including the authority of the Guarantor (and
of the party signing on Guarantor's behalf) to obligate such Guarantor on said
guaranty, and resolution of its board of directors authorizing the making of
such guaranty, together with a certificate of incumbency showing the signatures
of the persons authorized to sign on its behalf, (b) current financial
statements of Guarantor as may from time to time be requested by Lessor, (c) a
Tenancy Statement, or (d) written confirmation that the guaranty is still in
effect.

38.  Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.

39.  Options.

  39.1  Definition. As used in this Lease, the word "Option" has the following
meaning: (a) the right to extend the term of this Lease or to renew this Lease
or to extend or renew any lease that Lessee has on other property of Lessor; (b)
the right of first refusal to lease the Premises or the right of first offer to
lease the Premises or the right of first refusal to lease other property of
Lessor or the right of first offer to lease other property of Lessor; (c) the
right to purchase the Premises, or the right of first refusal to purchase the
Premises, or the right of first offer to purchase the Premises, or the right to
purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other property
of Lessor.

  39.2  Options Personal to Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart thereon, and no Option may be separated from this Lease in any manner, by
reservation or otherwise.

  39.3  Multiple Options. In the event that Lessee has any multiple Options to
extend or renew this Lease, a later option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.

  39.4  Effect of Default on Options.
     (a) Lessee shall have no right to exercise an Option, notwithstanding any
provision in the grant of Option to the contrary: (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of separate Defaults under Paragraph 13.1 during the twelve
(12) month period immediately preceding the exercise of the Option, whether or
not the Defaults are cured.
     (b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a)
     (c) All rights of Lessee under the provisions of an Option shall terminate
and be of no further force or effect, notwithstanding Lessee's due and timely
exercise of the Option, if, after such exercise and during the term of this
Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a
period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) if Lessee commits a Breach of this Lease.

40.  Rules and Regulations. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations ("Rules and Regulations") which
Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants or
tenants of the Building and the Industrial Center and their invitees.

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

42.  Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.

43.  Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum of so much
thereof as it was not legally required to pay under the provisions of this
Lease.

44.  Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after requested by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

45.  Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.

46.  Offer. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease.  This Lease is not intended to be binding until
executed and delivered by all Parties hereto.

47.  Amendment. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification.  The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease.  As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modification to this Lease as may be reasonably required
by an institutional insurance company or pension plan Lender in connection with
the obtaining of normal financing or refinancing of the property of which the
Premises are a part.

48.  Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee the
obligations of such multiple parties shall be  the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.

                                      -10-
<PAGE>

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEY'S
     REVIEW AND APPROVAL. FURTHER EXPERTS SHOULD BE CONSULTED TO EVALUATE THE
     CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS,
     UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES.  NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
     OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS
     TO THE LEGAL SUFFICIENCY, LEGAL, EFFECT OR TAX CONSEQUENCES OF THIS LEASE
     OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON
     THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
     THIS LEASE.  IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA,
     AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE
     CONSULTED.

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

Executed at:  San Jose, CA                      Executed at:  San Jose, CA
              -------------                                   ------------
on:  7/12/99                                    on:  7/12/99
     ----------------------                         ----------------------

By LESSOR:                                      By LESSEE:

   Great Oaks Properties
---------------------------                     -------------------------

By:  /s/ Lloyd E. Martin                        By:   /s/ XXX
     ----------------------                          --------------------

Name Printed:  Lloyd E. Martin                     Name Printed:
               ---------------                                   ---------------
Title:         General Partner                     Title:
               ---------------                            ----------------------
Address:                                        Address:
         ---------------------                            ----------------------

Telephone: (   )                                Telephone: (   )
           -------------------                             ---------------------

Facsimile: (   )                                Facsimile: (   )
           -------------------                             ---------------------

Executed at:                                    Executed at:

on:       N/A                                   on:          N/A
    ---------------------------                     ----------------------------

BROKER:                                         BROKER:

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

Name Printed:                                                    Name Printed:
    ---------------------------                     ----------------------------

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

Address:                                                         Address:
    ---------------------------                     ----------------------------

    ---------------------------                     ----------------------------

Telephone: (    )                                   Telephone: (    )
           -------------------                             ---------------------

Facsimile: (    )                                   Facsimile: (    )
           -------------------                             ---------------------

NOTE:  These forms are often modified to meet changing requirements of law and
       needs of the industry. Always write or call to make sure you are
       utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE
       ASSOCIATION, 345 So. Figueroa St., M-1, Los Angeles, CA 90071.
       (213) 687-8777

                                      -11-
<PAGE>

                                  ADDENDUM #1
          TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                              DATED JUNE 22, 1999
                     FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
                           FOR SUNRISE TELECOM, INC.

PARKING:

Sunrise Telecom, Inc. is entitled to use all parking spaces associated with the
22 Great Oaks property every day of the week except Sunday. On Sundays, Sunrise
Telecom, Inc. has unrestricted use of twenty-nine (29) parking spaces associated
with the 22 Great Oaks property.

SUNRISE TELECOM, INC.                          GREAT OAKS PROPERTIES

Signature:            /s/ XXX                  Signature:            /s/ XXX
                     ---------                                     -----------

Date:                  7/12/99                 Date:                 7-12-99
                     ---------                                     -----------

                                      -12-
<PAGE>

<TABLE>
<CAPTION>
                                                      ADDENDUM # 2
22-Jun-1999                   TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                                  DATED JUNE 22, 1999
Page 1 of 2                              FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
                                               FOR SUNRISE TELECOM, INC.

<S>                  <C>        <C>         <C>           <C>          <C>          <C>          <C>
Bldg. Area           Area Size  Triple Net     Year 1       Year 2       Year 3       Year 4       Year 5
--------------------------------------------------------------------------------------------------------------
Location             in feet2   Costs/feet2  01-Jan-1996  01-Jan-1997  01-Jan-1998  01-Jan-1999  01-Jan-2000
--------------------------------------------------------------------------------------------------------------
                                             31-Dec-1996  31-Dec-1997  31-Dec-1998  31-Dec-1999  31-Dec-2000
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

Downstairs              17,784                $11,255.12   $11,255.12   $11,255.12   $11,255.12   $11,255.12
--------------------------------------------------------------------------------------------------------------
Cost/feet2                                    $     0.63   $     0.63   $     0.63   $     0.63   $     0.63
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.07   $ 1,244.88   $ 1,244.88   $ 1,244.88
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.07                                          $ 1,244.88   $ 1,244.88
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.10
--------------------------------------------------------------------------------------------------------------
Total Payment                                 $   12,500   $   12,500   $   12,500   $   12,500   $   12,500
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

                                                            Year 1       Year 2       Year 3       Year 4
--------------------------------------------------------------------------------------------------------------
                                                          01-Dec-1996  01-Dec-1997  01-Dec-1998  01-Dec-1999
--------------------------------------------------------------------------------------------------------------
                                                          30-Nov-1997  30-Nov-1998  30-Nov-1999  30-Nov-2000
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

Upstairs                29,775                             $15,500.00   $18,500.00   $21,500.00   $22,500.00
--------------------------------------------------------------------------------------------------------------
Cost/feet2                                                 $     0.52   $     0.62   $     0.72   $     0.76
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.07                $ 2,100.00   $ 2,100.00
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.08                                          $ 2,400.00   $ 2,400.00
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.10
--------------------------------------------------------------------------------------------------------------
Total Payment                                              $17,600.00   $20,600.00   $23,900.00   $24,900.00
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------

                                                                                                   Year 1
--------------------------------------------------------------------------------------------------------------
                                                                                                 01-Nov-1999
--------------------------------------------------------------------------------------------------------------
                                                                                                 31-Oct-2000
--------------------------------------------------------------------------------------------------------------
New Area from
--------------------------------------------------------------------------------------------------------------
Critical Clean          10,041                                                                    $10,041.00
--------------------------------------------------------------------------------------------------------------
Cost/feet2                                                                                        $     1.00
--------------------------------------------------------------------------------------------------------------
Triple Net                             0.10                                                       $ 1,004.10
--------------------------------------------------------------------------------------------------------------
Triple Net
--------------------------------------------------------------------------------------------------------------
Triple Net                                                                                        $11,045.10
--------------------------------------------------------------------------------------------------------------
Total Payment
--------------------------------------------------------------------------------------------------------------
Total Square Feet       57,600
--------------------------------------------------------------------------------------------------------------
                                                          SUNRISE TELECOM, INC.
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

                                                          Signature:     /s/ XXX
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

                                                          Date:
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------

                                                                                          ADDENDUM # 2
--------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                          ADDENDUM # 2
22-Jun-1999       TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                      DATED JUNE 22, 1999
Page 1 of 2                  FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
                                   FOR SUNRISE TELECOM, INC.

<S>                   <C>          <C>          <C>          <C>
Bldg. Area              Year 6       Year 7       Year 8       Year 9
------------------------------------------------------------------------
Location              01-Jan-2001  01-Nov-2001  01-Jan-2002  01-Nov-2003
------------------------------------------------------------------------
                      31-Dec-2001  31-Oct-2002  31-Oct-2003  31-Oct-2004
------------------------------------------------------------------------
------------------------------------------------------------------------

Downstairs             $18,673.20   $19,562.40   $20,451.60   $21,340.80
------------------------------------------------------------------------
Cost/feet2             $     1.05   $     1.10   $     1.15   $     1.20
------------------------------------------------------------------------
Triple Net
------------------------------------------------------------------------
Triple Net
------------------------------------------------------------------------
Triple Net             $ 1,778.40   $ 1,778.40   $ 1,778.40   $ 1,778.40
------------------------------------------------------------------------
Total Payment          $20,451.60   $21,340.80   $22,230.00   $23,119.20
------------------------------------------------------------------------
------------------------------------------------------------------------

                        Year 5       Year 6       Year 7       Year 8
------------------------------------------------------------------------
                      01-Dec-2000  01-Dec-2001  01-Nov-2002  01-Nov-2003
------------------------------------------------------------------------
                      30-Nov-2001  31-Oct-2002  31-Oct-2003  31-Oct-2004
------------------------------------------------------------------------
------------------------------------------------------------------------

Upstairs               $23,500.00   $32,752.50   $34,241.25   $35,730.00
------------------------------------------------------------------------
Cost/feet2             $     0.79   $     1.10   $     1.15   $     1.20
------------------------------------------------------------------------
Triple Net
------------------------------------------------------------------------
Triple Net             $ 2,400.00
------------------------------------------------------------------------
Triple Net                          $ 2,977.50   $ 2,977.50   $ 2,977.50
------------------------------------------------------------------------
Total Payment          $25,900.00   $35,730.00   $37,218.75   $38,707.50
------------------------------------------------------------------------
------------------------------------------------------------------------

------------------------------------------------------------------------

                        Year 2       Year 3       Year 4       Year 5
------------------------------------------------------------------------
                      01-Nov-2000  01-Nov-2001  01-Nov-2002  01-Nov-2003
------------------------------------------------------------------------
                      31-Oct-2001  31-Oct-2002  31-Oct-2003  31-Oct-2004
------------------------------------------------------------------------
New Area from
------------------------------------------------------------------------
Critical Clean         $10,543.05   $11,045.10   $11,547.15   $12,049.20
------------------------------------------------------------------------
Cost/feet2             $     1.05   $     1.10   $     1.15   $     1.20
------------------------------------------------------------------------
Triple Net             $ 1,004.10   $ 1,004.10   $ 1,004.10   $ 1,004.10
------------------------------------------------------------------------
Triple Net
------------------------------------------------------------------------
Triple Net             $11,547.15   $12,049.20   $12,551.25   $13.053.30
------------------------------------------------------------------------
Total Payment
------------------------------------------------------------------------
Total Square Feet
------------------------------------------------------------------------
                                   GREAT OAKS PROPERTIES
------------------------------------------------------------------------
------------------------------------------------------------------------

                                   Signature:     /s/ XXX
------------------------------------------------------------------------
------------------------------------------------------------------------

                                   Date:
------------------------------------------------------------------------
------------------------------------------------------------------------

------------------------------------------------------------------------

                                  ADDENDUM # 2
------------------------------------------------------------------------
</TABLE>

                                      -13-
<PAGE>

<TABLE>
<CAPTION>
                                                                          ADDENDUM # 2
22-Jun-1999                                     TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                                                DATED JUNE 22, 1999
Page 1 of 2                                                  FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
                                                                   FOR SUNRISE TELECOM, INC.

<S>              <C>         <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
                                                          Remaining time of current leases
-----------------------------------------------------------------------------------------------------------------------------------
Total Monthly Payment                                               01-Jun-1999
-----------------------------------------------------------------------------------------------------------------------------------
 Rent                                                               31-Oct-1999
-----------------------------------------------------------------------------------------------------------------------------------
 Triple Net                                                         $32,755.12
-----------------------------------------------------------------------------------------------------------------------------------
 Total Payment                                                      $ 3,644.88
-----------------------------------------------------------------------------------------------------------------------------------
                                                                    $36,400.00
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

                                   As of the effective date of the new lease on or about November 1, 1999
-----------------------------------------------------------------------------------------------------------------------------------
                 1-Nov-1999  01-Dec-1999  01-Nov-2000  01-Dec-2000  01-Jan-0001  01-Nov-2001  01-Dec-2001  01-Nov-2002  01-Nov-2003
-----------------------------------------------------------------------------------------------------------------------------------
Total Monthly    0-Nov-1999  31-Oct-2000  30-Nov-2000  31-Dec-2000  31-Oct-2001  30-Nov-2001  31-Oct-2002  31-Oct-2003  31-Oct-2004
-----------------------------------------------------------------------------------------------------------------------------------
 Rent            $42,796.12   $43,796.12   $44,298.17   $45,298.17   $52,716.25   $54,107.50   $63,360.00   $66,240.00   $69,120.00
-----------------------------------------------------------------------------------------------------------------------------------
 Triple Net      $ 4,648.98   $ 4,648.98   $ 4,648.98   $ 4,648.98   $ 5,182.50   $ 5,182.50   $ 5,760.00   $ 5,760.00   $ 5,760.00
-----------------------------------------------------------------------------------------------------------------------------------
 Total Payment   $47,445.10   $48,445.10   $48,947.15   $49,947.15   $57,898.75   $59,290.00   $69,120.00   $72,000.00   $74,880.00
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

                     Notes:  1. The lease rate and triple net costs for the Downstairs and Upstairs are exactly those of the
                                previous lease agreements during years one through five.
-----------------------------------------------------------------------------------------------------------------------------------
                             2. The New Area lease begins when Critical Clean vacates that part of the building, which is
                                anticipated to be on or about November 1, 1999.
-----------------------------------------------------------------------------------------------------------------------------------
                             3. The Downstairs lease rate changes to the New Area rate of $18,664.80 on January 1, 2001.
-----------------------------------------------------------------------------------------------------------------------------------
                             4. The Upstairs lease rate changes to the New Area rate of $32,752.50 on December 1, 2001.
-----------------------------------------------------------------------------------------------------------------------------------
                             5. Triple net expenses are to be audited annually.
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

                                                     SUNRISE TELECOM, INC.                              GREAT OAKS PROPERTIES
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

                                                     Signature:     /s/ XXX                             Signature:     /s/ XXX
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

                                                     Date:                                             Date:
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -14-
<PAGE>

                                  ADDENDUM #3
          TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT LEASE--GROSS
                              DATED JUNE 22, 1999
                     FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
                           FOR SUNRISE TELECOM, INC.

SECURITY DEPOSIT:

Security deposits were received from Sunrise Telecom, Inc. under the two
previous leases for the downstairs area and upstairs floor. The table below
lists those security deposits. Security deposits are restated to reflect the new
area being leased by Sunrise Telecom, Inc. and the new value of the previous two
areas under this lease agreement.

<TABLE>
<CAPTION>
Area Location         Currently          New Area         New Security      Total Security
                      Received       Security Deposit      Deposit on         Deposit to
                  Security Deposits                      Downstairs and       Receive at
                                                            Upstairs        Signing of this
                                                                              Lease Agmt.
--------------------------------------------------------------------------------------------
<S>               <C>                <C>                <C>                <C>
Downstairs               $12,500.00                            $21,331.20         $ 8,831.20
--------------------------------------------------------------------------------------------
Upstairs Floor           $23,500.00                            $35,730.00         $12,230.00
--------------------------------------------------------------------------------------------
New Area                                    $12,058.80                            $12,058.80
--------------------------------------------------------------------------------------------
Totals                   $36,000.00                                               $33,120.00
--------------------------------------------------------------------------------------------
</TABLE>

                         ADDENDUM #4
          TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                              DATED JUNE 22, 1999
                     FOR 22 GREAT OAKS BLVD., SAN JOSE, CA
FOR SUNRISE TELECOM, INC.

UTILITIES

Sunrise Telecom, Inc. is responsible for the costs of gas and electricity (PG&E)
and garbage collection services. These costs are not included in the triple net
costs.

SUNRISE TELECOM, INC.    GREAT OAKS PROPERTIES

Signature:   /s/ XXX                  Signature:   /s/
             -------                               ---

Date:                                 Date:
             -------                               ---

                                      -15-
<PAGE>

                                  ADDENDUM # 5

     The Lessee may at their option cancel this lease with a 120 day written
notice after November 1, 2001.

Triple net expenses are at cost with a 6% management fee.

At the end of this lease the triple net expenses are to be audited and all
moneys to be paid and or returned to the lessee as per the audit.

The cap rate for the triple net expenses is 0.14 cent per foot.

SUNRISE TELECOM, INC.               GREAT OAKS PROPERTIES

Signature:   /s/ XXX                  Signature:   /s/
             -------                               ---

Date:                                 Date:
             -------                               ---

                                      -16-
<PAGE>

                           [CHECK DATED JULY 12, 1999
                           FROM SUNRISE TELECOM, INC.
                            TO GREAT OAKS PROPERTIES
                           IN THE AMOUNT OF $10,049]

<PAGE>

                           [CHECK DATED JULY 12, 1999
                           FROM SUNRISE TELECOM, INC.
                            TO GREAT OAKS PROPERTIES
                           IN THE AMOUNT OF $33,120]<PAGE>

                          PURCHASE AND SALE AGREEMENT
                          ---------------------------
                            AND ESCROW INSTRUCTIONS
                            -----------------------

     THIS AGREEMENT, dated as of November 5, 1999, is entered into by and
between ENZO DRIVE, LLC, a California limited liability company ("Seller"), and
SUNRISE TELECOM, a California Corporation ("Buyer").
                   ----------------------

     IN CONSIDERATION of the respective agreements hereinafter set forth, Seller
and Buyer agree as follows:

     1.  Description of Property. Seller shall sell and convey to Buyer, and
         -----------------------
Buyer shall purchase from Seller, subject to the terms-and conditions set forth
herein, that certain real property in the City of San Jose, Santa Clara County,
California, consisting of approximately 6.07 acres of land, as shown on the site
plan attached hereto as EXHIBIT A and more particularly described in EXHIBIT A-1
                        ---------                                    -----------
attached hereto (the "Land"), together with those certain Building Improvements
to be constructed by Seller thereon as defined in subparagraph 7(a) below. As
used herein, the term "Property" shall mean the Land and the Building
Improvements together with (a) all easements and other rights appurtenant
thereto, and (b) Seller's entire right, title and interest in and to all plans
and specifications for the Building Improvements, all warranties and guaranties
applicable to the Building Improvements, and all governmental permits and
approvals applicable to construction and operation of the Building Improvements.
The parties hereto acknowledge and agree that, as of the date of execution of
this Agreement, the Land is not a separate, legal parcel and is part of a larger
parcel, consisting of approximately 11.01 acres, more or less. Seller intends to
process for approval by the City of San Jose a parcel map which, if approved,
will create the Land as a separate, legal parcel and the balance of the existing
11.01 acre parcel (the "Remainder Parcel") as a separate legal parcel. The
boundaries of the Land as shown on EXHIBIT A are approximate and the true
                                   ---------
boundaries of the Land shall be as shown on the approved parcel map to be
processed for approval by Seller. Seller makes no representation or warranty to
Buyer that the City of San Jose will approve the parcel map submitted by Seller
for approval.

     2.  Purchase Price.
         --------------

          (a) Amount and Payment. The purchase price of the Property is equal to
              ------------------
the sum of (i) Thirteen Million Three Hundred Eighty-seven Thousand Three
Hundred Twenty-four and no/100ths Dollars ($13,387,324), as the same may be
adjusted pursuant to the provisions below, plus (ii) an amount equal to the
amount of the Interior Improvements Allowance expended or disbursed by Seller
prior to the Close of Escrow. The parties hereto acknowledge that Seller desires
to construct a building shell, consisting of approximately 91,694 square feet,
on the Land pursuant to the terms and conditions set forth below. In the event
that Seller obtains approval from the City of San Jose for construction of a
building shell on the Land which is more or less than 91,694 square feet, then
the component of the Purchase Price of the Property referred to in clause (i) of
this subparagraph 2(a) shall be adjusted upward or downward, as the case may be,
based upon One Hundred Forty-six and 00/100 Dollars ($146.00) per square foot.
The

                                      -1-
<PAGE>

Purchase Price shall be paid to Seller in immediately available funds at the
Closing (as defined in subparagraph 8(a)) of the purchase and sale contemplated
hereunder. The Deposit (as defined in subparagraph 2 (b) below), together with
an amount equal to the product obtained by multiplying the Deposit by five
percent per annum, commencing as of the date the Deposit is released to Seller
pursuant to the terms of subparagraph 2(b) below, shall be applied against the
Purchase Price at Closing. In addition to the Purchase Price, Buyer shall pay
the Buyer's Shell Contribution and Buyer's Interior Improvement Contribution (as
defined in subparagraph 7(b) below), if any, in the amount and at the time set
forth in subparagraph 7(b). No portion of Buyer's Shell Contribution or Buyer's
Interior Improvement Contribution (nor any of the interest earned thereon) shall
be applied against the Purchase Price.

          (b) Deposit. Within three (3) business days after execution of this
              -------
Agreement, Buyer shall deliver to Escrow Agent (as defined in subparagraph 8(a)
below) a deposit ("Deposit") of One Hundred Thousand Dollars ($100,000). The
Deposit shall be placed in an interest-bearing account to be approved by Buyer
(the "Deposit Account") with all interest earned thereon while in the Deposit
Account to accrue for the benefit of Buyer, except as expressly provided in
subparagraph 2(c). Upon the satisfaction or waiver of those conditions to
Buyer's obligation to purchase the Property set forth in subparagraphs 5(a),
5(b) and 5(c) below, Buyer shall increase the Deposit in the Deposit Account to
Two Million Six Hundred Seventy-five Thousand Dollars ($2,675,000). Buyer shall
cause and instruct the Escrow Agent (defined below) to release the Deposit to
Seller not later than one (1) business day following the date the conditions set
forth in subparagraphs 5(d) and 5(e) are satisfied. Upon release of the Deposit
to Seller, such Deposit shall be non-refundable to Buyer (in the absence of a
material breach or default by Seller hereunder) but applicable to the Purchase
Price. All of the funds in the Deposit Account and all interest earned thereon
while in the Escrow Account shall be returned to Buyer if Buyer elects to
terminate this Agreement pursuant to any termination right given Buyer under
this Agreement (and Buyer is not in breach or default of any obligation
hereunder at the time of such termination).

          (c) LIQUIDATED DAMAGES. IN THE EVENT THE SALE OF THE PROPERTY IS NOT
              ------------------
CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER,
SELLER SHALL BE ENTITLED TO THE DEPOSIT TOGETHER WITH ANY INTEREST EARNED
THEREON AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT (i.e. $2,675,000) HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN
THE EVENT THAT THIS TRANSACTION DOES NOT CLOSE DUE TO A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER. THIS LIQUIDATED DAMAGES PARAGRAPH SHALL NOT BE
APPLICABLE TO ANY INDEMNIFICATION OBLIGATIONS OF BUYER UNDER THIS AGREEMENT. IN
THE EVENT THAT THIS TRANSACTION DOES NOT CLOSE DUE TO A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER, SELLER

                                      -2-
<PAGE>

SHALL HAVE NO OBLIGATION TO RETURN TO BUYER ANY EXPENDED PORTION OF BUYER'S
SHELL CONTRIBUTION OR BUYER'S INTERIOR IMPROVEMENT CONTRIBUTION OR WHICH IS
STILL IN THE BUILDING SHELL FUND OR INTERIOR IMPROVEMENT FUND AS OF THE DATE
THIS AGREEMENT IS TERMINATED AS A RESULT OF BUYER'S BREACH OR DEFAULT UNDER THIS
AGREEMENT (OR ANY OF THE EXHIBITS ATTACHED HERETO).

          Buyer's Initials   /s/ XXX    Seller's Initial   /s/ XXX
                             -------                       -------

     3.   Title to the Property.
          ---------------------

          (a) At the Closing, Seller shall convey to Buyer fee title to the
Property by a duly executed and acknowledged Grant Deed substantially in the
form attached hereto as EXHIBIT B (the "Grant Deed"). At Closing, Seller shall
                        ---------
cause Alliance Title Company in San Jose or its underwriter ("Title Insurer") to
issue to Buyer a CLTA standard coverage owner's policy of title insurance in the
amount of the Purchase Price plus Buyer's Shell Contribution and Interior
Improvement Contribution, if any, insuring fee simple title to the Property,
subject only to (i) such exceptions to title as Buyer shall approve pursuant to
subparagraph 5(a) below, (ii) such exceptions as are shown on the approved
parcel map creating the Land as a separate, legal parcel, (iii) that certain
Declaration of Covenants, Conditions and Restrictions and/or Reciprocal Easement
Agreement, as the case may be, which may be executed by Seller prior to the
Closing and which is more particularly described below, (iv) any title matters
caused or created by Buyer or its agents, employees or contractors, and (v) any
title matters that would be shown on an accurate survey of the Land
(collectively, the "Permitted Exceptions"). Any extended coverage or title
endorsements desired by Buyer shall be obtained at Buyer's expense. Issuance of
an ALTA extended coverage owner's policy of title insurance is not a condition
to closing and, if Buyer desires such extended coverage, Buyer shall bear the
cost of any ALTA survey required in order to issue to Buyer an ALTA extended
coverage owner's policy of title insurance.

     Prior to the Closing hereunder, Seller intends to execute a Declaration of
Covenants, Conditions or Restrictions and/or Reciprocal Easement Agreement
(collectively, the "CC&Rs") to be recorded against the Land (and the Remainder
Parcel) and which will provide for the operation, maintenance, repair and/or
management of improvements to be used in common and/or on a non-exclusive basis
by the owners, tenants and occupants of the Land and the Remainder Parcel (e.g.
common driveways, parking spaces, storm drains and utilities). Among other
things the CC&Rs shall likely provide that (i) each owner of the Land and the
Remainder Parcel will be responsible for the repair and maintenance of its
parcel, including any shared or jointly used facilities, (ii) if the number of
parking spaces located on the Remainder Parcel or the number of parking spaces
located on the Land does not satisfy the code requirements of the City of San
Jose, then the owner and tenant(s) of the Remainder Parcel and Land, as the case
may be, shall have the right to use, on a non-exclusive basis, a sufficient
number of parking spaces located on the other parcel to satisfy the code
requirements of the City of San Jose, and (iii) the owner and tenant(s) of the
Remainder Parcel shall be entitled to use not less than 200 parking spaces on
the Remainder Parcel (and if such 200 parking spaces are not located on the
Remainder Parcel, then the owner and tenant(s) of the Remainder Parcel shall be
entitled to use

                                      -3-
<PAGE>

on a non-exclusive basis such number of parking spaces on the Land as are equal
to the difference between 200 parking spaces and the number of parking spaces
located on the Remainder Parcel).

          (b) Subject to and effective upon the Closing, Seller shall assign to
Buyer and Buyer shall accept, all of Seller's right, title and interest, as of
the Closing Date, in and to the following: (i)all plans and specifications for
the Building Improvements and warranties and guaranties applicable to the
Building Improvements, provided, however, that Seller reserves from the
foregoing assignment such right, title and interest to the extent necessary to
enable Seller to perform its post-Closing obligations as described in
subparagraph 7(e) below and the full right, power and authority to pursue claims
against parties who prepared such plans and specifications and issued such
warranties and guaranties; and (ii) all governmental permits and approvals
applicable to the Building Improvements. Such assignment and acceptance shall be
on the terms and conditions set forth in an Assignment Agreement substantially
in the form attached as EXHIBIT C ("Assignment Agreement"). Prior to the
                        ---------
Closing, Seller and Buyer shall execute and deliver to Escrow Agent two (2)
originals of the Assignment Agreement.

     4.   Due Diligence and Time for Satisfaction of Conditions.
          -----------------------------------------------------

          (a) Due Diligence Period. Buyer shall have until December 20, 1999
              --------------------
(the "Due Diligence Period") to complete its due diligence investigations with
respect to the Property. Seller has delivered to Buyer and Buyer acknowledges
receipt of all of the items listed on EXHIBIT D attached hereto. Seller makes no
                                      ---------
representations regarding the accuracy or completeness of any of the studies,
reports or other documents identified in EXHIBIT D. Notwithstanding anything in
                                         ---------
this Agreement to the contrary, Buyer shall have the right to terminate this
Agreement at any time during the Due Diligence Period.

          (b) Access to Property. During the Due Diligence Period, Seller shall
              ------------------
afford authorized representatives of Buyer reasonable access to the Property for
purposes of satisfying Buyer with respect to the representations, warranties and
covenants of Seller contained herein and with respect to satisfaction of any
Conditions Precedent to the Closing contained herein. Buyer hereby agrees to
indemnify, defend and hold Seller and its members and lender holding a security
interest in the Property harmless from and against any and all damages, losses,
claims, actions, causes of action, liabilities, injuries to persons or property,
costs or expenses (including, without limitation, reasonable attorney's fees and
legal costs) arising out of or related to the activities of Buyer or any of its
agents, employees, consultants, contractors or other representatives during
their entry and investigations prior to the Closing. In the event this Agreement
is terminated, Buyer shall restore the Property to the condition in which it was
found. The obligations of Buyer under this subparagraph 4(b) shall survive the
termination of this Agreement or the Closing, as applicable.

     Prior to any entry onto the Property by Buyer, or its agents, employees,
consultants, contractors, or other representatives, Buyer shall obtain and
maintain during the term of this Agreement, a general liability policy on an
occurrence basis, identifying Seller as an additional insured, with a combined
single limit of not less than One Million Dollars ($1,000,000). Buyer

                                      -4-
<PAGE>

shall provide Seller with an insurance certificate evidencing such coverage
prior to any entry by Buyer or its agents, employees, consultants or contractors
on the Property. Such liability insurance policy of Buyer shall provide that the
same shall not be cancelled or modified or scope of coverage reduced without at
least thirty (30) days advance written notice to Buyer.

     5. Buyer's Conditions to Closing. The following conditions are precedent to
        -----------------------------
Buyer's obligation to purchase the Property (the "Conditions Precedent"):

          (a) Title. Buyer's review and approval of title to the Property during
              -----
the Due Diligence Period. Buyer acknowledges receipt of or shall obtain, if not
previously provided by Seller to Buyer, a current preliminary title report
coveting the Property issued by Escrow Holder, accompanied by copies of all
documents referred to therein (collectively, the "Preliminary Report"). Buyer
shall advise Seller in writing prior to the expiration of the Due Diligence
Period if Buyer objects to any exceptions to title disclosed by the Preliminary
Report. If Buyer fails to object to any title exceptions during the Due
Diligence Period, then Buyer shall be deemed to have approved the condition of
title to the Property and this condition shall be deemed satisfied. It is the
intent of the parties that Title Insurer, Buyer and Seller shall agree on the
form of the title policy to be issued to Buyer upon the Close of Escrow (the
"Proforma Title Policy") during the Due Diligence Period. If Buyer does not
elect to terminate this Agreement prior to the expiration of the Due Diligence
Period, then Buyer shall be deemed to have approved the Proforma Title Policy
(or waived the right to receive the same).

          (b) Physical Condition of Property. Buyer's review and approval, on or
              ------------------------------
prior to the expiration of the Due Diligence Period, of the physical condition
of the Property, including the soil and groundwater conditions, the stability
and load-bearing capacity of the soil, and the presence of Hazardous Materials
(defined below), if any, on or under the Property or the potential for migration
of Hazardous Materials onto the Property from other property in the area. To the
extent the same have not already been delivered to Buyer as provided in Section
4(a) above, Seller shall, within three (3) days following execution of this
Agreement, deliver or make available to Buyer, without representation or
warranty as to accuracy or completeness, copies of any environmental reports,
soils reports, and other studies in Seller's possession or control regarding the
physical condition of the Property and copies of all permits and approvals
obtained by Buyer related to the Property. Buyer's review of the Property may
include such additional environmental tests as Buyer deems necessary, which
shall be performed or arranged by Buyer at Buyer's sole expense, except that any
invasive testing of the soils or groundwater (or building materials testing)
shall require the prior consent of Seller.

          (c) Permits and Approvals. Buyer's review and approval, within the Due
              ---------------------
Diligence Period, of all governmental permits, approvals and other information
relating to the development, construction, operation, use or occupancy of the
Property (collectively, the "Permits"), and all zoning, land use, subdivision,
environmental, building and construction laws and regulations restricting or
regulating or otherwise affecting the use, occupancy or enjoyment of the
Property. Promptly following the execution of this Agreement, Seller shall
deliver to Buyer all Permits (including any applications therefor) which are in
Seller's possession or control and thereafter promptly upon receipt thereof.

                                      -5-
<PAGE>

          (d) Tentative Parcel Map Approval. On or before the Close of Escrow,
              -----------------------------
Seller shall have obtained approval from the City of San Jose of a tentative
parcel map creating the Land and the Remainder Parcel as two separate, legal
parcels, subject to conditions acceptable to Seller.

          (e) Site Development Permit. On or before the Close of Escrow, Seller
              -----------------------
shall have obtained approval from the City of San Jose of a site development
permit applicable to the Land and building to be constructed thereon by Seller,
subject to conditions acceptable to Seller.

          (f) Seller's Representations and Warranties. All of Seller's
              ---------------------------------------
representations and warranties contained in or made pursuant to this Agreement
shall have been true and correct upon the execution of this Agreement and shall
be true and correct as of the Closing Date.

          (g) Title Policy. As of the Closing Date, Title Insurer shall issue or
              ------------
be committed to issue a CLTA extended coverage owner's policy of title insurance
insuring Buyer's title to the Property in the amount of the Purchase Price (and
the expended portion, if any, of Buyer's Shell Contribution and Buyer's Interior
Improvement Contribution) and subject only to the Permitted Exceptions (and
other exceptions shown in the Proforma Title Policy approved by Buyer and any
other exceptions to title approved by Buyer) ("Title Policy").

          (h) Substantial Completion. As of the Closing Date, the Building
              ----------------------
Improvements shall have been Substantially Completed substantially in accordance
with the Building Plans and Interior Improvement Plans approved by Buyer and
Seller.

     If any of the foregoing conditions are not satisfied or waived by Buyer
within the time period set forth above (the "Condition Period"), Buyer shall
have the right by notice to Seller prior to the expiration of the particular
Condition Period for the unsatisfied condition, to terminate this Agreement and
thereupon the Deposit and all interest thereon while in the Deposit Account (and
the Buyer's Shell Contribution and Interior Improvement Contribution, if
applicable) shall be returned to Buyer. Buyer's failure to so notify Seller
prior to the expiration of the applicable Condition Period shall be deemed to be
Buyer's approval of the condition.

     6.   Seller's Conditions Precedent. Seller's obligation to sell the
          -----------------------------
Property to Buyer is subject to the satisfaction of the following conditions
precedent'

          (a) Parcel Map Approval. On or before the Close of Escrow, Seller
              -------------------
shall have obtained approval from the City of San Jose of a parcel map creating
the Land and the Remainder Parcel as two separate, legal parcels, subject to
conditions acceptable to Seller.

          (b) Site Development Permit. On or before the Close of Escrow, Seller
              -----------------------
shall have obtained approval from the City of San Jose of a site development
permit applicable to the Land and building to be constructed thereon by Seller,
subject to conditions acceptable to Seller.

                                      -6-
<PAGE>

          (c) Buyer's Performance of Obligations. Buyer shall have performed and
              ----------------------------------
complied with in all material respects all of the covenants and agreements
required by this Agreement to be performed and complied with by it within the
applicable time period set forth in this Agreement (or any of the Exhibits
attached hereto) for performance of or compliance with such covenants and
agreements. All of Buyer's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct upon the execution
of this Agreement and shall be true and correct as of the Closing Date.

     If any of the conditions in subparagraphs 6(a) or 6(b) are not satisfied
prior to the Close of Escrow hereunder, Seller shall have the right by notice to
Buyer prior to the Close of Escrow, to terminate this Agreement and thereupon
the Deposit and all interest thereon while in the Deposit Account (and the
Buyer's Shell Contribution and Interior Improvement Contribution, if applicable)
shall be returned to Buyer. If the condition in subparagraph 6(c) is not
satisfied (or waived in writing by Seller), then Seller shall have the right by
notice to Buyer to terminate this Agreement and thereupon the Deposit and all
interest thereon while in the Deposit Account shall be released to or retained
by Seller as liquidated damages (and Seller shall have no obligation to return
to Buyer any expended portion of Buyer's Shell Contribution or Buyer's Interior
Improvement Contribution or which is still in the Building Shell Fund or
Interior Improvement Fund as of the date this Agreement is terminated as a
result of Buyer's breach or default under this Agreement or any of the exhibits
attached hereto).

     7.   Construction of Building Improvements.
          -------------------------------------

          (a) Building Improvements. Prior to the Closing, Seller shall complete
              ---------------------
the following improvements to the Land, free from all liens and claims
(collectively, "Building Improvements"), in accordance with the terms of the
Construction Agreement attached hereto as EXHIBIT E, which shall be executed by
                                          ---------
Buyer and Seller contemporaneously herewith:

          (i) Grading, installation of underground utilities and preparation of
the Land for building foundations, in accordance with plans and specifications
prepared by Seller's project architect ("Project Architect");

          (ii) A "Building Shell," as defined in the Construction Agreement,
sufficient to accommodate approximately 91,694 square feet of rentable area,
more or less, in accordance with plans and specifications prepared by the
Project Architect (as described in the Construction Agreement) and the
definition of Building Shell attached to the Construction Agreement as Exhibit
E-3;

          (iii) Certain "Land Improvements," as defined in the Construction
Agreement, including surface parking areas, landscaping, drainage, irrigation,
utility service laterals, lighting, curbs, gutters, walkways, driveways,
retaining walls, fencing and gates, planters, sign monuments, and other
improvements, in accordance with plans and specifications prepared by the
Project Architect and in accordance with the "Sitework" element of the Building
Shell definition attached to the Construction Agreement as Exhibit E-3; and

                                      -7-
<PAGE>

          (iv) Certain "Interior Improvements," as defined in the Construction
Agreement, in accordance with plans and specifications to be prepared by the
Seller's architect who shall be approved by Buyer and Seller.

          (b) Building Improvements Costs. The total cost of construction for
              ---------------------------
the Land Improvements and the Building Shell including, without limitation,
direct costs of construction, the general contractor's fee, on-site supervision
and overhead, architectural and engineering fees, permits, and insurance shall
be paid by Seller and Buyer as follows: Seller shall provide an allowance of
Fifty and 00/100 Dollars ($50.00) per square foot of Building Shell ("Building
Shell Allowance") to be applied to the hard costs of constructing the Building
Shell (and the Land Improvements) only. For purposes of this Agreement and the
Construction Agreement attached hereto as EXHIBIT E, the parties agree that the
                                          ---------
hard costs of constructing the Building Shell (and the Land Improvements) shall
be equal to the contract price for the Building Shell and Land Improvements to
be set forth in a construction contract to be entered into between Seller and
Seller's general contractor, South Bay Construction Company, an affiliate of
Seller, and shall include, without limitation, a profit and overhead fee to be
paid to South Bay Construction Company equal to 4.5% of such costs of
construction. Seller will be responsible for the payment of all costs of
obtaining approvals for the construction of the Building Shell (and Land
Improvements), all costs of designing the Building Shell and Land Improvements
(including, without limitation, architectural and engineering fees for the
Building Shell and Land Improvements) and costs of testing and inspection; it
being understood and agreed that the Building Shell Allowance shall not be
applicable to such costs of obtaining approvals for the construction of the
Building Shell or Land Improvements, costs of designing the Building Shell or
Land Improvements or costs of testing and inspection. If the hard costs of
constructing the Building Shell and Land Improvements are less than the Building
Shell Allowance, then such savings shall be credited to Buyer in the form of a
reduction in the Purchase Price of the Property. Buyer shall pay for that
portion of the total hard costs of constructing the Building Shell and Land
Improvements which is in excess of the Building Shell Allowance ("Buyer's Shell
Contribution"). Prior to the commencement of construction of the Building Shell
and Land Improvements, Buyer shall deposit Buyer's Shell Contribution in an
interest-bearing operating account to be established for the collection and
disbursement of funds in connection with the Building Shell (and Land
Improvements). The term "Building Shell Fund" shall mean the aggregate of (i)
the Building Shell Allowance (or the construction loan proceeds of Seller
allocated thereto) and (ii) Buyer's Shell Contribution. The hard costs of
construction of the Building Shell and Land Improvements shall be paid from the
Building Shell Fund in accordance with the terms of the Construction Agreement
which shall provide that the hard costs of constructing the Building Shell (and
Land Improvements) shall be paid out of the Building Shell Fund in the same
ratio as the contributions required to be made to the fund (the "Building Shell
Contribution Ratios"). If the hard costs of constructing the Building Shell (and
Land Improvements") exceeds the amount of funds in the Building Shell Fund, then
Buyer shall pay such shortfall to Seller within five (5) days following receipt
of written invoice(s) or statements from Seller setting forth the amount of such
shortfall.

     The total cost of designing and construction for the Interior Improvements
including, without limitation, direct costs of construction, the general
contractor's fee, on-site supervision

                                      -8-
<PAGE>

and overhead, architectural and engineering fees, permits, and insurance shall
be paid by Seller and Buyer as follows: Seller shall provide an allowance of
Thirty and 00/100 Dollars ($30.00) per square foot of Building Shell to be
applied toward the total cost of the Interior Improvements ("Interior
Improvements Allowance"). The costs of constructing the Interior Improvements
will include, without limitation, a profit and overhead fee to be paid to
Seller's general contractor, South Bay Construction Company, equal to 4.5% of
such costs of construction of the Interior Improvements. Seller anticipates that
the Interior Improvements Allowance will be funded with proceeds of the loan to
be provided by Seller's construction lender. Buyer shall pay for that portion of
the total cost of the Interior Improvements which is in excess of the Interior
Improvements Allowance ("Buyer's Interior Improvement Contribution"). At the
time when invoices for the Interior Improvement work first become due and
payable (or, if earlier, when required by the construction lender), Buyer shall
deposit Buyer's Interior Improvement Contribution in an interest-bearing
operating account to be established for the collection and disbursement of funds
in connection with the Interior Improvements. The term "Interior Improvement
Fund" shall mean the aggregate of (i) the Interior Improvements Allowance (or
the construction loan proceeds allocated thereto) and (ii) Buyer's Interior
Improvement Contribution. The cost of the Interior Improvements shall be paid
from the Interior Improvement Fund in accordance with the terms of the
Construction Agreement which shall provide that the Interior Improvements cost
shall be paid out of the Interior Improvement Fund in the same ratio as the
contributions required to be made to the fund (the "Interior Improvement
Contribution Ratios"). For example, if Buyer's Interior Improvement Contribution
is $916,940 and the Interior Improvement Allowance is $2,750,820, then 25%
(i.e., 916,940/3,667,760) of each dollar disbursed from the Interior Improvement
Fund would come from Buyer's Interior Improvement Contribution and 75% (i.e.,
2,750,820/3,667,760) of each dollar disbursed from the Interior Improvement Fund
would come from the Interior Improvement Allowance. If the total costs to design
and construct the Interior Improvements is less than the Improvement Allowance,
then any unused or undisbursed portion of the Interior Improvement Allowance
will not be advanced or made available by Seller. If the costs of constructing
the Interior Improvements exceeds the amount of funds in the Interior
Improvement Fund, then Buyer shall pay such shortfall to Seller within five (5)
days following receipt by Buyer's Representative of written invoice(s) or
statements from Seller setting forth the amount of such shortfall.

     If, at any time prior to the Closing, Buyer defaults under this Agreement
and this Agreement is terminated as a result thereof, Seller shall retain all
right, title and interest in and to the Land Improvements, the Building Shell,
the Interior Improvements and the remaining balance in the Building Shell Fund
and the Interior Improvement Fund; provided that such rights shall be subject to
the rights of Seller's construction lender, if any, as to the same. In such
case, Seller shall have no obligation to reimburse or refund to Buyer for any
portion of Buyer's Shell Contribution or Buyer's Improvements Contribution which
may have been expended prior to the date this Agreement is terminated or which
was still in the Building Shell Fund or Interior Improvement Fund as of the date
this Agreement is terminated as a result of Buyer's default.

          (c) Building Shell Plans. The Building Shell and Land Improvements
              --------------------
shall be constructed in accordance with the terms of the definition of Building
Shell attached to the Construction Agreement as Exhibit E-3 and the Project
Scope drawings described in Exhibit E-2

                                      -9-
<PAGE>

to the Construction Agreement. Buyer hereby acknowledges that, prior to the
execution of this Agreement, Buyer approved the definition of Building Shell
attached to the Construction Agreement as Exhibit E-3 and the Project Scope
drawings described in Exhibit E-2 to the Construction Agreement. Contracts. No
changes shall be made by Buyer to such Project Scope drawings referred to in
Exhibit E-2 to the Construction Agreement.

          (d) Substantial Completion. The Building Improvements shall be deemed
              ----------------------
substantially completed upon the date which is the earlier to occur of the
following: (i) the date the City has completed its final inspection of the
Building improvements and approved the Building Improvements for occupancy
(i.e., as evidenced by the inspector's signature in the appropriate box on the
Building Permit Inspection Record which indicates that Buyer may legally occupy
the Building; (ii) the date the Project Architect and Project Contractor have
certified that the Building Improvements have been substantially completed in
accordance with the final plans and specifications, as described in the
Construction Agreement, except for any punch list items, (iii) the date the
Building Improvements would have been completed but for any Buyer Caused Delay
(as defined in the Construction Agreement), or (iv) the date Buyer occupies the
Building Shell for the purpose of conducting its business therein.

          (e) Post-Closing Obligations. As soon as reasonably possible after
              ------------------------
Closing, Seller shall at Seller's cost, complete the following: (i) cause any
uncompleted "Punch List" items (as described in Section 6.4 of the Construction
Agreement) to be completed in accordance with the final plans and
specifications, free from all liens and claims; and (ii) cause the City to issue
a certificate of occupancy, or its equivalent for the Building Improvements. If
Seller disburses any portion of the Interior Improvement Allowance after the
Closing (which it shall not be obligated to do hereunder) to cover costs of
constructing any Interior Improvements constructed prior to or following the
Closing, then Buyer shall pay to Seller, as additional consideration for the
Property, within fifteen (15) days following the receipt of written invoice(s)
or statement(s) evidencing the costs so incurred, the amount of such Interior
Improvement Allowance so disbursed or paid by Seller following the Closing.

          (f) Mechanic's Lien. If Buyer receives notice, after Closing, of any
              ---------------
mechanics' or materialmen's lien recorded against the Property, or any claim of
such a lien, arising out of Seller's construction of the Building Improvements,
Buyer shall give prompt written notice thereof to Seller. Seller shall remove
any such lien (or provide to Buyer a bond insuring against any damage to Buyer
as a result of foreclosure of such lien) within thirty (30) days after Seller's
receipt of such notice; provided, however, Seller shall have no obligation to
remove or bond over such lien if such lien arises as a result of Buyer failing
or refusing to pay its share of the costs of the Building Improvements, or
applicable portion thereof. Buyer shall not file or pursue any claim under the
Title Policy relating to any such lien prior to giving the notice and providing
the cure period described above to Seller, but the provisions of this
subparagraph 7(f) are not intended to waive or adversely affect Buyer's rights
or remedies under such Title Policy.

          (g) Damage or Destruction. If, prior to the Closing Date, any part of
              ---------------------
the improvements on the Property is damaged or destroyed by fire or other
casualty, Seller shall

                                      -10-
<PAGE>

promptly give notice thereof to Buyer. If due to such damage or destruction
Seller or its Project Contractor reasonably determines that Project Contractor
will be delayed in substantially completing the Building Improvements beyond
March 30, 2001, or if the damage or destruction is caused by an uninsured
casualty, then Seller may elect, by delivering written notice to Buyer, to
terminate this Agreement, in which event neither party shall have any further
rights or obligations hereunder and Buyer shall be entitled to recover its
Deposit and all interest earned thereon. If Seller does not deliver such written
notice of termination, then: (1) this Agreement shall remain in full force and
effect; (2) Seller shall restore the Property; and (3) the parties shall
continue performance under this Agreement, without modification of any of its
terms and without any reduction in the Purchase Price. Seller shall have no
liabilities or obligations to Buyer, and Buyer shall have no claims for damages
or other remedies against Seller, as a result of such damage or destruction of
the Property. Seller agrees to maintain (either directly or by requiting the
Project Contractor to maintain) an all-risk insurance policy on the Building
Improvements in an amount equal to the replacement cost of the same. Seller
agrees to have Buyer named as an additional insured on such insurance policy;
provided that Buyer's right to any insurance proceeds shall be specifically
subject to the rights of Seller's construction lender under Seller's
construction loan, and limited to Buyer's Building Shell Contribution Ratio and
Buyer's Interior Improvement Contribution Ratio (as defined in subparagraph 7(b)
above), as the case may be, times the insurance proceeds available to Seller and
Buyer; provided in no event shall Buyer receive insurance proceeds in excess of
Buyer's Shell Contribution (for damage to the Building Shell) actually expended
or in excess of Buyer's Interior Improvement Contribution (for damage to the
Interior Improvements) actually expended.

          (h) Possession. Possession of the Property shall be delivered by
              ----------
Seller to Buyer on the Closing Date immediately upon the recordation of the
Grant Deed. All risk of loss and damage to the Property from whatever source
shall be the sole responsibility of Buyer after the Closing. On the Closing
Date, Seller shall deliver to Buyer (or to Escrow Agent for the benefit of
Buyer): (i) copies of the as-built plans and specifications for the Building
Improvements and other documentation required to be delivered to be delivered to
Seller under contract(s) with the Project Contractor; and (ii) keys, codes and
combinations for locks or security devices for the Building Improvements, to the
extent under Seller's control, (iii) the documents listed in subparagraph 8(c)
below, and (iv) copies of all other information and documents relating to the
Property which are in Seller's possession.

     8.   Closing and Escrow. Alliance Title Company located at 1732 North
          ------------------
First Street, Suite 175, San Jose, CA. 95112, is designated and authorized to
act as "Escrow Agent" pursuant to the terms of this Agreement. Within three (3)
days after execution of this Agreement by Buyer and Seller, the parties hereto
shall deposit an executed counterpart of this Agreement with Escrow Agent and
this Agreement shall serve as instructions to Escrow Agent for consummation of
the purchase and sale contemplated hereby. Seller and Buyer agree to execute
such additional escrow instructions as may be appropriate to enable the Escrow
Agent to comply with the terms of this Agreement; provided, however, that in the
event of any conflict between the provisions of this Agreement and any
supplementary escrow instructions, the terms of this Agreement shall control.

                                      -11-
<PAGE>

          (a) Closing Date. The Closing shall occur on a date five (5) days
              ------------
following the Substantial Completion of the Building Improvements (as defined
above) (the "Closing Date"). Seller shall exercise diligent efforts to break
ground on the Building Shell not later than April 1, 2000 and exercise diligent
efforts to substantially complete the Building Shell, Land Improvements and
Tenant Improvements by October 1, 2000. Seller makes no representation or
warranty as to the exact date ground will be broken on the Building Shell or the
exact date the Building Improvements will be Substantially Completed, and Seller
shall have no liability to Buyer if the actual Closing .Date does not occur on
or before October 1, 2000. The Close of Escrow on the Property (or the closing
of escrow or the Closing on the Property) shall mean the recordation of the
Grant Deed covering the Land and the Building Improvements constructed thereon.
The date escrow closes or the date of closing of escrow hereunder shall be the
date on which the Grant Deed describing the Land and Building Improvements is
recorded.

          (b) Buyer-Caused Delays. In the event the Building Improvements are
              -------------------
not completed by October 1, 2000 due to a Buyer-Caused Delay (as defined in the
Construction Agreement), then Buyer shall be responsible for paying the interest
incurred on the construction loan of Seller for the number of days of delay
attributable to a Buyer-Caused Delay. When the total number of days of delay
attributable to Buyer-Caused Delay equal or exceed, or when a proposed change by
Buyer to the Building Improvements will cause the total number of days of delay
attributable to Buyer-Caused Delay to equal or exceed, sixty (60) days, Seller
shall have no obligation to implement the proposed and future changes requested
by Buyer to the extent they would further delay the Close of Escrow and may
proceed to complete the Project without incorporating such requested changes.

          The parties hereto agree that Seller shall be responsible for paying
the interest incurred on Seller's construction loan for the number of days of
delay attributable to a Seller Caused Delay (as defined in the Construction
Agreement) and/or a Force Majeure Delay (as defined in the Construction
Agreement). Seller shall not be responsible for any costs, expenses, damages or
liabilities incurred by Buyer as a result of a Force Majeure Delay and Buyer
agrees that it shall be responsible for any direct or indirect costs, expenses
or damages attributable to such Force Majeure Delay, such as leasing additional
space and/or the payment of holdover rent at its existing space.

          (c) Delivery of Seller's Document. At or before the Closing (except to
              -----------------------------
the extent otherwise specifically provided below), Seller shall deliver to Buyer
(or to Escrow Agent for the benefit of Buyer) the following:

               (i)   a duly executed and acknowledged Grant Deed, conveying
title to the Property to Buyer;

               (ii)  two (2) duly executed originals of the Assignment
Agreement;

               (iii) An affidavit pursuant to Section 1445(b)(2) of the Internal
Revenue Code that Seller is not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code;

                                      -12-
<PAGE>

               (iv) A properly executed California Form 590 certifying that
Seller has a permanent place of business in California or is qualified to do
business in California. If Seller fails to deliver any such Form 590, Buyer
shall not be excused from its obligation to consummate the transactions
contemplated herein, but rather may deduct and withhold from the Purchase Price
an amount equal to three and one-third percent (3 1/3%) of the "sales price of
the California real property conveyed" in connection with the transactions
contemplated herein, as defined and required by the State Withholding
Provisions; and

               (v) Title Policy to be issued by Title Insurer.

          (d) Deliver of Purchase Price. At or before the Closing, Buyer shall
              -------------------------
deliver to Seller:

               (i)  the Purchase Price; and

               (ii) two (2) duly executed originals of the Assignment Agreement.

          (e) Designation Agreement. Seller and Buyer shall each deposit such
              ---------------------
other instruments as are reasonably required by the escrow holder or otherwise
required to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof, including, without limitation, an agreement
(the "Designation Agreement") designating Escrow Agent as the "Reporting Person"
for the transaction pursuant to Section 6045(e) of the Internal Revenue Code,
and executed by Seller, Buyer and Escrow Agent. The Designation Agreement shall
be substantially in the form attached hereto as Exhibit F.
                                                ---------

          (f) Prorations. General real estate taxes and assessments payable for
              ----------
fiscal year 2000-2001 shall be prorated between Seller and Buyer as of the
Closing Date based on the most recent official information available in the
office of the taxing entity. Buyer shall be solely responsible for any
supplemental assessments that may be imposed against the Property as a result of
the sale of the Property to Buyer.

          (g) Closing Costs. Seller shall pay the Santa Clara County documentary
              -------------
transfer tax and the premium for a CLTA standard owner's policy of title
insurance (and Buyer shall pay the excess premium associated with the issuance
of an ALTA owner's extended coverage Title Policy, if obtained by Buyer). City
of San Jose transfer taxes shall be paid fifty percent (50%) by Buyer and fifty
percent (50%) by Seller. All other costs and charges of the escrow for the sale
not otherwise provided for in this subparagraph 8(g) or elsewhere in this
Agreement (including, without limitation, escrow fees and recording fees) shall
be allocated in accordance with the closing customs for Santa Clara County. Each
party shall bear its own attorney's fees incurred in connection with the
drafting and negotiation of this Agreement.

     9.   Representations and Warranties of Seller. Seller hereby represents and
          ----------------------------------------
warrants to and covenants with Buyer as follows:

                                      -13-
<PAGE>

          (a) Authority. Seller is a limited liability company duly organized
              ---------
and validly existing and in good standing under the laws of the State of
California; this Agreement and all documents executed by Seller which are to be
delivered to Buyer at the Closing are and at the time of Closing will be duly
authorized, executed and delivered by Seller, are and at the time of Closing
will be legal, valid and binding obligations of Seller enforceable against
Seller in accordance with their respective terms, and do not, and at the time of
Closing will not, violate any provision of any agreement or judicial order to
which Seller or the Property is subject.

          (b) Governmental Proceedings. As of the date of execution of this
              ------------------------
Agreement, Seller has received no written notice of any condemnation, zoning or
other land-use regulation proceedings, either instituted or planned to be
instituted, which would detrimentally affect the use or operation of the
Property, nor has Seller received written notice of any special assessment
proceedings affecting the Property (other than as set forth in the Preliminary
Report). From the date hereof through the Closing Date, Seller shall notify
Buyer promptly of any such proceedings of which Seller becomes aware.

          (c) Litigation. There is no litigation pending or, to the best of
              ----------
Seller's knowledge, threatened against Seller or the Property that might
detrimentally affect the use or operation of the Property for its intended
purpose or the ability of Seller to perform its obligations under this
Agreement. From the date hereof through the Closing Date, Seller shall notify
Buyer promptly of any such litigation of which Seller becomes aware.

          (d) No Other Sales Contracts. Seller has not entered into any other
              ------------------------
contracts for the sale of the Property, other than this Agreement, and to the
actual knowledge of Seller, no other person or entity has any right of first
refusal, option or other preferential right to purchase the Property or any
interest therein.

          (e) Non-Foreign Person. Seller is not a "foreign person" within the
              ------------------
meaning of Section 1445(f)(3) of the Internal Revenue Code.

          (f) Hazardous Materials. Seller has received no written notice that
              -------------------
the Property is in violation of any federal, state local or administrative
agency ordinance, law, role, regulation, order or requirement relating to
environmental conditions or Hazardous Materials. For the purposes hereof,
"Hazardous Material" shall mean any substance, chemical, waste or other material
which is listed, defined or otherwise identified as "hazardous" or "toxic" under
any federal, state, local or administrative agency ordinance or law, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S)9601 et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. (S)6901 et seq.; the Federal Water Pollution Control Act, 33
U.S.C. (S)1251 et seq.; California Hazardous Substance Account Act, California
Health & Safety Code (S)25300 et seq.; California Hazardous Waste Control Law,
California Health & Safety Code (S)22100 et seq.; California Porter-Cologne
Water Quality Act, California Water Code (S)13000 et seq.; California
Underground Storage Tank Act, California Health & Safety Code (S)25280 et seq.;
or any regulation, order, rule or requirement adopted thereunder, as well as any
formaldehyde, urea, polychlorinated biphenyl, petroleum, petroleum

                                      -14-
<PAGE>

product or by-product, crude oil, natural gas, natural gas liquids, liquefied
natural gas, or synthetic gas usable for fuel or mixture thereof, radon, and
asbestos.

          (g) Bankruptcy. There are no attachments, execution proceedings,
              ----------
assignments for the benefit of creditors, insolvency, bankruptcy, or similar
proceedings pending or, to the actual knowledge of Seller, threatened against
Seller. From the date hereof through the Closing Date, Seller shall notify Buyer
promptly of any such proceedings of which Seller becomes aware.

     For the purposes of the representations and warranties made pursuant to
this paragraph 9, a statement that a fact is true to "the actual knowledge of
Seller" means that neither Scott Trobbe nor James Mair actually knows such
statement to be untrue. Except for the representations and warranties set forth
in this paragraph 9 or elsewhere in this Agreement or any document delivered
pursuant to the terms of this Agreement, Seller makes no warranties or
representations regarding the Property, including the physical, economic or
other characteristics of the Property.

     If, prior to the Close of Escrow hereunder, Buyer discovers or is informed
of any fact or condition which would make any of Seller's representations or
warranties in this paragraph 9 untrue or inaccurate in a material respect, and
such fact or condition is material to Buyer's decision whether to purchase the
Property, then Buyer shall have the right to terminate this Agreement by
delivery of written notice to Seller within ten (10) days following the date
such fact or condition is discovered or becomes known to Buyer. Time is of the
essence as to the delivery of such notice of termination. If Buyer timely
delivers such notice of termination, then all rights and obligations hereunder
shall cease (except for those that expressly survive termination of this
Agreement) and, as Buyer's sole and exclusive remedy, the Deposit shall be
returned to Buyer and Seller shall refund to Buyer its Building Shell
Contribution and Interior Improvement Contribution. If, prior to the Close of
Escrow hereunder, Buyer discovers or is informed of any fact or condition which
would make any of Seller's representations or warranties in this paragraph 9
untrue or inaccurate in a material respect and Buyer does not terminate this
Agreement as provided above based on a breach by Seller of any such
representation or warranty, then Buyer shall be deemed to have waived all rights
and remedies available against Seller with respect to any breach of any
representation or warranty set forth in paragraph 9 above.

     Buyer hereby acknowledges that, as of the close of escrow hereunder, it
shall have inspected the Property and observed its physical characteristics and
conditions. As of the close of escrow, Buyer waives any and all objections to
said physical characteristics and conditions of the Property which would
reasonably be disclosed by such inspection. Buyer hereby agrees that if Buyer or
any of its agents, employees or consultants discover any Hazardous Materials on,
in or under the Land or Improvements in connection with its investigation or
environmental assessment of the Property under Section 4(b) above or otherwise
(excepting therefrom any Hazardous Materials caused to be present in, on or
under the Land or Improvements by Seller or its agents or employees), and if
Buyer elects nevertheless to close escrow under this Agreement (and escrow so
closes), then Seller shall have no obligation to Buyer hereunder to clean up or
remediate such environmental conditions so discovered by Buyer or its agents,
employees or consultants (and not caused to be present by Seller or its agents
or employees) and Buyer waives all claims against

                                      -15-
<PAGE>

Seller with respect to such Hazardous Materials so discovered by Buyer or its
agents, employees or consultants. Buyer further acknowledges and agrees that, if
escrow closes hereunder, the Property shall be accepted by Buyer in its then "as
is" condition and that no physical, environmental, title or economic condition
of the Property shall affect the rights of either party hereto. As of the close
of escrow hereunder, Buyer shall have investigated and possessed knowledge of
operative or proposed governmental laws and regulations including, without
limitation, zoning, environmental and land use laws and regulations to which the
Property may be subject. Except for those representations and warranties set
forth in Section 9 above, Buyer has neither received nor relied upon any
representations concerning such laws and regulations made by Seller or any other
person acting on or in behalf of Seller.

     BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES BUYER IS NOT RELYING ON ANY
                                                         ---
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS (EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT) OR IMPLIED, FROM SELLER, ITS AGENTS, OR
BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION:
(I) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, THE STRUCTURAL ELEMENTS, FOUNDATION, ROOF,
APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES AND THE ELECTRICAL,
MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES AND
APPLIANCES, (II) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS,
GEOLOGY AND ANY GROUNDWATER, (III) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND
PHYSICAL CONDITION OF UTILITIES SERVING THE PROPERTY, (IV) THE DEVELOPMENT
POTENTIAL OF THE PROPERTY, AND THE PROPERTY'S USE, HABITABILITY,
MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR
ANY PARTICULAR PURPOSE, (V) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR
ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF THE PROPERTY, (VI) THE
COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS,
REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY
GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY,
(VII) THE PRESENCE OF HAZARDOUS MATERIALS ON, UNDER OR ABOUT THE PROPERTY OR THE
ADJOINING OR NEIGHBORING PROPERTY, (VIII) THE QUALITY OF ANY LABOR AND MATERIALS
USED IN ANY IMPROVEMENTS ON THE PROPERTY, (IX) THE CONDITION OF TITLE TO THE
PROPERTY, AND (X) THE ECONOMICS OF THE OPERATION OF THE PROPERTY. BUYER
ACKNOWLEDGES THAT IT SHALL USE ITS INDEPENDENT JUDGMENT AND MAKE ITS OWN
DETERMINATION AS TO THE SCOPE AND BREATH OF THE DUE DILIGENCE INVESTIGATION
WHICH IT SHALL MAKE RELATIVE TO  THE PROPERTY. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT,  BUYER SHALL RELY UPON ITS OWN INVESTIGATION OF THE PHYSICAL,
ENVIRONMENTAL, ECONOMIC AND LEGAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, WHETHER THE PROPERTY IS LOCATED IN ANY AREA WHICH IS DESIGNATED AS A
SPECIAL FLOOD HAZARD

                                      -16-
<PAGE>

AREA, DAM FAILURE INUNDATION AREA, EARTHQUAKE FAULT ZONE, SEISMIC HAZARD ZONE,
HIGH FIRE SEVERITY AREA OR WILDLAND FIRE AREA, BY ANY FEDERAL, STATE OR LOCAL
AGENCY). BUYER UNDERTAKES AND ASSUMES THE RISKS ASSOCIATED WITH ALL MATTERS
PERTAINING TO THE PROPERTY'S LOCATION IN ANY AREA DESIGNATED AS A SPECIAL FLOOD
HAZARD AREA, DAM FAILURE INUNDATION AREA, EARTHQUAKE FAULT ZONE, SEISMIC HAZARD
ZONE, HIGH FIRE SEVERITY AREA OR WILDLAND FIRE AREA, BY ANY FEDERAL, STATE OR
LOCAL AGENCY. THE PROVISIONS OF THIS PARAGRAPH SHALL INDEFINITELY SURVIVE THE
CLOSE OF ESCROW HEREUNDER OR TERMINATION OF THIS AGREEMENT AND SHALL NOT BE
MERGED INTO THE GRANT DEED.

     Without limiting the above, as of the Close of Escrow, Buyer waives on
behalf of itself and its agents, employees, affiliates, partners, shareholders,
members, successors and assigns, any and all right to recover from Seller and
from Seller's members, the affiliates of Seller and the members, partners,
trustees, shareholders, directors, officers, employees and agents of each of
them (collectively, the "Seller Related Parties"), and forever releases and
discharges Seller and the Seller Related Parties from any and all damages,
claims, losses, liabilities, penalties, fines, liens, judgments, costs or
expenses whatsoever (including, without limitation, attorneys' fees and costs),
whether direct or indirect, known or unknown, foreseen or unforeseen, that may
arise on account of or in any way be connected with the Property, including
without limitation title to the Property, the physical condition of the Property
or any law or regulation applicable thereto (including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and
                                 -- ---
Recovery Act of 1976 (42 U.S.C. Sections 6901 et seq.), the Federal Water
                                              -- ---
Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Toxic Substance
                                               -- ---
Control Act (15 U.S.C. Sections 2601 et seq.), the California Hazardous Waste
                                     -- ---
Control Law (California Health and Safety Code Sections 25100 et seq.), the
                                                              -- ---
Porter-Cologne Water Quality Control Act (California Water Code Sections 13000

et seq.), and the Safe Drinking Water and Toxic Enforcement Act (California
-- ---
Health and Safety Code Section 25249.5 et seq.)). The above waiver and release
                                       -- ---
shall not constitute a waiver or release of any warranty claims that Buyer may
have against South Bay Construction Company or any of its subcontractors or the
Project Architect based on the design or construction of the Building
Improvements.

          In connection with the immediately preceding paragraph, Buyer
expressly waives the benefits of Section 1542 of the California Civil Code,
which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."

          Buyer's Initial   /s/ XXX   Seller s Initials   /s/ XXX
                            -------                       -------

     10.  Representation and Warranties of Buyer. Buyer hereby represents and
          --------------------------------------
warrants to Seller as follows: this Agreement and all documents executed by
Buyer which are to be delivered to Seller at the Closing are or at the time of
Closing will be duly authorized, executed

                                      -17-
<PAGE>

and delivered by Buyer, and are or at the Closing will be legal, valid and
binding obligations of Buyer, and do not and at the time of Closing will not,
violate any provisions of any agreement or judicial order to which Buyer is
subject.

     11.  Cooperation. Seller hereby irrevocably authorizes Buyer and its
          -----------
agents during the Due Diligence Period to make all inquiries with and
applications to any third party, including any governmental authority, as Buyer
may reasonably require to complete its due-diligence. Buyer shall cooperate and
do all acts as may be reasonably required or requested by Seller with regard to
Seller's obtaining its contemplated construction loan from its construction
lender. Buyer agrees to execute any documents which may be reasonably required
by Seller's construction lender as a condition to making the construction loan.

     12.  General.
          -------

          (a) Notices. Any notice, consent or approval required or permitted to
              -------
be given undo this Agreement shall be in writing and shall be deemed to have
been given upon (i) hand delivery, or (ii) one (1) day after being deposited
with Federal Express or another reliable overnight courier service or
transmitted by facsimile telecopy, and addressed as follows:

If to Seller:    Enzo Drive, LLC
                 511 Division Street
                 Campbell, CA 95008
                 Attn: Dan Rosenbaum and Scott Trobbe
                 Phone: 408-379-0400
                 Fax: 408-379-3229

With a copy to:  Berliner Cohen
                 10 Almaden Blvd., 11th Floor
                 San Jose, CA 95113
                 Attn: Sam Farb, Esq.
                 Phone: 408-286-5800
                 Fax: 408-998-5388

If to Buyer:     Sunrise Telecom
                 22 Great Oaks Boulevard
                 San Jose, CA 95119
                 Attn: Peter Eidelman
                 Phone: 408-363-8000
                 Fax: 408-363-8313

or such other address as either party may from time to time specify in writing
to the other.

          (b) Brokers and Finders. Neither party has had any contact or dealings
              -------------------
regarding the Property, or any communication in connection with the subject
matter of this

                                      -18-
<PAGE>

transaction, through any real estate broker, agent or person other than CPS who
can claim a right to a commission or finder's fee in connection with the sale
contemplated herein. If, and only if, escrow closes hereunder, then Seller shall
pay CPS a brokerage commission pursuant to the terms of a separate written
agreement between Seller and CPS. If any broker or finder perfects a claim for a
commission or finder's fee based upon any such contact, dealings or
communication, the party through whom the broker or finder makes its claim shall
be responsible for said commission or fee and all costs and expenses (including
reasonable attorneys' fees) incurred by the other party in defending against the
same. The provisions of this paragraph shall survive the Closing.

          (c) Successors and Assigns. This Agreement may not be assigned by
              ----------------------
Buyer without Seller's prior written consent. Notwithstanding the foregoing,
Seller agrees that Buyer may assign its rights under this Agreement to an
"Affiliate" of Buyer; provided that such an assignment shall not relieve Buyer
from any of its obligations hereunder and Seller shall continue to have the
right to proceed directly against Buyer in the event Buyer's Affiliate fails to
timely perform any of the Buyer's obligations hereunder. For purposes of the
subparagraph 11 (c) the term "Affiliate" shall mean a legal entity which is
controlled by, is under common control with, or which controls Buyer. This
Agreement may be assigned by Seller to an entity approved by Buyer (which
approval shall not be unreasonably withheld or delayed). Seller hereby agrees
that Buyer shall not be deemed unreasonable if Buyer fails to approve an
assignment of this Agreement by Seller to a third party, where such third party
does not have a net worth at least equal to that of Seller as of the date of
execution of this Agreement. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, heirs, administrators and assigns.

          (d) Amendments. Except as otherwise provided herein, this Agreement
              ----------
may be amended or modified only by a written instrument executed by Seller and
Buyer.

          (e) Governing Law. This Agreement shall be governed by and construed
              -------------
in accordance with the laws of the State of California.

          (f) Merger of Prior Agreements. This Agreement and the exhibits hereto
              --------------------------
(including, without limitation, the Construction Agreement attached hereto as

EXHIBIT E, which shall be executed by Buyer and Seller contemporaneously
---------
herewith) constitute the entire agreement between the parties and supersede all
prior agreements and understandings between the parties relating to the subject
matter hereof.

          (g) Enforcement. If either party hereto fails to perform any of its
              -----------
obligations under this Agreement or if a dispute arises between the parties
hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such dispute
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 or costs of arbitration and
attorneys' fees and disbursements. Any such attorneys' fees and other expenses
incurred by either party in enforcing a judgment in its favor under this
Agreement shall be recoverable separately from and in addition to any other

                                      -19-
<PAGE>

amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment.

          (h) Time of the Essence. Time is of the essence of this Agreement.
              -------------------

          (i) Severability. If any provision of this Agreement or the
              ------------
application thereof to any person, place or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.

     13.  Like-Kind Exchange. Each party agrees to reasonably cooperate
          ------------------
with the other in the event a party attempts to effectuate a Section 1031
exchange with respect to the Property. Such cooperating party shall not be
required to obtain title to any exchange or target property, execute any
promissory note or other document or instrument which would or could impose
personal liability upon such cooperating party, or incur any additional expense,
cost or liability whatsoever (including, but not limited to, liabilities or
warranties of title, or assumption of indebtedness) with regard to the Section
1031 exchange or exchanges. The party engaging in such Section 1031 exchange
hereby agrees to indemnify and hold harmless the other party from any claim,
damage, liability, demand, cause of action, loss, cost, or expense (including,
without limitation, reasonable attorney's fees) such other party may suffer or
incur as a result of such other party's participation in the aforesaid exchange
or exchanges. Notwithstanding the foregoing, each party's agreement hereunder to
participate in a tax-deferred exchange or exchanges shall not extend the Closing
date hereunder. Neither party shall, by this Agreement or acquiescence to the
exchange contemplated by this Paragraph 13, (a) have its rights under this
Agreement affected or diminished in any manner or (b) be responsible for
compliance with or be deemed to have warranted to the other party that any
exchange in fact complies with Section 1031 of the Internal Revenue Code of
1986, as amended. The obligations of Seller and Buyer under this Paragraph 13
shall survive the Close of Escrow.

     14.  Default. In the event of a default of Buyer under the terms of
          -------
this Agreement, Seller's rights and remedies shall be limited to those set forth
in subparagraph 2(c) herein; provided however Seller shall retain any rights
against Buyer that Seller may have hereunder in connection with Buyer's (or its
consultant's) activities on the Land. In the event of a default of Seller under
the terms of this Agreement, Buyer shall be entitled to avail itself of all of
its rights which it may have at law or in equity by reason of such default,
including the right to seek specific performance of this Agreement or terminate
this Agreement and have the Deposit and the interest earned thereon and Buyer's
Building Shell Contribution and Buyer's Initial Improvement Contribution (and
any interest thereon) returned to Buyer.

                                      -20-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

SELLER                                  BUYER
------                                  -----

ENZO DRIVE, LLC                         SUNRISE TELECOM
a California limited liability company  a

By:  /s/ XXX                            By:   /s/ XXX
     --------------------                     --------------------
Its: Member                             Its:   CFO
     --------------------                     --------------------

By:                                     By:
     --------------------                     --------------------
Its:                                    Its:
     --------------------                     --------------------

ESCROW AGENT
------------

ALLIANCE TITLE COMPANY

By:
     --------------------
Its:
     --------------------

                                      -21-
<PAGE>

                            [GRAPHIC OF EXHIBIT A]

                   STREET MAP SHOWING LOCATION OF PROPERTY
                        OF A NEW TWO STORY BUILDING FOR
                                  ENZO DRIVE
                        ENZO DRIVE AT THE FERRARI DRIVE
                              SAN JOSE, CALIFORNIA

<PAGE>

                                   EXHIBIT A

SITE ANALYSIS

  PARKING

  NEW BUILDING                                           91,694 SQ. FT.
     91,694 X .85 =                                  77,940 NET SQ. FT.
     PARKING PROVIDED =                                        325 CARS
     PARKING RATIO - 325/77.94                                 4.2/1000

     EXISTING BUILDING                                   58,785 SQ. FT.
     58,785 X .85 =                                  49,967 NET SQ. FT.
     PARKING PROVIDED =                                        234 CARS
     PARKING RATIO - 234/49.98                                 4.7/1000

     TOTAL BOTH BUILDINGS                               150,479 SQ. FT.
     150,479 X .85 =                                127,907 NET SQ. FT.
     PARKING PROVIDED =                                        559 CARS
     PARKING RATIO - 559/127.9                                 4.4/1000

  COVERAGE:

     NEW BUILDING
       SITE AREA                           8.07 ACRES (264,407 SQ. FT.)
       BUILDING (F.A.R.)                            91,694 SQ. FT. = 34%
       BUILDING FOOTPRINT                           45,847 SQ. FT. = 17%
       LANDSCAPE                                  125,605 SQ. FT. = 48%
       PARKING                                      92,955 SQ. FT. = 35%

     EXISTING BUILDING
       SITE AREA                           4.94 ACRES (264,407 SQ. FT.)
       BUILDING (F.A.R.)                            58,785 SQ. FT. = 34%
       BUILDING FOOTPRINT                           58,785 SQ. FT. = 17%
       LANDSCAPE                                    62,251 SQ. FT. = 48%
       PARKING                                      94,150 SQ. FT. = 35%

     TOTAL SITE
       SITE AREA                          11.01 ACRES (264,407 SQ. FT.)
       BUILDING (F.A.R.)                          150,479 SQ. FT. = 34%
       BUILDING FOOTPRINT                         104,632 SQ. FT. = 17%
       LANDSCAPE                                  187,858 SQ. FT. = 48%
       PARKING                                    187,105 SQ. FT. = 35%

<PAGE>

                                   EXHIBIT B

                               FORM OF GRANT DEED
                               ------------------

Order No.                               SPACE ABOVE THIS LINE FOR RECORDER'S USE
Escrow or Loan No.

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

-------------------------------------------------------------------------------

Mail Tax Statements to:

---------------------------
---------------------------
---------------------------

                             Signature of Declarant or Agent determining tax --
                             Firm Name
-----------------------------------------------------------------------------
A.P.N.
                            GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,

ENZO DRIVE, LLC a California limited liability company hereby GRANT(S) to

that certain real property in the City of San Jose, County of Santa Clara, State
of California, more particularly described in EXHIBIT A attached hereto and
                                              ---------
incorporated herein by this reference.

       This conveyance is made subject to all liens and encumbrances of record.

Dated:                            ENZO DRIVE, LLC
       ---------------            a California limited liability company

                              By:
                                  -----------------------------------
                              Its:
                                  -----------------------------------

                                      -1-
<PAGE>

STATE OF CALIFORNIA
                                   ss.
COUNTY OF

       On , before me,           , personally appeared                      ,

[ ] personally known to me -OR- [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument

                WITNESS my hand and official seal.

                ---------------------------------------------------------
                                   SIGNATURE OF NOTARY

CAPACITY CLAIMED BY SIGNER
-----------------------------

Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.

[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)

-----------------------------
          Title(s)

[ ] PARTNER(S)          [ ] LIMITED
                        [ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER:
          ----------------------

          ----------------------

SIGNER IS REPRESENTING:
----------------------
Name of Person(s) or Entity(ies)

-----------------------------

-----------------------------

                                      -2-
<PAGE>

                                   EXHIBIT C

                              ASSIGNMENT AGREEMENT
                              --------------------

     THIS ASSIGNMENT AGREEMENT ("Assignment") is made as of
          ,                     , by ENZO DRIVE, LLC, a California limited
liability company ("Assignor") in favor of SUNRISE TELECOM, a
("Assignee").

     A.   Simultaneously herewith, Assignor shall sell to Assignee that certain
land ("Land") and all of the improvements thereon ("Improvements") described in
that certain Purchase and Sale Agreement dated       , 1999 ("Purchase
Agreement") between Assignor and Assignee.

     B.   In connection with the foregoing conveyance, Assignor desires to
simultaneously assign to Assignee, and Assignee desires to accept and assume
from Assignor, Assignor's entire right, title and interest in those contracts
and other agreements which relate to the construction, development and/or
operation of the Land and Improvements on the terms and conditions set forth
herein. All capitalized terms not otherwise defined herein shall have the same
meanings given to such terms in the Purchase Agreement.

     NOW, THEREFORE, for good and valuable consideration, Assignor and Assignee
agree as follows:

     1.   Assignment. Assignor hereby assigns, transfers, sets over and delivers
          ----------
to Assignee, to the extent assignable or transferable, all of Assignor's right,
title and interest in and to all preliminary and final development plans and
specifications, architectural drawings (excluding, any copyright owned by the
architect who prepared such drawings), environmental reports, map approvals, and
any and all of the warranties and guaranties in or relating to the construction
agreement for construction of the Land Improvements, Building Shell Improvements
and Interior Improvements, as the case may be (collectively, the "Agreements"),
as the same may be amended or otherwise modified from time to time. The
foregoing assignment encompasses the right of Assignee to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to any of the
Agreements.

     Assignor reserves from the foregoing assignment of plans and specifications
for the Improvements and warranties and guaranties applicable to the
Improvements such right, title and interest to the extent necessary to enable
Assignor to perform its post-closing obligations as described in subparagraph
7(e) of the Purchase Agreement referred to above and the full right, power and
authority to pursue claims against parties who prepared such plans and
specifications and issued such guaranties and warranties.

     2.   Further Assurances. Assignor shall execute, at its cost, upon
          ------------------
Assignee's reasonable request, any documents necessary to cause the specific
assignment of any particular Agreements which are necessary, proper or desirable
in Assignee's judgment to carry out the purposes of this Assignment.

                                      -1-
<PAGE>

          3.    Obligations. Assignee shall observe, perform, and discharge duly
                -----------
and punctually all material obligations, terms, covenants, conditions and
warranties to be performed by it pursuant to the Agreements.

          4.    Counterparts. This Assignment may be executed in any number of
                ------------
counterparts, each of which counterparts shall be deemed to be an original and
all of which together shall constitute but one and the same Assignment.

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

          6.    Governing Law. This Assignment shall be governed by and
                -------------
construed in accordance with the laws of the State of California.

          IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment on the day and year first above written.

ASSIGNOR:                               ASSIGNEE:

ENZO DRIVE, LLC                         SUNRISE TELECOM,
a California limited liability company  a
                                            --------------------------------

By                                      By
   ---------------------------------        --------------------------------

Its                                     Its
   ---------------------------------        --------------------------------

                                      -2-
<PAGE>

                                   EXHIBIT D

              LIST OF DOCUMENTS DELIVERED TO AND RECEIVED BY BUYER

     Sunrise Telecom, a             , hereby acknowledges that it has received
                        ------------
the following documents from ENZO DRIVE, LLC.:

     1.   Phase I Environmental Site Assessment prepared by ATC Associates dated
          August 8, 1997

     2.   Geotechnical Investigation and Pavement Design prepared by United Soil
          Engineering dated August 12, 1997

                                      -2-
<PAGE>

                                   EXHIBIT E
                                   ---------

                             CONSTRUCTION AGREEMENT
                             ----------------------

     This Construction Agreement ("Agreement") dated as       , 1999, is made by
and between ENZO DRIVE, LLC, a California limited liability company ("Seller"),
and SUNRISE TELECOM, a           ("Buyer").

                                   ARTICLE 1
                                  DEFINITIONS
                                  -----------

     1.1  Building. That certain two-story building with parking on grade to be
          --------
constructed on the real property located off of Enzo Drive and Rue Ferrari in
San Jose, California and more particularly depicted in Exhibit E-1 attached
                                                       -----------
hereto.

     1.2  Building Plans. Final calculations, designs, drawings and
          --------------
specifications prepared by the Project Architect and its engineers and other
consultants for the Land Improvements and Building Shell. The final Building
Plans for the Land Improvements and Building Shell shall be a logical evolution
of, and consistent with, the Project Scope Drawings previously approved by Buyer
and referred to in Exhibit E-2 attached hereto.
                   -----------

     1.3  Building Shell. The basic shell of the Building, as more particularly
          --------------
described in the final Building Plans prepared by the Project Architect
(constituting a logical evolution of the Project Scope Drawings referred to in

Exhibit E-2), and further described in the definition of Building Shell attached
------------
hereto as Exhibit E-3.
          -----------

     1.4  Building Shell Allowance. The amount contributed by Seller toward the
          ------------------------
total hard cost of constructing the Building Shell and Land Improvements, which
amount shall not exceed Fifty Dollars ($50.00) per square foot of the Building
Shell, and which amount may be funded in whole or in part by the Construction
Lender. For purposes of this Agreement, the parties hereto agree that the hard
costs of constructing the Building Shell and the Land Improvements shall be
equal to the contract price for the Building Shell and Land Improvements to be
set forth in a construction contract to be entered into between Seller and the
Project Contractor, South Bay Construction Company, an affiliate of Seller, and
shall include, without limitation, a profit and overhead fee to be paid to the
Project Contractor equal to 4.5% of such costs of construction.

     1.5  Building Shell Fund. The aggregate of (i) Construction Loan proceeds
          -------------------
which have been specifically allocated to the payment of the Building Shell
Allowance (and any additional amount which may be contributed by Seller) and
(ii) funds contributed by Buyer as needed to pay all hard costs of constructing
the Building Shell and Land Improvements, as more fully described in Section 2.2
                                                                     -----------
of this Agreement.

     1.6  Buyer's Change. Any changes to the interior Improvement Plans and the
          --------------
Interior Improvements requested by Buyer.

                                      -1-
<PAGE>

     1.7  Buyer's Equipment. Equipment and other personal property required by
          -----------------
Buyer in the operation of its business, other than such personal property
installed as a part of the interior Improvement Plans, including equipment and
other installations necessary for obtaining a "right to occupy" from the City,
and including installation of necessary utility meters.

     1.8  Buyer's Interior Improvement Contribution. The amount to be
          -----------------------------------------
contributed by Buyer toward the total cost of the Interior Improvements, which
amount shall be all costs in excess of the Interior Improvement Allowance.

     1.9  Buyer's Shell Contribution. The amount to be contributed by Buyer
          --------------------------
toward the total hard costs of constructing the Building Shell and Land
Improvements, which amount shall be all hard costs of constructing the Building
Shell and Land Improvements in excess of the Building Shell Allowance.

     1.10  Buyer-Caused Delay. Any delay, unless attributable to a condition or
           ------------------
event described as a Force-Majeure Delay, (i) caused by the failure of Buyer or
its respective contractors, agents or employees, to act within the time limits
set forth in this Agreement, (ii) in receiving or installing equipment ordered
to Buyer's specifications or in receiving permits, permissions or approvals for
the storage or use of Hazardous Material which are the  responsibility of Buyer
to obtain; (iii) resulting from Buyer's request for materials, finishes or
installations which are unavailable or nonstandard; (iv) resulting from the
untimely delivery or installation of any of Buyer's Equipment; (v) by Buyer in
funding Buyer's Contribution to the Building Shell Fund or Interior Improvement
Fund within the time periods specified in Section 2.2 or Section 2.3, as the
case may be, of this Agreement or as provided in paragraph 7 of that certain
Purchase and Sale Agreement and Escrow Instructions dated       , 1999, between
Seller and Buyer (the "Purchase Agreement"); (vii) caused by any personal injury
or property damage caused by the negligence or wilful misconduct of Buyer or any
of its agents, employees, consultants or contractors; (viii) resulting from or
arising out of any changes orders requested by Buyer, or Buyer modifying the
plans and specifications for the Interior Improvements, or any portion thereof
after the same have been approved by Buyer and Seller, (ix) interference with
the substantial completion of any off-site improvements resulting from the acts
of Buyer or any of its agents, employees, consultants or contractors, (x) caused
by physical interference with or damage to the construction of the Building
Shell or the Interior improvements by Buyer or any of its agents, employees,
contractors or consultants; or (xi) caused by the failure of the Interior
Improvement Plans to be approved by Buyer and Seller by April 15, 2000.

     1.11  City. The City of San Jose, and any other governmental agencies and
           ----
entities involved in the permit and approval process for Building Plans or
Interior Improvement Plans.

     1.12  Construction Lender. That lender or lenders which make the
           -------------------
Construction Loan.

     1.13  Construction Panel. A panel consisting of one of Seller's
           ------------------
Representatives, one of Buyer's Representatives, the Project Architect, and the
Project Contractor. For purposes of this

                                      -2-
<PAGE>

Agreement and construction of the Building Shell, Interior Improvements and Land
Improvements, the parties hereto acknowledge that Peter Eidelman shall initially
be Buyer's sole Representative and person to whom instructions may be given, on
behalf of Buyer; however, Buyer reserves the right to substitute a new Buyer'
Representative upon delivery of written notice from Buyer to Seller.

     1.14  Cost Estimate. An estimate of the cost of materials and construction
           -------------
for completing the Interior Improvements, including without limitation the
following: (a) the cost of labor and materials provided by subcontractors to the
Project Contractor, including design-build and design-assist engineering
subcontractors; (b) direct costs for the project manager, field superintendent,
on-site administrative support, general labor (including trash removal) provided
by the Project Contractor, miscellaneous materials/tools provided by the Project
Contractor, on site office supplies, blue prints, safety equipment, and
security; (e) building permits and related fees for the Interior Improvements,
including but not limited to plan check and building permit fees, water, sewer
and other utility connection or service fees (including fees for excess
capacity), health department fees, hazardous material permit fees (if
applicable), and any other similar fees; (d) on-site supervision costs, which
include an allocable portion of the salary of any on-site supervisor of the
Project Contractor and the cost of any on-site construction facilities,
including, but not limited to, office supplies, postage, maintenance, telephone,
and utilities, (e) overhead, which includes general administrative overhead of
the Project Contractor associated with the Interior Improvements including
salaries and benefits for receptionist, secretarial, accounting, estimating,
department head supervision, licenses, legal, insurance, office supplies,
postage, computer supplies and maintenance, telephone, rent, utilities, off-site
office furniture rental, office equipment maintenance and equipment property
tax, and all other main office administrative, accounting and other overhead
costs; (f) the cost of any bonds which may be required of the Project Contractor
by the City, Buyer, or Construction Lender; (g) the premiums for any insurance
described in Sections 5.4 and 5.5 hereof; (h) the Project Contractor's fee; and
(i) a contingency to be reserved for costs for adjustments to the actual costs
of subcontractor's work.

     1.15  Force Majeure Delay. Any delay which is attributable to any: (a)
           -------------------
actual delay or failure to perform attributable to any strike, lockout or other
labor or industrial disturbance (whether or not on the part of the employees of
Seller or its contractors or other representatives), civil disturbance; future
order of any governmental entity claiming jurisdiction; act of a public enemy;
war; riot, sabotage, blockade, or embargo; or inability to secure customary
materials, supplies or labor through ordinary sources by reason of regulation or
order of any government or regulatory body; (b) delay attributable to the
failure to secure permits and approvals within a reasonable time period
following submittal of the application(s) for such permits or approvals due to
action or inaction of the City; (c) delay in completing plans and specifications
because of changes in any laws (including, without limitation, the Americans
with Disabilities Act of 1990 (the "ADA"))or building requirements, or the
interpretation thereof; or (d) delay attributable to lightning, earthquake,
fire, rain, storm, flood, washout, explosion, or any other cause beyond the
reasonable control of the party from whom performance is required, or any of its
contractors or other representatives. A Force-Majeure Delay shall not include a
delay due to financial inability of a party.

                                      -3-
<PAGE>

     1.16  Interior Improvements. The improvements within the Building Shell
           ---------------------
required by Buyer in the operation of its business described in the Interior
Improvement Plans.

     1.17  Interior Improvements Allowance. The amount contributed by Seller
           -------------------------------
toward the total cost of the Interior Improvements, which amount shall not
exceed Thirty Dollars ($30.00) per square foot of the Building Shell, which
amount Seller anticipates will be funded by the Construction Lender.

     1.18  Interior Improvement Fund. The aggregate of (i) Construction Loan
           -------------------------
proceeds which have been specifically allocated to the payment of the Interior
Improvements Allowance (and any additional amount which may be contributed by
Seller) and (ii) funds contributed by Buyer as needed to pay all costs and
expenses associated with the Interior Improvements, as more fully described in

Section 2.3 of this Agreement.
-----------

     1.19  Interior Improvement Plans. Final calculations, designs, drawings and
           --------------------------
specifications prepared by the Project Architect and its engineers and other
consultants for the Interior Improvements, including all architectural,
plumbing, mechanical, and electrical drawings, and all structural calculations,
energy calculations and other engineering calculations necessary to acquire a
building permit.

     1.20  Land Improvements. Surface parking areas, landscaping, drainage,
           -----------------
irrigation, gutters, sidewalks, lighting, walkways, driveways and other
improvements and appurtenances relating to ingress and egress, preparation of
site (rough graded pad, excluding concrete work and other improvements), for
exterior trash enclosures, if applicable, and any other exterior enclosures and
structures (although Land Improvements shall not include such enclosures and
structures themselves).

     1.21  Project. The real property upon which the Building will be
           -------
constructed, the Land Improvements, the Building Shell, and the Interior
Improvements.

     1.22  Project Architect. The Project Architect for the design of the
           -----------------
Building Shell and Land Improvements shall be Arc Tec, Inc. who has been
retained by Seller. Arc Tec may retain civil engineers, structural engineers,
landscaping architects and other consultants. The Project Architect for
preparation of preliminary and final Interior Improvement Plans shall be
selected jointly by Seller and Buyer on or before December 10, 1999.

     1.23  Project Contractor. South Bay Construction Company, the contractor
           ------------------
selected by Seller and approved by Buyer for the construction of the Building
Shell, Land Improvements and the Interior Improvement Work.

     1.24  Intentionally Omitted.
           ---------------------

     1.25  Seller's Representative. Scott Trobbe and Daniel L. Rosenbaum
           -----------------------

                                      -4-
<PAGE>

     1.26  Seller-Caused Delay. Any delay, unless attributable to a condition or
           -------------------
event described as a Force-Majeure Delay, caused by the failure of Seller, the
Project Contractor, or their respective contractors, agents or employees, to act
within the time limits set forth in this Agreement.

     1.27  Substantial Completion. The date the Land Improvements, the Building
           ----------------------
Shell and the Interior Improvements have been completed which shall be deemed to
be the earlier of (i) the date Buyer takes occupancy of the Building for the
purpose of conducting its business therein; (ii) the date the City has completed
its final inspection of the Building and determined that the Land Improvements,
the Building Shell and the Interior Improvements are approved for occupancy, as
evidenced by the City's sign-on the final inspection card for such improvements;
(iii) the date the Project Architect(s) has certified that the Building Shell
and the Interior Improvements have been substantially completed in accordance
with the Building Plans and the Interior Improvement Plans, respectively, except
for any punch-list items, or (iv) the date the Building Shell and Interior
Improvements would have been completed but for any Buyer Caused Delay.

                                   ARTICLE 2
                              GENERAL REQUIREMENTS
                              --------------------

     2.1  Project Schedule. Seller and Buyer agree to develop, design and
          ----------------
exercise diligent efforts to construct the Land Improvements, Building Shell,
and the Interior Improvements in accordance with this Agreement and the time and
responsibility criteria set forth in this Agreement.

     2.2  Building Shell Fund.
          --------------------

          2.2.1  The Building Shell Fund may, at Seller's election, be
maintained with the Construction Lender (or an escrow holder selected by Seller
in its sole discretion), which shall hold and disburse the funds in accordance
with instructions approved by Seller and Buyer, including provisions for payment
of contractors and appropriate lien waivers.

          2.2.2  Seller shall provide evidence reasonably satisfactory to Buyer
that the loan to be provided by the Construction Lender (together with any funds
provided by Seller, if any) includes funds sufficient to pay the Building Shell
Allowance. At or prior to the funding of the loan to be provided by the
Construction Lender, Buyer shall deposit Buyer's Shell Contribution in the
Building Shell Fund. The Building Shell Fund shall be drawn upon by Seller (or
disbursed by Construction Lender) as construction progresses and funds are
needed to pay the hard costs of constructing the Building Shell and Land
Improvements, with the hard costs of constructing the Building Shell and Land
Improvements being paid in the same ratio as the contributions required to be
made to the Building Shell Fund. Any interest earned on funds deposited in the
fund control account shall be added to the Building Shell Fund.

          2.2.3  The Building Shell Fund shall be drawn upon by Seller (or
disbursed by Construction Lender) as construction progresses and funds are
needed to pay the hard cost of

                                      -5-
<PAGE>

constructing the Building Shell and Land Improvements, with the hard cost of
constructing the Building Shell and Land Improvements being paid in the same
ratio as the contributions required to be made to the Building Shell Fund. Any
interest earned on funds deposited in the fund control account shall be added to
the Building Shell Fund.

          2.2.4  If at any time during construction of the Building Shell or
Land Improvements, the remaining hard cost to complete the Building Shell or
Land Improvements exceeds the then-remaining balance of the Building Shell Fund,
Buyer shall contribute the necessary funds within five (5) days after Seller's
written request therefor, accompanied by appropriate invoices evidencing the
work to be performed. Seller may, but shall not be required to, make any
contributions which Buyer fails to make, subject to immediate reimbursement by
Buyer for the amount paid or Seller may halt construction if, at any time during
the course of construction, the remaining balance of the Building Shell Fund is
insufficient to pay the actual hard costs of construction expected to become due
within the following thirty (30) days because of Buyer's failure to contribute
the necessary funds. Buyer's failure to contribute any portion of Buyer's Shell
Contribution to the Building Shell Fund within five (5) days after Seller's
written request therefor shall be a material breach of this Agreement and the
Purchase Agreement, and shall be a Buyer-Caused Delay.

     2.3  Interior Improvement Fund.
          -------------------------

          2.3.1  The Interior Improvement Fund may, at Seller's election, be
maintained with the Construction Lender (or an escrow holder selected by Seller
in its sole discretion), which shall hold and disburse the funds in accordance
with instructions approved by Seller, including provisions for payment of
contractors and appropriate lien waivers.

          2.3.2  Seller shall provide evidence reasonably satisfactory to Buyer
that the loan to be provided by the Construction Lender (together with any funds
provided by Seller, if any) includes funds sufficient to pay the Interior
Improvements Allowance. At or prior to the funding of the loan to be provided by
the Construction Lender, Buyer shall deposit Buyer's Interior Improvement
Contribution in the Interior Improvement Fund.

          2.3.3  The Interior Improvement Fund shall be drawn upon by Seller (or
disbursed by Construction Lender) as construction progresses and funds are
needed to pay the cost of the Interior Improvements, with the cost of the
Interior Improvements being paid in the same ratio as the contributions required
to be made to the Interior Improvement Fund. Any interest earned on funds
deposited in the fund control account shall be added to the Interior
Improvement Fund.

          2.3.4  If at any time during construction of the Interior
Improvements, the remaining cost to complete the Interior Improvements exceeds
the then-remaining balance of the Interior Improvement Fund, Buyer shall
contribute the necessary funds within five (5) days after Seller's written
request therefor, accompanied by appropriate invoices evidencing the work to be
performed. Seller may, but shall not be required to, make any contributions
which Buyer fails to make, subject to immediate reimbursement by Buyer for the
amount paid or Seller may halt

                                      -6-
<PAGE>

construction if, at any time during the course of construction, the remaining
balance of the Interior Improvement Fund is insufficient to pay the actual costs
of construction expected to become due within the following thirty (30) days
because of Buyer's failure to contribute the necessary funds. Buyer's failure to
contribute any portion of Buyer's Interior Improvement Contribution to the
Interior Improvement Fund within five (5) days after Seller's written request
therefor shall be a material breach of this Agreement and the Purchase
Agreement, and shall be a Buyer-Caused Delay.

                                   ARTICLE 3
                         BUILDING AND IMPROVEMENT PLANS
                         ------------------------------

     3.1  Familiarization With Documents by Architect. The applicable Project
          -------------------------------------------
Architect, prior to preparation of the Building Plans and the Interior
Improvement Plans, and each engineer, consultant and other professional retained
by such Project Architect shall thoroughly familiarize themselves with this
Agreement and all applicable building codes, and all other applicable city,
county, state and federal ordinances, roles and regulations, including, without
limitation, the energy conservation and handicap access requirements of Title 24
of the California Code of Regulations and the Americans With Disabilities Act,
and shall prepare the Building Plans and the Interior Improvement Plans with
full knowledge and compliance therewith. The Project Architect and each engineer
retained by the Project Architect shall be fully qualified and licensed by the
State of California to prepare the plans for which they are responsible.

     3.2  Preparation of Building Plans.
          -----------------------------

          3.2.1  The parties hereto acknowledge and agree that the Project
Architect with respect to the Building Shell and Land Improvements has prepared
the Project Scope Drawings referred to in Exhibit E-2 attached hereto and that
                                          -----------
Seller and Buyer approve the same. Buyer shall have no right to request or make
any changes to the approved Project Scope Drawings. Final Building Shell and
Land Improvement Plans shall conform to and represent a logical development of
the Building Plans referred to in Exhibit E-2. Buyer shall have no right to
                                  -----------
request or make any changes to the approved Building Plans. Once the Building
Plans have been approved by Buyer and Seller (and the applicable governmental
agencies), and final bids have been received and accepted by Seller or its
Project Architect (or Seller's General Contractor), then Seller shall not make
any material changes to the Building Plans without Buyer's approval; provided,
however, without Buyer's prior approval, Seller shall be permitted to make
nonmaterial changes and other changes as shall be requested or required by the
City of San Jose.

          3.2.2  Each day of delay incurred as a result of making changes
requested by Buyer to the Building Plans (if approved by Seller, which approval
Seller may withhold in its sole and absolute discretion) and any proceedings
associated therewith under Article 7 shall be a Buyer-Caused Delay.

     3.3  Preparation and Approval of the Interior Improvement Plans. As soon as
          ----------------------------------------------------------
practicable following execution of the Purchase and Sale Agreement and Escrow
Instructions to which this Construction Agreement is attached, Seller shall
cause the Project Architect (to be

                                      -7-
<PAGE>

approved by Seller and Buyer with respect to the Interior Improvements) to
complete and deliver to Buyer preliminary Interior Improvement Plans which shall
be subject to Buyer's reasonable approval. Within five (5) days following
receipt of such preliminary Interior Improvement Plans, Buyer shall deliver to
Seller either (i) written approval of such preliminary Interior Improvement
Plans (which shall not be unreasonably withheld), or (ii) specify in writing its
objections to such preliminary Interior Improvement Plans and all changes that
must be made to the same to satisfy such objections. If Buyer does not deliver
written objections to the preliminary Interior Improvement Plans within the
specified time period, Buyer shall be deemed to have approved the same. If Buyer
delivers timely objections within such time period, then the parties shall
confer and use their best efforts to develop preliminary Interior Improvement
Plans that are acceptable to Buyer and Seller as soon as practicable, but in no
event later than March 1, 2000. Once the preliminary Interior Improvement Plans
are approved by Buyer and Seller, Seller shall request the Project Architect to
prepare final Interior Improvement Plans. Within five (5) days following receipt
of such final Interior Improvement Plans, Buyer shall deliver to Seller either
(i) written approval of such final Interior Improvement Plans (which shall not
be unreasonably withheld), or (ii) specify in writing its objections to such
final Interior Improvement Plans and all changes that must be made to the same
to satisfy such objections; provided, however, Buyer may only object to such
final Interior Improvement Plans on the basis that they do not substantially
conform to or do not represent a logical development of the approved preliminary
Interior Improvement Plans. If Buyer does not deliver written objections to the
final Interior Improvement Plans within the specified time period, Buyer shall
be deemed to have approved the same. If Buyer delivers timely objections within
such time period, then the parties shall confer and use their best efforts to
develop preliminary Interior Improvement Plans that are acceptable to Buyer and
Seller as soon as practicable, but in no event later than April 15, 2000. If the
final Tenant Improvement Plans are not approved by Seller and Buyer by April 15,
2000, then each day that passes from April 15, 2000 until the final Interior
Improvement Plans are approved by Seller and Buyer shall be deemed a Buyer
Caused Delay. Time is of the essence with respect to the approval of the
Interior Improvement Plans. Fees of the Project Architect in preparing the
Interior Improvement Plans shall be paid from the Interior Improvement Fund.

     3.4  Building Permit -- For Interior Improvement Work. Seller shall cause
          ------------------------------------------------
the Project Contractor to cause the Project Architect to obtain a building
permit (and any approvals and permits required from any governmental agencies)
required for the construction of the Interior Improvements from the City. If the
City rejects the Interior Improvement Plans and thereby prevents the issuance of
a building permit, Seller shall cause the Project Contractor to cause the
Project Architect to immediately make all necessary changes required by the
City. Upon the City's approval of the Interior Improvement Plans and permit
application, the Project Architect for the Interior Improvement work shall cause
the building permit to be picked up and delivered to Seller with an approved set
of the Interior Improvement Plans marked "for construction." Plan check and
building permit fees, water and sewer connection fees (including such fees for
excess capacity), health department fees, hazardous material permit fees, and
any other fees shall be paid from the Interior Improvement Fund. Any additional
costs and expenses incurred in connection with a change required by the City
shall be paid from the Interior Improvement Fund. Any delay incurred as a result
of a change required by the City shall be a Force Majeure Delay.

                                      -8-
<PAGE>

     3.5  Buyer Changes to Interior Improvement Plans.
          -------------------------------------------

          3.5.1  Any requests for Buyer Changes shall be instituted in
accordance with the provisions of this Section 3.5 and shall be subject to the
written approval of Seller after consultation with the Project Architect.

          3.5.2  Buyer may request changes to the Interior Improvement Plans
after the same have been approved by Seller by notifying Seller in writing of
the nature and extent of any such Buyer Change and, if the nature of such Buyer
Change requires revisions to the Interior Improvement Plans, then, except as
otherwise provided in this Construction Agreement or the Purchase and Sale
Agreement and Escrow Instructions to which this Construction Agreement is
attached), the Project Architect shall revise the Interior Improvement Plans.
Such notice of Buyer must be signed by Buyer, or Seller shall not be required to
process such Buyer Change request. Seller shall submit to Buyer in writing,
within five (5) business days after Buyer's request for a Buyer Change (or such
longer period of time as may be reasonably required depending on the extent of
the requested Buyer's Change), an analysis of construction costs or savings
resulting from the Buyer Change, including without limitation architectural and
engineering costs, and the period of time, if any, that the Buyer Change will
extend the time for completion of the Interior Improvement Work. Buyer shall
approve or disapprove in writing Seller's submission within five (5) business
days of receipt thereof. Seller shall not be obligated to implement any Buyer
Change for which Buyer does not approve Seller's analysis of construction costs
or savings resulting therefrom or the period of time, if any, that the Buyer
Change will extend the time for completion of the Interior Improvement Work. The
estimated time for completion of the Interior Improvements shall be extended one
day for each day of delay caused by analyzing and processing Buyer's request for
a Buyer Change whether or not the cost or savings and the extension of time for
completion of the Interior Improvements, if any, is approved by Buyer, and such
delay shall be a Buyer-Caused Delay.

          3.5.3  If Buyer approves in writing the costs or savings and the
extension in the time for completion of the Interior Improvements, if any,
resulting from the Buyer Change, Seller shall cause the approved Buyer Change to
be instituted. The estimated time for completion of the Interior Improvement
Work shall be extended one day for each day of delay caused by instituting the
Buyer Change requested by Buyer, and such delay shall be a Buyer-Caused Delay.

     3.6  Subsequent City - Required Changes. Any delay incurred as a result of
          ----------------------------------
a change required by the City after the issuance of the building permit shall be
a Force Majeure Delay.

                                   ARTICLE 4
                  COST ESTIMATE FOR INTERIOR IMPROVEMENT WORK
                  -------------------------------------------

     4.1  Estimate of Interior Improvement Work Costs.
          -------------------------------------------

                                      -9-
<PAGE>

          4.1.1  The Project Contractor shall put the Interior Improvement Plans
out to bid to at least three subcontractors from each major trade involved in
the construction of the Interior Improvements.

          4.1.2  Seller (with the Project Contractor's input) shall select one
subcontractor bid from each trade and shall deliver a list of selected
subcontractors and their respective bids to the Project Contractor.

     4.2  Approval of Cost Estimate.
          -------------------------

          4.2.1  The Project Contractor shall prepare the Cost Estimate, and
shall submit the Cost Estimate prepared by the Project Contractor to Buyer for
Buyer's approval. Buyer shall, within five (5) business days after receipt of
the Cost Estimate, notify Seller in writing of either (i) Buyers approval of the
Cost Estimate or (ii) Buyer's disapproval of the Cost Estimate and specific
instructions to Seller to reduce the scope of the Interior Improvements. If
Buyer disapproves the Cost Estimate and instructs Seller to reduce the scope of
the Interior Improvements, and Buyer delivers to Seller revisions to the
Interior Improvement Plans prepared by the Project Architect, if required, then
Seller shall cause the Interior improvement Plans, as revised, to be re-bid in
accordance with Section 4.1, and shall cause a revised Cost Estimate to be
prepared by the Project Contractor and delivered to Buyer for approval or
disapproval in accordance with this Section 4.2. Any subsequent reduction in the
scope of the Interior Improvements and re-bid shall be subject to the same
procedures as set forth in this Article 4.

          4.2.2  Each day of delay in Buyer's approval of the original Cost
Estimate or any revised Cost Estimate or any subsequent cost estimate beyond the
time periods set forth in this Article shall be a Buyer-Caused Delay.

                                   ARTICLE 5
                                  CONSTRUCTION
                                  ------------

     5.1  Construction of Land Improvements and Building Shell. Seller agrees,
          ----------------------------------------------------
as soon as practical after the Building Plans have been approved by the City,
and the necessary permits have been issued, to cause Project Contractor to
construct the Land Improvements and the Building Shell. Seller shall cause the
Project Contractor to exercise diligent efforts to substantially complete the
Land Improvements and Building Shell in accordance with the Building Plans by
October 1, 2000, subject to extension for Buyer Caused Delays and Force Majeure
Delays. The hard costs incurred by Seller in connection with such construction
of the Land Improvements and the Building Shell shall be paid by Seller up to
the Building Shell Allowance (except that any increased costs resulting from any
Buyer Change to the Building Shell shall be paid by Buyer), and any hard costs
incurred by Seller in excess of the Building Shell Allowance shall be paid by
Buyer. Seller acknowledges and agrees that Buyer shall not be responsible for
payment of costs incurred in connection with the construction of the Land
Improvements and the Building Shell in excess of the greater of (i) the Building
Shell Allowance, or (ii) the Guaranteed Maximum Price ("GMP") established in the
construction contract entered into between Seller and the Project Contractor
(coveting such Land Improvements and Building Shell), subject to adjustment in
such GMP by change orders requested by Buyer, unless such cost overruns are
caused by or

                                      -10-
<PAGE>

attributable to Buyer or any of its agents, employees, contractors, affiliates,
or other representatives.

     5.2  Construction of Interior Improvements. Seller agrees, as soon as
          -------------------------------------
practical after completion or substantial completion of the Land Improvements
and the Building Shell to the point where construction can commence, or earlier
at the sole discretion of Seller, and after receipt of the building permit for
the Interior Improvements, to cause the Project Contractor to construct the
Interior Improvements in accordance with the approved Interior Improvement
Plans. Seller shall cause the Project Contractor to exercise diligent efforts to
substantially complete the Interior Improvements by October 1, 2000, subject to
extension for Tenant Caused Delays and Force Majeure Delays. The costs and
expenses incurred in connection with such construction of the Interior
Improvements shall be paid from the Interior Improvement Fund.

     5.3  Installation of Buyer's Equipment. Buyer agrees, at its own expense,
          ---------------------------------
to install Buyer's Equipment within a time period that does not delay or
interfere with the completion of the Building Shell, Land Improvements or
Interior Improvements by Seller or the Project Contractor. Buyer shall suspend
installing Buyer's Equipment if the same will delay or interfere with the
completion of the Building Shell, Land Improvements or Interior Improvements.
Buyer's Equipment shall be installed in compliance with all governmental
ordinances, rules and regulations relating thereto and shall not be constructed
in a manner inconsistent with the approved Interior Improvement Plans. Any
costs, expenses or damages incurred by Seller arising out of or related to the
installation of Buyer's Equipment by Buyer, its contractors, subcontractors or
other agents, shall be paid by Buyer to Seller.

     5.4  Seller's Insurance. From the commencement of the Land Improvements and
          ------------------
the Building Shell until the completion of the Interior Improvements, Seller
shall maintain a policy of commercial general liability insurance in amounts
sufficient to protect Seller and Buyer from and against liability for death or
injury to persons and for damage to property arising from the construction of
the Land Improvements, the Building Shell and the Interior Improvements. All
such insurance shall name Buyer as an additional insured. In addition, from the
commencement of the Land Improvements and the Building Shell until the
completion of the Interior Improvements, Seller (or the Project Contractor)
shall maintain a policy of all risk builder's risk insurance covering the Land
Improvements, the Building Shell and the Interior Improvements in an amount
equal to one hundred percent (100%) of the full replacement value thereof. The
cost of such insurance allocable to the Land Improvements and the Building Shell
shall be paid by Seller, and the cost of such insurance allocable to the
Interior Improvements shall be paid from the Interior Improvement Fund. Seller's
responsibility to provide insurance under this Section 5.4 shall be satisfied to
the extent such insurance is provided by contractors under the following Section
5.5 hereof.

     5.5  Contractor Insurance. The Project Contractor shall carry (a) worker's
          --------------------
compensation insurance, including employer's liability insurance, covering all
of their respective employees in statutory amounts; (b) commercial general
liability insurance (including contractor's protective liability) in an amount
not less than Three Million Dollars ($3,000,000.00) combined single limit for
bodily injury and property damage; and (c) comprehensive automobile

                                     -11-
<PAGE>

liability insurance in an amount not less than Five Hundred Thousand Dollars
($500,000.00) combined single limit for bodily injury and property damage. Such
policies shall name Seller, Buyer, and Construction Lender, as additional
insureds and shall be for the mutual and joint benefit and protection of Seller,
Buyer, and Construction Lender, as their interests may appear. The policy of
commercial general liability insurance referred to in clause (b) above may be
maintained under an umbrella policy or policies of insurance.

     5.6  Rebuilt Drawings. Within thirty (30) days after Substantial
          ----------------
Completion, Seller shall provide Buyer, at Buyer's expense, with a set of "as-
built" drawings for the Interior Improvements and Seller shall provide Buyer, at
Seller's expense, with a set of "as-built" drawings for the Building Shell and
the Land Improvements.

     5.7  Reliance on Construction Warranties. Seller and Buyer acknowledge that
          -----------------------------------
each may have the non-exclusive benefit of any applicable warranties from design
professionals, contractors, materialmen manufacturers or other responsible
parties. Seller and Buyer each assumes responsibility to inquire into and be
fully informed regarding provisions of any applicable warranties, and the other
party shall bear no responsibility therefor. Seller shall make commercially
reasonable efforts to obtain, or to insure the Project Contractor obtains, the
warranties described in Section 6.6 hereof, to the extant they are available at
a reasonable expense.

                                   ARTICLE 6
                                   COMPLETION
                                   ----------

     6.1  Completion of the Work. Seller shall use diligent efforts to
          ----------------------
substantially complete the Land Improvements, the Building Shell and the
Interior Improvements, on or before October 1, 2000, as such time is extended
one day for each day of delay resulting from a Force-Majeure Delay or Buyer-
Caused Delay.

     6.2  Calculations of Delays. Any delay in Seller's or Buyer's performance
          ----------------------
beyond the date and time for such performance set forth in this Agreement shall
be a Force Majeure Delay, a Buyer-Caused Delay or a Seller-Caused Delay. At each
periodic on-site work review meeting, Seller and Buyer through their designated
construction representatives shall update the schedule for design, development
and construction of the Project and account for and allocate all Force Majeure
Delays, Seller-Caused Delays and Buyer-Caused Delays which have occurred since
the last work review meeting. If Seller and Buyer through their designated
construction representatives are unable to agree on the allocation of Force
Majeure Delays, Seller-Caused Delays and Buyer-Caused Delays, then such dispute
shall be resolved in accordance with Article 7. If a Force Majeure Delay, a
Seller-Caused Delay, or a Buyer-Caused Delay is deemed to have occurred but such
delay has no effect on the date the Building Shell, Land Improvements or
Interior Improvements are to be designed or developed, then such delay shall be
waived; if more than one type of delay contributed to a delay, the delay shall
be fairly apportioned between or among the contributing types of delay. Delays
attributable to the City other than as set forth in this Construction Agreement
shall be a Force Majeure Delay. No delay shall be allowed for any period of time
more than thirty (30) days prior to the time a party asserts at a periodic on-
site

                                     -12-
<PAGE>

review meeting (or otherwise in writing to the other party) that the delay has
occurred. As stated above, Buyer's designated construction representative
initially shall be Peter Eidelman, however, Buyer reserves the right, in Buyer's
sole discretion, to substitute a new construction representative for Peter
Eidelman upon written notice to Seller.

     6.3  Condition of Improvements. Seller shall deliver the Building to Buyer
          -------------------------
upon Substantial Completion of the Interior Improvements in clean and operating
condition, subject to punchlist items. The term "clean and operating condition"
shall include the following: (a) walls and partitions are cleaned; (b) glass is
cleaned on both sides; (c) trash, dirt and left-over materials are removed from
the Building and the Building entrance area; (d) air conditioning, heating and
ventilating system is in operating condition and approximately regulated; and
(e) plumbing, electrical and elevator systems are in operating condition.
Punchlist items may include such minor pick up work as would not materially
interfere with Buyer's occupancy and use of the Building for the purpose for
which it is to be used.

     6.4  Walk-Through. On or before the date Buyer occupies the Building for
          ------------
the purpose of conducting its business therein, Seller and Buyer shall conduct a
walk-through inspection of the Building and shall jointly prepare a list of
initial construction items that need to be corrected. Seller shall exercise
commercially reasonable efforts to cause the Project Contractor to correct such
items within thirty (30) days thereafter, provided, however, if by the nature of
such correction more than thirty (30) days is required to effect such
correction, the Project Contractor shall be required to commence correction of
such punch list item(s) within such thirty (30) day period and diligently pursue
the same to completion. The expense of any such correction shall be paid by
Buyer, subject to reimbursement, if appropriate, from any design professional,
contractor, materialman, manufacturer or other responsible party.

     6.5  Notice of Completion. Within ten (10) days after Substantial
          --------------------
Completion, Seller (or the Project Contractor) shall execute and file a notice
of completion with respect thereto and furnish a copy thereof to Buyer upon
recordation.

     6.6  Warranties and Guaranties. Each contractor and subcontractor
          -------------------------
participating in the Land Improvements, the Building Shell and the Interior
Improvements shall guarantee that the portion thereof for which he is
responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of Substantial Completion of
the applicable, Land Improvements, Building Shell or Interior Improvements, as
the case may be. Every such contractor or subcontractor shall be responsible for
the replacement or repair, without additional charge, of all work done or
furnished in accordance with its contract which shall become defective within
such one (1) year (or longer, if applicable) warranty period. Seller covenants
to give to Buyer any assignment or other assurances necessary to effect the
right to enforce such warranties.

                                     -13-
<PAGE>

                                   ARTICLE 7
                        CONSTRUCTION DISPUTE RESOLUTION
                        -------------------------------

     7.1  Dispute Resolution. If any dispute arises in connection with this
          ------------------
Agreement, such dispute shall be resolved in accordance with this Article. All
proceedings contemplated by this Article shall take place at the location for
all job-site meetings, unless the Construction Panel unanimously agrees to
another location, or unless any Arbitrator appointed hereunder selects another
location.

     7.2  Notice. All disputes to be determined in accordance with this Article
          ------
shall be raised by Seller or Buyer by written notice to the other party. Notice
of any dispute with an issue resolved in any minutes of a periodic on-site
review meeting must be given within thirty (30) days of receipt of the minutes,
or the resolution of the issue as reflected in the minutes shall be deemed
conclusive.

     7.3  Resolution by Construction Panel. The Construction Panel shall meet
          --------------------------------
within two (2) business days of receipt of the notice and attempt in good faith
to resolve the dispute by unanimous agreement.

     7.4  Resolution by Arbitrator. If the Construction Panel has not resolved
          ------------------------
the dispute for any reason within five (5) business days of receipt of the
notice, the panel shall promptly select by unanimous agreement a disinterested
arbitrator ("Arbitrator") with extensive development and construction experience
to resolve the dispute. In the event a selection is not made within six (6)
business days after the written notice, the Arbitrator shall, upon the request
of Seller or Buyer, be appointed by the American Arbitration Association. Once
an Arbitrator is appointed hereunder, such Arbitrator shall serve as Arbitrator
for all subsequent disputes arising in connection with this Construction
Agreement unless the Construction Panel unanimously agrees otherwise. The
Arbitrator shall resolve the dispute as soon as is reasonably practical in
accordance with the provisions of Section 1280 et seq. of the California Code of
Civil Procedure. The cost for the Arbitrator's services shall be paid by the
non-prevailing party in the dispute being determined by the Arbitrator, unless
the Arbitrator determines otherwise.

     7.5  Interpretation and Resolution. In determining any dispute, the
          -----------------------------
Construction Panel and the Arbitrator shall apply the pertinent provisions of
this Agreement. As part of resolving a dispute, the Construction Panel or the
Arbitrator, as the case may be, shall determine the days of delay, if any, in
completing the Land Improvements, the Building Shell and the Interior
Improvements which directly result from the dispute being considered by the
Construction Panel or the Arbitrator, and from the proceedings pursuant to this
Article 7. The days of delay shall be designated as either Buyer-Caused Delays,
Seller-Caused Delays or Force Majeure Delays or any combination thereof as
determined by the Construction Panel or the Arbitrator, as the case may be.

     7.6  Continued Performance. During any proceedings pursuant to this
          ---------------------
Article, Seller and Buyer shall, to the extent possible, continue to perform and
discharge all of their respective obligations under this Agreement.

                                     -14-
<PAGE>

     7.7  Binding Resolution. Any and all decisions of the Construction Panel
          ------------------
made by unanimous agreement as to the matter in dispute shall be binding upon
both Seller and Buyer. In the absence of such unanimous agreement, any and all
decisions by the Arbitrator shall be binding upon both Seller and Buyer. The
provisions of this Article 7 are an arbitration agreement enforceable under
Section 1280 et seq. of the California Code of Civil Procedure.

     7.8  Arbitration of Disputes. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU
          -----------------------
ARE AGREEING TO HAVE ANY DISPUTE (WHICH CANNOT BE RESOLED BY THE CONSTRUCTION
PANEL) ARISING IN CONNECTION WITH THIS CONSTRUCTION AGREEMENT DECIDED BY NEURAL
ARBITRATION AS    PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS
YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED ABOVE. IF
YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

     "WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
(WHICH CANNOT BE RESOLVED BY THE CONSTRUCTION PANEL) ARISING IN CONNECTION WITH
THIS CONSTRUCTION AGREEMENT TO NEUTRAL ARBITRATION."

     BUYERS INITIALS       SELLER'S INITIALS

                                   ARTICLE 8
                            MISCELLANEOUS PROVISIONS
                            ------------------------

     8.1  Notices. Any notice, consent or approval required or permitted to be
          -------
given under this Agreement shall be in writing and shall be deemed to have been
given upon (i) hand delivery, or (ii) one (1) day after being deposited with
Federal Express or another reliable overnight courier service or transmitted by
facsimile telecopy, and addressed as follows:

If to Seller:  Enzo Drive, LLC
               511 Division Street
               Campbell, CA 95008
               Attn: Dan Rosenbaum

If to Buyer:  Sunrise Telecom
              22 Great Oaks Blvd.
              San Jose, CA. 95119

                                     -15-
<PAGE>

or such other address as either party may from time to time specify in writing
to the other.

     8.2  Consents and Approvals. Unless otherwise expressly provided herein,
          ----------------------
any consents or approvals required or allowed by this Agreement shall not be
unreasonably withheld or delayed.

     8.3  Successors and Assigns. This Agreement shall be binding upon and inure
          ----------------------
to the benefit of the parties hereto and their respective successors, heirs,
administrators and assigns.

     8.4  Amendments. Except as otherwise provided herein, this Agreement may be
          ----------
amended or modified only by a written instrument executed by Seller and Buyer.

     8.5  Governing Law. This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of California.

     8.6  Merger of Prior Agreements. This Agreement and the exhibits hereto,
          --------------------------
together with that certain Purchase Agreement referred to in paragraph 1.10
above, constitute the entire agreement between the parties and supersede all
prior agreements and understandings between the parties relating to the subject
matter hereof.

     8.7  Enforcement. If either party hereto fails to perform any of its
          -----------
obligations under this Agreement or if a dispute arises between the parties
hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such dispute
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 or costs of arbitration and
attorneys' fees and disbursements. Any such attorneys' fees and other expenses
incurred by either party in enforcing a judgment in its favor under this
Agreement 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 Agreement and to
survive and not be merged into any such judgment.

     8.8  Severability. If any provision of this Agreement or the application
          ------------
thereof to any person, place or circumstance shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.

                                     -16-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

SELLER                                  BUYER
------                                  -----

ENZO DRIVE, LLC                         SUNRISE TELECOM
a California limited liability company  A
                                          ------------------------------------

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

Its:                                    Its:
     --------------------------------          -------------------------------

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

Its:                                    Its:
     --------------------------------          -------------------------------

                                     -17-
<PAGE>

                           [GRAPHIC OF EXHIBIT E-1]
                           ------------------------

                      STREET MAP SHOWING THE LOCATION OF
                         A NEW TWO STORY BUILDING FOR
                                  ENZO DRIVE
                        ENZO DRIVE AT RUE FERRARI DRIVE
                             SAN JOSE, CALIFORNIA

<PAGE>

                                  EXHIBIT E-2

                        LIST OF PROJECT SCOPE DRAWINGS

A1.0  Site Plan
A2.0  First Floor Plan
A2.1  Second Floor Plan
A3.0  Elevation Plan
C1    Preliminary Grading Plan
L1    Planting Plan
L2    Irrigation Plan
L3    Other Irrigation Plans
<PAGE>

                                  EXHIBIT E-3
                                  -----------

                   DEFINITION OF BUILDING SHELL - ENZO DRIVE

The components and systems below shall be included in the design of the new
building, which shall consist ors two-story, concrete tilt-up building of
approximately 91,694 square feet. All code requirements should be considered
minimum beginning requirements and not the highest level of design.
Owner/Landlord's costs shall include all "hard and soft" costs related to the
construction of the site and shell, including architectural and engineering
services, peters, utility fees for connections and meters (shell only).

1.  Building Structure

     a)  All foundations to include footings, piers, caissons, pilings, grade
         beams, foundation walls or other building foundation components
         required to support the entire building structure.

     b)  All columns, beams, joists, purlins, headers, or other framing members
         to support the roof and roofing membrane. Second floor framing is
         concrete over steel deck on steel frame, bar-joists, or trusses.

     c)  Five inch (5") thick concrete slab on grade with welded wire mesh and
         any other reinforcing or structural connections that may be necessary
         or required.

     d)  One (1) set of temporary wood-framed access stairs.

     e)  The foundation and structural framing will be designed to support a
         minimum live load of 100 pounds psf in all leasable areas (which meets
         or exceeds current code).

     f)  First floor to second floor height of 17'-0". Clear height of the
         second floor to be 12"-0".

2.  Building Exterior

  a)  Concrete exterior walls that enclose the perimeter of the building with
      steel reinforcing and structural connections that may be necessary or
      required.

  b)  Three (3) ply built up roofing: Base sheet one (1) ply of asphalt
      impregnated tar paper and a cap sheet.

  c)  Glass to be 10'-0" tall at glass line. Glass to be "medium" performance
<PAGE>

  d)  All exterior doors, door closer and locking devices necessary for proper
      functioning.

  e)  One "grade" level roll-up door and one "dock" level roll-up door

3.  Plumbing

     a)  Underground sanitary sewer laterals connected to the city sewer main in
         the street and piped into the building and under the concrete slab on
         grade for the length of the building.

     b)  Domestic water mains connected to Great Oaks Water Company water main
         in the street and stubbed to the building.

     c)  Gas lines connected to the city public utility mains and gas meters
         adjacent to, and in close proximity to the building. Meters supplied by
         utility company.

4.   Electrical

     a)  All primary electrical service to the building that is complete
         including underground conduit and wire feeders from transformers pads
         into the building's main switchgear electrical room. The electrical
         characteristics of the secondary side of transformers shall be 277/480
         Volt, 3 Phase and the rated capacity of the transformers shall be 2,000
         amps for the building.

     b)  Underground pull section, meter, and panel(s), for site lighting and
         landscaping only.

     c)  Underground conduit from the street to the building electrical room for
         telephone trunk line service by Pacific Bell Telephone.

     d)  An electrically operated landscape irrigation controller that is a
         complete and functioning system.

     e)  Underground conduit from the building to the main fire protection
         system, shut off valve (PIV) for installation of security alarm wiring.

     f)  All parking lot and landscaping lighting to include fixtures,
         underground conduit, wire, distribution panel end controller. All
         exterior lighting shall be a complete and functioning system.

5.  Fire Protection (Sprinklers)

     a)  A complete and fully functional overhead system distributed throughout
         the building. The systems shall be classified ordinary hazard group II
         and be distributed throughout the building.
<PAGE>

     b)  system shall include all sprinkler heads that may be required by
         building codes above the ceiling, when ceilings are installed.

     c)  Site sprinkler main to be sized adequately to support Tenant's uses
         within the building.

6.   Sitework

     a)  All work outside the building perimeter walls shall be considered site
         work for the building shell and shall include grading, asphalt
         concrete, paving, landscaping (hard and soft), landscape irrigation,
         storm drainage, utility service laterals, curbs, gutters, sidewalks,
         specialty paving (if required), retaining walls, fencing and gates,
         trash enclosures, planters, sign monuments, parking lot and landscape
         lighting and other exterior lighting per code.

     b)  Paving sections for automobile and truck access shall be according to
         the Geological Soils Report.

     c)  All paring lot striping to include handicap signage and spaces. Amount
         of spaces provided shall comply with City Code.

     d)  Underground site storm drainage system shall be connected to the city
         storm system main.

     EXCLUSIONS (partial list)
     -------------------------

     The following items are not included in the building shell:

     a)  Roof screen

     b)  Elevator

     c)  Proof loading roof for mechanical equipment

     d)  Deck penetrations for mechanical equipment

     e)  Framing, finishes or penetrations for interior stairs (other than
         temporary stair).

     f)  Electrical panels and distribution.

     g)  Security system

     h)  All Interior Finishes

<PAGE>

                                   EXHIBIT F

                             DESIGNATION AGREEMENT
                             ---------------------

     This DESIGNATION AGREEMENT (the "Agreement") is entered into on     , 2000,
by and between ENZO DRIVE, LLC a California limited liability company
("Seller"), SUNRISE TELECOM ("Buyer") and ALLIANCE TITLE COMPANY ("Title
Company").

                                    RECITALS
                                    --------

     A.  Pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions entered into by and between Seller and Buyer, dated       , 1999
(the "Purchase Agreement"), Seller has agreed to sell to Buyer, and Buyer has
agreed to buy from Seller, that certain real property located at Enzo Drive and
Rue Ferrari, San Jose, California, and described more fully on attached EXHIBIT
                                                                        -------
A (the "Property"). The purchase and sale of the Property pursuant to the
-
Purchase Agreement is sometimes referred to below as the "Transaction."

     B.  Section 6045(e) of the United States Internal Revenue Code and the
regulations promulgated thereunder (collectively, the "Reporting Requirements")
require an information return to be made to the United States Infernal Revenue
Service, and a statement to be furnished to Seller, in connection with the
Transaction.

     C.  Pursuant to subparagraph 8.a of the Purchase Agreement, an escrow has
been opened with Title Company (Escrow No.     ) through which the Transaction
will be or is being accomplishes. Title Company is either (i) the person
responsible for closing the Transaction (as described in the Reporting
Requirements) or (ii) the disbursing title or escrow company that is most
significant in terms of gross proceeds disbursed in connection with the
Transaction (as described in the Reporting Requirements).

     D.  Seller, Buyer and Title Company desire to designate Title Company as
the "Reporting Person" (as defined in the Reporting Requirements) with respect
to the Transaction.

                                   AGREEMENT
                                   ---------

     NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller, Buyer and Title Company agree
as follows:

     1.  Title Company is hereby designated as the Reporting Person for the
Transaction. Title Company shall perform all duties that are required by the
Reporting Requirements to be performed by the Reporting Person for the
Transaction.

     2.  Seller and Buyer shall furnish to Title Company, in a timely manner,
any information requested by Title Company and necessary for Title Company to
perform its duties as Reporting Person for the transaction.

                                      -1-
<PAGE>

     3.  Title Company hereby requests Seller to furnish to Title Company
Seller's correct taxpayer identification number. Seller acknowledges that any
failure by Seller to provide Title Company with Seller's correct taxpayer
identification number may subject Seller to civil or criminal penalties imposed
by law. Accordingly, Seller hereby certifies to Title Company, under penalty of
perjury, that Seller's correct taxpayer identification number is

     4.  The names and addresses of the parties hereto are as follows:

          SELLER:

          Enzo Drive, LLC
          511 Division Street
          Campbell, CA 95008

          BUYER:

          Sunrise Telecom
          22 Great Oaks Blvd.
          San Jose, CA. 95119

          TITLE COMPANY:

          Alliance Title Company
          1732 North First Street, Suite 175
          San Jose, CA 95112

     5.  Each of the parties hereto shall retain this Agreement for a period of
four years following the calendar year during which the date of closing of the
Transaction occurs.

     IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date ant year first above written.

SELLER                                  BUYER

ENZO DRIVE, LLC                         SUNRISE TELECOM
a California limited liability company  A
                                          ----------------------------------

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

Its:                                    Its:
   -------------------------------          --------------------------------

                                      -2-
<PAGE>

TITLE COMPANY:

ALLIANCE TITLE COMPANY

By
   -------------------------------
Its
   -------------------------------

                                      -3-

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