1160 Bordeaux Drive (Sunnyvale, CA) Lease - AMB Property LP and SonicWALL Inc.


                                     LEASE



                                     DATED

                              SEPTEMBER 27, 1999



                                BY AND BETWEEN



                              AMB PROPERTY, L. P.

                                  as Landlord


                                      and



                                SONICWALL, INC.

                                   as Tenant



                     AFFECTING PREMISES COMMONLY KNOWN AS



                              1160 BORDEAUX DRIVE
                                 SUNNYVALE, CA

                                       i

 
                               TABLE OF CONTENTS



                                                                    Page
                                                                    
1.   Basic Provisions                                                1
     1.1  Parties                                                    1
     1.2  Premises                                                   1
     1.3  Term                                                       1
     1.4  Base Rent                                                  1
     1.5  Tenant's Share of Operating Expenses                       1
     1.6  Tenant's Estimated Monthly Rent Payment                    1
     1.7  Security Deposit                                           1
     1.8  Permitted Use                                              1
     1.9  Guarantor                                                  1
     1.10 Addenda and Exhibits                                       1
     1.11 Address for Rent Payments                                  1
     
2.   Premises, Parking and Common Areas                              2
     2.1  Letting                                                    2
     2.2  Common Areas - Definition                                  2
     2.3  Common Areas - Tenant's Rights                             2
     2.4  Common Areas - Rules and Regulations                       2
     2.5  Common Area Changes                                        2

3.   Term                                                            2
     3.1  Term                                                       2
     3.2  Delay in Possession                                        2
     3.3  Commencement Date Certificate                              2

4.   Rent                                                            2
     4.1  Base Rent                                                  2
     4.2  Operating Expenses                                         3

5.   Security Deposit                                                3
     
6.   Use                                                             4
     6.1  Permitted Use                                              4
     6.2  Hazardous Substances                                       4
     6.3  Tenant's Compliance with Requirements                      4
     6.4  Inspection:  Compliance with Law                           5
     
7.   Maintenance, Repairs, Trade Fixtures and Alterations            5
     7.1  Tenant's Obligations                                       5
     7.2  Landlord's Obligations                                     5
     7.3  Alterations                                                5
     7.4  Surrender/Restoration                                      6
     
8.   Insurance; Indemnity                                            6
     8.1  Payment of Premiums                                        6
     8.2  Tenant's Insurance                                         6
     8.3  Landlord's Insurance                                       6
     8.4  Waiver of Subrogation                                      6
     8.5  Indemnity                                                  6
     8.6  Exemption of Landlord from Liability                       7
     
9.   Damage or Destruction                                           7
     9.1  Termination Right                                          7
     9.2  Damage Caused by Tenant                                    7
     
10.  Real Property Taxes                                             7
     10.1 Payment of Real Property Taxes                             7
     10.2 Real Property Tax Definition                               7
     10.3 Additional Improvements                                    8
     10.4 Joint Assessment                                           8
     10.5 Tenant's Property Taxes                                    8
 

                                       i

 
 
                                                                   
11.  Utilities                                                       8

12.  Assignment and Subletting                                       8
     12.1  Landlord's Consent Required                               8
     12.2  Rent Adjustment                                           8

13.  Default; Remedies                                               8
     13.1  Default                                                   8
     13.2  Remedies                                                  9
     13.3  Late Charges                                              9

14.  Condemnation                                                    9
     
15.  Estoppel Certificate and Financial Statements                   9
     15.1  Estoppel Certificate                                      9
     15.2  Financial Statement                                       9
     
16.  Additional Covenants and Provisions                             9
     16.1  Severability                                              9
     16.2  Interest on Past-Due Obligations                          9
     16.3  Time of Essence                                           9
     16.4  Landlord Liability                                        9
     16.5  No Prior or Other Agreements                              9
     16.6  Notice Requirements                                       10
     16.7  Date of Notice                                            10
     16.8  Waivers                                                   10
     16.9  Holdover                                                  10
     16.10 Cumulative Remedies                                       10
     16.11 Binding Effect; Choice of Law                             10
     16.12 Landlord                                                  10
     16.13 Attorneys' Fees and Other Costs                           10
     16.14 Landlord's Access: Showing Premises; Repairs              10
     16.15 Signs                                                     11
     16.16 Termination: Merger                                       11
     16.17 Quiet Possession                                          11
     16.18 Subordination: Attornment; Non-Disturbance                11
     16.19 Rules and Regulations                                     11
     16.20 Security Measures                                         11
     16.21 Reservations                                              11
     16.22 Conflict                                                  12
     16.23 Offer                                                     12
     16.24 Amendments                                                12
     16.25 Multiple Parties                                          12
     16.26 Authority                                                 12
 
Signatures                                                           12
 

EXHIBIT A
EXHIBIT B
EXHIBIT C Not Applicable
EXHIBIT D
EXHIBIT E
EXHIBIT F
EXHIBIT G
EXHIBIT H
EXHIBIT I

                                       ii

 
                            AMB PROPERTY CORPORATION
                          INDUSTRIAL MULTI-TENANT LEASE


1.   Basic Provisions ("Basic Provisions").

     1.1    Parties: This Lease ("Lease") dated September 27, 1999, is made by
            -------
and between AMB Property, L.P., a Delaware limited partnership, ("Landlord") and
SonicWALL, Inc., a California corporation ("Tenant") (collectively the
"Parties," or individually a "Party").

     1.2    Premises: The area consisting of 32,256 square feet of leasable area
            --------
as outlined on Exhibit A attached hereto ("Premises"), of the building
("Building") located at 1160 Bordeaux Drive in the City of Sunnyvale, State of
California. The Building is located in the industrial center commonly known as
Moffett Park I & II (the "Industrial Center"). Tenant shall have non-exclusive
rights to the Common Areas (as defined in Paragraph 2.3 below), but shall not
have any rights to the roof, exterior walls or utility raceways of the Building
or to any other buildings in the Industrial Center. The Premises, the Building,
the Common Areas, the land upon which they are located and all other buildings
and improvements thereon are herein collectively referred to as the "Industrial
Center."

     1.3    Term: Five (5) years and Zero (0) months ("Term") commencing October
            ----
1, 1999 ("Commencement Date") and ending September 30, 2004 ("Expiration Date").

     1.4    Base Rent: $43,545.60 per month ("Base Rent"). $43,545.60 payable on
            ---------
execution of this Lease for period, October 1, 1999 to October 31, 1999.

     1.5    Tenant's Share of Operating Expenses ("Tenant's Share"):
            ------------------------------------

            (a)    Industrial Center                       9.87%
            (b)    Building                                 100%

     1.6    Tenant's Estimated Monthly Rent Payment: Following is the estimated
            ---------------------------------------
monthly Rent payment to Landlord pursuant to the provisions of this Lease. This
estimate is made at the inception of the Lease and is subject to adjustment
pursuant to the provisions of this Lease:

            (a)    Base Rent (Paragraph 4.1)            $ 43,545.60
            (b)    Operating Expenses (Paragraph 4.2;
                     excluding Real Property Taxes,
                   Landlord Insurance)                  $  4,015.00
            (d)    Landlord Insurance (Paragraph 8.3)   $    263.00
            (e)    Real Property Taxes (Paragraph 10)   $  4,384.00

                   Estimated Monthly Payment                         $52,207.60

     1.7    Security Deposit:  $49,996.80 ("Security Deposit").
            ----------------

     1.8    Permitted Use: ("Permitted Use") General office, sales, designing,
            -------------
manufacturing of equipment and other related uses.

     1.9    Guarantor: N/A
            ---------

     1.10   Addenda and Exhibits: Attached hereto are the following Addenda and
            --------------------
Exhibits, all of which constitute a part of this Lease:

            (a)  Addenda:   First Addendum to Lease
            (b)  Exhibits:  Exhibit A:  Diagram of Premises.
                            Exhibit B:  Commencement Date Certificate.
                            Exhibit C:  Not Applicable
                            Exhibit D:  Approved Specifications.
                            Exhibit E:  Description of Private Restrictions.
                            Exhibit F:  Sign Criteria.
                            Exhibit G:  Hazardous Materials Questionnaire.
                            Exhibit H:  Legal Description.
                            Exhibit I:  Rules and Regulations.

                                       1

 
     1.11 Address for Rent Payments: All amounts payable by Tenant to Landlord
          --------------------------                                           
shall until further notice from Landlord be paid to AMB Property L. P., c/o
Orchard Properties at the following address:

                         File No.: 3750789034
                         P.O. Box 840349
                         Dallas, TX 75284-0349

                                       2

 
2.   Premises, Parking and Common Areas.

     2.1  Letting. Landlord hereby leases to Tenant and Tenant hereby leases
          -------                                                            
from Landlord the Premises upon all of the terms, covenants and conditions set
forth in this Lease. Any statement of square footage set forth in this Lease or
that may have been used in calculating Base Rent and/or Operating Expenses is an
approximation which Landlord and Tenant agree is reasonable and the Base Rent
and Tenant's Share based thereon is not subject to revision whether or not the
actual square footage is more or less.

     2.2  Common Areas - Definition. "Common Areas" are all areas and
          -------------------------                                   
facilities outside the Premises and within the exterior boundary line of the
Industrial Center and interior utility raceways within the Premises that are
provided and designated by the Landlord from time to time for the general non-
exclusive use of Landlord, Tenant and other tenants of the Industrial Center and
their respective employees, suppliers, shippers, tenants, contractors and
invitees.

     2.3  Common Areas - Tenant's Rights. Landlord hereby grants to Tenant, for
          ------------------------------                                        
the benefit of Tenant and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Landlord under the terms hereof or under the terms of any rules and
regulations or covenants, conditions and restrictions governing the use of the
Industrial Center.

     2.4  Common Areas - Rules and Regulations. Landlord shall have the
          ------------------------------------                          
exclusive control and management of the Common Areas and shall have the right,
from time to time, to establish, modify, amend and enforce reasonable Rules and
Regulations with respect thereto in accordance with Paragraph 16.19.

     2.5  Common Area Changes. Landlord shall have the right, in Landlord's
          -------------------                                               
sole discretion, from time to time provided Tenant's proximity to parking,
access to Premises and visibility of signage from the street are not materially
diminished other than on a temporary basis for repairs and maintenance:

          (a) To make changes to the Common Areas, including, without
limitation, changes in the locations, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;

          (b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;

          (c) To designate other land outside the boundaries of the Industrial
Center to be a part of the Common Areas;

          (d) To add additional buildings and improvements to the Common Areas;

          (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and

          (f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Industrial Center as Landlord may, in
the exercise of sound business judgment, deem to be appropriate.

3.   Term.

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

     3.2  Delay in Possession. If for any reason Landlord cannot deliver
          -------------------                                            
possession of the Premises to Tenant by the Commencement Date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder.  In such case,
Tenant shall not, except as otherwise provided herein, be obligated to pay Rent
or perform any other obligation of Tenant under the terms of this Lease until
Landlord delivers possession of the Premises to Tenant.  The term of the Lease
shall commence on the earlier of (i) the date Tenant takes possession of the
Premises for the conduct of business or (ii) one (1) day following notice to
Tenant that Landlord has substantially completed (as defined in the First
Addendum) the Tenant Improvements. If possession of the Premises is not
delivered to Tenant within 60 days after the Commencement Date and such delay is
not due to Tenant's acts, failure to act or omissions 

                                       3

 
Tenant may by notice in writing to Landlord within 10 days after the end of said
60 day period cancel this Lease and the parties shall be discharged from all
obligations hereunder. If such written notice of Tenant is not received by
Landlord within said 10 day period, Tenant's right to cancel this Lease shall
terminate.

     3.3  Commencement Date Certificate. At the request of Landlord, Tenant
          -----------------------------                                     
shall execute and deliver to Landlord a completed certificate ("Commencement
Date Certificate") in the form attached hereto as Exhibit B.

4.   Rent.

     4.1  Base Rent. Tenant shall pay to Landlord Base Rent and other monetary
          ---------                                                            
obligations of Tenant to Landlord under the terms of this Lease (such other
monetary obligations are herein referred to as "Additional Rent") in lawful
money of the United States, without offset or deduction, in advance on or before
the first day of each month. Base Rent and Additional Rent for any period during
the term hereof which is for less than one full month shall be prorated based
upon the actual number of days of the month involved. Payment of Base Rent and
Additional Rent shall be made to Landlord at its address stated herein or to
such other persons or at such other addresses as Landlord may from time to time
designate in writing to Tenant. Base Rent and Additional Rent are collectively
referred to as "Rent". All monetary obligations of Tenant to Landlord under the
terms of this Lease are deemed to be rent.

     4.2  Operating Expenses. Tenant shall pay to Landlord on the first day of
          ------------------                                                   
each month during the term hereof, in addition to the Base Rent, Tenant's Share
of all Operating Expenses in accordance with the following provisions:

          (a) "Operating Expenses" are all costs incurred by Landlord relating
to the ownership, management and operation of the Industrial Center, Building
and Premises including, but not limited to, the following:

              (i)    The management, operation, repair, maintenance and
replacement in neat, clean, good order and condition of the Common Areas,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, drainage systems, lighting facilities, fences and gates,
exterior signs and tenant directories.

              (ii)   Water, gas, electricity, telephone and other utilities
servicing the Common Areas.

              (iii)  Trash disposal, janitorial services, snow removal, property
management and security services.

              (iv)   Reserves set aside for maintenance, repair and replacement
of the Common Areas and Building.

              (v)    Real Property Taxes.

              (vi)   Premiums for the insurance policies maintained by Landlord
under Paragraph 8 hereof.

              (vii)  Environmental monitoring and insurance programs, but not
costs of clean up of Hazardous Substances.

              (viii) Monthly amortization of capital improvements to the Common
Areas and the Building. The monthly amortization of any given capital
improvement shall be the sum of the (i) quotient obtained by dividing the cost
of the capital improvement by Landlord's reasonable estimate of the number of
months of useful life of such improvement plus (ii) an amount equal to the cost
of the capital improvement times 1/12 of the lesser of 12% or the maximum annual
interest rate permitted by law.

              (ix)   Maintenance of the Building including, but not limited to,
painting, caulking and repair and replacement of Building components, including,
but not limited to, roof, elevators and fire detection and sprinkler systems.

              (x)    If Tenant fails to maintain the Premises, any expense
incurred by Landlord for such maintenance provided Tenant has been notified of
the need for the maintenance and has failed to perform the maintenance within
thirty (30) days after receipt of such notice, or has failed to commence the
maintenance within fifteen (15) days, and prosecute same to completion if the
maintenance cannot reasonably be accomplished within thirty (30) days.

                                       4

 
          (b) Tenant's Share of Operating Expenses that are not specifically
attributed to the Premises or Building ("Common Area Operating Expenses") shall
be that percentage shown in Paragraph 1.5(a). Tenant's Share of Operating
Expenses that are attributable to the Building ("Building Operating Expenses")
shall be that percentage shown in Paragraph 1.5(b). Landlord in its reasonable
discretion shall determine which Operating Expenses are Common Area Operating
Expenses, Building Operating Expenses or expenses to be entirely borne by
Tenant.

          (c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose any obligation upon
Landlord to either have said improvements or facilities or to provide those
services.

          (d) Tenant shall pay monthly in advance on the same day as the Base
Rent is due Tenant's Share of estimated Operating Expenses in the amount set
forth in Paragraph 1.6. Landlord shall deliver to Tenant within 90 days after
the expiration of each calendar year a reasonably detailed statement showing
Tenant's Share of the actual Operating Expenses incurred during the preceding
year. If Tenant's estimated payments under this Paragraph 4(d) during the
preceding year exceed Tenant's Share as indicated on said statement, Tenant
shall be credited the amount of such overpayment against Tenant's Share of
Operating Expenses next becoming due. If Tenant's estimated payments under this
Paragraph 4.2(d) during said preceding year were less than Tenant's Share as
indicated on said statement, Tenant shall pay to Landlord the amount of the
deficiency within 10 days after delivery by Landlord to Tenant of said
statement. At any time Landlord may adjust the amount of the estimated Tenant's
Share of Operating Expenses to reflect Landlord's estimate of such expenses for
the year.

5.   Security Deposit. Tenant shall deposit with Landlord upon Tenant's
execution hereof the Security Deposit set forth in Paragraph 1.7 as security for
Tenant's faithful performance of Tenant's obligations under this Lease. If
Tenant fails to pay Base Rent or Additional Rent or otherwise defaults under
this Lease (as defined in Paragraph 13.1), Landlord may use the Security Deposit
for the payment of any amount due Landlord or to reimburse or compensate
Landlord for any liability, cost, expense, loss or damage (including attorney's
fees) which Landlord may suffer or incur by reason thereof. Tenant shall on
demand pay Landlord the amount so used or applied so as to restore the Security
Deposit to the amount set forth in Paragraph 1.7. Landlord shall not be required
to keep all or any part of the Security Deposit separate from its general
accounts. Landlord shall, at the expiration or earlier termination of the term
hereof and after Tenant has vacated the Premises, return to Tenant that portion
of the Security Deposit not used or applied by Landlord. No part of the Security
Deposit shall be considered to be held in trust, to bear interest, or to be
prepayment for any monies to be paid by Tenant under this Lease.

6.   Use.

     6.1  Permitted Use. Tenant shall use and occupy the Premises only for the
          -------------                                                        
Permitted Use set forth in Paragraph 1.8. Tenant shall not commit any nuisance,
permit the emission of any objectionable noise or odor, suffer any waste, make
any use of the Premises which is contrary to any law or ordinance or which will
invalidate or increase the premiums for any of Landlord's insurance. Tenant
shall not service, maintain or repair vehicles on the Premises, Building or
Common Areas. Tenant shall not store foods, pallets, drums or any other
materials outside the Premises.

     6.2  Hazardous Substances.
          -------------------- 

          (a) Reportable Uses Require Consent. The term "Hazardous Substance"
              -------------------------------                                 
as used in this Lease shall mean any product, substance, chemical, material or
waste including asbestos whose presence, nature, quantity and/or intensity of
      ------------------                                                     
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either:  (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Landlord to
any governmental agency or third party under any applicable statute or common
law theory.  Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products or by-products
thereof.  Tenant shall not engage in any activity in 

                                       5

 
or about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent of
Landlord and compliance in a timely manner (at Tenant's sole cost and expense)
with all Applicable Requirements (as defined in Paragraph 6.3). "Reportable Use"
shall mean (i) the installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on or about the Premises of a
Hazardous Substance with respect to which any Applicable Requirements require
that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Tenant may, without
Landlord's prior consent, but upon notice to Landlord and in compliance with all
Applicable Requirements, use any ordinary and customary materials reasonably
required to be used by Tenant in the normal course of the Permitted Use, so long
as such use is not a Reportable Use and does not expose the Premises, or
neighboring properties to any meaningful risk of contamination or damage or
expose Landlord to any liability therefor. In addition, Landlord may (but
without any obligation to do so) condition its consent to any Reportable Use of
any Hazardous Substance by Tenant upon Tenant's giving Landlord such additional
assurances as Landlord, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Landlord's option, removal on or before Lease
expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or the deposit
of an additional Security Deposit.

          (b) Duty to Inform Landlord. If Tenant knows, or has reasonable cause
              -----------------------                                           
to believe, that a Hazardous Substance is located in, under or about the
Premises or the Building, 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
Substance. Tenant shall not cause or permit any Hazardous Substance to be
spilled or released in, on, under or about the Premises (including, without
limitation, through the plumbing or sanitary sewer system).

          (c) Indemnification. Tenant shall indemnify, protect, defend and hold
              ---------------                                                   
Landlord, Landlord's affiliates, Lenders, and the officers, directors,
shareholders, partners, employees, managers, independent contractors, attorneys
and agents of the foregoing ("Landlord Entities") and the Premises, harmless
from and against any and all damages, liabilities, judgments, costs, claims,
liens, expenses, penalties, loss of permits and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Tenant or by any of Tenant's employees, agents, contractors or invitees.
Tenant's obligations under this Paragraph 6.2(c) shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Tenant, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof to the extent required by law, or of any
contamination therein involved. Tenant's obligations under this Paragraph 6.2(c)
shall survive the expiration or earlier termination of this Lease.

     6.3  Tenant's Compliance with Requirements. Tenant shall, at Tenant's sole
          -------------------------------------                                 
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance), now in effect or which may hereafter come into effect.
Tenant shall, within 5 days after receipt of Landlord's written request, provide
Landlord with copies of all documents and

                                       6

 
information evidencing Tenant's compliance with any Applicable Requirements and
shall immediately upon receipt, notify Landlord in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Tenant or the
Premises to comply with any Applicable Requirements.

     6.4  Inspection; Compliance with Law. In addition to Landlord's
          -------------------------------                            
environmental monitoring and insurance program, the cost of which is included in
Operating Expenses, Landlord and the holders of any mortgages, deeds of trust or
ground leases on the Premises ("Lenders") shall have the right to enter the
Premises at any time in the case of an emergency, and otherwise at reasonable
times upon twenty-four (24) hours prior notice, for the purpose of inspecting
the condition of the Premises and for verifying compliance by Tenant with this
Lease and all Applicable Requirements. Landlord shall be entitled to employ
experts and/or consultants in connection therewith to advise Landlord with
respect to Tenant's installation, operation, use, monitoring, maintenance, or
removal of any Hazardous Substance on or from the Premises. The cost and
expenses of any such inspections shall be paid by the party requesting same
unless a violation of Applicable Requirements exists or is imminent or the
inspection is requested or ordered by a governmental authority. In such case,
Tenant shall upon request reimburse Landlord or Landlord's Lender, as the case
may be, for the costs and expenses of such inspections.

7.   Maintenance, Repairs, Trade Fixtures and Alterations.

     7.1  Tenant's Obligations. Subject to the provisions of Paragraph 7.2
          --------------------                                             
(Landlord's Obligations), Paragraph 9 (Damage or Destruction) and Paragraph 14
(Condemnation), Tenant shall, at Tenant's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair (whether or not such portion of the Premises requiring repair, or the
means of repairing the same, are reasonable or readily accessible to Tenant and
whether or not the need for such repairs occurs as a result of Tenant's use, any
prior use, the elements or the age of such portion of the Premises) including,
without limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connectors if within the Premises, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, and skylights, but excluding any items which are the responsibility of
Landlord pursuant to Paragraph 7.2 below. Tenant's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all improvements thereon or a part thereof in good order, condition and state of
repair.

     7.2  Landlord's Obligations. Subject to the provisions of Paragraph 6
          ----------------------                                           
(Use), Paragraph 7.1 (Tenant's Obligations), Paragraph 9 (Damage or Destruction)
and Paragraph 14 (Condemnation), Landlord at its expense and not subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good order, good and
watertight condition and good repair the foundations, windows except for
breakage and exterior walls of the Building and utility systems outside the
Building. Landlord, subject to reimbursement pursuant to Paragraph 4.2, shall
keep in good order, condition and repair the Building roof and Common Areas.

     7.3  Alterations. Construction by Tenant of Alterations shall be governed
          -----------                                                          
by the following:

     A.   Except as set forth below and except for the installation of a card
access security system, which Landlord hereby approves, Tenant shall not
construct any Tenant Alterations or otherwise alter, improve, modify, or perform
any work of improvement to the Premises without Landlord's prior written
approval. However, Tenant shall be entitled, without Landlord's prior approval,
to make Tenant Alterations (i) which do not affect the structural or exterior
parts or water tight character of the Building, and (ii) the reasonably
estimated cost of which, plus the original cost of any part of the Premises
removed or materially altered in connection with such Tenant Alterations,
together do not exceed the Permitted Tenant Alterations Limit per work of
improvement. In the event Landlord's approval for any Tenant Alterations is
required, Tenant shall not construct the Tenant Alterations until Landlord has
approved in writing the plans and specifications therefor. Such Tenant
Alterations shall be constructed substantially in compliance with such approved

                                       7

 
plans and specifications by a licensed contractor first approved by Landlord.
All Tenant Alterations (whether Landlord's consent is required or not) shall be
constructed by a licensed contractor in accordance with all Laws (including the
ADA) using new materials of good quality.

     B.   Tenant shall not commence construction of any Tenant Alterations until
(i) all required governmental approvals and permits have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied,
(iii) Tenant has given Landlord at least five days' prior written notice of its
intention to commence such construction, and (iv) if requested by Landlord,
Tenant has obtained contingent liability and broad form builders' risk insurance
in an amount reasonably satisfactory to Landlord if there are any perils
relating to the proposed construction not covered by insurance carried pursuant
to the Lease.

     C.   All Tenant Alterations shall remain the property of Tenant during the
Lease Term but shall not be altered or removed from the Premises except with
Landlord's advance written permission. At the expiration or sooner termination
of the Lease Term, all Tenant Alterations shall be surrendered to Landlord as
part of the realty and shall then become Landlord's property, and Landlord shall
have no obligation to reimburse Tenant for all or any portion of the value or
cost thereof; provided, however, that if Landlord requires Tenant to remove any
Tenant Alterations, Tenant shall so remove such Tenant Alterations prior to the
expiration or sooner termination of the Lease Term. Notwithstanding the
foregoing, Tenant shall not be obligated to remove any Tenant Alterations with
respect to which the following is true: (i) Tenant was required, or elected, to
obtain the approval of Landlord to the installation of the Leasehold Improvement
in question; (ii) at the time Tenant requested Landlord's approval, Tenant
requested of Landlord in writing that Landlord inform Tenant of whether or not
Landlord would require Tenant to remove such Leasehold Improvement at the
expiration of the Lease Term; and (iii) at the time Landlord granted its
approval, it did not inform Tenant that it would require Tenant to remove such
Leasehold Improvement at the expiration of the Lease Term.

     D.   Landlord's consent to the construction of Tenant Alterations may be
withheld in Landlord's reasonable discretion. Landlord shall give Tenant its
consent or disapproval with ten (10) days after Tenant has submitted complete
plans and specifications to Landlord requesting approval. Landlord's consent to
construction of Tenant Alterations and Landlord's approval of plans and
specifications for Tenant Alterations shall not create any responsibility or
liability on Landlord's part in regard to the completeness, competency, design
sufficiency, or compliance with Law of such Tenant Alterations or the plans and
specifications therefor.

     7.4  Surrender/Restoration. Tenant shall surrender the Premises by the end
          ---------------------                                                 
of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair
ordinary wear and tear excepted. Without limiting the generality of the above,
Tenant shall remove all personal property, trade fixtures and floor bolts, patch
all floors and cause all lights to be in good operating condition.

8.   Insurance; Indemnity.

     8.1  Payment of Premiums. The cost of the premiums for the insurance
          -------------------                                             
policies maintained by Landlord under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy periods
commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement Date of Expiration
Date.

     8.2  Tenant's Insurance.
          ------------------ 

          (i) At its sole cost and expense, Tenant shall maintain in full force
and effect during the Term of the lease the following insurance coverages
insuring against claims which may arise from or in connection with the Tenant's
operation and use of the leased premises.

              (a)  Commercial General Liability with minimum limits of
$1,000,000 per occurrence; $3,000,000 general aggregate for bodily injury,
personal injury and property damage. If required by Landlord, liquor liability
coverage will be included.

              (b)  Workers' Compensation insurance with statutory limits and
Employers Liability with a $1,000,000 per accident limit for bodily injury or
disease.

                                       8

 
                (c)  Automobile Liability covering all owned, non-owned and
hired vehicles with a $1,000,000 per accident limit for bodily injury and
property damage.

                (d)  Property insurance against all risks of loss to any tenant
improvements or betterments and business personal property on a full replacement
cost basis with no coinsurance penalty provision; and Business Interruption
Insurance with a limit of liability representing loss of at least approximately
six months of income.

          (ii)  Tenant shall deliver to AMB certificates of all insurance
reflecting evidence of required coverages prior to initial occupancy; and
annually thereafter.

          (iii) If, in the opinion of Landlord's insurance advisor, the amount
of scope of such coverage is deemed inadequate at any time during the Term,
Tenant shall increase such coverage to such reasonable amounts or scope as
Landlord's advisor deems adequate.

          (iv)  All insurance required under Paragraph 8.2 (i) shall be primary
and non-contributory (ii) shall provide for severability of interests, (iii)
shall be issued by insurers, licensed to do business in the state in which the
Premises are located and which are rated A:VII or better by Best's Key Rating
Guide, (iv) shall be endorsed to include Landlord and such other persons or
entities as Landlord may from time to time designate, as additional insureds
(Commercial General Liability only), and (v) shall be endorsed to provide at
least 30-days prior notification of cancellation or material change in coverage
to said additional insureds.

     8.3  Landlord's Insurance. Landlord shall maintain all risk, not including
          --------------------                                                  
earthquake and flood, insurance covering the buildings, Commercial General
Liability with minimum limits of $1,000,000 per occurrence and $3,000,000 general
aggregate for bodily injury, personal injury and property damage and such other
insurance in such amounts and covering such other liability or hazards as deemed
appropriate by Landlord. The amount and scope of coverage of Landlord's
insurance shall be determined by Landlord from time to time in its sole
discretion and shall be subject to such deductible amounts as Landlord may
elect. Premiums for any such insurance shall be a Common Area Operating Expense.

     8.4  Waiver of Subrogation. To the extent permitted by law and without
          ---------------------                                             
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
on account of any and all claims Landlord or Tenant may have against the other
with respect to property insurance actually carried, or required to be carried
hereunder, to the extent of the proceeds realized from such insurance coverage.

     8.5  Indemnity. Except for indemnity of Landlord entities for Hazardous
          ---------                                                         
Substances which is provided in Section 6.2 c of this Lease. Tenant shall
protect, indemnify and hold the Landlord Entities harmless from and against any
and all loss, claims, liability or costs (including court costs and attorney's
fees) incurred by reason of:

          (i)   any damage to any property (including but not limited to
property of any Landlord Entity) or death or injury to any person occurring in
or about the Premises, the Building or the Industrial Center to the extent that
such injury or damage shall be caused by or arise from any actual or alleged
act, neglect, fault or omission by or of Tenant, its agents, servants,
employees, or invitees;

          (ii)  the conduct or management of any work or anything whatsoever
done by the Tenant on or about the Premises or from transactions of the Tenant
concerning the Premises;

          (iii) Tenant's failure to comply with any and all governmental laws,
ordinances and regulations applicable to the condition or use of the Premises or
its occupancy; or

          (iv)  any breach or default of the part of Tenant in the performance
of any covenant or agreement on the part of the Tenant to be performed pursuant
to this Lease.

The provisions of this Paragraph 8.5 shall survive the termination of this Lease
with respect to any claims or liability accruing prior to such termination.

     8.6  Exemption of Landlord from Liability. Except to the extent caused by
          ------------------------------------                                 
the active negligence or willful misconduct of Landlord, Landlord Entities shall
not be liable for and Tenant waives any claims against Landlord Entities for
injury or damage to the person or 

                                       9

 
the property of Tenant, Tenant's employees, contractors, invitees, customers or
any other person in or about the Premises, Building or Industrial Center from
any cause whatsoever, including, but not limited to, damage or injury which is
caused by or results from (i) fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or (ii) from the condition of the Premises, other portions of the Building or
Industrial Center. Landlord shall not be liable for any damages arising from any
act or neglect of any other tenant of Landlord nor from the failure by Landlord
to enforce the provisions of any other lease in the Industrial Center.
Notwithstanding Landlord's negligence or breach of this Lease, Landlord shall
under no circumstances be liable for injury to Tenant's business, for any loss
of income or profit therefrom or any indirect, consequential or punitive
damages.

9.   Damage or Destruction.

     9.1  Termination Right. Tenant shall give Landlord immediate written
          -----------------                                               
notice of any damage to the Premises. Subject to the provisions of Paragraph
9.2, if the Premises or the Building shall be damaged to such an extent that
there is substantial interference for a period exceeding 90 consecutive days
with the conduct by Tenant of its business at the Premises, Tenant, at any time
prior to commencement of repair of the Premises and following 10 days written
notice to Landlord, may terminate this Lease effective 30 days after delivery of
such notice to Landlord. Such termination shall not excuse the performance by
Tenant of those covenants that under the terms hereof survive termination. Rent
shall be abated in proportion to the degree of interference during the period
that there is such substantial interference with the conduct of Tenant's
business at the Premises. Abatement of rent and Tenant's right of termination
pursuant to this provision shall be Tenant's sole remedy for failure of Landlord
to keep in good order, condition and repair the foundations and exterior walls
of the Building, Building roof, utility systems outside the Building and the
Common Areas.

     9.2  Damage Caused by Tenant. Tenant's termination rights under Paragraph
          -----------------------                                              
9.1 shall not apply if the damage to the Premises or Building is the result of
any negligent or intentional act or omission of Tenant or of any of Tenant's
agents, employees, customers, invitees or contractors ("Tenant Acts"). Any
damage resulting from a Tenant Act shall be promptly repaired by Tenant except
to the extent it is not covered by Tenant's insurance of any kind and it is
covered by Landlord's All Risk Insurance covering the building in which case
Landlord shall repair the damage and Tenant shall be responsible for the
deductible. Landlord at its option may at Tenant's expense repair any damage
caused by Tenant Acts. Tenant shall continue to pay all rent and other sums due
hereunder and shall be liable to Landlord for all damages that Landlord may
sustain resulting from a Tenant Act.

10.  Real Property Taxes.

     10.1 Payment of Real Property Taxes. Landlord shall pay the Real Property
          ------------------------------                                       
Taxes due and payable during the term of this Lease and, except as otherwise
provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.

     10.2 Real Property Tax Definition. As used herein, the term 
          ----------------------------                                          
"Real Property Taxes" is any form of tax or assessment, general, special,
ordinary or extraordinary, imposed or levied upon (a) the Industrial Center, (b)
any interest of Landlord in the Industrial Center, (c) Landlord's right to rent
or other income from the Industrial Center, and/or (d) Landlord's business of
leasing the Premises. Real Property Taxes include (i) any license fee,
commercial rental tax, excise tax, improvement bond or bonds, levy or tax; (ii)
any tax or charge which replaces or is in addition to any of such above-
described "Real Property Taxes" and (iii) any fees, expenses or costs (including
attorney's fees, expert fees and the like) incurred by Landlord in protesting or
contesting any assessments levied or any tax rate. The term "Real Property
Taxes" shall also include any increase resulting from a change in the ownership
of the Industrial Center or Building, the execution of this Lease or any
modification, amendment or transfer thereof. Real Property Taxes for tax years
commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement Date and Expiration
Date.

                                       10

 
     10.3 Additional Improvements. Operating Expenses shall not include Real
          -----------------------                                            
Property Taxes attributable to improvements placed upon the Industrial Center by
other tenants or by Landlord for the exclusive enjoyment of such other tenants.
Notwithstanding Paragraph 10.1 hereof, Tenant shall, however, pay to Landlord at
the time Operating Expenses are payable under Paragraph 4.2, the entirety of any
increase in Real Property Taxes if assessed by reason of improvements placed
upon the Premises by Tenant or at Tenant's request.

     10.4 Joint Assessment. If the Building is not separately assessed, Real
          ----------------                                                   
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed.

     10.5 Tenant's Property Taxes. Tenant shall pay prior to delinquency all
          -----------------------                                            
taxes assessed against and levied upon Tenant's improvements, fixtures,
furnishings, equipment and all personal property of Tenant contained in the
Premises or stored within the Industrial Center.

11.  Utilities. Tenant shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon.

12.  Assignment and Subletting.

     12.1 Landlord's Consent Required.
          --------------------------- 

          (a) Tenant shall not assign, transfer, mortgage or otherwise transfer
or encumber (collectively, "assign") or sublet all or any part of Tenant's
interest in this Lease or in the Premises without Landlord's prior written
consent which consent shall not be unreasonably withheld. Landlord shall give
Tenant its approval or disapproval within thirty (30) days after Tenant's
request in writing with required documentation for the sublease. Relevant
criteria in determining reasonability of consent include, but are not limited
to, credit history of a proposed assignee or sublessee, references from prior
landlords, any change or intensification of use of the Premises or the Common
Areas and any limitations imposed by the Internal Revenue Code and the
Regulations promulgated thereunder relating to Real Estate Investment Trusts.
Assignment or sublet shall not release Tenant from its obligations hereunder.
Tenant shall not (i) sublet or assign or enter into other arrangements such that
the amounts to be paid by the sublessee or assignee thereunder would be based,
in whole or in part, on the income or profits derived by the business activities
of the sublessee or assignee; (ii) sublet the Premises or assign this Lease to
any person in which Landlord owns an interest, directly or indirectly (by
applying constructive ownership rules set forth in Section 856(d)(5) of the
Internal Revenue Code (the "Code"); or (iii) sublet the Premises or assign this
Lease in any other manner which could cause any portion of the amounts received
by Landlord pursuant to this Lease or any sublease to fail to qualify as 
"rents from real property" within the meaning of Section 856(d) of the Code, or
which could cause any other income received by Landlord to fail to qualify as
income described in Section 856(c)(2) of the Code. The requirements of this
Section 12.1 shall apply to any further subleasing by any subtenant.

          (b) A change in the control of Tenant shall constitute an assignment
requiring Landlord's consent. The transfer, on a cumulative basis, of 50% or
more of the voting or management control of Tenant shall constitute a change in
control for this purpose. Notwithstanding the foregoing, this Subsection 12.2(b)
(regarding a change in control as constituting an assignment requiring
Landlord's consent) shall not apply to or after the initial public offering of
the Tenant's securities.

     12.2 Rent Adjustment. If, as of the effective date of any permitted
          ----------------                                                
assignment or subletting the then remaining term of this Lease is less than one
(1) year and if the proposed assignment or subletting is for the remainder of
the term of the lease, Landlord may, as a condition to its consent: (i) require
that the amount and adjustment schedule of the rent payable under this Lease be
adjusted to what is then the market value and/or adjustment schedule for
property similar to the Premises as then constituted, as determined by Landlord;
or (ii) terminate the Lease as of the date of assignment or subletting subject
to the performance by Tenant of those covenants which under the terms hereof
survive termination.

13.  Default; Remedies.

                                       11

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

          (a) The abandonment of the Premises by Tenant;

          (b) Failure to pay any installment of Base Rent, Additional Rent or
any other monies due and payable hereunder, said failure continuing for a period
of 3 days after Landlord has given Tenant notice that the same is due (a three
(3) day notice to pay rent or quit would satisfy this provision);

          (c) A general assignment by Tenant or any guarantor for the benefit of
creditors;

          (d) The filing of a voluntary petition in bankruptcy by Tenant or any
guarantor, the filing of a voluntary petition for an arrangement, the filing of
a petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by Tenant's creditors or guarantors;

          (e) Receivership, attachment, of other judicial seizure of the
Premises or all or substantially all of Tenant's assets on the Premises;

          (f) Failure of Tenant to maintain insurance as required by Paragraph
8.2;

          (g) Any breach by Tenant of its covenants under Paragraph 6.2;

          (h) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in other Paragraphs of this Paragraph 13.1 which shall be governed by
such other Paragraphs), which failure continues for 30 days after written notice
thereof from Landlord to Tenant provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such 30 day period despite reasonable diligence, Tenant shall not be in
default under this subparagraph unless Tenant fails to begin to cure within
fifteen (15) days after notices and/or thereafter diligently and continuously to
prosecute the cure to completion;

          (i) Any transfer of a substantial portion of the assets of Tenant, or
any incurrence of a material obligation by Tenant, unless such transfer or
obligation is undertaken or incurred in the ordinary course of Tenants business
or in good faith for equivalent consideration, or with Landlord's consent; and

     13.2 Remedies. In the event of any Default by Tenant, Landlord shall have
          --------                                                             
the remedies set forth in the Addendum attached hereto entitled "Landlord's
Remedies in Event of Tenant Default".

     13.3 Late Charges. Tenant hereby acknowledges that late payment by Tenant
          ------------                                                         
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges. Accordingly, if any installment of rent or
other sum due from Tenant shall not be received by Landlord or Landlord's
designee within 10 days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to 5% of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's Default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.

14.  Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of exercise of said power (all
of which are herein called "condemnation"), this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 10% of the floor area of the Premises, or
more than 25% of the portion of the Common Areas designated for Tenant's
parking, is taken by condemnation, Tenant may, at Tenant's option, to be
exercised in writing within 10 days after Landlord shall have given Tenant
written notice of such taking (or in the absence of such notice, within 10 days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning authority takes such possession. If Tenant does
not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises

                                       12

 
remaining, except that the Base Rent shall be reduced in the same proportion as
the rentable floor area of the Premises taken bears to the total rentable floor
area of the Premises. No reduction of Base Rent shall occur if the condemnation
does not apply to any portion of the Premises. Any award for the taking of all
or any part of the Premises under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of
Landlord, provided, however, that Tenant shall be entitled to any compensation,
separately awarded to Tenant for Tenant's relocation expenses and/or loss of
Tenants trade fixtures. In the event that this Lease is not terminated by reason
of such condemnation, Landlord shall to the extent of its net severance damages
in the condemnation matter, repair any damage to the Premises caused by such
condemnation authority. Tenant shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.

15.  Estoppel Certificate and Financial Statements.

     15.1 Estoppel Certificate. Each party (herein referred to as "Responding
          --------------------                                                
Party") shall within 10 business days after written notice from the other Party
(the "Requesting Party") execute, acknowledge and deliver to the Requesting
Party, to the extent it can truthfully do so, an estoppel certificate, plus such
additional information, confirmation and/or statements as be reasonably
requested by the Requesting Party.

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

16.  Additional Covenants and Provisions.

     16.1 Severability. The invalidity of any provision of this Lease, as
          ------------                                                    
determined by a court of competent jurisdiction, shall not affect the validity
of any other provision hereof.

     16.2 Interest on Past-Due Obligations. Any monetary payment due Landlord
          --------------------------------                                    
hereunder not received by Landlord within 10 days following the date on which it
was due shall bear interest from the date due at 12% per annum, but not
exceeding the maximum rate allowed by law in addition to the late charge
provided for in Paragraph 13.3.

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

     16.4 Landlord Liability. Tenant, its successors and assigns, shall not
          ------------------                                                
assert nor seek to enforce any claim for breach of this Lease against any of
Landlord's assets other than Landlord's interest in the Industrial Center.
Tenant agrees to look solely to such interest for the satisfaction of any
liability or claim against Landlord under this Lease. In no event whatsoever
shall Landlord (which term shall include, without limitation, any general or
limited partner, trustees, beneficiaries, officers, directors, or stockholders
of Landlord) ever be personally liable for any such liability.

     16.5 No Prior or Other Agreements. This Lease contains all agreements
          ----------------------------                                     
between the Parties with respect to any matter mentioned herein, and supersedes
all oral, written prior or contemporaneous agreements or understandings.

     16.6 Notice Requirements. All notices required or permitted by this Lease
          -------------------                                                  
shall be in writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission
during normal business hours, and shall be deemed sufficiently given if served
in a manner specified in the Paragraph 16.6. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notice purposes. Either Party may by written notice to the other
specify a different address for notice purposes, except that upon Tenant's
taking possessing of the Premises, the Premises shall constitute Tenant's
address for the purpose of mailing or delivering notices to Tenant. A copy of
all notices required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such addresses as Landlord
may from time to time hereafter designate by written notice to Tenant.

                                       13

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

     16.8  Waivers. No waiver by Landlord of a Default by Tenant shall be deemed
           -------                                                           
a waiver of any other term, covenant or condition hereof, or of any subsequent
Default by Tenant of the same or any other term, covenant or condition hereof.

     16.9  Holdover. Tenant has no right to retain possession of the Premises or
           -------- 
any part thereof beyond the expiration or earlier termination of this Lease. If
Tenant holds over with the consent of Landlord: (i) the Base Rent payable shall
be increased to 150% of the Base Rent applicable during the month immediately
preceding such expiration or earlier termination; (ii) Tenant's right to
possession shall terminate on 30 days notice from Landlord and (iii) all other
terms and conditions of this Lease shall continue to apply. Nothing contained
herein shall be construed as a consent by Landlord to any holding over by
Tenant. Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all claims, demands, actions, losses, damages, obligations,
costs and expenses, including, without limitation, attorneys' fees incurred or
suffered by Landlord by reason of Tenant's failure to surrender the Premises on
the expiration or earlier termination of this Lease in accordance with the
provisions of this Lease.

     16.10 Cumulative Remedies. No remedy or election hereunder shall be
           -------------------                                           
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies in law or in equity.

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

     16.12 Landlord. The covenants and obligations contained in this Lease on
           --------                                                           
the part of Landlord are binding on Landlord, its successors and assigns, only
during and in respect of their respective period of ownership of such interest
in the Industrial Center. In the event of any transfer or transfers of such
title to the Industrial Center, Landlord (and in case of any subsequent
transfers or conveyances, the then grantor) shall be concurrently freed and
relieved from and after the date of such transfer or conveyance, without any
further instrument or agreement, of all liability with respect to the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed.

     16.13 Attorneys' Fees and Other Costs. If any Party brings an action or
           -------------------------------                                   
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding shall be entitled
to reasonable attorneys' fees. The term "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought. Landlord shall be entitled to attorneys' fees, costs and expenses
incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting breach. Tenant shall reimburse
Landlord on demand for all reasonable legal, engineering and other professional
services expenses incurred by Landlord in connection with all requests by Tenant
for consent or approval hereunder.

     16.14 Landlord's Access; Showing Premises; Repairs. Landlord and
           --------------------------------------------               
Landlord's agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times upon twenty-four (24)
notice for the purpose of showing the same to prospective purchasers, lenders,
or tenants, and making such alterations, repairs, improvements or additions to
the Premises or to the Building, as Landlord may reasonably 

                                       14

 
deem necessary. Landlord may at any time place on or about the Premises or
Building any ordinary "For Sale" signs and Landlord may at any time during the
last 180 days of the term hereof place on or about the Premises any ordinary
"For Lease" signs. All such activities of Landlord shall be without abatement of
rent or liability to Tenant.

     16.15  Signs. Tenant shall not place any signs at or upon the exterior of
            -----                                                              
the Premises or the Building, except that Tenant may, with Landlord's prior
written consent, install (but not on the roof) such signs as are reasonably
required to advertise Tenant's own business so long as such signs are in a
location designated by Landlord and comply with sign ordinances and the signage
criteria established for the Industrial Center by Landlord. Tenant shall have
right to install, at Tenant's cost, signs bearing Tenant's name on two (2)
monument signs for the Building and on the exterior of the Building of the
maximum size permitted by local zoning ordinances and any rules of the
industrial center.

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

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

     16.18  Subordination; Attornment; Non-Disturbance.
            ------------------------------------------ 

               (a)  Subordination. This Lease shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or mortgage
(collectively, "Mortgage") now or hereafter placed by Landlord upon the real
property of which the Premises are a part, to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Tenant agrees that any person holding any
Mortgage shall have no duty, liability or obligation to perform any of the
obligations of Landlord under this Lease. In the event of Landlord's default
with respect to any such obligation, Tenant will give any Lender, whose name and
address have previously in writing been furnished Tenant, notice of a default by
Landlord. Tenant may not exercise any remedies for default by Landlord unless
and until Landlord and the Lender shall have received written notice of such
default and a reasonable time (not less than 90 days) shall thereafter have
elapsed without the default having been cured. If any Lender shall elect to have
this Lease superior to the lien of its Mortgage and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such Mortgage. The
provisions of a Mortgage relating to the disposition of condemnation and
insurance proceeds shall prevail over any contrary provisions contained in this
Lease.

               (b)  Attornment. Subject to the non-disturbance provisions of
subparagraph C of this Paragraph 16.18, Tenant agrees to attorn to a Lender or
any other party who acquires ownership of the Premises by reason of a
foreclosure of a Mortgage. In the event of such foreclosure, such new owner
shall not: (i) be liable for any act or omission of any prior landlord or with
respect to events occurring prior to acquisition of ownership, (ii) be subject
to any offsets or defenses which Tenant might have against any prior Landlord.

               (c)  Non-Disturbance. With respect to Mortgage entered into by
Landlord after the execution of this Lease, Tenant's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Mortgage holder that Tenant's possession and this Lease will not be disturbed so
long as Tenant is not in default and attorns to the record owner of the
Premises. Landlord shall use reasonable efforts to obtain a non-disturbance
agreement from any existing mortgage holder within thirty (30) days after the
full execution of this Lease.

                                       15

 
               (d)  Self-Executing. The agreements contained in this Paragraph
16.18 shall be effective without the execution of any further documents;
provided, however, that upon written request from Landlord or a Lender in
connection with a sale, financing or refinancing of Premises, Tenant and
Landlord shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment
and/or non-disturbance agreement as is provided for herein. Landlord is hereby
irrevocably vested with full power to subordinate this Lease to a Mortgage.

     16.19  Rules and Regulations. Tenant agrees that it will abide by, and to
            ---------------------                                              
cause its employees, suppliers, shippers, customers, tenants, contractors and
invitees to abide by all reasonable rules and regulations ("Rules and
Regulations") which Landlord may make from time to time for the management,
safety, care, and cleanliness of the Common Areas, the parking and unloading of
vehicles and the preservation of good order, as well as for the convenience of
other occupants or tenants of the Building and the Industrial Center and their
invitees. Landlord shall not be responsible to Tenant for the non-compliance
with said Rules and Regulations by other tenants of the Industrial Center.

     16.20  Security Measures. Tenant acknowledges that the rental payable to
            -----------------                                                 
Landlord hereunder does not include the cost of guard service or other security
measures. Landlord has no obligations to provide same. Tenant assumes all
responsibility for the protection of the Premises, Tenant, its agents and
invitees and their property from the acts of third parties.

     16.21  Reservations. Landlord reserves the right to grant such easements
            ------------                                                      
that Landlord deems necessary and to cause the recordation of parcel maps, so
long as such easements and maps do not reasonably interfere with the use of the
Premises by Tenant. Tenant agrees to sign any documents reasonable requested by
Landlord to effectuate any such easements or maps.

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

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

     16.24  Amendments. This Lease may be modified only in writing, signed by
            ----------                                                        
the parties in interest at the time of the modification.

     16.25  Multiple Parties. Except as otherwise expressly provided herein, if
            ----------------
more than one person or entity is named herein as Tenant, the obligations of
such persons shall be the joint and several responsibility of all persons or
entities named herein as such Tenant.

     16.26  Authority. Each person signing on behalf of Landlord or Tenant
            ---------
warrants and represents that he or she is authorized to execute and deliver this
Lease and to make it a binding obligation of Landlord or Tenant.

            The parties hereto have executed this Lease at the place and on the
dates specified above their respective signatures.
 
Landlord:                                    Tenant:
AMB Property, L.P.                           SonicWALL, Inc.
a Delaware limited partnership               a California corporation
By:  AMB Property Corporation,
     a Maryland corporation
 
 By:  /s/ John L. Rossi                      By:  /s/ Michael J. Sheridan
      ---------------------                     -------------------------------

      John L. Rossi
 Its: Regional Manager                       Its:            CFO
                                                 ------------------------------
 
Telephone: (415)394-9000                     Telephone: (408) 327 - 7855
          -----------------                            ------------------------
Facsimile: (415)394-0903                     Facsimile: (408) 844 - 9100
          -----------------                            ------------------------

                                       16

 
Executed at: 505 Montgomery Street           Executed at:      Santa Clara
                                                         ----------------------
             6/th/ Floor
             San Francisco, CA 94111
 
Date:  9/31/99  Date:                        Date:  9/29/99
     ---------------------                        -------------------------
 

                                       17

 
                            FIRST ADDENDUM TO LEASE

     THIS FIRST ADDENDUM is dated for reference purposes as September 27, 1999,
and is made a part of that Lease Agreement (the "Lease") dated September 27,
1999, by and between AMB PROPERTY L.P., a Delaware limited partnership
("Landlord") and SONICWALL, INC., a California corporation ("Tenant") affecting
certain real property commonly known as 1160 Bordeaux Drive, Sunnyvale,
California, with reference to the following facts. In the event of a conflict
between this First Addendum to Lease and the Lease, the Addendum prevails and is
controlling.

          1.   Base Monthly Rent:
               -----------------
 
               Months  1 - 12:                          $43,545.60
               Months 13 - 24:                          $45,158.40
               Months 25 - 36:                          $46,771.20
               Months 37 - 48:                          $48,384.00
               Months 49 - 60 and any partial month:    $49,996.80

          2.   Option to Extend Lease Term: Landlord does not grant Tenant an
               ---------------------------  
option to extend the Lease.

          3.   Early Occupancy:
               --------------- 

               A.   As consideration for Tenant's performance of all obligations
to be performed by Tenant under the Lease, and upon receipt of (i) the first
month's Base Monthly Rent and Security Deposit totaling $93,542.40, and (ii) a
certificate of insurance as provided by Article 9.1C of the Lease, Landlord
shall permit Tenant to enter and use the Premises" until October 1, 1999 (the
"Early Occupancy Period") for the purposes of installing Tenant's furniture,
communications cabling and electrical wiring to support Tenant's cubicles and
equipment. Such occupancy during the Early Occupancy Period shall be subject to
all of the terms, covenants and conditions of the Lease provided, however, that
the rent payable during the Early Occupancy Period shall be waived.

               B.   In the event either party shall bring any action or legal
proceeding for damages for alleged breach of any provision of this agreement, to
recover rent, to terminate tenancy of the Premises, or to enforce, protect or
establish any term or covenant of this agreement or the Lease or right of remedy
of either party, the prevailing party shall be entitled to recover as a part of
such action or proceeding, reasonable attorney's fees and court costs as may be
fixed by the court or jury.

               C.   In consideration of executing this Early Occupancy
Agreement, Tenant agrees to indemnify and save Landlord harmless of and from any
and all liability, damage, expense, cause of action, suits or claims or
judgments resulting from injury to person or property arising from the use of
the Premises by Tenant during the Early Occupancy Period, including loss or
damage to Tenant, its equipment, materials or supplies.

               D.   Tenant agrees to cooperate with construction personnel
completing the Interior Improvements in the Premises and not cause any delay in
the completion of these improvements. It is the intent of Landlord and Tenant
that Tenant's obligation to pay the Base Monthly Rent and all Additional Rent
not be delayed by any

                                       1

 
cause or other act of Tenant and, if it is so delayed, and provided that
Landlord promptly notifies Tenant in writing of each separate delay and the
estimated period of delay, then Tenant's obligation to pay the Base Monthly Rent
and all Additional Rent shall commence as of the date it would have commenced
absent said delay caused by Tenant.

               E.   During the Early Occupancy Period, Tenant shall arrange to
have all utility services, including but not limited to gas, electric, water and
trash, billed directly to Tenant for payment.


          4.   Interior Improvements:
               ----------------------

     The Premises will be delivered to Tenant with all electrical, HVAC and
plumbing in good working condition. Tenant agrees that the Premises are to be
leased and accepted by Tenant in their condition existing as of the Commencement
Date.

     Landlord, at Landlord's sole cost, shall improve the Premises with all the
following "Tenant Improvements" prior to Commencement Date:

               1.   Install slate floor throughout the lobby and finish the
ceiling.

               2.   Install carpet throughout the space except the tile area by
                    the rollup doors, but not in the large lab area, lunchroom
                    or restrooms.

     Landlord and Tenant acknowledge that the following additional "Tenant
Improvements" are not practical to complete by the "Commencement Date".
Landlord, at Landlord's sole cost, shall diligently pursue substantial
completion of the following "Additional Tenant Improvements" within ninety (90)
days of "Commencement Date". Tenant shall be responsible for removing furniture
and other items to allow work to be performed. All Additional Tenant
Improvements shall be performed during weekends or after 5:00 P.M. in the
evening or weekdays (i.e. during non-business hours).

               1.   Install two (2) conference rooms as shown on Exhibit D
                    attached.  The larger conference room shall have a glass
                    front and shall have a door from the lobby.

               2.   Install men and women's showers.

               3.   Remove the rollup door and install glass, then finish the
                    ceiling to match existing.

               4.   Install one (1) 14' x 14' private office as shown on Exhibit
                    D attached.

               5.   Install double doors with glass windows into the large lab
                    area.

               6.   Install carpet instead of tile in the area directly in front
                    of the rollup door.

     For purposes of this Lease "Substantial completion" shall mean installed in
accordance with the drawing and specifications and all Building codes and permit

                                       2

 
requirements, subject to minor punch list items that do not materially affect
the use or aesthetic appearance of the Premises. Landlord shall complete any
punch list items within thirty (30) days of Tenant's delivery of the punch list.
Any construction warranties (to the extent they exist on these improvements)
shall be assigned to the tenant.

          5.   Tenant Alterations: Tenant shall be entitled, without Landlord's
               ------------------
prior approval, to make Tenant's Alterations (i) which do not affect the
structural or exterior parts or water tight character of the Building, and (ii)
the reasonably estimated cost of which, plus the original cost of any part of
the Premises removed or materially altered in connection with such Tenant's
Alterations, together do not exceed Five Thousand and 00/100 Dollars
($5,000.00). Tenant has the right to install six (6) private offices at Tenant's
expense, which may at option of the Landlord be required to be removed upon
lease termination.

          6.   Tenant Maintenance: Tenant shall (i) maintain, repair and replace
               ------------------
when necessary all HVAC equipment which services only the Premises, and shall
keep the same in good condition through regular inspection and servicing, and
(ii) maintain continuously throughout the Lease Term a service contract for the
maintenance of all such HVAC equipment with a licensed HVAC repair and
maintenance contractor approved by Landlord, which contract provides for the
periodic inspection and servicing of the HVAC equipment at least once every
sixty (60) days during the Lease Term. Tenant shall furnish Landlord with a copy
of such service contract, which shall provide that it may not be cancelled or
changed without at least thirty (30) day's prior written notice to Landlord.
Notwithstanding the foregoing, Landlord may elect at any time to assume
responsibility for the maintenance, repair and replacement of such HVAC
equipment that serves only the Premises. Tenant shall maintain continuously
through the Lease Term a service contract for the washing of all windows (both
interior and exterior surfaces) in the Premises.

               A.   Tenant shall maintain continuously throughout the Lease Term
a service contract for the maintenance of all such HVAC equipment with a
licensed HVAC repair and maintenance contractor approved by Landlord, which
contract provides for the periodic inspection and servicing of the HVAC
equipment at least once every sixty (60) days during the Lease Term. Tenant
shall furnish Landlord with a copy of such service contract, which shall provide
that it may not be cancelled or changed without at least thirty (30) day's prior
written notice to Landlord. Notwithstanding the foregoing, Landlord may elect at
any time to assume responsibility for the maintenance, repair and replacement of
such HVAC equipment that serves only the Premises, with the cost thereof to be
allocated as provided in Section 7b below. Tenant shall maintain continuously
through the Lease Term a service contact for the washing of all windows (both
interior and exterior surfaces in the Premises).

               B.   There are four (4) 20 ton VAC HVAC units (each consisting of
condensing unit, an air handler and a heating ware supply) on the roof of the
Premises (the "VAC HVAC" Units). Tenant will be responsible for repair or
replacement cost of up to Fifteen Thousand Dollars ($15,000.00) in the aggregate
over the term of the Lease for each such VAC HVAC Unit. Landlord shall be
responsible for all repairs and or replacements in excess of the first
$15,000.00 incurred by tenant over the term of the Lease for each VAC HVAC Unit
as provided in the following sentence. In the event repairs or replacements for
an individual VAC HVAC Unit are necessary which would bring the amount of repair
or replacement costs to be paid by Tenant for such particular VAC HVAC Unit to
exceed $15,000 in the aggregate over the term of the Lease, Landlord shall (i)
be responsible to pay for repair and maintenance of such VAC HVAC costing in
excess of $15,000 and thereafter for the remainder of the term of the Lease; or
(ii) replace such VAC HVAC Unit and amortize the cost of such new VAC HVAC Unit 

                                       3

 
over 20 a year life, with Tenant reimbursing Landlord as an Operating Expense
for the amortized amount falling within the remainder of the Lease Term.

          7.   Landlord's Representation Regarding Hazardous Materials: 
               -------------------------------------------------------  
Landlord, to the best of Landlord's knowledge, hereby makes the following
representations to Tenant as of the Effective Date without having made any
investigation to verify the accuracy thereof and is subject to and qualified by
all information and disclosures made to Tenant by Landlord.

               A.   The soil and groundwater on or under the Project does not
contain hazardous Materials in amounts which violate any Hazardous Materials
Laws to the extent that any governmental entity could require wither Landlord or
Tenant to make any remedial action with respect to such Hazardous Materials.

               B.   During the time that Landlord has owned the Project,
Landlord has received no written notice of: (i) any violation, or alleged
violation, of any Hazardous Materials Law with respect to the Project that has
not been remediated to the extent that no other remediation is then legally
required by applicable law; (ii) any pending claims relating to the presence of
Hazardous Materials on the Project; or, (iii) any pending investigation by any
governmental agency concerning the Project relating to Hazardous Materials.

          8.   Landlord's Remedies in Event of Tenant Default: (AMB)
               ----------------------------------------------       

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

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

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

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

                    4.   any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new lessee or lessees; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus

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

                                       4

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

As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default of
Tenant hereunder.

               B.   Continuation of Lease. In the event of any Default by
                    --------------------- 
Tenant, then in addition to any other remedies available to Landlord at law or
in equity and under this Lease, Landlord shall have the remedy described in
California Civil Code Section 1951.4 (Landlord may continue this Lease in effect
after Tenant's Default and abandonment and recover Rent as it becomes due,
provided tenant has the right to sublet or assign, subject only to reasonable
limitations).

               C.   Re-entry. In the event of any Default by Tenant, Landlord
                    -------- 
shall also have the right, with or without terminating this Lease, in compliance
with applicable law, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant.

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

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

                                       5

 
               F.   Cumulative Remedies. The remedies herein provided are not
                    -------------------    
exclusive and Landlord shall have any and all other remedies provided herein or
by law or in equity.

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

               H.   Notice Provisions. Tenant agrees that any notice given by
                    -----------------   
Landlord pursuant to Paragraph 13.1 of the Lease shall satisfy the requirements
for notice under California Code of Civil Procedure Section 1161, and Landlord
shall not be required to give any additional notice in order to be entitled to
commence an unlawful detainer proceeding.

          9.   Year 2000 Disclaimer: Landlord hereby disclaims any liability for
               --------------------                                             
any and all damages, injuries or other losses, whether ordinary, special,
consequential, punitive or otherwise, arising out of, relating to, or in
connection with, (a) the failure of any automated, computerized and/or software
system or other technology used in, on, or about the Property or relating to the
management or operation of the Property to accurately receive, provide or
process date/time data (including, but not limited to, calculating, comparing
and sequencing) both before and after September 9, 1999, and before, after,
during and between the years 1999 A. D. and 2000 A. D., and leap year
calculations and, or (b) the malfunction, ceasing to function or providing of
invalid or incorrect results by any such technology as a result of date/time
data. The foregoing disclaimer shall apply to any such technology used in, on,
or about the Property or that affects the Property, whether or not such
technology is within the control of Owner or any of Owner's agents or
representatives. THE FOREGOING DISCLAIMER INCLUDES A DISCLAIMER OF ALL
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATTERS
DESCRIBED HEREIN, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.

                                       6

 
LANDLORD:                                TENANT:
 
AMB Property, L.P.                       SonicWALL, Inc.
a Delaware limited partnership           a California corporation
By:  AMB Property Corporation,
     a Maryland corporation
 
 By:  /s/ John L. Rossi                  By:  /s/ Michael J. Sheridan
    ------------------------                -------------------------------
      John L. Rossi
 Its: Regional Manager                   Its: CFO
                                             ------------------------------
 
Telephone: (415) 394-9000                Telephone: (408) 327 - 7855
          ------------------                       ------------------------
Facsimile: (415) 394-0903                Facsimile: (408) 844 - 9100
          ------------------                       ------------------------

Executed at: 505 Montgomery Street       Executed at:   Santa Clara
                                                     ----------------------
             6/th/ Floor
             San Francisco, CA 94111
 
Date:  9/30/99                           Date:  9/29/99
     ---------------------                    -----------------------
 
                                       7

 
                                   EXHIBIT A

                               [MAP OF PROPERTY]

 
                                   EXHIBIT B


                         COMMENCEMENT DATE CERTIFICATE


  THIS COMMENCEMENT DATE CERTIFICATE is made as of September 27, 1999, by and
between the parties hereto with regard to that Lease dated September 27, 1999,
by and between AMB PROPERTY, L.P., a Delaware limited partnership, as Landlord
("Landlord"), and SONICWALL, INC., a California corporation as Tenant
("Tenant"), affecting those Premises commonly known as 1160 Bordeaux Drive,
Sunnyvale, California.  The parties hereto agree as follows:

  1.  Possession of the Premises has been delivered to Tenant and Tenant has
accepted and taken possession of the Premises.

  2.  The Commencement Date of the Lease Term is October 1, 1999 and the Lease
Term shall expire on September 30, 2004 unless sooner terminated according to
the terms of the Lease or by mutual agreement.

  3.  The Base Monthly Rent initially due pursuant to the Lease is Forty-Three
Thousand Five Hundred Forty-Five and 60/100 Dollars ($43,545.60) per month,
subject to any subsequent adjustments required by the Lease.

  4.  Landlord has received a Security Deposit in the amount of Forty-Nine
Thousand Nine Hundred Ninety-Six and 80/Dollars ($49,996.80).  In addition,
Tenant has prepaid rent in the amount of Forty-Three Thousand Five Hundred
Forty-Five and 60/Dollars ($43,545.60), which shall be applied to the first
installment of Base Monthly Rent.

  5.  The Lease is in full force and effect, neither party is in default of its
obligations under the Lease, and Tenant has no setoffs, claims, or defenses to
the enforcement of the Lease.

LANDLORD:                                      TENANT:                 
                                                                       
AMB Property, L.P.                             SonicWALL, Inc.         
a Delaware limited partnership                 a California corporation 
By:  AMB Property Corporation,
     a Maryland corporation

  By:     /s/ John L. Rossi                    By:  Michael J. Sheridan
     ---------------------------                    ------------------------
         John L. Rossi
  Its:   Regional Manager                      Its:      CFO
                                                    ------------------------
 

 
Telephone: (415) 394-9000                      Telephone: (408) 327 - 7855
          -------------------------                      -------------------
Facsimile: (415) 394-0903                      Facsimile: (408) 344 - 9100
          -------------------------                      ------------------- 
 
Executed at:  505 Montgomery Street            Executed at:  Santa Clara
                                                           -----------------
              6th Floor
              San Francisco, CA 94111
 
Date:  9/30/99                                 Date:  9/29/99
     ------------------------------                 ------------------------

 
                                   EXHIBIT C


                         INTERIOR IMPROVEMENT AGREEMENT

                                (NOT APPLICABLE)

 
                                   EXHIBIT D


                            [FLOOR PLAN OF PROPERTY]

 
                                   EXHIBIT E


                    DECLARATION OF PROTECTIVE COVENANTS FOR
                         MOFFETT INDUSTRIAL PARK NO. 3

That certain Declaration of Protective Covenants recorded at page 544 of Book O
549 of the Official Records of Santa Clara County, State of California on
September 5, 1972.

          THIS DECLARATION, made this 31st day of August, 1973, by THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA (hereafter called Prudential), a New
Jersey Corporation.

          WITNESSETH:
          -----------

          Whereas Prudential is the owner of that certain real property located
in the City of Sunnyvale, County of Santa Clara, State of California. described
in Exhibit "A" (hereafter called Moffett Industrial Park No. 3) and,

          Whereas Prudential proposes to subdivide Moffett Industrial Park No. 3
and to subject it to the following restrictions:

          NOW, THEREFORE, Prudential hereby declares that Moffett Industrial
Park No. 3 is and shall be held, conveyed, encumbered, leased and used subject
to the following uniform restrictions, covenants and equitable servitudes in
furtherance of a plan for the subdivision. improvement and sale thereof and the
enhance the value, desirability and attractiveness of Moffett Industrial Park
No. 3, the restrictions set forth herein shall run with the real property
included within Moffett Industrial Park No. 3 shall be binding on all persons
having or acquiring any interest in such real property or any part thereof,
shall inure to the benefit if every portion of Moffett Industrial Park No. 3 and
any interest therein shall inure to the benefit of and be binding upon each
successor in interest of Prudential and may be enforced by Prudential or its
successors in interest or by any Owner (as defined in Article I below) or his
successors in interest or by any Owner (as defined in Article 1 below) or his
successors in interest.

GENERAL PROVISIONS.

A.  Definitions

1.  "Architectural Control Committee" means Prudential. or any committee which
Prudential may appoint by an appropriate instrument recorded with the Santa
Clara County Recorder.

2.  "Lot" means such lot as shown on the parcel or subdivision map, or maps for
Moffett Industrial Park No. 3.

3.  "Site" means a parcel consisting either of a Lot, a portion of a Lot,
contiguous Lots, or portions of contiguous Lots.

4.  "Improvements" means all improvements to a Site, including, but without
limitation, buildings, loading areas, trackage, parking areas. pavement, poles,
fences, landscaping, signs and structures of any type.

5.  "Building" means the main portion of any building or similar structure and
all projections or extensions thereof, including garages, outside platforms and
docks.

 
6.  "Owner" means the person or persons, partnership or corporation in whom
title to a Site is vested, as shown by the official records of the Office of the
County Recorder of Santa Clara County, "Owner" does not mean mortgagees, trustee
and beneficiaries of deeds of trust or holders of any indebtedness secured by a
mortgage deed or trust.

B.  Purposes of Restrictions.

    The purpose of these covenants, conditions and restrictions is to insure
proper development and use of Moffett Industrial Park No. 3. to protect the
Owner of each Site against such improper development and use of other Sites as
will depreciate the value of his Site, to prevent erection of structures of
unsuitable or inharmonious design or construction, to secure and maintain
sufficient setbacks from streets and between structures, to maintain Common
Landscaping (as defined in Article V) and in general to provide for a high
quality of improvement of Moffett Park Industrial Park No. 3 in accordance with
a general plan.

II. REGULATION OF IMPROVEMENTS.

A.  Minimum Setback Lines.
    ----------------------

    No Improvement shall be constructed on any Site within fifty (50) feet of
the right-of-way line of any public street.  No Improvement other than
landscaping, paving and fenced shall be constructed on any Site within twenty
(20) feet of any other Site.  The Architectural Control Committee may approve
lesser setback lines if in its opinion a variation would be compatible with the
general development of Moffett Industrial Park No. 3.

B.  Ground Coverage.
    ----------------

    No more than forty-five per cent (45%) of the surface of any Site shall be
covered with a Building or Buildings.

C.  Construction Operations.
    ------------------------

    Construction of all Improvements shall be expedited so that none shall
remain in a partially finished condition any longer than reasonably necessary
for the completion thereof.

D.  Excavation.
    -----------

    No excavation shall be made on, and no sand, gravel or soil shall be
removed from, any Site, except in connection with the construction of
Improvements, and upon completion thereof, exposed openings shall be backfilled,
and disturbed ground shall be graded, leveled and paved or landscaped.

E.  Landscaping.
    ------------

    Within ninety (90) days of occupancy or completion of any building on a
Site, whichever occurs first, such Site shall be landscaped in accordance with
plans approved by the Architectural Control Committee.  The Owner of the Site
shall maintain such landscaping in good order and condition.

F.  Signs.
    ------

 
    No billboard or advertising signs shall be permitted on any Site other than
those approved by the Architectural Control Committee which identify the name,
business and products of the person or firm occupying the Site or the offer the
Site for sale or lease.

G.  Parking Areas.
    --------------

    Each Site shall have facilities for parking sufficient to serve the
business conducted thereon without using adjacent streets thereof, and no use
shall be made of any Site which would require parking in excess of the parking
spaces on the Site.  In any event, the number and size of the parking spaces on
each Site shall conform with all ordinances of the City of Sunnyvale applicable
with respect thereto.  Parking areas shall be laid out and constructed according
to plans approved by the Architectural Control Committee and shall be maintained
thereafter in good condition.  Except with the approval of the Architectural
Control Committee no parking shall be permitted within fifty (50) feet of the
right-of-way line of any street or between any Building and any street.

H.  Loading Area.
    -------------

    All vehicle loading and unloading in connection with an Owner's business
shall be conducted upon his Site, and sufficient space shall be provided
therefor.  Loading Areas shall be screened from view from streets and adjoining
properties by a visual barrier of not less than six (6) feet in height.  Except
with the prior written approval of the Architectural Control Committee, loading
areas shall not be located between any Building and any street closer than
seventy-five (75) feet to the right-of-way line of any street.

I.  Storage Areas.
    --------------

    No materials, supplies, equipment or trash containers shall be stored on a
Site except inside a Building or behind a visual barrier not less than six (6)
feet in height or rising two (2) feet above the stored materials, supplies or
equipment. whichever is higher, screening such storage areas from view from
streets and adjoining Sites.  Except with the prior written approval of the
Architectural Control Committee, storage areas shall not be located between any
Building and any street.

J.  Building-Regulations.
    ---------------------

    All Buildings shall be constructed and maintained in accordance with the
following standards unless an exception is approved in writing by the
Architectural Control Committee:

    1.  Exterior walls shall be of masonry, concrete or approved equal
    material.

    2.  Exterior walls shall be painted or otherwise finished in a manner
    acceptable to the Architectural Control Committee.  Exterior walls shall
    not be repainted or refinished unless and until the Architectural Control
    Committee shall have approved the color or refinishing materials to be
    used.

    3.  All Buildings shall be maintained in good order and repair and
    condition.  All exterior painted surfaces shall be maintained in first-
    class condition and shall be repainted at least once every five (5) years.

    4.  All electrical, telephone and other utility lines shall be underground
    and shall not be exposed on the exterior of any Building.

 
    5.  All electrical and mechanical apparatus, equipment, fixtures (other
    than lighting fixtures) conduit, ducts, vents, flues and pipes located on
    the exterior of any Building shall be concealed form view and shall be
    architecturally treated in a manner acceptable to the Architectural Control
    Committee.

III. APPROVAL OF PLANS.

     No Improvement shall be erected. placed, altered, maintained or permitted
to remain on any Site until plans and specifications showing plot layout and all
exterior elevations, with materials and colors therefor and structural design,
signs and landscaping shall have been submitted to and approved in writing by
the Architectural Control Committee. Such plans and specifications shall be
submitted in writing over the signature of the Owner of the Site or his
authorized agent.  Approval shall be based, among other things, on adequacy of
Site dimensions, adequacy of structural design; effect of location and use of
improvements on neighboring Sites; improvements, operations, and uses; relation
of topography, grade, and finished ground elevation of the Site being improved
to that of neighboring Sites: proper facing of main elevation with respect to
nearby streets; and conformity of the plans and specifications to the purpose
and general plan and intent of this Declaration.  The Architectural Control
Committee shall not arbitrarily or unreasonably withhold its approval of such
plans and specifications.  If the Architectural Control Committee fails to
either approve or disapprove such plans and specifications within thirty (30)
days after the same have been submitted to it, it shall be conclusively presumed
that the Architectural Control Committee has approved said plans and
specifications, subject, however, to the restrictions contained in Articles II
and IV hereof.

Neither the Architectural Control Committee nor its successors or assigns shall
be liable in damages to anyone submitting plans to them for approval, or to any
Owner by reason of mistake in judgement, negligence, or nonfeasance arising out
of or in connection with the approval or disapproval or failure to approve any
such plans.  Every person who submits plans to the Architectural Control
Committee for approval agrees, by submission of such plans, and every Owner
agrees, by acquiring title to a Site, that he will not bring any action or suit
against the Architectural Control Committee to recover such damages.

Notwithstanding anything to the contrary contained herein. after the expiration
of one (1) year from the date of issuance of a building permit by municipal or
other governmental authority for any Improvement, said Improvement shall, in
favor of purchasers and encumbrances in good faith and for value, be deemed to
be in compliance with all provisions of Article III, unless actual notice of
such noncompliance or noncompletion, executed by the Architectural Control
Committee, shall appear of record in the Office of the County Recorder of Santa
Clara County, California, or unless legal proceedings shall have been instituted
to enforce compliance or completion.

IV.  REGULAT1ON OF OPERATIONS AND USES.

A.   Permitted Operations and Uses.
     ------------------------------

     Except as provided in paragraphs B and C below, any industrial use will be
permitted on a Site including, but without limitation, manufacturing,
processing, storage, wholesale, office, laboratory, professional and research
and development.  Such retail uses as may be required for the convenience of
Owners and their employees shall be permitted and such retail uses may include,
but without limitation, restaurants, drug stores, barber and beauty shops, shoe
repair shops, cleaners, motels, post offices, banks and automobile service
stations.  Such municipal, governmental and public utility uses as may be
necessary or appropriate shall be permitted.

B.   Prohibited Operations and Uses.
     -------------------------------

 
     No site shall be used as a junk yard, stock yard, or slaughter yard or for
commercial excavation of building or construction materials, fat rendering or
distillation of bones, dumping, disposal, incineration or reduction of garbage,
sewage, offal, dead animals or refuse, or the smelting of iron, tin, zinc or
other ores or the prospecting or drilling for natural gas, oil or like
substances, except with prior written permission of the Architectural Control
Committee, and then only in such manner as will not materially inconvenience
other Owners or materially depreciate the value of adjacent property.

C.   Nuisance.
     ---------

     No noxious or offensive activity shall be carried on nor shall anything be
done on any Site which may be or become an annoyance or nuisance to the Owners
or occupants of other Sites or which will be offensive by reason of odor, fumes,
dust, dirt, fly-ash, smoke, noise, glare or which will be hazardous by reason of
danger of fire or explosion.

V.   COMMON LANDSCAPING.

     The Owner of each Site shall maintain landscaping existing thereon at the
time of purchase ("Common Landscaping") in a condition that meets the approval
of the Architectural Control Committee.  In the event that the Owner of any Site
does not maintain Common Landscaping in such condition or the landscaping
described in Article II E as therein provided, Prudential or its agents shall
have the right to maintain such landscaping in such condition, Prudential or its
agents shall have the right at any reasonable time to enter into any Site for
the purpose of such maintenance and for such other purposes as are reasonably
related thereto.  Prudential shall use due diligence and reasonable care in
repairing, maintaining and installing Common Landscaping to see that such
repair, maintenance and installation does not interfere with the Owner's use of
its Site.  In the event that Prudential or its agents should undertake any such
maintenance on any such Site, the Owner thereof shall reimburse Prudential for
all of Prudential's costs incurred for such maintenance.  In any legal
proceeding brought by Prudential to recover such costs, the Owner shall be
obligated to pay for the costs and expenses for such proceeding, including
reasonable attorneys' fees.

VI.  ENFORCEMENT.

A.   Interpretation.
     ---------------

     In case of uncertainty as to the meaning of any article, section,
subsection, paragraph, sentence, clause, phrase, or word of this Declaration the
interpretation of Prudential shall be final, conclusive and binding upon all
interested parties.

B.   Abatement and Suit.
     -------------------

     Violation of any restriction herein contained shall give to Prudential and
every Owner the right to enter the property upon or as to which said violation
or breach exists and to summarily abate and remove at the expense of the Owner
thereof, any structure, thing or condition that may be or exist thereon contrary
to the intent and meaning of the provisions hereof, or to prosecute a proceeding
law or in equity against the person or persons who have violated or are
attempting to violate any of these restrictions to enjoin or prevent them from
doing so, to cause said violation to be remedied or to recover damages from said
violation.

     In any legal or equitable proceeding for the enforcement of this
Declaration the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.  All remedies provided herein or at law or in equity shall be
cumulative and not exclusive.

 
C.   Inspection.
     -----------

     Prudential may from time to time at any reasonable hour or hours, enter and
inspect any property subject to these restrictions to ascertain compliance
therewith.

D.   Failure to Enforce Not a Waiver of Rights.
     ------------------------------------------

     Except as provided in the last paragraph of Article III hereof, the failure
of Prudential or any Owner to enforce any restriction contained herein shall in
no event be deemed a waiver of the right to do so thereafter nor of the right to
enforce any other restrictions contained herein.

VII. EXTINGUISHMENT, CONTINUATION AND MODIFICATION.

     This Declaration, every provision hereof and every covenant, condition and
restriction contained herein shall continue in full force and effect for a
period of forty (40) years from the date hereof, provided, however, that this
Declaration, or any provisions hereof, or any covenant, condition or restriction
contained herein, may be terminated, extended, modified, or amended with the
written consent of the Owners of sixty-five per cent (65%) of the land in
Moffett Park Industrial Park No. 3 (exclusive of portions thereof now or
hereafter dedicated to public use); provided, further, that so long as
Prudential owns at least twenty per cent (20%) of Moffett Industrial Park No. 3,
no such termination, extension, modification or amendment shall be effective
without written consent of Prudential.  No such termination, extension,
modification or amendment shall, be effective until a proper instrument in
writing has been executed and acknowledged and recorded in the Office of the
Recorder of Santa Clara County, California.

VIII. MOFFETT MUSIVLIAL PARK NO. 3 OWNERS ASSOCIATION.

A.    Membership.
      -----------

      Each Owner shall be a member of the Moffett Industrial Park No. 3 Owners
Association, an unincorporated association (hereinafter called the
"Association").

B.    Transfer of Rights and Duties.
      ------------------------------

      The rights and duties of Prudential under this Declaration shall be
transferred to and automatically assumed by the Association upon the earliest of
the following to occur:

      1.  The sale of ninety per cent (90%) of Moffett Industrial Park No. 3 by
Prudential to Owners as evidenced by the official records of the Santa Clara
County Recorder; or

      2.  The recordation by Prudential of an appropriate instrument with the
Santa Clara County Recorder transferring the rights and duties of Prudential
under this Declaration to the Association.

C.    Organization.
      -------------

      The members of the Association may at any time meet and adopt by-laws or
rules of procedure to govern the operation of the Association.  Until such by-
laws or rules of procedure are adopted, meetings of the Association may be
called by any member thereof upon seven (7) days' written notice to each member
setting forth the time and place thereof, provided that notice may be waived in
writing at any time by any member or members not so notified; twenty-five per
cent (25%) of the members of the Association shall constitute a quorum; and the
Association may act by a vote of a majority of its members present at a meeting,
duly called, at which a quorum is present or without a meeting by unanimous
written consent of its members.

 
IX.   ASSIGNMENT OF PRUDENTIAL'S RIGHTS AND DUTIES.

      Any and all of the rights, powers and reservations of Prudential herein
contained may be assigned to any person, corporation or entity which assumes in
writing the duties of Prudential pertaining to the particular rights, powers and
reservations assigned, and thereafter to the extent of such assignment, such
person, corporation or entity shall have the same rights and powers and be
subject to the same obligations and duties as are herein given to and assumed by
Prudential.

X.    CONSTRUCTIVE NOTICE AND ACCEPTANCE.

  Every Owner is and shall be conclusively deemed to have. consented and agreed
to every covenant, condition and restriction contained herein, whether or not
any reference to this Declaration is contained in the instrument by which such
Owner acquired an interest in any portion of Moffett Industrial Park No. 3.

IN WITNESS WHEREOF. Prudential, the declared herein, has caused its name to be
hereunto subscribed as of the day and yea first above written.

EXHIBIT "A"

DESCRIPTION

The Land referred to in this report is situated in the State of California,
County of Santa Clara, City of Sunnyvale, and is described as follows:

All that certain real property in the City of Sunnyvale, County of Santa Clara,
State of California, described as follows:

All of parcel "A" as shown upon that certain map entitled, "Parcel Map for Guy
F. Atkinson Company, being a portion of Rancho Pastoria de los Borregas,
Crossman Sub. No. 2 T. J. Murphy Sub. No. 3, which map was filed for record in
the office of the Recorder of the County of Santa Clara, State of California, on
January 6, 1970 in book 263 of Maps, at page 20.

 
                                   EXHIBIT F

                                 SIGN CRITERIA

                               [GRAPHICS OF SIGN]

 
                                   EXHIBIT G


2290 North First Street, Suite 300
San Jose. California 95131
(408) 922-0400
FAX (408) 922-0157

                                                                         ORCHARD
                                                                      PROPERTIES

TO:            PROSPECTIVE TENANT

FROM:          ORCHARD PROPERTIES

SUBJECT:       HAZARDOUS MATERIALS QUESTIONNAIRE AS IT RELATES
               CALIFORNIA HEALTH AND SAFETY CODE
               SECTIONS 25503.5 AND 25503.6

California Health and Safety Code Section 25503.5 requires any business which
handles Hazardous Materials in excess of certain limits to establish a business
plans for emergency response to a release or threatened release of Hazardous
Materials.  Health and. Safety Code Section 25503.6 specifies that any business
which is required under Section 25503.5 to establish and implement a business
plan and is located on leased property is required to notify the owner in
writing that the business is subject to Section 25503.5 and to provide a copy of
the business plan to the owner within five working days after receiving a
request from the owner or owner's agent for a copy.

The purpose of this letter is to request that you either verify that you are not
subject to Health and Safety Code Sections 25503.5 and 25503.6 or that you
provide the information required to be provided by those Sections by:

          1.   Completing the attached acknowledgment;

          2.   Completing the attached questionnaire;

          3.   If you are a reporting company, attaching a copy of your
               Hazardous materials management plan.

If you have questions as to your own specific requirements, please contact the
local fire department to assess your use.

Very truly yours,

ORCHARD PROPERTIES, AMO(R)

Joe Lewis
President

 
2290 North First Street, Suite 300
San Jose. California 95131
(408) 922-0400
FAX (408) 922-0157

                                                                         ORCHARD
                                                                      PROPERTIES


                                 ACKNOWLEDGMENT
                                 --------------
                                        
THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT IT (Mark One):

_____     Does not use any hazardous materials other than minor amounts of
          reproduction and janitorial chemicals consistent with routine office
          uses.
          (No need to fill out the attached Hazardous Materials Questionnaire.)

_____     Does not use hazardous materials in a manner or in a quantity
          requiring the preparation of a hazardous material management plan or
          any other documents under California Health and Safety Code Section
          25503.5.
          (Please fill out the attached Hazardous Materials Questionnaire.)

_____     Uses only those chemicals identified in -the attached questionnaire in
          accordance with the provisions of the attached hazardous materials
          management plan, which has been approved by the Fire Department of the
          City of ______________ and is in full force and effect.
          (Please fill out the attached Hazardous Materials Questionnaire and
          attach copy of your Hazardous Materials Management Plan.)

          THE UNDERSIGNED FURTHER ACKNOWLEDGES THAT IT HAS COMPLIED IN ALL
RESPECTS TO THE PROVISIONS OF LOCAL, STATE AND FEDERAL LAW AND THE HAZARDOUS
MATERIALS MANAGEMENT PLAN ATTACHED HERETO IN CONNECTION WITH ITS STORAGE, USE
AND DISPOSAL OF HAZARDOUS MATERIALS AND THAT IT HAS DISPOSED OF HAZARDOUS
MATERIALS ONLY BY (1) DISCHARGE TO APPROPRIATELY TREATED WASTE TO A PUBLICLY
OWNED TREATMENT WORK IN ACCORDANCE WITH A VALID AND ENFORCEABLE WASTE DISCHARGE
PERMIT AND (2) DELIVERY OF HAZARDOUS WASTES TO A PROPERLY LICENSED WASTE
DISPOSAL AGENT.


          IN WITNESS WHEREOF, the undersigned, an authorized officer of the
aforementioned company has executed this acknowledgement as of the date written
below.

          ________________________

          (Company Name)

          a_______________________

          By:_____________________

          ________________________
          (Print Name and Title)

 
                                   EXHIBIT H

                               Legal Description

All that certain Real Property in the City of Sunnyvale, County of Santa Clara,
State of California, description as follows:

All of Parcel 2, as shown upon that certain Map entitled, "Parcel map being a
Resubdivision of a portion Parcel 2-B, as shown upon that certain Parcel Map
recorded in Book 339 of Maps, at Page 55 and Parcel 5 as shown on Parcel Map
recorded in Book 373 of Maps, at Page 33, Santa Clara County Records", which Map
was filed for record in the Office of the Recorder of the County of Santa Clara,
State of California on August 22, 1976 in Book 380 of Maps, at Page 9.

All of Parcel A-1, as shown upon that certain Map entitled, "Parcel Map, being a
subdivision of Parcel "A" as shown upon that certain Parcel Map, which Map was
filed for record in the Office of the Recorder of the County of Santa Clara,
State of California on November 23, 1971 in Book 293 of Maps, at Page 13", which
Map was filed for record in the County of Santa Clara, State of California on
August 28, 1974 in Book 345 of Maps, at Page 18.

 
                                   EXHIBIT I


                             RULES AND REGULATIONS

1.   No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without the
prior written consent of the Landlord.  Landlord shall have the right to remove,
at Tenant's expense and without notice, any sign installed or displayed in
violation of this rule.  All approved signs or lettering on doors and walls
shall be printed, painted, affixed or inscribed at the expense of Tenant by a
person or vendor chosen by Landlord.  In addition, Landlord reserves the right
to change from time to time the format of the signs or lettering and to require
previously approved signs or lettering to be appropriately altered.

2.   If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use.  No awning shall be
permitted on any part of the Premises.  Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.

3.   Tenant shall not obstruct any sidewalks, halts, passages, exits, entrances,
elevators, escalators or stairways of the Building.  The halls, passages, exits,
entrances, elevators and stairways are not for the general public, and Landlord
shall in all cases retain the right to control and prevent access thereto of all
persons whose presence in the judgment of Landlord would be prejudicial to the
safety, character, reputation and interests of the Building and its tenants
provided that nothing herein contained shall be construed to prevent such access
to persons with whom any tenant normally deals in the ordinary course of its
business, unless such persons are engaged in illegal activities.  No tenant and
no employee or invitee or any tenant shall go upon the roof of the Building.

4.   The directory of the Building will be provided exclusively for the display
of the name and location of tenants only and Landlord reserves the right to
exclude any other names therefrom.

5.   Tenant shall not alter any lock or install a new or additional lock or bolt
on any door of its Premises.  Tenant, upon the termination of its tenancy, shall
deliver to Landlord the keys of all doors which have been furnished to Tenant,
and in the event of loss of any keys so furnished, shall pay Landlord therefor.

6.   Tenant shall have the right to use in common with other tenants or
occupants of the Building the parking facilities of the Building, as shown on
Exhibit A, if any, as designated from time to time by Landlord. Tenant shall not
at any time park or permit the parking of Tenant's vehicle, or the vehicles of
others, adjacent to loading areas or so as to interfere in any way with the use
of such areas. Tenant shall not park or permit to be parked any inoperative
vehicles or equipment on any portion of the parking or loading areas. The
parking ratio is 3.5: 1.

7.   If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with Landlord's instructions in
their installation.

8.   Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight, size and position of all
equipment, materials, furniture or other property brought into the Building.
Heavy objects shall, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight.  Business machines and 

 
mechanical equipment belonging to Tenant which cause noise or vibration that may
be transmitted to the structure of the Building or to any space therein to such
a degree as to be objectionable to Landlord or to any tenants shall be placed
and maintained by Tenant at Tenants expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. The persons employed to move
such equipment in or out of the Building must be acceptable to Landlord.
Landlord will not be responsible for loss of, or damage to, any such equipment
or other property from any cause, and all damage done to the Building by
maintaining or moving such equipment or other property shall be repaired at the
expense of Tenant.

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

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

12.  Except as approved by Landlord, Tenant shall not mark, drive nails, screw
or drill into the partitions, woodwork or plaster or in any way deface the
Premises.  Tenant shall not cut or bore holes for wires.  Tenant shall not affix
any floor covering to the floor of the Premises in any manner except as approved
by Landlord.  Tenant shall repair any damage resulting from noncompliance with
this rule.

13.  Tenant shall store all its trash and garbage within its Premises.  Tenant
shall not place into any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord.

14.  No cooking shall be done or permitted by any Tenant on the Premises, except
that use by the Tenant of Underwriters, Laboratory approved equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted,
provided that such equipment and use is in accordance with all federal, state
and city laws, codes, ordinances, rules and regulations.  Tenant shall have the
right to install and operate microwave oven(s) and toaster(s) for the use of its
employees.

15.  Tenant shall not use any hand trucks except those equipped with the rubber
tires and side guards or such other material-handling equipment as Landlord may
approve.  Term shall not bring any other vehicles of any kind into the Building.

16.  Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant except as Tenant's address.

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

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

 
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Building.

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

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

21.  Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invites and guests.