Document:

<PAGE>

                                                                   Exhibit 10.7

                            STANDARD INDUSTRIAL LEASE

                                 BY AND BETWEEN

                              MCCANDLESS PROPERTIES

                                   AS LANDLORD

                                       AND

                       MONOLITHIC SYSTEM TECHNOLOGY, INC.

                                    AS TENANT

<PAGE>

                                      LEASE

         THIS LEASE is made this 24th day of September, 1996, by and between
McCandless Properties, a California limited partnership, ("Landlord") and
Monolithic System Technology, Inc., a California corporation ("Tenant").

                                   WITNESSETH:

         Landlord leases to Tenant and Tenant leases from Landlord those certain
premises outlined in red on Exhibit A (the "Premises") commonly known as 1020
Stewart Drive, Sunnyvale, California, which Landlord and Tenant hereby agree
consists of approximately eight thousand (8,000) square feet in 10121020 Stewart
Drive, Sunnyvale, California (the "Project"). As used herein the term Project
shall mean and include all of the land described in Exhibit B and all the
buildings, improvements, fixtures and equipment now or hereafter situated on
said land.

         Tenant covenants, as a material part of the consideration of this
lease, to perform and observe each and all of the terms, covenants and
conditions set forth below, and this lease is made upon the condition of such
performance and observance.

1.       USE

         Subject to the restrictions contained in paragraph 6 hereof, Tenant
shall use the Premises for sales, marketing, research and development, testing,
storage, light assembly and distribution of electronic products and general
office and administrative uses and shall not use or permit the Premises to be
used for any other purpose.

2.       TERM

         (a) The term shall be for five (5) years (unless sooner terminated as
hereinafter provided) and, subject to paragraphs 2(b) and 3, shall commence on
November 15, 1996 and end on November 14, 2001. In the event the existing tenant
vacates the Premises and Landlord obtains legal possession of the Premises
before the October 31, 1996 expiration of the existing tenant's term in the
Premises and such existing tenant enters into a written early termination
agreement with Landlord, Tenant may, at its option, occupy the Premises early,
in which case the term shall commence upon the sooner of November 15, 1996 or
the date of such occupancy by Tenant.

3.       POSSESSION

         (a) If Landlord for any reason cannot deliver possession of the
Premises to Tenant by the date of commencement set forth in paragraph 2, this
lease shall not be void or voidable, Landlord shall not be liable to Tenant for
any loss or damage on account thereof and Tenant shall not be liable

<PAGE>

for rent until Landlord delivers possession of the Premises. If the term
commences on a date other than the date specified in paragraph 2 above, then
the parties shall immediately execute an amendment to this lease stating the
actual date of commencement and the revised expiration date. The expiration
date of the term shall be extended by the same number of days that Tenant's
possession of the Premises was delayed from that set forth in paragraph 2.
Tenant acknowledges that the Premises are currently subject to a lease
between Landlord and Helios, Inc./Phase Metrics, which does not expire until
October 31, 1996, and that this lease shall not commence until Landlord has
obtained legal possession of the Premises, which may include a written
termination agreement between Landlord and Helios/Phase Metrics regarding
same.

         Notwithstanding the above, if Landlord is unable to deliver possession
of the Premises by December 31, 1996 (plus such number of days of delay caused
by Tenant or other causes beyond Landlord's reasonable control except the
holdover of the existing tenant in the Premises which shall be deemed within
Landlord's control), then Tenant may, at its option (exercisable only within
(10) ten days of following such date) and as its sole remedy terminate this
lease, provided if Tenant fails to timely exercise such right Tenant's right to
terminate shall lapse. If Tenant elects to terminate this lease as provided in
this paragraph, all amounts deposited with Landlord by Tenant shall be returned
to Tenant and Landlord shall not be liable to Tenant for any loss, damage or
expense resulting from Landlord's failure to deliver possession.

         (b) Tenant's inability or failure to take possession of the Premises
when delivery is tendered by Landlord shall not delay the commencement of the
term of this lease or Tenant's obligation to pay rent. Tenant acknowledges that
Landlord shall incur significant expenses upon the execution of this lease, even
if Tenant never takes possession of the Premises, including without limitation
brokerage commissions and fees and legal and other professional fees. Tenant
acknowledges that all of said expenses shall be included in measuring Landlord's
damages should Tenant breach the terms of this lease.

4.       MONTHLY RENT

         (a) BASIC RENT. Tenant shall pay to Landlord as basic rent for the
Premises, in advance and subject to adjustment as provided in paragraph 5, the
sum of Ten Thousand Four Hundred and 00/100 Dollars ($10,400.00) on or before
the first day of the first full calendar month of the term and on or before the
first day of each and every successive calendar month. Basic rent for any
partial month shall be payable in advance and shall be prorated at the rate of
1/30th of the monthly basic rent per day.

         Notwithstanding the above, Tenant shall not be required to pay to
Landlord basic rent during the first (15) fifteen days of the term.

         (b) COMMON AREA CHARGES. In addition to the above basic rent, and as
additional rent, Tenant shall pay to Landlord, subject to adjustments and
reconciliation as provided in paragraph 16 of this lease, the sum of One
Thousand One Hundred Thirty-Three and 00/100 Dollars ($1,133.00) on or before
the first day of the first full calendar month of the term and on the first day
of each and every succeeding calendar month, said sum representing Tenant's
estimated payment of its percentage share of common area charges as provided for
in paragraph 16 of this lease. Payment of

                                       2

<PAGE>

common area charges for any partial month shall be payable in advance and
shall be prorated at the rate of 1/30th of the monthly payment of common area
charges per day.

         (c) MANNER AND PLACE OF PAYMENT. All payments of basic rent and common
area charges shall be paid to Landlord, without deduction or offset, in lawful
money of the United States of America, at the office of Landlord at 360 S. San
Antonio Road, Suite 14, Los Altos, California 94022 or to such other person or
place as Landlord may from time to time designate in writing.

         (d) FIRST MONTH'S RENT. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord, the sum of Eleven Thousand Five
Hundred and Thirty-Three and 00/100 Dollars ($11,533.00), to be applied against
the basic rent and common area charges for the first lease month of the term.

         (e) SECURITY DEPOSIT. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord the sum of Sixty Six Thousand and
00/100 Dollars ($66,000.00), which sum shall be held by Landlord as a security
deposit for the faithful performance by Tenant of all of the terms, covenants
and conditions of this lease to be kept and performed by Tenant. If Tenant
defaults with respect to any provision of this lease, including but not limited
to, the provisions relating to the payment of basic rent and common area
charges, Landlord may (but shall not be required to) use, apply, or retain all
or any part of this security deposit for the payment of any amount which
Landlord may spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of default. If any
portion of said deposit is so used, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in the amount sufficient to
restore the security deposit to its original amount; Tenant's failure to do so
shall be a material breach of this lease. Landlord shall not be required to keep
this security deposit separate from its general funds and Tenant shall not be
entitled to interest on such deposit. If Tenant is not in default at the
expiration or termination of this lease, the security deposit or any balance
thereof shall be returned to Tenant after Tenant has vacated the Premises. In
the event of termination of Landlord's interest in this lease, Landlord shall
transfer said deposit to Landlord's successor in interest, and Tenant agrees
that Landlord shall thereupon be released from liability for the return of such
deposit or any accounting therefor.

         Notwithstanding the above and provided that Tenant is not in default
under any of the terms and conditions of this lease, Landlord shall credit such
security deposit against monthly basic rent due for the third (3rd), fifteenth
(15th), twenty-seventh (27th), thirty-ninth (39th) and fifty-first (51rst) lease
months of the term in the amounts of $10,400.00, $10,400.00, $10,800.00,
$11,200.00 and $11,600.00 respectively. Once Landlord has granted all such
security deposit credits as described above, the remaining security deposit held
by Landlord shall amount to Eleven Thousand Six Hundred and 00/100 Dollars
($11,600.00).

5.       ADJUSTMENT OF BASIC RENT

         The basic rent provided for in paragraph 4(a) shall be adjusted
periodically and the monthly basic rent for each period shall be as set forth
below:

         Lease Months 1-12          $10,400.00 per month

         Lease Months 13-24         $10,400.00 per month

                                       3

<PAGE>

         Lease Months 25-36         $10,800.00 per month

         Lease Months 37-48         $11,200.00 per month

         Lease Months 49-60         $11,600.00 per month

6.       RESTRICTION ON USE

         Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or kept in or about the
Premises or Project, anything which is prohibited by or will in any way increase
the existing rate of, or otherwise affect, fire or any other insurance covering
the Project or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Project or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in or about
the Premises or the Project which will constitute waste or which will in any way
obstruct or interfere with the rights of other tenants, business invitees or
occupants of the Project or injure or annoy them, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit
any nuisance in or about the Premises or the Project. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord. Tenant
shall not use the Premises for the preparation, or mixing of anything that might
emit any objectionable odor, noise or light into the adjoining premises or
Common Area. Tenant shall not do anything on the Premises that will cause damage
to the Project and Tenant shall not overload the floor capacity of the Premises
or the Project. No machinery, apparatus or other appliance shall be used or
operated in or on the Premises that will in any manner injure, vibrate or shake
the Premises. Landlord shall be the sole judge, of whether such odor, noise,
light or vibration is such as to violate the provisions of this paragraph. No
waste materials or refuse shall be dumped upon or permitted to remain upon any
part of the Premises or the Project except in trash containers placed inside
exterior enclosures designated for that purpose by Landlord, or where otherwise
designated by Landlord; and no toxic or hazardous materials shall be disposed of
through the plumbing or sewage system. No materials, supplies, equipment,
finished products or semi-finished products, raw materials or articles of any
nature shall be stored or permitted to remain outside of the building proper. No
retail sales shall be made on the Premises.

7.       COMPLIANCE WITH LAWS

         Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and comply with (i) all
laws, statutes, ordinances and governmental rules, regulations and requirements
now or hereafter in effect, (ii) with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted and (iii) with
any direction or occupancy certificate issued pursuant to law by any public
authority; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant (whether or not Landlord is
a party thereto) that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This lease shall remain
in full force and effect notwithstanding any loss of use or other effect on

                                       4

<PAGE>

Tenant's enjoyment of the Premises by reason of any governmental laws, statutes,
ordinances, rules, regulations and requirements now or hereafter in effect.

         Notwithstanding the above, Landlord shall, at Landlord's sole cost and
expense, make any additions or changes to the Premises required to bring the
Premises into compliance with laws, statutes, ordinances and governmental rules,
regulations or requirements (except for the Americans with Disabilities Act
referenced below), as in effect at the execution date of this lease.

         Landlord and Tenant hereby acknowledge that the Americans with
Disabilities Act may affect Tenant's use and occupancy of the Premises and
require Tenant to modify or alter the design, layout or other physical elements
of the interior of the Premises or provide auxiliary aids and services in
connection with its business operations. Tenant shall comply in all respects
with the requirements of the Americans with Disabilities Act as it affects
Tenant's use and occupancy of the Premises throughout the term of the lease, as
may be extended, and Tenant acknowledges and agrees that, notwithstanding any
modifications to the Common Area which may be made by Landlord in order to
conform such areas with the requirements of the Americans with Disabilities Act,
Landlord makes no representations or warranties regarding the compliance of the
Premises or the Project with the Americans with Disabilities Act, nor shall
Landlord have any obligations or liabilities to Tenant to construct any
modifications or alterations to the interior of the Premises in order to comply
with the Americans with Disabilities Act.

8.       ALTERATIONS

         Tenant shall not make or suffer to be made any alteration, addition or
improvement to or of the Premises or any part thereof (collectively referred to
herein as "alterations") without (i) the prior written consent of Landlord
(which consent shall not be unreasonably withheld), (ii) a valid building permit
issued by the appropriate governmental authority and (iii) otherwise complying
with all applicable laws, regulations and requirements of governmental agencies
having jurisdiction and with the rules, regulations and requirements of any
board of fire underwriters or similar body. Any alteration made by Tenant
(excluding moveable furniture and trade fixtures not attached to the Premises)
shall at once become a part of the Premises and belong to Landlord. Without
limiting the foregoing, all heating, lighting, electrical (including all wiring,
conduit, outlets, drops, buss ducts, main and subpanels), air conditioning,
partitioning, drapery and carpet installations made by Tenant, regardless of how
attached to the Premises, together with all other alterations that have become
an integral part of the Project in which the Premises are a part, shall be and
become part of the Premises and belong to Landlord upon installation and shall
not be deemed trade fixtures, and shall remain upon and be surrendered with the
Premises at the termination of the lease.

         If Landlord consents to the making of any alteration by Tenant, the
same shall be made by Tenant at its sole risk, cost and expense and only after
Landlord's written approval of any contractor or person selected by Tenant for
that purpose, and the same shall be made at such time and in such manner as
Landlord may from time to time designate. Tenant shall, if required by Landlord,
secure at Tenant's cost a completion and lien indemnity bond for such work. Upon
the expiration or sooner termination of the term, Landlord may, at its sole
option, require Tenant, at Tenant's sole cost and expense, to promptly both
remove any such alteration made by Tenant and designated by Landlord to be
removed and repair any damage to the Premises caused by such removal. Any
moveable furniture and equipment or trade fixtures remaining on the Premises at
the expiration or other

                                       5

<PAGE>

termination of the term shall become the property of the Landlord unless
promptly removed by Tenant.

         If during the term any alteration, addition or change of the Premises
is required by law, regulation, ordinance or order of any public authority,
Tenant, at its sole cost and expense, shall promptly make the same. If during
the term any alterations, additions or changes to the Common Area or to the
Project in which the Premises is located is required by law, regulation,
ordinance or order of any public or quasipublic authority, and it is impractical
in Landlord's judgment for the affected tenants to individually make such
alterations, additions or changes, Landlord shall make such alterations,
additions or changes and the cost thereof shall be a common area charge and
Tenant shall pay its percentage share of such cost to Landlord as provided in
paragraph 16.

9.       REPAIR AND MAINTENANCE

         By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair (excepting only "punchlist items"). Except
as expressly provided below, Tenant shall at its sole cost keep and maintain the
entire Premises and every part thereof including, without limitation, the
windows, window frames, plate glass, glazing, elevators within the Premises,
truck doors, doors and all door hardware, the interior walls and partitions,
lighting and the electrical, mechanical, and plumbing systems. Tenant shall also
repair and maintain the heating and air conditioning systems (unless Landlord
has elected to keep and maintain the heating and air conditioning systems as
provided below) which shall include, without limitation, a periodic maintenance
agreement with a reputable and licensed heating and air conditioning service
company. If Tenant's use of the heating and air conditioning systems is limited
to normal business hours (8:00 a.m. to 6:00 p.m.), such agreement shall provide
for service at least as often as every 60 days; if Tenant's use of the heating
or air conditioning systems extends beyond such normal business hours this
service shall be as often as may be reasonably required by landlord and in any
event such service shall meet all warranty enforcement requirements of such
equipment and comply with all manufacturer recommended maintenance. In the event
that Tenant does not maintain the heating and air conditioning systems as
provided for herein, Landlord may elect, at its option, to keep and maintain the
heating and air conditioning systems of the premises and in such event, Tenant
shall pay to Landlord upon demand the full cost of such maintenance.

         Subject to the provisions of paragraph 17, Landlord shall keep and
maintain the roof, structural elements, and exterior walls of the buildings
constituting the Project and Common Area in good order and repair. Tenant waives
all rights under and benefits of California Civil Code Sections 1932(l), 1941,
and 1942 and under any similar law, statute or ordinance now or hereafter in
effect. The cost of the repairs and maintenance which are the obligation of
Landlord hereunder, including without limitation, maintenance contracts and
supplies, materials, equipment and tools used in such repairs and maintenance
shall be a common area charge and Tenant shall pay its percentage share of such
costs to Landlord as provided in paragraph 16; provided, however, that if any
repairs or maintenance is required because of an act or omission of Tenant, or
its agents, employees or invitees, Tenant shall pay to Landlord upon demand the
full cost of such repairs or maintenance.

         Notwithstanding anything to the contrary herein, Landlord shall deliver
the Premises with the roof, parking lot, ceiling tiles, air conditioning and
heating systems, electrical, lighting and plumbing systems and interior lighting
in good working order and repair as of the commencement of

                                       6

<PAGE>

the term. During the first ninety (90) days of the term, Landlord shall, at
Landlord's expense, make all necessary repairs or replacements to the
heating, ventilating and air-conditioning system necessary to maintain such
system in good working order and repair.

10.      LIENS

         Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, its agents, employees or contractors. Upon Tenant's receipt of a
preliminary twenty (20) day notice filed by claimant pursuant to California
Civil Code Section 3097, Tenant shall immediately provide Landlord with a copy
of such notice. Should any such lien be filed against the Project, Tenant shall
give immediate notice of such lien to Landlord. In the event that Tenant shall
not, within ten (10) days following the imposition of such lien, cause the same
to be released of record, Landlord shall leave, in addition to all other
remedies provided herein and by law, the right, but no obligation, to cause the
same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord for such purpose,
and all expenses (including attorneys' fees) incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
rate of ten percent (10%) per annum or the maximum rate permitted by law,
whichever is less. Landlord shall have the right at all times to post and, keep
posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper for the protection of Landlord, the Premises and the
Project and any other party having an interest therein, from mechanics' and
material men's liens and like liens. Tenant shall give Landlord at least fifteen
(15) days prior notice of the date of commencement of any construction on the
Premises in order to permit the posting of such notices. In the event Tenant is
required to post an improvement bond with a public agency in connection with any
work performed by Tenant on or to the Premises, Tenant shall include Landlord as
an additional obligee.

11.      INSURANCE

         Tenant, at its sole cost and expense, shall keep in force during the
term (i) commercial general liability and property damage insurance with a
combined single limit of at least $2,000,000 per occurrence insuring against
personal or bodily injury to or death of persons occurring in, on or about the
Premises or Project and any and all liability of the insured with respect to,
the Premises or arising out of Tenant's maintenance, use or occupancy of the
Premises and all areas appurtenant thereto, (ii) direct physical loss-special
insurance covering the leasehold improvements in the Premises and all of
Tenant's equipment, trade fixtures, appliances, furniture, furnishings, and
personal property from time to time located in, on or about the Premises, with
coverage in the amount of the full replacement cost thereof, and (iii) Worker's
Compensation Insurance as required by law, together with employer's liability
coverage with a limit of not less than $1,000,000 for bodily injury for each
accident and for bodily injury by disease for each employee. Tenant's commercial
general liability and property damage insurance and Tenant's Workers
Compensation Insurance shall be endorsed to provide that said insurance shall
not be canceled or reduced except upon at least thirty (30) days prior written
notice to Landlord. Further, Tenant's commercial general liability and property
damage insurance shall be primary and shall name Landlord and McCandless Simons
Company, Inc., and their respective partners, officers, directors and employees
and such other persons or entities as directed from time to time by Landlord as
additional insured for all liability using ISO Bureau Form CG20111185 (or a
successor form); shall contain a severability of

                                       7

<PAGE>

interest clause and a cross-liability endorsement; shall be endorsed to
provide that the limits and aggregates apply per location using ISO Bureau
Form CG25041185; and shall be issued by an insurance company admitted to
transact business in the State of California and rated A+VIII or better in
Best's Insurance Reports (or successor report). The deductibles for all
insurance required to be maintained by Tenant hereunder shall be reasonably
satisfactory to Landlord. The commercial general liability insurance carried
by Tenant shall specifically insure the performance by Tenant of the
indemnification provisions set forth in paragraph 18 of this lease provided,
however, nothing contained in this paragraph 11 shall be construed to limit
the liability of Tenant under the indemnification provisions set forth in
said paragraph 18. If Landlord or any of the additional insured named on any
of Tenant's insurance, have other insurance which is applicable to the
covered loss on a contributing, excess or contingent basis, the amount of the
Tenant's insurance company's liability under the policy of insurance
maintained by Tenant shall not be reduced by the existence of such other
insurance. Any insurance carried by Landlord or any of the additional insured
named on Tenant's insurance policies shall be excess and non-contributing
with the insurance so provided by Tenant.

         Tenant shall, prior to the commencement of the term, provide Landlord
with a completed Certificate of Insurance, using a form acceptable in Landlord's
reasonable judgment, attaching thereto copies of all endorsements required to be
provided by Tenant under this lease. Tenant agrees to increase the coverage or
otherwise comply with changes in connection with said commercial general
liability, property damage, direct physical loss and Worker's Compensation
Insurance as Landlord or Landlord's lender may from time to time require.

         Landlord shall obtain and keep in force a policy or policies of
insurance covering loss or damage to the Premises and Project, in the amount of
the full replacement value thereof, providing protection against those perils
included within the classification of "all risk" insurance, with increased cost
of reconstruction and contingent liability (including demolition), plus a policy
of rental income insurance in the amount of one hundred percent (100%) of twelve
(12) months' rent (including sums paid as additional rent) and such other
insurance as Landlord or Landlord's lender may from time to time require.
Landlord may, but shall not be obligated to, also obtain flood and/or earthquake
insurance. Landlord shall have no liability to Tenant if Landlord elects not to
obtain flood and/or earthquake insurance. The cost of all such insurance
purchased by Landlord, plus any charges for deferred payment of premiums and the
amount of any deductible incurred upon any covered loss within the Project,
shall be common area charges and Tenant shall pay to Landlord its percentage
share of such costs as provided in paragraph 16; provided, however, that the
cost of any earthquake deductible shall be treated as a capital expenditure as
described in paragraph 56. If the cost of insurance is increased due to Tenant's
use of the Premises, then Tenant shall pay to Landlord upon demand the full cost
of such increase.

         Landlord and Tenant hereby mutually waive any and all rights of
recovery against one another for real or personal property loss or damage
occurring to the Premises or the Project, or any part thereof, or to any
personal property therein, from perils insured against under fire and extended
insurance and any other property insurance policies existing for the benefit of
the respective parties so long as such insurance permits waiver of liability and
contains a waiver of subrogation without additional premiums.

                                       8

<PAGE>

         If Tenant does not take out and maintain insurance as required pursuant
to this paragraph 11, Landlord may, but shall not be obligated to, take out the
necessary insurance and pay the premium therefor, and Tenant shall repay to
Landlord promptly on demand, as additional rent, the amount so paid. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all reasonable expenses (including attorney fees) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of the premiums thereon.

12.      UTILITIES AND SERVICE

         Tenant shall pay for all water, gas, light, heat, power, electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered or billed to the Premises, the cost of such utility service or other
service shall be a common area charge and Tenant shall pay its percentage share
of such cost to Landlord as provided in paragraph 16. In addition, the cost of
all utilities and services furnished by Landlord to the Common Area shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.

         If Tenant's use of any such utility or service is materially in excess
of the average furnished to the other tenants of the Project, and such utility
or service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess use, or Landlord may
cause such utility or service to be separately metered, in which case Tenant
shall pay the full cost of such utility or service and reimburse Landlord upon
demand for the cost of installing the separate meter.

         Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.

13.      TAXES AND OTHER CHARGES

         All real estate taxes and assessments and other taxes, fees and charges
of every kind or nature, foreseen or unforeseen, which are levied, assessed or
imposed upon Landlord and/or against the Premises, building, Common Area or
Project, or any part thereof by any federal, state, county, regional, municipal
or other governmental or quasi-public authority, together with any increases
therein for any reason, shall be a common area charge and Tenant shall pay its
percentage share of such costs to Landlord as provided in paragraph 16. By way
of illustration and not limitation, "other taxes, fees and charges" as used
herein include any and all taxes payable by Landlord (other than state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, and premium taxes), whether or not now customary or
within the contemplation of the parties hereto, (i) upon, allocable to, or
measured by the rent payable hereunder, including, without

                                       9

<PAGE>

limitation, any gross income or excise tax levied by the local, state or
federal government with respect to the receipt of such rent, (ii) upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any part
thereof, (iii) upon or measured by the value of Tenant's personal property or
leasehold improvements located in the Premises, (iv) upon this transaction or
any document to which Tenant is a party creating or transferring an interest
or estate in the Premises, (v) upon or with respect to vehicles, parking or
the number of persons employed in or about the Project, and (vi) any tax,
license, franchise fee or other imposition upon Landlord which is otherwise
measured by or based in whole or in part upon the Project or any portion
thereof. If Landlord contests any such tax, fee or charge, the cost and
expense incurred by Landlord thereby (including, but not limited to, costs of
attorneys and experts) shall also be common area charges and Tenant shall pay
its percentage share of such costs to Landlord as provided in paragraph 16.
In the event the Premises and any improvements installed therein by Tenant or
Landlord are valued by the assessor disproportionately higher than those of
other tenants on the building or Project or in the event alterations or
improvements are made to the Premises, Tenant's percentage share of such
taxes, assessments, fees and/or charges shall be readjusted upward
accordingly and Tenant agrees to pay such readjusted share. Such
determination shall be made by Landlord from the respective valuations
assigned in the assessor's work sheet or such other information as may be
reasonably available and Landlord's determination thereof shall be conclusive.

         Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures and
other personal property located in the Premises, including carpeting and other
property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. If any of Tenant's personal property
shall be assessed with the Project, Tenant shall pay to Landlord, as additional
rent, the amount attributable to Tenant's personal property within ten (10) days
after receipt of a written statement from Landlord setting forth the amount of
such taxes, assessments and public charges attributable to Tenant's personal
property.

14.      ENTRY BY LANDLORD

         Landlord reserves, and shall at all reasonable times have, the right to
enter the Premises to inspect the Premises, (ii) to supply services to be
provided by Landlord hereunder, (iii) to show the Premises to prospective
purchasers, lenders or tenants and to put `for sale' or `for lease' signs
thereon, (iv) to post notices required or allowed by this lease or by law, (v)
to alter, improve or repair the Premises and any portion of the Project, and
(vi) to erect scaffolding and other necessary structures in or through the
Premises or the Project where reasonably required by the character of the work
to be performed. Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage arising
from Landlord's entry and acts pursuant to this paragraph and Tenant shall not
be entitled to an abatement or reduction of rent if Landlord exercises any
rights presented in this paragraph. For each of the foregoing purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, on and about the Premises (excluding Tenant's vaults, safes and similar
areas designated in writing by Tenant in advance), and Landlord shall have the
right to use any and all means which Landlord may deem proper to open said doors
in an emergency in order to obtain entry to the Premises. Any entry by Landlord
to the Premises pursuant to this paragraph shall not under any circumstances be

                                      10

<PAGE>

construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the premises or
any portion thereof.

         Notwithstanding the foregoing, and except in the case of emergency,
Landlord shall give Tenant at least twenty-four (24) hours prior notice of its
intent to enter the Premises, and such entry shall be subject to the reasonable
security requirements of Tenant. In the course of such entry, Landlord shall not
unreasonably interfere with Tenant's use of the Premises unless reasonably
required in order for Landlord to fulfill its obligations under the lease.

15.      COMMON AREA; PARKING

         Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe and so long as such
rules and regulations do not conflict with the terms and conditions of this
lease, Tenant and Tenant's employees and invitees shall, in common with other
occupants of the Project, and their respective employees and invitees and others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas and facilities within the Project provided and designated
by Landlord for the general use and convenience of the occupants of the Project
which areas and facilities shall include, but not be limited to, sidewalks,
parking, refuse, landscape and plaza areas, roofs and building exteriors, which
areas and facilities are referred to herein as "Common Area". This right shall
terminate upon the termination of this lease.

         Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord shall also
have the right at any time to change the name, number or designation by which
the Project is commonly known. Landlord further reserves the right to promulgate
such rules and regulations relating to the use of the Common Area, and any part
thereof, as Landlord may deem appropriate for the best interests of the
occupants of the Project. The rules and regulations shall be binding upon Tenant
upon delivery of a copy of them to Tenant and Tenant shall abide by them and
cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice.

         Tenant shall have the non-exclusive use of thirty-two (32) parking
spaces in the Common Area as designated from time to time by Landlord. Landlord
reserves the right at its sole option to assign and label parking spaces, but it
is specifically agreed that Landlord is not responsible for policing any such
parking spaces. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or the trucks or other vehicles of others,
adjacent to loading areas so as to interfere in any way with the use of such
areas; nor shall Tenant at any time park or permit the parking of Tenant's
vehicles or trucks, or other vehicles or trucks of Tenant's suppliers or others,
in any portion of the Common Area not designated by Landlord for such use by
Tenant. Tenant shall not park or permit any inoperative vehicle or equipment to
be parked on any portion of the Common Area. Tenant shall not permit, allow or
place any type of circulars or advertisements on vehicles parking in the Common
Area. Tenant shall not use any Common Area, including the space directly
adjacent to the Premises for sales or displays.

         Landlord shall operate, manage and maintain the Common Area. The manner
in which the Common Area shall be operated, managed and maintained and the
expenditures for such operation, management and maintenance shall be at the sole
discretion of Landlord. The cost of such maintenance, operation and management
of the Common Area, including but not limited to

                                      11

<PAGE>

landscaping, repair of paving, parking lots and sidewalks, repaving,
resurfacing, repairs, replacements, painting, lighting, cleaning, trash
removal, roof replacement and repair, fire protection and similar items;
non-refundable contributions toward one or more reserves for replacements
other than equipment; rental on equipment; security and exterminator services
and salaries and employee benefits (including union benefits) of on-site and
accounting personnel directly engaged in such maintenance and operations
management, shall be a common area charge and Tenant shall pay to Landlord
its percentage share of such costs as provided in paragraph 16.

16.      COMMON AREA CHARGES

         Tenant shall pay to Landlord, as additional rent, an amount equal to
forty-one and three one hundredths percent (41.03%) of the total common area
charges as defined below. Tenant's percentage share of common area charges shall
be paid as follows:

         Tenant's estimated monthly payment of common area charges payable by
Tenant during the calendar year in which the term commences is set forth in
paragraph 4(b) of this lease. Prior to the commencement of each succeeding
calendar year of the term (or as soon as practicable thereafter), Landlord shall
deliver to Tenant a written estimate of Tenant's monthly payment of common area
charges. Tenant shall pay, as additional rent, on the first day of each month
during the term in accordance with paragraph 4(b) of the lease, its monthly
share of common area charges as estimated by Landlord. Within one hundred twenty
(120) days of the end of each calendar year and of the termination of this lease
(or as soon as practicable thereafter), Landlord shall deliver to Tenant a
statement of actual common area charges incurred for the preceding year. If such
statement shows that Tenant has paid less than its actual percentage then Tenant
shall on demand pay to Landlord the amount of such deficiency. If Tenant fails
to pay such deficiency due within ten (10) days after demand, Tenant shall pay
an additional ten percent (10%) of the amount due as a penalty. If such
statement shows that Tenant has paid more than its actual percentage share then
Landlord shall, at its option, promptly refund such excess to Tenant or credit
the amount thereof to the rent next becoming due from Tenant. Landlord reserves
the right to revise any estimate of common area charges if actual or projected
common area charges show an increase or decrease in excess of 10% from any
earlier estimate for the same period. In such event, Landlord shall deliver the
revised estimate to Tenant, together with an explanation of the reasons
therefor, and Tenant shall revise its payments accordingly. Landlord's and
Tenant's obligation with respect to adjustments at the end of the term or
earlier expiration of this lease shall survive such termination or expiration.

         "Common area charges," as used in this lease, shall include, but not be
limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 15 as
being common area charges; (ii) amortization of such capital improvements having
a useful life greater than one year as Landlord may have installed for the
purpose of reducing operating costs and/or to comply with governmental rules and
regulations promulgated after completion of the building (Tenant's share of any
such capital improvement shall equal Tenant's proportionate share of the
fraction of the cost of such capital improvement equal to the remaining term of
the lease over the useful life of such capital improvement); (iii) salaries and
employee benefits (including union benefits) of personnel engaged in the
operation and maintenance of the Project (or the building in which the Premises
are located) and payroll taxes applicable thereto; (iv) supplies, materials,
equipment and tools used or required in connection with the operation and
maintenance of the Project: (v) licenses, permits and inspection fees; (vi) a
reasonable reserve for repairs and replacement of equipment used in the
maintenance and

                                      12

<PAGE>

operation of the Project; (vii) all other operating costs incurred by
Landlord in maintaining and operating the Project; and (viii) an amount equal
to five percent (5%) of the actual expenditures for the aggregate of all
other common area charges as compensation for Landlord's accounting and
processing services.

         Notwithstanding the foregoing, common area charges shall not include
any management fees other than the fee (equal to five percent (5%) of the cost
of all other common area charges) as compensation for Landlord's accounting and
processing services which is specifically referenced herein. In addition, common
area charges shall not include (i) the cost of maintenance and repair of
structural elements of the Premises excluding the roof and exterior walls or
(ii) the cost of bringing the Premises into compliance with laws, statutes,
ordinances and governmental rules, regulations or requirements (except for the
Americans with Disabilities Act ), as in effect at the execution date of this
lease as described in paragraph 7 of this lease. Capital improvements with an
estimated useful life in excess of one (1) year shall be amortized as provided
in paragraph 56 of this lease.

17.      DAMAGE BY FIRE; CASUALTY

         In the event the Premises are damaged by any casualty which is covered
under an insurance policy required to be maintained by Landlord pursuant to
paragraph 11, Landlord shall be entitled to the use of all insurance proceeds
and shall repair such damage as soon as reasonably possible and this lease shall
continue in full force and effect.

         In the event the Premises are damaged by any casualty not covered under
an insurance policy required to be maintained pursuant to paragraph 11, Landlord
may, at Landlord's option, either (i) repair such damage, at Landlord's expense,
as soon as reasonably possible, in which event this lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty (30) days
after the date of the occurrence of such damages of Landlord's intention to
cancel and terminate this lease as of the date of the occurrence of the damages;
provided, however, that if such damage is caused by an act or omission of Tenant
or its agent, servants or employees, then Tenant shall repair such damage
promptly at its sole cost and expense. In the event Landlord elects to terminate
this lease pursuant hereto, Tenant shall have the right within ten (10) days
after receipt of the required notice to notify Landlord in writing of Tenant's
intention to repair such damage at Tenant's expense, without reimbursement from
Landlord, in which event this lease shall continue in full force and effect and
Tenant shall proceed to make such repairs as soon as reasonably possible. If
Tenant does not give such notice within the ten (10) day period, this lease
shall be canceled and terminated as of the date of the occurrence of such
damage. Under no circumstances shall Landlord be required to repair any injury
or damage to (by fire or other cause), or to make any restoration or replacement
of, any of Tenant's personal property, trade fixtures or property leased from
third parties, whether or not the same is attached to the Premises.

         If the Premises are totally destroyed (or the entire Premises is
rendered untenantable due to a partial destruction) during the term from any
cause (including any destruction required by any authorized public authority),
whether or not covered by the insurance required under paragraph 11, this lease
shall automatically terminate as of the date of such total destruction;
provided, however, that if the Premises can reasonably and lawfully be repaired
or restored within twelve (12) months of the date of destruction to
substantially the condition existing prior to such destruction and if the
proceeds of the insurance payable to the Landlord by reason of such destruction
are sufficient to pay

                                      13

<PAGE>

the cost of such repair or restoration, then the insurance proceeds shall be
so applied, Landlord shall promptly repair and restore the Premises and this
lease shall continue, without interruption, in full force and effect. If the
Premises are totally destroyed during the last twelve (12) months of the
term, either Landlord or Tenant may at either parties' option cancel and
terminate this lease as of the date of occurrence of such damage by giving
written notice to the other of its' election to do so within thirty (30) days
after the occurrence of such damage.

         If the Premises are partially or totally destroyed or damaged and
Landlord or Tenant repair them pursuant to this lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated only in proportion to the square footage of the Premises rendered
untenantable to Tenant by such damage or destruction. Tenant shall have no claim
against Landlord for any damage, loss or expense suffered by reason of any such
damage, destruction, repair or restoration. The parties waive the provisions of
California Civil Code sections 1932(2) and 1933(4) (which provisions permit the
termination of a lease upon destruction of the leased premises), and hereby
agree that the provisions of this paragraph 17 shall govern in the event of such
destruction.

18.      INDEMNIFICATION

         Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Project by or from any
cause whatsoever except (i) the failure of Landlord to perform its obligations
under this lease where such failure has persisted for an unreasonable period of
time after notice of such failure or (ii) the willful misconduct or negligent
acts or omissions of Landlord or its agents, employees or contractors. Without
limiting the foregoing, Landlord shall not be liable to Tenant for any injury to
or death of any person or damages to or destruction of property by reason of, or
arising from, any latent defect in the Premises or Project or the act or
negligence of any other tenant of the Project. Tenant shall immediately notify
Landlord of any defect in the Premises or Project.

         Except as to injury to persons or damage to property the principal
cause of which is the failure by Landlord to observe any of the terms and
conditions of this lease, Tenant shall hold Landlord harmless from and defend
Landlord against any claim, liability, loss, damage or expense (including
attorney fees) arising out of any injury to or death of any person or damage to
or destruction of property occurring in, on or about the Premises from any cause
whatsoever or on account of the use, condition, occupational safety or occupancy
of the Premises. Tenant shall further hold Landlord harmless from and defend
Landlord against any claim, liability, loss, damage or expense (including
reasonable attorney fees) arising (i) from Tenant's use of the Premises or from
the conduct of its business or from any activity or work done, permitted or
suffered by Tenant or its agents or employees in or about the Premises or
Project, (ii) out of the failure of Tenant to observe or comply with Tenant's
obligation to observe and comply with laws or other requirements as set forth in
paragraph 7, (iii) by reason of Tenant's use, handling, storage, or disposal of
toxic or hazardous materials or waste, (iv) by reason of any labor or service
performed for, or materials used by or furnished to, Tenant or any contractor
engaged by Tenant with respect to the Premises, or (v) from any other act,
neglect, fault or omission of Tenant or its agents or employees. The provisions
of this paragraph 18 shall survive the expiration or earlier termination of this
lease.

                                      14

<PAGE>

19.      ASSIGNMENT AND SUBLETTING

         Tenant shall not voluntarily assign, encumber or otherwise transfer its
interest in this lease or in the premises, or sublease all or any part of the
Premises, or allow any other person, concessionaire or entity to occupy or use
all or any part of the Premises, without first obtaining Landlord's written
consent (which consent shall not be unreasonably withheld) and otherwise
complying with the requirements of this paragraph 19. Any assignment,
encumbrance or sublease without Landlord's consent, shall constitute a default.

         If Tenant desires to sublet or assign all or any portion of the
Premises, Tenant shall give Landlord written notice thereof, specifying the
projected commencement date of the proposed sublet or assignment (which date
shall be not less than thirty (30) days or more than ninety (90) days after the
date of such notice), the portions of the Premises proposed to be sublet or
assigned, and the identity of the proposed assignee or subtenant. Tenant shall
further provide Landlord with such other information concerning the proposed
assignee or subtenant as requested by Landlord. Any proposed assignee or
sublessee must agree to assume and agree to perform all the covenants and
conditions of Tenant under this lease. Tenant shall be free to assign or sublet
all or a portion of the Premises subject to the following conditions: (i) any
sublease shall be on the same terms set forth in the notice given to Landlord;
(ii) no sublease shall be valid and no subtenant shall take possession of the
sublet premises until an executed counterpart of such sublease has been
delivered to Landlord; (iii) no subtenant shall have a further right to sublet;
(iv) fifty percent (50%) of any sums or other economic consideration received by
Tenant as a result of such assignment or sublet (except rental or other payments
received which are attributable to the amortization over the term of this lease
of the cost of leasehold improvements constructed for such assignees or
subtenant, and brokerage fees) whether denominated rentals or otherwise, which
exceed, in the aggregate, the total sums which Tenant is obligated to pay
Landlord under this lease (prorated to reflect obligations allocable to that
portion of the Premises subject to such sublease), shall be payable to Landlord
as additional rent under this lease without affecting or reducing any other
obligation of Tenant hereunder; and (v) no sublet or assignment shall release
Tenant of Tenant's obligation or alter the primary liability of Tenant to pay
the rent and to perform all other obligations to be performed by Tenant
hereunder. Tenant shall pay to Landlord promptly upon demand as additional rent,
Landlord's actual and reasonable attorneys' fees and other costs incurred for
reviewing, processing or documenting any requested assignment or sublease,
whether or not Landlord's consent is granted. Tenant shall not be entitled to
assign this lease or sublease all or any part of the Premises (and any attempt
to do so shall be voidable by Landlord) during any period in which Tenant is in
default under this lease.

         If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution of
the partnership shall be deemed an assignment of this lease subject to all the
conditions of this paragraph 19. If Tenant is a corporation any dissolution,
merger, consolidation or other reorganization of Tenant or the sale or other
transfer of a controlling percentage of the capital stock of Tenant or the sale
of more than fifty percent (50%) of the value of Tenant's assets shall be an
assignment of this lease subject to all the conditions of this paragraph 19. The
term "controlling percentage" means the ownership of, and the right to vote,
stock possessing more than 50% of the total combined voting power of all classes
of Tenant's capital stock issued, outstanding and entitled to vote. This
paragraph shall not apply if Tenant is a corporation the stock of which is
traded through an exchange.

                                      15

<PAGE>

         The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment or
sublet. In the event of default by any assignee of Tenant or any successor of
Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or
sublets of this lease or amendments or modifications to this lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and such action shall not relieve
Tenant of liability under this lease.

         No interest of Tenant in this lease shall be assignable by operation of
law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a partnership
or consists of more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; (ii) if a writ of attachment or
execution is levied on this lease; or (iii) if, in any proceeding or action to
which Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute a default
by Tenant and Landlord shall have the right to elect to terminate this lease, in
which case this lease shall not be treated as an asset of Tenant.

         Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this lease, all rent from any subletting of all or a
part of the Premises as permitted by this lease, and Landlord, as assignee and
as attorney-in fact for Tenant, or a receiver of Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this lease; except that, until the occurrence of an act or default by
Tenant, Tenant shall have the right to collect such rent, subject to promptly
forwarding to Landlord any portion thereof to which Landlord is entitled
pursuant to this paragraph 19.

         Notwithstanding the above requirement that Tenant obtain the consent of
Landlord prior to any assignment or sublet, Tenant may, without obtaining the
prior consent of Landlord, assign or sublease the whole or any part of the
Premises to any corporation or other entity which is wholly owned by Tenant or
of which Tenant is a wholly owned subsidiary, or which is wholly owned by either
of the foregoing or which merges with Tenant provided that (i) Tenant shall give
written notice thereof to Landlord in the manner required for other assignments
or subleases by this paragraph 19; (ii) Tenant shall continue to be fully
obligated under this lease; (iii) any such assignee or sublessee shall expressly
assume and agree to perform all of the terms and conditions of this lease to be
performed by Tenant; and (iv) any such assignment of sublet shall be subject to
all other terms and conditions of this paragraph 19 pertaining to assignments
and/or sublets (excepting only the requirement concerning prior written consent
of Landlord).

20.      DEFAULT

         The occurrence of any of the following shall constitute a default by
Tenant: (i) failure of Tenant to pay any rent or other sum payable hereunder
within three (3) days of when due; (ii) abandonment of the Premises (Tenant's
failure to occupy and conduct business in the Premises

                                      16

<PAGE>

for fourteen (14) consecutive days shall be deemed an abandonment) unless
Tenant gives prior written notice to Landlord of its intention not to so
occupy the Premises, reaffirms its obligations under this lease including its
obligation to pay all sums due hereunder, provides adequate security for the
Premises and otherwise continues to perform each and every obligation to be
performed by Tenant under this lease and Tenant's failure to occupy in no
event exceeds six (6) months; or (iii) failure of Tenant to perform any other
term, covenant or condition of this lease if the failure to perform is not
cured within thirty (30) days after notice thereof has been given to Tenant
(provided that if such default cannot reasonably be cured within thirty (30)
days, Tenant shall not be in default if Tenant commences to cure such failure
to perform within the thirty (30) day period and diligently and in good faith
continues to cure the failure to perform). The notice referred to in clause
(iii) above shall specify the failure to perform and the applicable lease
provision and shall demand that Tenant perform the provisions of this lease
within the applicable period of time. No notice shall be deemed a forfeiture
or termination of this lease unless Landlord so elects in the notice. No
notice shall be required in the event of abandonment or vacation of the
Premises.

         In addition to the above, the occurrence of any of the following events
shall also constitute a default by Tenant: (i) Tenant fails to pay its debts as
they become due or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors; (ii) any financial statements
given to Landlord by Tenant, any assignee of Tenant, subtenant of Tenant, any
guarantor of Tenant, or successor in interest of Tenant (including, without
limitation, any schedule of Tenant's aged accounts payable) are materially
false. At any time during the term of this lease Landlord, at Landlord's option,
shall have the right to receive from Tenant upon Landlord's request, a current
annual balance sheet for Landlord's review.

         In the event of a default by Tenant, then Landlord, in addition to any
other rights and remedies of Landlord at law or in equity, shall have the right
either to terminate Tenant's right to possession of the Premises (and thereby
terminate this lease) or, from time to time and without termination of this
lease, to relet the premises or any part thereof for the account and in the name
of Tenant for such term and on such terms and conditions as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises.

         Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord's rights and remedies
under this lease, including but not limited to the right to recover and to relet
the Premises. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in
such reletting and in making alterations and repairs. Rentals received by
Landlord from such reletting shall be applied (i) to the payment of any
indebtedness due hereunder, other than basic rent and common area charges, from
Tenant to Landlord; (ii) to the payment of the cost of any repairs necessary to
return the Premises to good condition normal wear and tear excepted, including
the cost of alterations and the cost of storing any of Tenant's property left on
the Premises at the time of reletting; and (iii) to the payment of basic rent or
common area charges due and unpaid hereunder. The residue, if any, shall be held
by Landlord and applied in payment of future rent or damages in the event of
termination as the same may become due and payable hereunder and the balance, if
any at the end of the term of this lease, shall be paid to Tenant. Should the
basic rent and common area charges received from time to time from such
reletting during any month be less than that agreed to be paid during that month
by Tenant hereunder, Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such reletting of the
Premises by Landlord shall

                                      17

<PAGE>

be construed as an election on its part to terminate this lease unless a
notice of such intention is given to Tenant or unless the termination hereof
is decreed by a court of competent jurisdiction. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect to
terminate this lease for such previous breach, provided it has not been cured.

         Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right of
entry and may remove all persons and property from the Premises and shall have
all the rights and remedies of a landlord provided by California Civil Code
Section 1951.2 or any successor code section. Upon such termination, in addition
to all its other rights and remedies, Landlord shall be entitled to recover from
Tenant all damages it may incur by reason of such breach, including the cost of
recovering the Premises and including (i) the worth at the time of 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 Tenant proves could have been reasonably avoided; (iii) the
worth at the time of the award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this lease or which in the
ordinary course of events would be likely to result therefrom. The "worth at the
time of award of the amounts referred to in (i) and (ii) above is computed by
allowing interest at the rate of twelve percent (12%) per annum. The "worth at
the time of award of the amount referred to in (iii) above shall be computed by
discounting such amount at the discount rate of the federal reserve bank of San
Francisco at the time of award plus one percent (1%). Property removed from the
Premises may be stored in a public or private warehouse or elsewhere at the sole
cost and expense of Tenant. In the event that Tenant shall not immediately pay
the cost of storage of such property after the same has been stored for a period
of thirty (30) days or more, Landlord may sell any or all thereof at a public or
private sale in such manner and at such times and places that Landlord, in its
sole discretion, may deem proper, without notice to or demand upon Tenant.

21.      LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT

         Landlord, at any time after Tenant commits a default, may, but shall
not be obligated to, cure the default at Tenant's cost. If Landlord at any time,
by reason of Tenant's default, pays any sum or does any act that requires the
payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord and shall bear interest at the rate of twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less, from the date
the sum is paid by Landlord until Landlord is reimbursed by Tenant. Amounts due
Landlord hereunder shall be additional rent.

22.      EMINENT DOMAIN

         If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payments, income, rent, award or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance. Tenant shall

                                      18

<PAGE>

have no claim against Landlord or otherwise for the value of any unexpired
term of this lease. Notwithstanding the foregoing, Tenant shall be entitled
to any compensation for depreciation to and cost of removal of Tenant's
equipment and fixtures and any compensation for its relocation expenses
necessitated by such taking, but in each case only to the extent the
condemning authority makes a separate award therefor or specifically
identifies a portion of the award as being therefor. Each party waives the
provisions of Section 1265.130 of the California Code of Civil Procedure
(which section allows either party to petition the Superior Court to
terminate this lease in the event of a partial taking of the Premises).

         If any action or proceeding is commenced for such taking of the
Premises or any portion thereof or of any other space in the Project, or if
Landlord is advised in writing by any entity or body having the right or power
of condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to discontinue
the use and operation of the Project or decide to demolish, alter or rebuild the
Project, then Landlord shall have the right to terminate this lease by giving
Tenant written notice thereof within sixty (60) days of the earlier of the date
of Landlord's receipt of such notice of intention to condemn or the commencement
of said action or proceeding. Such termination shall be effective as of the last
day of the calendar month next following the month in which such notice is given
or the date on which title shall vest in the condemnor, whichever occurs first.
In the event of a partial taking, or conveyance in lieu thereof, of the Premises
and fifty percent (50%) or more of the number of square feet in the Premises are
taken then Tenant may terminate this lease. Any election by Tenant to so
terminate shall be by written notice given to Landlord within sixty (60) days
from the date of such taking or conveyance and shall be effective on the last
day of the calendar month next following the month in which such notice is given
or the date on which title shall vest in the condemnor, whichever occurs first.

         If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this lease
is provided above, then this lease shall continue in full force and effect as to
the part of the Premises not so taken or conveyed and all payments of rent shall
be apportioned as of the date of such taking or conveyance so that thereafter
the amounts to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken bears to the total area of the Premises
prior to such taking.

23.      NOTICE AND COVENANT TO SURRENDER

         On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises and all of Tenant's
improvements and alterations in their condition existing as of the commencement
of the term (normal wear and tear excepted), with all originally painted
interior walls washed or repainted if marked or damaged, interior vinyl covered
walls cleaned and repaired or replaced if marked or damaged, all carpets
shampooed and cleaned, the air conditioning and heating system serviced and
repaired by a reputable and licensed service firm (unless Landlord has elected
to maintain such system pursuant to paragraph 8) and all floors cleaned and
waxed; all to the reasonable satisfaction of Landlord, Tenant shall remove all
of Tenant's personal property and trade fixtures, together with improvements or
alterations that Tenant is obligated to remove pursuant to the provisions of
paragraph 8, from the Premises, and all such property not removed shall be
deemed abandoned.

                                      19

<PAGE>

         If the Premises are not surrendered as required in this paragraph,
Tenant shall indemnify Landlord against all loss, liability and expense
(including but not limited to, attorney fees) resulting from the failure by
Tenant in so surrendering the Premises, including, without limitation, any
claims made by any succeeding tenants. It is agreed between Landlord and Tenant
that the provisions of this paragraph shall survive termination of this lease.

24.      TENANT'S QUITCLAIM

         At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required to
remove the cloud or encumbrance created by this lease from the real property of
which the Premises are a part. This obligation shall Survive said expiration or
termination.

25.      HOLDING OVER

         Any holding over after the expiration or termination of this lease with
the written consent of Landlord shall be construed to be a tenancy from month to
month at the monthly rent as adjusted, in effect on the date of such expiration
or termination. All provisions of this lease, except those pertaining to the
term and any option to extend, shall apply to the month to month tenancy. The
provisions of this paragraph are in addition to, and do not affect, Landlord's
right of reentry or other rights hereunder or provided by law.

         If Tenant shall retain possession of the Premises or any part thereof
without Landlord's consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention double the amount of the daily rental in effect during the last
month prior to the date of such expiration or termination. Tenant shall also
indemnify and hold Landlord harmless from any loss, liability and expense
(including, but not limited to, attorneys fees) resulting from delay by Tenant
in surrendering the Premises, including without limitation any claims made by
any succeeding tenant founded on such delay. Acceptance of rent by Landlord
following expiration or termination shall not constitute a renewal of this
lease, and nothing contained in this paragraph shall waive Landlord's right to
re-entry or any other right. Tenant shall be only a Tenant at sufferance whether
or not Landlord accepts any rent from Tenant, while Tenant is holding over
without Landlord's written consent.

26.      SUBORDINATION

         In the event Landlord's title or leasehold interest is now or hereafter
encumbered in order to secure a loan to Landlord, Tenant shall, at the request
of Landlord or the lender, execute in writing an agreement subordinating its
rights under this lease to the lien of such encumbrance, or, if so requested,
agreeing that the lien of lender's encumbrance shall be or remain subject and
subordinate to the rights of Tenant under this lease. Tenant hereby irrevocably
appoints Landlord the attorney-in-fact of Tenant to execute, deliver and record
any such instrument or instruments for and in the name and on behalf of Tenant.
Notwithstanding any such subordination, Tenant's possession under this lease
shall not be disturbed if Tenant is not in default and so long as Tenant shall
pay all amounts due hereunder and otherwise observe and perform all provisions
of this lease. In addition, if in connection with any such loan the lender shall
request reasonable modifications of this lease as a condition to such financing,
Tenant will not unreasonably withhold, delay or defer its consent

                                      20

<PAGE>

thereof, provided that such modifications do not increase the obligations of
Tenant hereunder or materially adversely affect the leasehold interest hereby
created or Tenant's rights hereunder.

         In the event that any lender requires that this lease be subordinated
to any encumbrance recorded after the date of the lease affecting the Premises,
this lease shall be subordinate to that encumbrance and Tenant agrees to execute
in writing an agreement effecting such subordination, provided Landlord
exercises its good faith efforts to first obtain from such lender a
non-disturbance agreement that provides in substance that as long as Tenant
performs its obligation under this lease, no foreclosure of, deed given in lieu
of foreclosure of, or sale under the encumbrance, and no steps or procedures
taken under the encumbrance, shall affect Tenant's rights under this lease.

27.      CERTIFICATE OF ESTOPPEL

         Each party shall, within five (5) calendar days after request therefore
execute and deliver to the other party, in recordable form, a certificate
stating that the lease is unmodified and in full force and effect, or in full
force and effect as modified and stating the modifications. The certificate
shall also state the amount of the monthly rent, the date to which monthly rent
has been paid in advance, the amount of the security deposit and/or prepaid
monthly rent, and, if the request is made by Landlord, shall include such other
items as Landlord or Landlord's lender may reasonably request. Failure to
deliver such certificate within such time shall constitute a conclusive
acknowledgment by the party failing to deliver the certificate that the lease is
in full force and effect and has not been modified except as may be represented
by the party requesting the Certificate. Any such Certificate requested by
Landlord may be conclusively relied upon by any prospective purchaser or
encumbrance of the Premises or Project. Further, within five (5) calendar days
following written request made from time to time by Landlord, Tenant shall
furnish to Landlord current financial statements of Tenant.

28.      SALE BY LANDLORD

         In the event the original Landlord hereunder, or any successor owner of
the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner and to look solely to such new
owner for performance of any and all such liabilities and obligations.

29.      ATTORNMENT TO LENDER OR THIRD PARTY

         In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee title
interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by a lender or any other third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to release Landlord of any obligation arising on or
after any such foreclosure sale and to attorn to the purchaser at any such
foreclosure sale and to recognize such purchaser as the Landlord under this
lease.

                                      21

<PAGE>

30.      DEFAULT BY LANDLORD

         Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

         If Landlord is in default of this lease, Tenant's sole remedy shall be
to institute suit against Landlord in a court of competent jurisdiction, and
Tenant shall have no right to offset any sums expended by Tenant as a result of
Landlord's default against future rent and other sums due and payable pursuant
to this lease. If Landlord is in default of this lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title and interest of Landlord in the Project of
which the Premises are a part, and out of rent or other income from such real
property receivable by Landlord or out of the consideration received by Landlord
from the sale or other disposition of all or any part of Landlord's right, title
and interest in the Project of which the Premises are a part. Neither Landlord
nor any of the partners comprising the partnership designated as Landlord shall
be personally liable for any deficiency.

31.      CONSTRUCTION CHANGES

         It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such changes
as Landlord or Landlord's architect determines to be desirable in the course of
construction of the Premises and/or the improvements constructed or being
constructed therein and no such changes or any changes in plans for any other
portions of the Project, shall affect this lease or entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant.

32.      MEASUREMENT OF PREMISES

         Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions and
columns, one-half of exterior walls, and one-half of the partitions separating
the Premises from the rest of the Project, Tenant's proportionate share of the
Common Area and, if applicable, covered areas immediately outside the entry
doors or loading docks. Tenant waives any claim against Landlord regarding the
accuracy of any such measurement and agrees that there shall not be any
adjustment in basic rent or common area charges or other amounts payable
hereunder by reason of Inaccuracies in such measurement.

33.      ATTORNEY FEES

         If either party commences an action against the other party arising out
of or in connection with this lease, the prevailing party shall be entitled to
have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, reasonable attorney fees, expert witness
fees, trial and appellate court costs, and deposition and transcript expenses.
If either party becomes a party to any litigation concerning this lease, or
concerning the Premises or the Project, by

                                      22

<PAGE>

reason of any act or omission of the other party or its authorized
representatives, the party that causes the other party to become involved in
the litigation shall be liable to the other party for all expenses of
litigation reasonably incurred, including, without limitation, travel
expenses, attorney fees, expert witness fees, trial and appellate court
costs, and deposition and transcript expenses.

34.      SURRENDER

         The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not work a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.

35.      WAIVER

         No delay or omission in the exercise of any right or remedy of either
party on any default by the other party shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent rent
or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the balance
of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of this
lease.

36.      EASEMENTS; AIRSPACE RIGHTS

         Landlord reserves the right to alter the boundaries of the Project and
grant easements and dedicate for public use portions of the Project without
Tenant's consent, provided that no such grant or dedication shall interfere with
Tenant's use of the Premises or otherwise cause Tenant to incur cost or expense.
From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge
and deliver to Landlord, in accordance with Landlord's instructions, any and all
documents, instruments, maps or plats necessary to effectuate Tenant's covenants
hereunder.

         This lease confers no rights either with regard to the subsurface of or
airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees that
no diminution or shutting off of light or view by a structure which is or may be
erected (whether or not by Landlord) on property adjacent to the building of
which the Premises are a part or to property adjacent thereto, shall in any way
affect this lease, or entitle Tenant to any reduction of rent, or result in any
liability of Landlord to Tenant.

37.      RULES AND REGULATIONS

         Landlord shall have the right from time to time to promulgate rules and
regulations for the safety, care and cleanliness of the Premises, the Project
and the Common Area or for the preservation of good order. On delivery of a copy
of such rules and regulations to Tenant, Tenant

                                      23

<PAGE>

shall comply with the rules and regulations, and a violation of any of them
shall constitute a default by Tenant under this lease. If there is a conflict
between the rules and regulations and any of the provisions of this lease,
the provisions of this lease shall prevail. Such rules and regulations may be
amended by Landlord from time to time with or without advance notice.

38.      NOTICES

         All notices, demands, requests, consents and other communications which
may be given or are required to be given by either party to the other shall be
in writing and shall be sufficiently made and delivered if personally served or
if sent by United States first class mail, postage prepaid. Prior to the
commencement date, all such communications from Landlord to Tenant shall be
served or addressed to Tenant at 420 Cowper Street, Palo Alto, California 94301;
on or after the commencement date all such communications from Landlord to
Tenant shall be addressed to Tenant at the aforementioned address or the
Premises. All such communications by Tenant to Landlord shall be sent to
Landlord at its offices at P.O. Box 872, Los Altos, California 94023-0872; after
October 18, 1996 all such communications by Tenant to Landlord shall be sent to
Landlord at 360 S. San Antonio Road, Suite 14, Los Altos, California 94022.
Either party may change its address by notifying the other of such change. Each
such communication shall be deemed received on the date of the personal service
or mailing thereof in the manner herein provided, as the case may be.

39.      NAME

         Tenant shall not use the name of the Project for any purpose, other
than as the address of the business conducted by Tenant in the Premises, without
the prior written consent of Landlord.

40.      GOVERNING LAW; SEVERABILITY

         This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be held or rendered invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.

41.      DEFINITIONS

         As used in this lease, the following words shall have the following and
phrases meanings:

         AUTHORIZED REPRESENTATIVE: any of officer, agent, employee or
independent contractor retained or employed by either party, acting within
authority given him by that party.

         ENCUMBRANCE: any deed of trust, mortgage or other written security
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the note
or obligation secured by such deed of trust, mortgage or other written security
device or agreement.

         LEASE MONTH: the period of time determined by reference to the day of
the month in which the term commences and continuing to one day short of the
same numbered day in the next succeeding month; e.g., the tenth day of one month
to and including the ninth day in the next succeeding month.

                                      24

<PAGE>

         LENDER: the beneficiary, mortgagee or other holder of an encumbrance,
as defined above.

         LIEN: a charge imposed on the Premises by someone other than Landlord,
by which the Premises are made security for the performance of an act. Most of
the liens referred to in this lease are mechanic's liens.

         MAINTENANCE: repairs, replacement, repainting and cleaning.

         MONTHLY RENT: the sum of the monthly payments of basic rent and common
area charges.

         PERSON: one or more human beings, or legal entities or other artificial
persons, including, without limitation, partnerships, corporations, trusts,
estates, associations and any combination of human being and legal entities.

         PROVISION: any term, agreement, covenant, condition, clause,
qualification, restriction, reservation or other stipulation in the lease that
defines or otherwise controls, establishes or limits the performance required or
permitted by either party.

         RENT: basic rent, common area charges, additional rent, and all other
amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease.

         Words used in any gender include other genders. If there be more than
one Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.

42.      TIME

         Time is of the essence of this lease and of each and all of its
provisions.

43.      EXAMINATION OF LEASE

         Submission of this lease for examination or signature by Tenant does
not constitute a reservation or option for a lease, and this lease is not
effective until its execution and delivery by both Landlord and Tenant.

44.      INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE

         Any amount due from Tenant to Landlord hereunder which is not paid when
due shall bear interest at the rate of ten percent (10%) per annum from when due
until paid, unless otherwise specifically provided herein, but the payment of
such interest shall not excuse or cure any default by Tenant under this lease.
In addition, Tenant acknowledges that late payment by Tenant to Landlord of
basic rent or common area charges or of any other amount due Landlord from
Tenant, will cause Landlord to incur costs not contemplated by this lease, the
exact amount of such costs being extremely difficult and impractical to fix.
Such costs include, without limitation, processing and accounting charges, and
late charges that may be imposed on Landlord, e.g., by the terms of any

                                      25

<PAGE>

encumbrance and note secured by any encumbrance covering the Premises.
Therefore, if any such payment due from Tenant is not received by Landlord when
due, Tenant shall pay to Landlord an additional sum of five percent (5%) of the
overdue payment as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. Acceptance of any late charge shall not
constitute a waiver of Tenant's default with respect to the overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies available
to Landlord. No notice to Tenant of failure to pay shall be required prior to
the imposition of such interest and/or late charge, and any notice period
provided for in paragraph 20 shall not affect the imposition of such interest
and/or late charge.

45.      ENTIRE AGREEMENT

         This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
by an instrument in writing signed by both Landlord and Tenant. Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves or their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this lease.

46.      CORPORATE AUTHORITY

         If Tenant is a corporation, each individual executing this lease on
behalf of the corporation represents and warrants that he is duly authorized to
execute and deliver this lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation and that
this lease is binding upon said corporation in accordance with its terms. If
Tenant is a corporation, Tenant shall deliver to Landlord, within ten (10) days
of the execution of this lease, a copy of the resolution of the Board of
Directors of Tenant authorizing the execution of this lease and naming the
officers that are authorized to execute this lease on behalf of Tenant, which
copy shall be certified by Tenant's president or secretary as correct and in
full force and effect.

47.      RECORDING

         Neither Landlord nor Tenant shall record this lease nor any short form
memorandum heretofore without the consent of the other.

48.      REAL ESTATE BROKERS

         Each party represents that it his not had dealings with any real estate
broker finder or other person with respect to this lease in any manner, except
Cornish & Carey Commercial-Oncor International and BT Commercial Real Estate.
Each party shall hold harmless the other party from all damages resulting from
any claims that may be asserted against the other party by any broker, finder or
other person with whom the other party has or purportedly has dealt.

49.      EXHIBITS AND ATTACHMENTS

         All exhibits and attachments to this lease are a part hereof.

                                      26

<PAGE>

50.      ENVIRONMENTAL MATTERS

         A.       TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS.

                  (1) HAZARDOUS MATERIALS HANDLING. Except for use incidental to
customary office cleaning and office maintenance, Tenant, its agents, invitees,
employees, contractors, sublessee, assigns and/or successors shall not use,
store, dispose, release or otherwise cause to be present or permit the use,
storage, disposal, release or presence of Hazardous Materials (as defined below)
on or about the Premises or Project. As used herein "Hazardous Materials" shall
mean any petroleum or petroleum byproducts, flammable explosives, asbestos, urea
formaldehyde, radioactive materials or waste and any "hazardous substance",
"hazardous waste", "hazardous materials", "toxic substance" or "toxic waste" as
those terms are defined under the provisions of the California Health and Safety
Code and/or the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as amended by
the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9601
et seq.), or any other hazardous or toxic substance, material or waste which is
or becomes regulated by any local governmental authority, the State of
California or any agency thereof, or the United States Government or any agency
thereof.

                  (2) NOTICES. Tenant shall immediately notify Landlord in
writing of: (i) any enforcement, cleanup, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any law,
regulation or ordinance relating to the industrial hygiene, environmental
protection or the use, analysis, generation, manufacture, storage, presence,
disposal or transportation of any Hazardous Materials (collectively "Hazardous
Materials Laws"); (ii) any claim made or threatened by any person against
Tenant, the Premises, Project or buildings within the Project relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or claimed to result from any Hazardous Materials; and (iii) any reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or removed from the Premises, Project or buildings within the
Project, including any complaints, notices, warnings, reports or asserted
violations in connection therewith. Tenant shall also supply to Landlord as
promptly as possible, and in any event within five (5) business days after
Tenant first receives or sends the same, with copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to the
Premises, Project or buildings within the Project or Tenant's use thereof.
Tenant shall promptly deliver to Landlord copies of hazardous waste manifests
reflecting the legal and proper disposal of all Hazardous Materials removed from
the Premises.

         B. INDEMNIFICATION OF LANDLORD. Tenant shall indemnify, defend (by
counsel acceptable to Landlord), protect, and hold Landlord, and each of
Landlord's partners, employees, agents, attorneys, successors and assigns, free
and harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
injury to any person or damage to any property whatsoever (including water
tables and atmosphere), arising from or caused in whole or in part, directly or
indirectly, by (i) the presence in, on, under or about the Premises, Project or
buildings within the Project or discharge in or from the Premises, Project or
buildings within the Project of any Hazardous Materials or Tenant's use,
analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under, about or from
the Premises, Project or buildings within the Project, or (ii) Tenant's failure
to comply with any Hazardous Materials Laws whether knowingly, unknowingly,

                                      27

<PAGE>

intentionally or unintentionally. Tenant's obligations hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repair, cleanup or detoxification or decontamination of
the Premises, Project or buildings within the Project, and the preparation and
implementation of any closure, remedial action or other required plans in
connection therewith, In addition, Tenant shall reimburse Landlord for (i)
losses in or reductions to rental income resulting from Tenant's use, storage or
disposal of Hazardous Materials, (ii) all costs of refitting or other
alterations to the Premises, Project or buildings within the Project required as
a result of Tenant's use, storage, or disposal of Hazardous Materials including,
without limitation, alterations required to accommodate an alternate use of the
Premises, Project or buildings within the Project, and (iii) any diminution in
the fair market value of the Premises, Project or buildings within the Project
caused by Tenant's use, storage, or disposal of Hazardous Materials. For
purposes of this paragraph 50, any acts or omissions of Tenant, or by employees,
agents, assignees, contractors or subcontractors of Tenant or others acting for
or on behalf of Tenant (whether or not they are negligent, intentional, willful
or unlawful) shall be strictly attributable to Tenant.

         C. SURVIVAL. The provisions of this paragraph 50 shall survive the
expiration or earlier termination of the term of this lease.

         Notwithstanding provisions in this lease to the contrary, Tenant shall
have no obligation to clean up or to reimburse, release, indemnify, or defend
Landlord with respect to removal or liability respecting hazardous materials or
wastes unless the hazardous materials in question were stored, disposed,
transported, used, analyzed, released, threaten to be released or otherwise
caused to be present in or about the Premises or Project by Tenant or its
agents, employees, invitees, assignees, contractors or subcontractors or others
acting for or on behalf of Tenant (whether or not they are negligent,
intentional, willful or unlawfull).

51.      SIGNAGE

         Tenant shall not, without obtaining the prior written consent of
Landlord, install or attach any sign or advertising material on any part of the
outside of the Premises, or on any part of the inside of the Premises which is
visible from the outside of the Premises, or in the halls, lobbies, windows or
elevators of the building in which the Premises are located or on or about any
other portion of the Common Area or Project. If Landlord consents to the
installation of any sign or other advertising material, the location, size,
design, color and other physical aspects thereof shall be subject to Landlord's
prior written approval and shall be in accordance with any sign program
applicable to the Project. In addition to any other requirements of this
paragraph 51, the installation of any sign or other advertising material by or
for Tenant must comply with all applicable laws, statutes, requirements, rules,
ordinances and any C.C.&R.'s or other similar requirements. With respect to any
permitted sign installed by or for Tenant, Tenant shall maintain such sign or
other advertising material in good condition and repair and shall remove such
sign or other advertising material on the expiration or earlier termination of
the term of this lease. The cost of any permitted sign or advertising material
and all costs associated with the installation, maintenance and removal thereof
shall be paid for solely by Tenant. If Tenant fails to properly maintain or
remove any permitted sign or other advertising material, Landlord may do so at
Tenant's expense. Any cost incurred by Landlord in connection with such
maintenance or removal shall be deemed additional rent and shall be paid by
Tenant to Landlord within ten (10) days following notice from Landlord. Landlord
may remove any unpermitted sign or advertising material without notice to Tenant
and the

                                      28

<PAGE>

cost of such removal shall be additional rent and shall be paid by Tenant
within ten (10) days following notice from Landlord. Landlord shall not be
liable to Tenant for any damage, loss or expense resulting from Landlord's
removal of any sign or advertising material in accordance with this paragraph
51. The provisions of this paragraph 51 shall survive the expiration or
earlier termination of this lease.

         Notwithstanding the above, Landlord hereby consents to the installation
of a sign bearing Tenant's name and corporate logo so long as the location and
size of the sign is the same as that of the presently existing sign.
Installation of such sign is however subject to Landlord's approval of the signs
specific location, size, design and color which approval shall not be
unreasonably withheld.

52.      SUBMISSION OF LEASE

         The submission of this lease to Tenant is not an offer to lease the
Premises, or an agreement by Landlord to reserve the Premises for Tenant.
Landlord will not be bound to Tenant until Tenant has duly executed and
delivered duplicate original leases to Landlord and Landlord has duly executed
and delivered one of those duplicate original leases to Tenant.

53.      ADDITIONAL RENT

         All costs, charges, fees, penalties, interest and any other payments
(including Tenant's reimbursement to Landlord of costs incurred by Landlord)
which Tenant is required to make to Landlord pursuant to the terms and
conditions of this lease and any amendments to this lease shall be and
constitute additional rent payable by Tenant to Landlord when due as specified
in this lease and any amendments to this lease.

54.      PREMISES TAKEN "AS IS"

         Tenant is leasing the Premises from Landlord "as is" in its existing
condition as of the date hereof. Landlord shall have no obligation to alter or
improve the Premises except only to thoroughly clean the Premises and shampoo
the carpet as reasonably necessary and except for Landlord's obligation to make
all necessary repairs or replacements, at Landlord's expense, to the heating and
air conditioning systems necessary to maintain such systems in good working
order and repair during the first ninety (90) days of the lease pursuant to
paragraph 9 of this lease.

55.      OPTION TO EXTEND TERM

         Landlord grants to Tenant the option to extend the term for one period
of three (3) years (the "extended term") under all the provisions of this lease
except for the amount of the basic rent. The basic rent for the extended term
shall be adjusted to the market rate and the basic rent as so adjusted shall be
adjusted annually as provided below, provided that in no event shall the basic
rent for the extended term be less than the basic rent in effect at the
expiration of the initial term. This option is further subject to the following
terms and conditions:

                  (a) Tenant must deliver its irrevocable written notice of
Tenant's exercise of this option to Landlord not less than six (6) lease months,
nor more than twelve (12) lease months, prior to the expiration of the initial
term.

                                      29

<PAGE>

                  (b) The parties shall have thirty (30) days from the date
Landlord receives Tenant's notice of exercise in which to agree on the amount
constituting the market rate. If Landlord and Tenant agree on the amount of the
market rate, they shall immediately execute an amendment to this lease setting
forth the expiration date of the extended term and the amount of the basic rent
to be paid by Tenant during the extended term, including the annual adjustment
period. If Landlord or Tenant are unable to agree on the amount of the market
rate within such time period, then, at the request of either party, the market
rate shall be determined by appraisal in the following manner: (1) within thirty
(30) days of the request for such appraisal, Landlord and Tenant shall each
select a licensed real estate broker with not less than five (5) years
experience in the business of commercial leasing of property of the same type
and use, and in the same geographic area, as the Premises; (ii) within fifteen
days of their appointment, such two real estate brokers shall select a third
real estate broker similarly qualified; (iii) within thirty (30) days from the
appointment of the third broker, the three brokers so selected shall, acting as
a board of arbitrators, then appraise the Premises and determine the amount of
the market rate, basing their determination on using standard procedures and
tests normally employed in making such appraisals and applying the factors
included within the definition of market rate set forth in subparagraph (c)
below. The decision of the majority of said brokers shall be final and binding
upon the parties hereto. If a majority of the brokers are unable to agree on the
market rate within the stipulated period of time, the three appraisals shall be
added together and their total divided by three; the resulting quotient shall be
the market rate. If, however, the low appraisal and/or the high appraisal are/is
more than 15% lower and/or higher than the middle appraisal, the low appraisal
and/or the high appraisal, as the case may be, shall be disregarded. If only one
appraisal is disregarded, the remaining two appraisals shall be added together
and their total divided by two and the resulting quotient shall be the market
rate. If both the low appraisal and the high appraisal are disregarded as stated
in this paragraph, the middle appraisal shall be the market rate. If a party
does not appoint a broker within the required time period, the broker appointed
by the other party shall be the sole broker and shall determine the market rate.
If the two brokers appointed by the parties are unable to agree on the third
broker, either of the parties to the lease, by giving ten (10) days' notice to
the other party, can apply to the then county real estate board of the county in
which the Premises are located, or to the presiding judge of the superior court
of that county, for the selection of a third broker who meets the qualifications
stated in this paragraph. Each party shall pay the expenses and charges of the
broker appointed by it and the parties shall pay the expenses and charges of the
third broker in equal shares. When the market rate has been so determined,
Landlord and Tenant shall immediately execute an amendment to this lease stating
the revised basic rent and adjustment provision for the extended term.

                  (c) As used herein, the "market rate" shall be the monthly
rent (triple net) then obtained for leases of comparable terms for premises in
the Project and/or projects within the City of Sunnyvale of similar type,
identity, quality and location as the Project.

                  (d) Tenant shall not assign or otherwise transfer this option
or any interest therein and any attempt to do so shall render this option null
and void. Tenant shall have no right to extend this term beyond the extended
term. If Tenant is in default under this lease at the date of delivery of
Tenant's notice of exercise to Landlord, then Such notice shall be of no effect
and this lease shall expire at the end of the initial term; if Tenant is in
default under this lease at the last day of the initial term, then Landlord may
in its sole discretion elect to have Tenant's exercise of this option be of no
effect, in which case this lease shall expire at the end of the initial term.

                                      30

<PAGE>

56.      CAPITAL EXPENDITURES

         Notwithstanding anything to the contrary in paragraphs 7 and 8, (i) as
to any required capital improvement to the Premises having a useful life of more
than one year and which is not required by reason of Tenant's specific use of or
activities on the Premises, Landlord shall make such capital improvement and
Tenant shall pay to Landlord, as additional rent and in equal monthly
installments over the remaining term of this lease, the fraction of the cost of
such capital improvements equal to the remaining term of this lease over the
useful life of such capital improvement; (ii) as to any required capital
improvement to the common area having a useful life of more than one year and
which is not required by Tenant's specific use of or activities on the Premises,
the cost thereof shall be included within common area charges ratably over the
useful life of such capital improvement. Any determination of useful life, as
such term is used in this paragraph 56, shall be reasonably made by Landlord.

         IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this lease on the date first above written.

LANDLORD:                                          TENANT:

McCandless Properties, a                           Monolithic System Technology,
California Limited Partnership, A                   Inc., California corporation

By: /s/ Charles S. McCandless                      By: /s/ Fu-Chieh Hsu
   ------------------------------------------         --------------------------
Charles S. McCandless, as Trustee under the                   (signature)
Charles S. and Jean A. McCandless Inter Vivos
Trust Agreement dated January 25, 1977, a                     Fu-Chieh Hsu
General Partner                                       --------------------------
                                                             (Printed Name)

                                                                President
                                                      --------------------------
                                                                 (Title)

Date:          10-1-96                                Date:       9-26-96
     ----------------------------------------              ---------------------

                                      31<PAGE>
                                                                    Exhibit 10.8

                            FIRST AMENDMENT TO LEASE

     THIS FIRST AMENDMENT TO LEASE (hereinafter "Amendment") is made upon this
30th day of June 2000, by and between McCANDLESS PROPERTIES, a California
limited partnership (Landlord") and MONOLITHIC SYSTEM TECHNOLOGY, INC., a
California corporation ("Tenant").

                                    RECITALS
                                    --------

     A. Tenant currently leases from Landlord approximately eight thousand
(8,000) square feet of space located at 1020 Stewart Drive, California (the
"Initial Premises") pursuant to that certain lease dated September 24, 1996
("Lease"). The Initial Premises are shown on Exhibits A and B attached hereto.

     B. Tenant desires to expand the Premises by adding approximately eleven
thousand five hundred (11,500) square feet of additional space located at 1012
Stewart Drive, California (the "Expansion Space"). The Expansion Space is shown
on Exhibits A and C attached hereto .

     C. Tenant desires to extend the term of the Lease.

     D. Landlord is willing to so extend the term and to so expand the Premises
on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants and agreements contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

     1. PREMISES. Commencing on July 1, 2000, the Expansion Space shall be added
to the Initial Premises and, thereafter, the total area leased shall be
increased from approximately eight thousand (8,000) square feet to approximately
nineteen thousand five hundred (19,500) square feet.

     2. TERM. The term of the Lease is for the entire Premises, as expanded, is
hereby extended to, and shall include, June 30, 2005. The period commencing on
July 1, 2000 and ending on June 30, 2005 is referred to herein as the Second
Extended Term.

     3. BASIC RENT. Paragraphs 4 (a)and 5 of the Lease are hereby amended to
provide that as of July 1, 2000 the amount of basic rent due and payable under
the Lease shall be as set forth below:

     July 1, 2000 until October 31, 2000                  $48,575.00/mo.

<PAGE>

     November 1, 2000 until June 30, 2001                 $48,975.00/mo.

     July 1, 2001 until October 31, 2001                  $50,844.00/mo.

     November 1, 2001 until June 30, 2002                 $66,544.00/mo.

     July 1, 2002 until June 30, 2003                     $69,820.00/mo.

     July 1, 2003 until June 30, 2004                     $73,301.00/mo.

     July 1, 2004 until June 30, 2005                     $76,986.00/mo.

     The above basic monthly rent calculations are predicated on basic rent of
$3.25 per square foot per month triple net as of July 1, 2000 for the Expansion
Space with five percent (5%) annual increases thereafter and basic rent of $3.41
per square foot per month triple net as of November 1, 2001 for the Initial
Premises from November 1, 2001 until June 30, 2002 with five percent (5%) annual
increases thereafter. A spreadsheet showing the calculations and totals of basic
rent for each month is attached hereto as Exhibit D.

     4. COMMON AREA CHARGES. Commencing on the July 1, 2000, Tenant's
proportionate share of common area charges as set forth in paragraph 16 of the
Lease shall be increased from 40.03% to 100%.

     5. SECURITY DEPOSIT. Commencing on the July 1, 2000, Tenant shall deposit
with Landlord the sum of Twenty Six Thousand Eight Hundred and 00/100 Dollars
($26,800.00), which sum shall be held by Landlord as additional security deposit
under the terms described in paragraph 4 (e) of the Lease. Tenant's total
security deposit held by Landlord therefore shall be increased as of July 1,
2000 from Twenty Three Thousand Two Hundred and 00/100 Dollars ($23,200) to
Fifty Thousand and 00/100 Dollars ($50,000.00). Such security deposit shall not
be reduced by means of a rent credit or any other means and Tenant hereby waives
any further security deposit reductions as provided for in paragraph 4 (e)of the
Lease.

     6. PARKING. Commencing on the Effective Date, Tenant's right to the
non-exclusive use of the parking spaces, as defined in paragraph 15 of the
Lease, shall be increased to sixty-eight (68) spaces.

     7. EXPANSION SPACE TAKEN "AS IS". Tenant is leasing the Premises from
Landlord "as is" in its existing condition as of the date hereof. Landlord shall
have no obligation to alter or improve the Premises except only to clean the
Premises as reasonably necessary.

     Tenant acknowledges that, except as expressly contained in this lease,
neither Landlord nor anyone acting for or on behalf of Landlord has made any
representation, warranty or promise to Tenant concerning the physical aspects or
condition of any of the Project; the feasibility, desirability or convertibility
of any of the Project into any particular use; the zoning, building or land use
restrictions applicable to the zoning, building or land use restrictions
applicable to the Project; the projected income or expenses for any of the
Project or any business conducted thereon; the suitability of the Project for
any particular use; or the presence or absence of any Hazardous Materials; and
that in entering into this lease, Tenant has not relied upon any representation,

                                       2

<PAGE>

statement or warranty of Landlord or anyone acting for or on behalf of Landlord,
other than as expressly contained in this lease, and that all matters concerning
the Premises shall be independently verified by Tenant and that Tenant shall
enter into this lease on Tenant's own examination thereof (or Tenant's election
not to do so). Tenant does hereby waive, and Landlord does hereby disclaim, all
warranties of any type or kind whatsoever with respect to the Project, express
or implied, including by way of description, but not limitation, those of
fitness for a particular purpose, tenantability, habitability and use. Tenant
hereby expressly assumes the risk that adverse physical conditions and the full
extent thereof (including, without limitation, soil, groundwater and surface
water contamination and air pollution from Hazardous Materials) may not be
revealed by Tenant's inspections, reviews and studies of the Project prior to
the date of possession.

     No person acting on behalf of Landlord is authorized to make, and by
execution hereof Tenant acknowledges that no such person has made, any
representation, warranty, guaranty or promise except as may be expressly set
forth herein; and no agreement, statement, representation, guaranty or promise
made by any such person which is not expressly contained herein shall be valid
or binding on Landlord and Landlord's agents, heirs, successors or assigns. The
only representations or warranties outstanding with respect to the Project, or
Landlord, either express or implied by law, are expressly set forth herein.

     Tenant acknowledges that any and all documentary information, soil reports,
environmental audits, site assessments, analyses or reports, insurance policies
or other information of whatever type which Tenant has received or may receive
from Landlord or Landlord's agents is furnished on the express condition that
Tenant shall make Tenant's own independent verification of the accuracy and
completeness of such information. Tenant agrees that Tenant shall not attempt to
assert any liability upon Landlord or Landlord's agents for furnishing such
information and Tenant does hereby release Landlord and Landlord's agents,
heirs, successors and assigns free and harmless from and against, any and all
such claims or liability.

     8. ENVIRONMENTAL MATTERS.

          A. TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS.

               (1) Without limiting Tenant's obligations under paragraph 7 of
the Lease, Tenant shall comply with and shall cause the Project to comply with,
all federal, state, and local laws, statutes, rules, regulations, codes,
ordinances, and other governmental requirements (including, without limitation,
permits, licenses, consent decrees and administrative orders)now or hereafter in
effect relating or pertaining in any way to (i) human health, safety or
protection, (ii) workplace safety, (iii) industrial hygiene, (iv) the use,
generation, handling, maintenance, treatment, removal, transportation, storage,
release, discharge, disposal, or disclosure of Hazardous Materials, or (v) the
protection or regulation of the environment, all as amended and modified from
time to time (collectively, "Environmental Requirements"). Tenant shall cause
all governmental permits and other approvals relating to the use or operation of
the Project required by applicable Environmental Requirements or any other
applicable laws to all times remain in effect, and Tenant shall at all times
comply with such permits and other approvals.

               (2) Tenant shall not cause, or permit to occur, any release,
discharge, use, generation, manufacture, storage, treatment, transportation, or
disposal by Tenant or any of its

                                       3

<PAGE>

employees, agents, contractors, visitors, clients, customers, sublessees,
assignees, successors, licensees or invitees, of any Hazardous Materials on, in,
under, about, or from the Premises or any other part of the Project. However,
notwithstanding the foregoing, Tenant may use on the Premises, without
Landlord's prior written consent, but only upon written notice to Landlord and
in compliance with all Environmental Requirements and other applicable laws, any
ordinary and customary materials reasonably required for use by Tenant in the
normal course of the permitted use described in paragraph 1 hereof and further,
but only so long as such use is not a Reportable Use (defined below)and does not
expose the Premises or any other part of the Project or neighboring properties
to any meaningful risk of contamination or damage or expose Landlord to any
liability whatsoever therefor. In addition, Landlord may (but without any
obligation to do so) condition its consent to any Reportable Use of any
Hazardous Materials by Tenant upon Tenant's giving Landlord such additional
assurances as Landlord in its sole discretion, deems necessary to protect
itself, the public, the Premises, the Project, and the environment against
damage, contamination or injury and/or liability therefor, including but not
limited to the installation (and, at Landlord's option, removal on or before the
expiration or earlier termination of this lease) of reasonably necessary
protective modifications to the Premises (such as concrete encasement) and/or
the deposit of an additional security deposit. As used herein, "Reportable Use"
shall mean (i) the installation or use of any above or below ground storage
tank, (ii) the release, generation, possession, storage, use, transportation,
discharge or disposal of any Hazardous Materials 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 agency or authority, and (iii) the
presence in, on or about the Premises, the Project of any Hazardous Materials
with respect to which any Environmental Requirements or other applicable laws
require that a notice be given to persons entering or occupying the Premises,
the Project or neighboring properties.

               (3) If Tenant knows, or has reasonable cause to believe, that any
Hazardous Materials have come to be located in, on, under or about the Premises
or the Project (other than those Hazardous Materials that have come to be
located beneath and/or in the vicinity of the Project prior to the date of this
lease and other than those Hazardous Materials as previously consented to by
Landlord in writing, if any), to by Landlord, Tenant shall immediately give
Landlord 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 Materials including but not limited to all such documents as
may be involved in any Reportable Use involving the Premises or the Project.
Landlord's receipt of any notice, documents or other information from Tenant as
provided above in this paragraph shall not create any obligation on the part of
Landlord to respond in any way to such notice, documents or information or the
conditions described therein.

               (4) Tenant shall immediately notify Landlord and provide copies
upon receipt of all written complaints, claims, citations, demands, inquiries,
reports, or notices relating to the condition of the Premises or compliance with
Environmental Requirements (provided, however, that Landlord's receipt of any of
the foregoing shall in no way create or impose any duty or obligation upon
Landlord to respond thereto. Tenant shall promptly cure and have dismissed with
prejudice any of those actions and proceedings to the satisfaction of Landlord.

                                       4
<PAGE>

               (5) Landlord, its agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground
leases on the Premises or Project shall have the right, but not the obligation,
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 Tenant with this lease (including compliance
with Environmental Requirements)and Landlord shall be entitled to employ experts
and/or consultants in connection therewith to advise Landlord with respect to
Tenant's activities, including but not limited to Tenant's use, storage,
handling, transportation, maintenance, or removal of any Hazardous Materials 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
Tenant or a violation of any Environmental Requirement or a contamination caused
or materially contributed to by the Tenant is found to exist or to be imminent ,
or unless the inspection is requested or ordered by a governmental agency or
authority as the result of any such existing or imminent violation or
contamination, in such case, Tenant shall upon request reimburse Landlord, for
the costs and expenses of such inspections.

               (6) If Tenant breaches any of its warranties, representations, or
covenants under this paragraph 8, Landlord may, without obligation, cause the
removal (or other cleanup or other response acceptable to Landlord) of any
Hazardous Materials from the Project, and the costs of any Hazardous Materials
removal, remediation, detoxification, or other response (including, without
limitation, disposal, transportation and storage costs and all costs of
refitting or otherwise altering the Premises or any other part of the Project
shall be covered by the indemnity in paragraph 8B, below, whether or not a court
or other governmental authority has ordered such removal, remediation,
detoxification or other response and those costs shall become due and payable on
demand by Landlord. Tenant shall give Landlord, its agents, contractors, and
employees access to the Premises to remove, remediate, detoxify, clean up or
otherwise respond to any Hazardous Materials, and this lease shall not be
construed as creating any such obligation.

          B. INDEMNIFICATION OF LANDLORD. Tenant agrees to indemnify, defend
(with counsel acceptable to Landlord and at Tenant's sole cost), and hold
Landlord and Landlord's partners, employees, agents, attorneys, successors and
assigns free and harmless from and against any and all losses, liabilities,
obligations, penalties, claims, litigation, orders, demands, defenses, costs,
judgments, suits, penalties, proceedings, damages (including, without
limitation, consequential damages, diminution of the value of the Premises or
Project, disbursements, losses, or expenses of any kind (including, without
limitation, attorneys' and experts' fees and expenses incurred in investigating,
defending, or prosecuting any litigation, claim, or proceeding) that may at any
time be imposed upon, suffered by, incurred by, or asserted or awarded against
Landlord or any of its partners, employees, agents, attorneys, successors or
assigns in connection with or arising directly or indirectly out of:

               (1) Any release, threatened release, discharge, handling, use,
storage, presence, transportation, or disposal of any Hazardous Materials
(whether or not the use thereof is a Reportable Use or has been consented to by
Landlord on, in, under, or affecting all or any part of the Premises or Project
which is (or are) attributable, in whole or in part, directly or indirectly, to
any act or omission of Tenant or any employee, agent, contractor, visitor,
client, customer, sublessee, assignee, successor, licensee or invitee of Tenant;

                                       5

<PAGE>

               (2) Any misrepresentation, inaccuracy, or breach of any warranty,
covenant, or agreement contained or referred to in this paragraph 8;

               (3) Any failure by Tenant or any employee, agent, contractor,
visitor, customer, sublessee, assignee, successor, client, licensee or invitee
of Tenant to comply with any Environmental Requirement or other applicable law,
whether such failure was made knowingly or unknowingly or intentionally or
unintentionally.

     This indemnification is the personal obligation of Tenant and shall
survive the expiration or sooner termination of this lease. Tenant, its
successors, and assigns waive, release, and agree not to make any claim or
bring any cost recovery action against Landlord under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended and
reauthorized to date (42 U.S.C. Sections 9601 et seq.) ("CERCLA"), or any
state equivalent or any similar law now existing or enacted after this date.
To the extent that Landlord is strictly liable under any such law,
regulation, ordinance, or requirement, Tenant's obligation to Landlord under
this indemnity shall also be without regard to fault on the part of Tenant
with respect to the violation or condition that results in liability to
Landlord.

          C. DEFINITION OF HAZARDOUS MATERIALS. "Hazardous Materials" means any
product substance, chemical, material or waste whose presence, nature, quantity
and/or intensity or existence, use, manufacture, disposal, transportation,
spill, release, or effect, either by itself or in combination with any other
materials, substances or chemicals is either (i) potentially injurious or
harmful to the public health, safety or welfare, the Premises, or the
environment (including, without limitation, any soil, air, groundwater, and
subsurface media on, in, under, above or about the Project); (ii) regulated or
monitored by any federal, state or local governmental authority; or (iii) a
basis for potential liability of Landlord to any governmental agency, private
party, or other third party under any Environmental Requirement or any other
applicable statute, regulation, code, ordinance or common law theory. Without
limiting the scope or generality of the foregoing, Hazardous Materials shall
include, but not be limited to any petroleum or petroleum byproducts or
petroleum hydrocarbons, flammable explosives, asbestos, urea formaldehyde,
radioactive materials or waste and any "hazardous substance" or "toxic waste" as
those terms are defined under the provision of the California Health and Safety
Code and/or CERCLA.

          D. DISCLOSURE. Tenant represents to Landlord that Tenant is aware that
detectable amounts of hazardous substances and groundwater contaminants have
come to be located beneath and/or in the vicinity of the Project. (See, for
example, California Regional Water Quality Control Board order No. 96-135)
Tenant has made such investigations and inquiries as it deems appropriate to
ascertain the effects, if any, of such substances and contaminants on its
operations and persons using the Project. Landlord makes no representation or
warranty with regard to the environmental condition of the Project. Tenant and
its affiliated entities and their respective partners, employees, successors and
assigns, hereby covenant and agree not to sue and forever release and discharge
Landlord, and its trustees, officers, directors, agents and employees for and
from any and all claims, losses, damages, causes of action and liabilities,
arising out of hazardous substances or groundwater contamination presently
existing on, under or emanating from the Project.

          E. SURVIVAL. The provisions of this paragraph 8 shall survive the
expiration or earlier termination of the term of this lease.

                                       6

<PAGE>

     Notwithstanding provisions in this lease to the contrary, Tenant shall have
no obligation to clean up or to reimburse, release, indemnify, or defend
Landlord with respect to removal or liability respecting hazardous materials or
wastes unless the hazardous materials in question were stored, disposed,
transported, used, analyzed, released, threaten to be released or otherwise
caused to be present in or about the Premises or Project by Tenant or its
agents, employees, invitees, assignees, contractors or subcontractors or others
acting for or on behalf of Tenant (whether or not they are negligent,
intentional, willful or unlawful).

     9. BROKERS. Each party represents that it has not had any dealings with any
real estate broker, finder or other person with respect to this Amendment or
expanding the Premises, and that there are no leasing commissions to be paid by
Landlord or Tenant in connection with this transaction. Each party hereto shall
hold harmless the other party from all damages, loss or liability resulting from
any claims that may be asserted against the other party by any broker, finder or
other person with whom such party has dealt, or purportedly has dealt, in
connection with this transaction.

     10. OPTION TO EXTEND TERM. Notwithstanding the provisions of this Amendment
extending the term of the lease, Tenant shall not be deemed to have exercised
its option to extend the term of the Lease as described in paragraph 55 of the
Lease and such option shall remain effective as described in paragraph 55 of the
Lease.

     11. SUBJECT TO TERMINATION AGREEMENT. Notwithstanding the above, the
validity and effectiveness of this Amendment is subject to and contingent upon
Landlord's receipt of a valid and fully executed termination agreement from the
existing tenant in the Expansion Space, Calient Networks, Inc. (formerly
Chromisys, Inc.), terminating such tenant's lease of the Expansion Space as of
June 30, 2000.

     12. RESTATEMENT OF OTHER LEASE TERMS. Except as specifically modified
herein, all other terms, covenants and conditions of the Lease, including
Tenant's obligation to pay common area charges, shall remain in full force and
effect.

                         SPACE INTENTIONALLY LEFT BLANK

                                       7

<PAGE>

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

LANDLORD:                                     TENANT:

McCANDLESS PROPERTIES,                        Monolithic System Technology, Inc.
a California limited partnership              a California corporation

By:                                           By:
   ---------------------------------------       ------------------------------
Jean A. McCandless, as Trustee under the
Charles S. McCandless and Jean A. McCandless
Inter Vivos Trust Agreement dated January 25, ---------------------------------
1977, a General Partner                                  (Printed Name)

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

            7-9-00                                       July 5, 2000
------------------------------------------    ---------------------------------
            (Date)                                           (Date)

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]