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<TEXT>

<PAGE>   1




                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549



                                    FORM 8-K


                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported): December 29, 2000





                                   CREE, INC.
             (Exact name of registrant as specified in its charter)


 NORTH CAROLINA                  34-21154                      56-1572719
 (State or other           (Commission File No.)             I.R.S. Employer
  jurisdiction                                             Identification Number
of incorporation)



                               4600 SILICON DRIVE
                          DURHAM, NORTH CAROLINA 27703
                    (Address of principal executive offices)



                                 (919) 313-5300
              (Registrant's telephone number, including area code)


                                       N/A
          (Former name or former address, if changed since last report)




<PAGE>   2

ITEM 2.     ACQUISITION OR DISPOSITION OF ASSETS.

            On December 29, 2000, Cree, Inc. (Nasdaq: CREE), completed its
previously announced acquisition of the UltraRF division (the "Business") of
Spectrian Corporation (Nasdaq: SPCT) of Sunnyvale, California, through the
purchase of the assets of the Business by Cree's wholly-owned subsidiary, Zoltar
Acquisition, Inc. The subsidiary was renamed UltraRF, Inc. following the
completion of the acquisition. The Business designs, manufactures and markets a
line of bipolar transistors and laterally diffused metal oxide semiconductor
(LDMOS) radio frequency (RF) power semiconductors. The asset purchase was
consummated pursuant to an Asset Purchase Agreement dated as of November 20,
2000 (the "Asset Purchase Agreement") between Spectrian and UltraRF. A copy of
the Asset Purchase Agreement is included as Exhibit 2.01 to this report and a
copy of the press release announcing the completion of the acquisition is
included as Exhibit 99.01. The description therein of the agreement and the
transactions consummated thereby does not purport to be complete and is
qualified in its entirety by reference to Exhibit 2.01.

            Under the terms of the Asset Purchase Agreement, Cree's subsidiary,
UltraRF, acquired substantially all of the assets of the Business, including
business inventories, equipment and tangible property, intangible assets,
contract rights, records, supplies, rights associated with prepaid expenses,
certain rights against third parties, certain software and trade accounts
receivable attributable to external sales (offset by accounts payable, with no
obligation of Cree to collect accounts receivable), and assumed certain
specified liabilities of the Business, including obligations and liabilities
under certain contracts, warranty obligations and tax obligations and
liabilities relating to the Business, in exchange for a total of 2,656,917
shares of Cree common stock. 191,094 shares of Cree common stock were placed in
escrow to secure Spectrian's representations, warranties and covenants under the
Asset Purchase Agreement. The escrow period is one year, with 50% of the
escrowed shares to be released after six months if there have been no
indemnification claims. The acquired assets included equipment and other
physical property used by the Business in designing, manufacturing and marketing
bipolar and LDMOS RF power semiconductors and Cree intends to continue such use
through its UltraRF subsidiary.

            The UltraRF facility is located in a building on one of two parcels
of land in Sunnyvale, California, that Spectrian leased in November 1996 for a
15-year term (with three options to extend the lease for up to an additional
fifteen years). In connection with the acquisition of the assets of the
Business, Spectrian and Cree's subsidiary, UltraRF, also entered into a sublease
agreement (included as Exhibit 10.01 to this report) with respect to the UltraRF
facility. Under the sublease, Spectrian has leased the UltraRF facility to
UltraRF for a term that expires in November 2011. If Spectrian exercises its
option to extend the term of its master lease with its landlord, UltraRF may
also exercise an option to extend its sublease of the UltraRF facility. Cree has
guaranteed the obligations of its subsidiary under the sublease.

            In addition, at the closing of the acquisition, Cree's subsidiary,
UltraRF, signed a supply agreement with Spectrian whereby Spectrian has
committed to purchase semiconductor components having a minimum aggregate
purchase price of approximately $58 million during the two years ended December
31, 2002, and UltraRF agreed to allocate sufficient capacity to supply Spectrian
with quantities in excess of its minimum commitment by up to 20%. The minimum
purchase amounts are fixed for each quarter during the two year term of the
agreement, with the aggregate of the eight quarters equaling $58 million. Cree,
UltraRF and Spectrian also entered into a development agreement, under which
Spectrian has agreed to provide funding of $2.4 million during calendar 2001 to
support development work by Cree and UltraRF directed to development of improved
high linearity and gain LDMOS driver modules, high efficiency LDMOS power
modules, and silicon carbide-based RF power transistors for potential use in
Spectrian's power amplifier products.


<PAGE>   3

            The Asset Purchase Agreement was negotiated at arm's length between
Cree and representatives of Spectrian. Neither Cree nor any director or officer
of Cree is affiliated with or has any material relationship with Spectrian.



<PAGE>   4

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

         (a)      Financial statements of businesses acquired.

                  The financial statements required to be filed as part of this
                  report will be filed by amendment to this report as soon as
                  practicable but not later than March 19, 2001.

         (b)      Pro forma financial information.

                  The historical pro forma financial information required to be
                  filed as part of this report will be filed by amendment to
                  this report as soon as practicable but not later than March
                  19, 2001.

         (c)      Exhibits.

Exhibit Number             Description of Exhibit
--------------             ----------------------

2.01                       Asset Purchase Agreement dated November 20, 2000,
                           among Cree, Inc., Spectrian Corporation, and Zoltar
                           Acquisition, Inc.*

10.01                      Sublease Agreement for 160 Gibraltar Court,
                           Sunnyvale, CA dated December 29, 2000, between
                           Spectrian Corporation and Zoltar Acquisition, Inc.

99.01                      Press Release regarding UltraRF Asset Purchase, dated
                           January 2, 2001 of Cree, Inc.


*Certain schedules and attachments have been omitted from this filing pursuant
to Item 601(b)(2). A list of omitted schedules and attachments is attached to
the agreement. Registrant hereby agrees to furnish supplementally to the
Commission a copy of any omitted schedule or attachment upon request.





<PAGE>   5

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                             CREE, INC.



                                             By: /s/ Cynthia B. Merrell
                                                 -------------------------------
Dated: January 12, 2001                          Cynthia B. Merrell
                                                 Chief Financial Officer


<PAGE>   6

                                  EXHIBIT INDEX


Exhibit Number                Description of Exhibit
--------------                ----------------------

2.01                       Asset Purchase Agreement dated November 20, 2000,
                           among Cree, Inc., Spectrian Corporation, and Zoltar
                           Acquisition, Inc.*

10.01                      Sublease Agreement for 160 Gibraltar Court,
                           Sunnyvale, CA dated December 29, 2000, between
                           Spectrian Corporation and Zoltar Acquisition, Inc.

99.01                      Press Release regarding UltraRF Asset Purchase, dated
                           January 2, 2001 of Cree, Inc.


*Certain schedules and attachments have been omitted from this filing pursuant
to Item 601(b)(2). A list of omitted schedules and attachments is attached to
the agreement. Cree hereby agrees to furnish supplementally to the Commission a
copy of any omitted schedule or attachment upon request.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.01
<SEQUENCE>2
<FILENAME>g66404ex2-01.txt
<DESCRIPTION>ASSET PURCHASE AGREEMENT
<TEXT>

<PAGE>   1

                                                                    EXHIBIT 2.01

================================================================================

                            ASSET PURCHASE AGREEMENT


                          Dated as of November 20, 2000

                                      Among


                                   CREE, INC.,

                          a North Carolina corporation

                                    "PARENT,"


                            ZOLTAR ACQUISITION, INC.,

                          a North Carolina corporation

                                    "NEWCO,"


                                       and


                             SPECTRIAN CORPORATION,

                             a Delaware corporation

                                   "SPECTRIAN"

================================================================================


<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----

<S>                                                                                               <C>
ASSET PURCHASE AGREEMENT ...........................................................................3

ARTICLE 1 DEFINITIONS ..............................................................................3

         SECTION 1.1  DEFINITIONS ..................................................................3
         SECTION 1.2  INTERPRETATION ...............................................................9

ARTICLE 2 SALE AND PURCHASE OF ACQUIRED ASSETS AND LIABILITIES .....................................9

         SECTION 2.1  PURCHASE AND SALE ............................................................9
         SECTION 2.2  ACQUIRED ASSETS AND EXCLUDED ASSETS ..........................................9
         SECTION 2.3  ASSUMPTION OF BUSINESS LIABILITIES AND OBLIGATIONS ..........................12

ARTICLE 3 PURCHASE PRICE ..........................................................................14

         SECTION 3.1  THE PURCHASE PRICE ..........................................................14

ARTICLE 4 THE CLOSING .............................................................................15

         SECTION 4.1  CLOSING DATE ................................................................15
         SECTION 4.2  TRANSACTIONS TO BE EFFECTED AT THE CLOSING ..................................15

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SPECTRIAN .............................................16

         SECTION 5.1  SPECTRIAN'S ORGANIZATION; GOOD STANDING .....................................16
         SECTION 5.2  AUTHORITY; EXECUTION AND DELIVERY ...........................................16
         SECTION 5.3  CONSENTS AND APPROVALS; NO VIOLATIONS .......................................16
         SECTION 5.4  FINANCIAL STATEMENTS ........................................................16
         SECTION 5.5  TITLE TO ACQUIRED ASSETS ....................................................16
         SECTION 5.6  ABSENCE OF CERTAIN CHANGES OR EVENTS ........................................17
         SECTION 5.7  EMPLOYMENT MATTERS ..........................................................17
         SECTION 5.8  EMPLOYEE BENEFIT PLANS ......................................................18
         SECTION 5.9  LITIGATION ..................................................................18
         SECTION 5.10 COMPLIANCE WITH LAWS ........................................................18
         SECTION 5.11 CONTRACTS ...................................................................19
         SECTION 5.12 NO BROKERS ..................................................................20
         SECTION 5.13 INTELLECTUAL PROPERTY .......................................................20
         SECTION 5.14 ACCREDITED INVESTOR STATUS ..................................................21
         SECTION 5.15 RELIANCE ON EXEMPTIONS ......................................................21
         SECTION 5.16 TRANSFER OR RESALE ..........................................................21
         SECTION 5.17 LEGENDS .....................................................................22
         SECTION 5.18 ENVIRONMENTAL COMPLIANCE ....................................................22
         SECTION 5.19 ALL ASSETS OF BUSINESS; CONDITION OF ACQUIRED ASSETS ........................24
         SECTION 5.20 TAXES .......................................................................24
         SECTION 5.21 INVENTORY ...................................................................24
         SECTION 5.22 MANUFACTURING YIELDS ........................................................24

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF NEWCO AND PARENT ......................................25

         SECTION 6.1  ORGANIZATION AND QUALIFICATION ..............................................25
         SECTION 6.2  CAPITALIZATION ..............................................................25
         SECTION 6.3  AUTHORITY; EXECUTION AND DELIVERY ...........................................25
         SECTION 6.4  CONSENTS AND APPROVALS; NO VIOLATIONS .......................................25
         SECTION 6.5  SEC DOCUMENTS ...............................................................26
         SECTION 6.6  COMPLIANCE WITH LAW; PERMITS ................................................26
         SECTION 6.7  LITIGATION ..................................................................26
</TABLE>


                                       i
<PAGE>   3

<TABLE>
<S>                                                                                                <C>
         SECTION 6.8  BROKERS AND FINDERS .........................................................26

ARTICLE 7 CERTAIN COVENANTS AND AGREEMENTS ........................................................26

         SECTION 7.1  COVENANTS OF SPECTRIAN RELATING TO CONDUCT OF BUSINESS ......................26
         SECTION 7.2  NEWCO'S ACCESS TO INFORMATION ...............................................27
         SECTION 7.3  PRESERVATION OF RECORDS .....................................................27
         SECTION 7.4  LEGAL CONDITIONS TO CLOSING .................................................28
         SECTION 7.5  EMPLOYEE BENEFITS ...........................................................28
         SECTION 7.6  TAX MATTERS .................................................................29
         SECTION 7.7  EXPENSES ....................................................................31
         SECTION 7.8  FINANCIAL INFORMATION .......................................................31
         SECTION 7.9  BULK TRANSFER LAWS ..........................................................31
         SECTION 7.10 ACTIONS OF NEWCO AND SPECTRIAN ..............................................31
         SECTION 7.11 NO ADDITIONAL REPRESENTATIONS ...............................................31
         SECTION 7.12 HART-SCOTT-RODINO ACT .......................................................32
         SECTION 7.13 LEASE .......................................................................32
         SECTION 7.14 DELIVERY OF AUDITED FINANCIAL STATEMENTS ....................................33
         SECTION 7.15 STUB PERIOD FINANCIAL INFORMATION ...........................................33
         SECTION 7.16 LISTING OF ADDITIONAL SHARES ................................................33
         SECTION 7.17 NON-COMPETITION; NON-SOLICITATION ...........................................33
         SECTION 7.18 ORDERLY DISPOSITION OF STOCK CONSIDERATION ..................................34
         SECTION 7.19 EXCLUSIVITY .................................................................34
         SECTION 7.20 REGISTRATION RIGHTS .........................................................35
         SECTION 7.21 PARENT'S INVESTIGATION PERIOD ...............................................35

ARTICLE 8 CONDITIONS PRECEDENT ....................................................................36

         SECTION 8.1  CONDITIONS TO EACH PARTY'S OBLIGATIONS ......................................36
         SECTION 8.2  CONDITIONS TO OBLIGATIONS OF PARENT AND NEWCO ...............................37
         SECTION 8.3  CONDITIONS TO THE OBLIGATIONS OF SPECTRIAN ..................................38

ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER .......................................................39

         SECTION 9.1  TERMINATION .................................................................39
         SECTION 9.2  AMENDMENTS AND WAIVERS ......................................................40

ARTICLE 10 INDEMNIFICATION ........................................................................40

         SECTION 10.1 INDEMNIFICATION BY SPECTRIAN ................................................40
         SECTION 10.2 INDEMNIFICATION BY PARENT AND NEWCO .........................................41
         SECTION 10.3 LOSSES NET OF INSURANCE, ETC ................................................42
         SECTION 10.4 TERMINATION OF INDEMNIFICATION ..............................................42
         SECTION 10.5 PROCEDURE ...................................................................42

ARTICLE 11 GENERAL PROVISIONS .....................................................................43

         SECTION 11.1 NOTICES .....................................................................43
         SECTION 11.2 HEADINGS ....................................................................44
         SECTION 11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ..................................44
         SECTION 11.4 SEVERABILITY ................................................................44
         SECTION 11.5 COUNTERPARTS ................................................................44
         SECTION 11.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES ..............................44
         SECTION 11.7 GOVERNING LAW ...............................................................45
         SECTION 11.8 PUBLICITY ...................................................................45
         SECTION 11.9 ASSIGNMENT ..................................................................45
</TABLE>


                                       ii
<PAGE>   4

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT, dated as of November 20, 2000 (this
"Agreement"), is by and among Cree, Inc., a North Carolina corporation
("Parent"), Zoltar Acquisition, Inc., a North Carolina corporation and
wholly-owned subsidiary of Parent ("Newco"), and Spectrian Corporation, a
Delaware corporation ("Spectrian").

         WHEREAS, Spectrian is engaged, among other things, in the Business
referred to below; and

         WHEREAS, Spectrian desires to sell to Newco, and Newco desires to
purchase from Spectrian, substantially all of the assets used in connection with
the Business, all upon the terms and subject to the conditions hereinafter set
forth.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:

         "Acquired Assets" shall have the meaning given such term in Section
2.2.

         "Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly Controls, is Controlled by or is under common
Control with such first person. A person shall be deemed to "Control" another
person if such first person has the power to direct or cause the direction of
such other person, whether through ownership of securities, by contract or
otherwise.

         "Assigned Rights" shall have the meaning given such term in the
Assignment and License Agreement attached hereto in Annex I.

         "Assumed Liabilities" shall have the meaning given such term in Section
2.3.

         "Audited Financial Statements" shall have the meaning given such term
in Section 7.14.

         "Business" shall mean Spectrian's line of business commonly know as the
"UltraRF division" which is generally engaged in the business of developing,
manufacturing and supplying radio frequency power semiconductor products in the
Semiconductor Field primarily for the wireless market.

         "Business Account Payable" shall mean any account payable of Spectrian
that relates primarily to or arises primarily out of the operation of the
Business.


                                       3
<PAGE>   5

         "Business Account Receivable" shall mean any external account
receivable of Spectrian that relates primarily to or arises primarily out of the
operation of the Business, excluding intercompany receivables.

         The term "business day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the City of New York are permitted or
required to close by law or regulation.

         "Business Equipment" shall mean all equipment, tools, and other
tangible property of any kind used or held primarily for use in the Business, as
set forth on Schedule 2.2(a)(ii).

         "Business Inventory" shall mean all inventories of raw materials,
manufactured and purchased parts, goods in process, finished goods and supplies
used or maintained in connection with the Business.

         "Business Names" shall mean all of Spectrian's goodwill relating to the
Business and Spectrian's rights to the use in the Business of the names and
marks "UltraRF" (including domain names) and any and all formative, variants and
derivatives thereof.

         "Closing" and "Closing Date" shall have the respective meanings given
such terms in Section 4.1.

         "COBRA" shall have the meaning given such term in Section 7.5.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Competing Business" shall have the meaning given such term in Section
7.17.

         "Confidentiality Agreement" shall have the meaning given such term in
Section 7.2.

         "Contracts" shall mean written and oral contracts, leases, indentures,
agreements, commitments, purchase orders and all other legally binding
arrangements, whether in existence on the date hereof or subsequently entered
into, including all amendments thereto.

         "DOJ" shall have the meaning given such term in Section 6.4.

         "Environmental Condition" shall have the meaning given such term in
Section 2.3(b)(viii).

         "ERISA" shall have the meaning given such term in Section 5.8.

         "Escrow Agent" shall mean Branch Banking and Trust Company, a North
Carolina banking corporation.

         "Escrow Consideration" means 95,547 shares of Parent Common Stock
(equal to a number of shares of Parent Common Stock equal to (x) $10 million
divided by (y) the average closing price of a share of Parent Common Stock on
the NASDAQ National Market for the five (5) consecutive trading days immediately
preceding the date hereof).


                                       4
<PAGE>   6

         "Exchange Act" shall mean the Securities and Exchange Commission Act of
1934, as amended.

         "Excluded Assets" shall have the meaning given such term in Section
2.2.

         "Excluded Liabilities" shall have the meaning given such term in
Section 2.3.

         "Facility" shall mean the real property and improvements thereon
located at 160 Gibraltar Court, Sunnyvale, California 94089.

         "Financial Information" shall have the meaning given such term in
Section 5.4.

         "FTC" shall have the meaning given such term in Section 6.4.

         "GAAP" shall mean United States generally accepted accounting
principles.

         "Governmental Entity" shall mean any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
or foreign.

         "Governmental Rule" shall mean any law, judgment, order, decree,
statute, ordinance, rule or regulation issued or promulgated by any Governmental
Entity.

         "Hazardous Substance" shall have the meaning given such term in Section
5.18.

         "HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

         "Immediately Available Consideration" shall mean at Parent's option
(which option must be exercised on the Closing Date), either (i) $30 million in
immediately available, freely transferable, cleared funds, or (ii) a number of
shares of Parent Common Stock equal to (a) $30 million divided by (b) the
average closing price of a share of Parent Common Stock on the NASDAQ National
Market for the five (5) consecutive trading days immediately preceding the
Closing Date which shares may then be sold by Spectrian through a registered
market maker designated by Parent (and whose commission shall be paid by Parent)
within five (5) business days of the Closing; provided, however, that in the
event Spectrian elects to sell such shares during the five (5) business day
period referred to above and the aggregate proceeds of such sale are less than
$30 million, Parent agrees that it shall pay the difference (which amount shall
be pro rated on a basis consistent with the percentage of such shares actually
sold) in immediately available, freely transferable, cleared funds by wire
transfer to an account designated by Spectrian within six (6) business days of
the Closing.

         "Indemnified Parties" shall have the meaning given such term in Section
7.21.

         "Indemnifying Party" shall have the meaning given such term in Section
10.5.

         "Intellectual Property" shall mean any and all of the following,
whether or not registered, together with all grants, registrations and
applications relating thereto: U.S. and foreign patents, utility models,
copyrights, mask works, trademarks, service marks, logos, designs, trade names,


                                       5
<PAGE>   7

inventions, trade secrets, know-how and all other proprietary and intellectual
property rights and information.

         "IRS" means the Internal Revenue Service.

         "Lease" shall have the meaning given such term in Section 7.13.

         "Lien" shall mean any mortgage, claim, charge, lien, security interest,
easement, right of way, pledge, covenant, restriction or encumbrance of any
nature whatsoever.

         "Loss" shall mean any loss, liability, claim, damage or expense,
whether accrued, absolute, fixed, contingent, known or unknown or otherwise.

         "Marketing Materials" shall mean all advertising materials, customer
lists, training materials and market research materials.

         "Material Adverse Effect" shall mean, with respect to the Business or
with respect to a party, a material adverse effect (i) on the business,
properties, assets, liabilities, operations, results of operations or condition
(financial or otherwise) of the Business, on the one hand, or Newco and the
Parent, on the other hand, as applicable, taken as a whole, or (ii) on the
ability of Spectrian, on the one hand, or Newco and the Parent, on the other
hand, to perform its obligations under or to consummate the transactions
contemplated by this Agreement.

         "Newco Indemnified Parties" shall have the meaning given such term in
Section 10.1.

         "Parent Common Stock" shall mean the common stock, par value $0.0025
per share, of Parent.

         "Parent SEC Reports" shall have the meaning given such term in Section
6.5.

         "Parent's Investigation" shall have the meaning given such term in
Section 7.21.

         "Parent's Investigation Period" shall have the meaning given such term
in Section 7.21.

         "Permits" shall mean permits, licenses, franchises, approvals, waivers,
orders, rights privileges and authorizations of any nature granted issued,
approved or allowed by or from any Governmental Entity.

         "Permitted Lien" shall mean (a) any mechanics', carriers', workmen's,
repairmen's, and other like Lien arising or incurred in the ordinary course of
business, (b) any Lien for Taxes, assessments and other governmental charges
that are not yet due and payable or that may thereafter be paid without penalty,
or that are being contested in good faith by appropriate proceedings and (c) any
imperfection of title or other covenants, restrictions or encumbrance that,
individually or in the aggregate with other such imperfections, covenants,
restrictions and encumbrances, is not substantial in character or amount and
does not materially interfere with the use of, the Acquired Assets in the
Business as presently conducted or proposed to be conducted.


                                       6
<PAGE>   8

         "Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, business association, organization,
Governmental Entity or other entity.

         "Personal Property" shall mean all of the Acquired Assets.

         "Post-Closing Period" shall mean any Taxable Period, or portion
thereof, that begins after the Closing.

         "Potential Transaction" shall have the meaning given such term in
Section 7.19.

         "Pre-Closing Period" shall mean any Taxable Period, or portion thereof,
that ends at the time of or before the Closing.

         "Property" shall have the meaning given such term in Section 7.21.

         "Purchased Intellectual Property" shall mean the Intellectual Property
of the Business to be transferred to Newco pursuant to the Assignment and
License Agreement.

         "Purchase Price" shall mean the Stock Consideration plus the
Immediately Available Consideration plus the Escrow Consideration.

         "Registrable Securities" shall have the meaning given such term in
Section 7.20.

         "Resolution CPA Firm" shall have the meaning given such term in Section
7.6.

         "SEC" shall mean the Securities and Exchange Commission.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         "Semiconductor Field" shall mean the design, fabrication, manufacture
and sale of electronic devices and/or circuits on semiconductor materials, as
well as passive elements in wafer, die or multi-chip module form (meaning
multiple bare die on an electronic interconnect substrate) or in integrated
circuit packaging, whether in hybrid or monolithic form.

         "Spectrian Benefit Plan" shall have the meaning given such term in
Section 5.8.

         "Spectrian Contractors" shall have the meaning given such term in
Section 5.7.

         "Spectrian Employees" shall have the meaning given such term in Section
7.5.

         "Spectrian Indemnified Parties" shall have the meaning given such term
in Section 10.2.

         "Spectrian Rights" shall have the meaning given such term in Section
5.13.

         "Spectrian's Cap Amount" shall have the meaning given such term in
Section 10.1.

         "Spectrian's Threshold Amount" shall have the meaning given such term
in Section 10.1.


                                       7
<PAGE>   9

         "Stock Consideration" means 812,154 shares of Parent Common Stock,
(equal to a number of shares of Parent Common Stock equal to (x) $85 million
divided by (y) the average closing price of a share of Parent Common Stock on
the NASDAQ National Market for the five (5) consecutive trading days immediately
preceding the date hereof).

         "Subject Rights" shall have the meaning defined in the Assignment and
License Agreement.

         "Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") shall mean income, gross receipts, ad valorem, excise, value-added,
sales, use, transfer, franchise, license, stamp, occupation, withholding,
employment, payroll, property, estimated or environmental tax, together with any
interest, penalty, deficiency or addition to tax, whether disputed or not.

         "Tax Return" shall mean any return, report, statement, declaration
estimate and the like required to be filed with any Taxing Authority.

         "Taxable Period" shall mean any taxable year or any other period that
is treated as a taxable year with respect to which any Tax may be imposed under
any applicable statute, rule or regulation.

         "Taxing Authority" shall mean any governmental body or authority
responsible for the imposition of any Tax.

         "Termination Date" shall have the meaning given such term in Section
11.3.

         "Third Party Claim" shall have the meaning given such term in Section
10.5.

         "Transaction Agreements" shall mean this Agreement, the Escrow
Agreement, the Development Agreement, the Employment Agreements, the Transition
Services Agreement, the Purchase and Supply Agreement, the Registration Rights
Agreement, and the Assignment and License Agreement, which Transaction
Agreements shall be attached hereto as Annex I and an Assignment and Assumption
Agreement which shall be in a mutually acceptable form.

         "Transferred Employee" shall have the meaning given such term in
Section 7.5.

         "UltraRF Net Assets" means, by reference to each respective balance
sheet prepared as of the date of calculation, the difference obtained by
subtracting (a) total liabilities of the Business as shown on such balance
sheet, including capital lease obligations but excluding Excluded Accrued
Liabilities from (b) total assets of the Business as shown on such balance
sheet, excluding intercompany accounts receivable.

         "Unaudited Closing Balance Sheet" shall have the meaning given such
term in Section 3.1.

         "Unaudited Stub Period Financial Information" shall have the meaning
given such term in Section 7.15.

         "WARN Act" shall have the meaning given such term in Section 7.5.


                                       8
<PAGE>   10

         Section 1.2 Interpretation.

                  (a) When used in this Agreement the words "include",
"includes" and "including" shall be deemed to be followed by the words "without
limitation".

                  (b) When used in this Agreement, the word "primarily" shall be
deemed to be followed by the words "or exclusively".

                  (c) Any terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.

                  (d) When used in this Agreement, the word "or" is not
exclusive.

                  (e) All references to Articles, Sections, Exhibits, Schedules
and Appendices shall be deemed references to Articles, Sections, Exhibits,
Schedules and Appendices to this Agreement, unless otherwise indicated.

                  (f) This Agreement shall be deemed drafted jointly by all the
parties hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this Agreement.

                                   ARTICLE 2
              SALE AND PURCHASE OF ACQUIRED ASSETS AND LIABILITIES

         Section 2.1 Purchase And Sale.

                  (a) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Spectrian shall sell, assign, transfer, convey
and deliver to Newco, and Newco shall (and Parent shall cause Newco to)
purchase, acquire and accept, all of Spectrian's right, title and interest in,
to and under the Acquired Assets.

                  (b) The Schedules attached hereto pursuant to Section 2.2 and
Section 2.3, shall reflect assets and liabilities as of October 1, 2000, and, in
each case, shall be deemed to include assets and liabilities accrued and
disposed in the ordinary course of business for the Business between such date
and the Closing Date.

         Section 2.2 Acquired Assets and Excluded Assets.

                  (a) The term "Acquired Assets" shall mean the properties,
assets, goodwill and rights of whatever kind and nature, real or personal,
tangible or intangible, other than the Excluded Assets, of Spectrian existing on
the Closing Date that constitute or relate primarily to or arise primarily out
of the operation of the Business, including, without limitation:

                           (i)      all Business Inventories;

                           (ii)     all Business Equipment and tangible
                                    property, including fab, test, assembly &
                                    burn in, construction in-process, office and
                                    research and development equipment,
                                    leasehold improvements and certain computer
                                    equipment, identified specific UltraRF
                                    software if legally


                                       9
<PAGE>   11

                                    transferable and utilized solely by UltraRF
                                    and if subject to any transfer fees then
                                    such fees are to be paid by the Parent, as
                                    set forth on Schedule 2.2(a)(ii);

                           (iii)    all rights associated with prepaid expenses
                                    related to the Business, including pre-paid
                                    taxes that are subject to proration pursuant
                                    to Section 7.6(a);

                           (iv)     all intangible assets of the Business
                                    existing on and as of the Closing Date,
                                    including the Business Names and the
                                    Purchased Intellectual Property to the
                                    extent transferred to Parent or Newco
                                    pursuant to the Assignment and License
                                    Agreement together with all goodwill
                                    associated therewith, licenses and
                                    sublicenses granted and obtained with
                                    respect thereto, and rights thereunder,
                                    remedies against infringement thereof, and
                                    rights to protections of interests therein
                                    under the laws of all jurisdictions;

                           (v)      all right, title and interest of Spectrian
                                    in and to the Contracts to which Spectrian
                                    is a party or by which Spectrian is bound
                                    that are listed in Schedule 2.2(a)(v), and
                                    all other Contracts to which Spectrian is a
                                    party on the Closing Date that relate
                                    primarily to or arise primarily out of the
                                    operation of the Business that are not
                                    required to be listed in such Schedule
                                    2.2(a)(v) and which were entered into in the
                                    ordinary course of the Business, in each
                                    case, to the extent such Contracts are
                                    assignable;

                           (vi)     all records and lists pertaining to accounts
                                    and suppliers, personnel records, books,
                                    ledgers, files, Marketing Materials and
                                    other printed and written materials
                                    reasonably necessary for Newco's continuing
                                    operation of the Business, other than books,
                                    records and other data relating to the
                                    Excluded Assets and the Excluded Liabilities
                                    and other books and records reasonably
                                    retained by Spectrian;

                           (vii)    all of Spectrian's rights against third
                                    parties pursuant to the warranties and
                                    guarantees related to the Acquired Assets,
                                    subject to the provisions concerning
                                    warranties and guarantees contained in the
                                    Purchase and Supply Agreement attached
                                    hereto in Annex I; and

                           (viii)   all trade accounts receivable attributable
                                    to external sales less the related allowance
                                    for doubtful accounts.

                  (b) The term "Excluded Assets" shall mean all properties,
assets, goodwill and rights of whatever kind and nature, real or personal,
tangible or intangible, other than the Acquired Assets of Spectrian existing on
the Closing Date, including without limitation the following:


                                       10
<PAGE>   12

                           (i)      cash on hand or in banks and cash
                                    equivalents owned by Spectrian relating to
                                    the operations of the Business;

                           (ii)     intercompany receivables;

                           (iii)    all rights of Spectrian under this Agreement
                                    and the agreements, instruments and
                                    certificates delivered in connection with
                                    this Agreement;

                           (iv)     all records prepared in connection with the
                                    sale of the Business, including the bids and
                                    other information received from third
                                    persons in respect of the Business and
                                    analyses relating to the Business;

                           (v)      any assets under any Benefit Plan;

                           (vi)     all rights relating to the Excluded
                                    Liabilities;

                           (vii)    business records other than Acquired Assets;

                           (viii)   any Tax refunds, insurance refunds,
                                    insurance deposits or recoveries from claims
                                    relating to the Business or the Acquired
                                    Assets with respect to Pre-Closing Periods;

                           (ix)     all Intellectual Property, other than the
                                    Purchased Intellectual Property to the
                                    extent transferred to Parent pursuant to the
                                    Assignment and License Agreement; and

                           (x)      except as provided in the Assignment and
                                    License Agreement, all of Spectrian's
                                    rights, claims, causes of action or rights
                                    of set-off against third parties relating to
                                    the Business or Acquired Assets with respect
                                    to Pre-Closing Periods, other than rights,
                                    claims or set-offs with respect to
                                    warranties and guarantees.

                  (c) Nothing in this Agreement shall be construed as an attempt
by Spectrian to assign any Contract to the extent that such Contract is not
assignable without the necessary consent of the other party or parties thereto.
Spectrian shall use commercially reasonable efforts, in cooperation with Newco,
to secure any necessary consent to assignment of those Contracts indicated with
an asterisk on Schedule 5.11 which consent has not been obtained prior to the
Closing Date; provided, however, that Spectrian shall not be required to make
any payment to any person or forego any benefits to obtain such consent. If any
such consent shall not be obtained, Spectrian agrees to cooperate with Newco in
any reasonable arrangement designed to provide for Newco the benefits intended
to be assigned to Newco under the relevant Contract, including enforcement of
any and all rights of Spectrian against the other party thereto arising out of
the breach or cancellation thereof by such other party or otherwise at the cost
and for the account of Newco. If and to the extent that such arrangement
satisfactory to Newco cannot be made, Newco shall not have any obligation with
respect to any such Contract.


                                       11
<PAGE>   13

         Section 2.3 Assumption of Business Liabilities and Obligations.

                  (a) Upon the terms and subject to the conditions of this
Agreement, Newco shall assume, effective as of the Closing, the Assumed
Liabilities. Neither Newco nor Parent will assume or have any responsibility,
however, with respect to any Excluded Liability or any other obligation or
liability of Spectrian not included within the definition of Assumed
Liabilities. "Assumed Liabilities" means:

                           (i)      all obligations and liabilities of Spectrian
                                    (other than known or unknown liabilities or
                                    obligations for breach or default which
                                    occurred prior to the Closing) under the
                                    Contracts included in the Acquired Assets
                                    and assigned to Newco;

                           (ii)     the following Business liabilities:

                                    (A)      Accounts payable, including
                                             payables for inventory purchases,
                                             property and equipment purchases,
                                             and other direct liabilities
                                             including uninvoiced receipts and
                                             manual accruals in the normal
                                             course of business, as set forth on
                                             Schedule 2.3(a)(ii)(A); provided
                                             that the date that such invoices
                                             are due to the vendor (within the
                                             normal payment term) for such
                                             accounts payable must be after the
                                             Closing Date;

                                    (B)      The equipment leases associated
                                             with the Business Equipment;

                                    (C)      Warranty obligations pursuant to
                                             and to the extent set forth in the
                                             Supply Agreement attached hereto;
                                             and

                                    (D)      (i) any obligation or liability for
                                             Taxes that is attributable to the
                                             Business or relating to the
                                             Acquired Assets with respect to
                                             Post-Closing Periods, and (ii)
                                             Newco's share, as determined
                                             pursuant to Section 7.6(a), of real
                                             property, personal property, ad
                                             valorem and similar Taxes relating
                                             to the Acquired Assets.

                  (b) The term "Excluded Liabilities" shall include:

                           (i)      other than the Assumed Liabilities, any
                                    obligation or liability for any Taxes of
                                    Spectrian;

                           (ii)     all obligations and liabilities of Spectrian
                                    in respect of any current or former employee
                                    of Spectrian engaged in the Business,
                                    including variable comp, payroll and payroll
                                    taxes, royalties, employee benefits and
                                    workers compensation, 401(K) Plan,
                                    garnishments, any obligation or liability of
                                    Spectrian arising under or in connection
                                    with any Employee Benefit Plan, liabilities
                                    related


                                       12
<PAGE>   14

                                    to accrued vacation, in each case, which
                                    obligation or liability arises out of acts
                                    or conditions that occurred prior to the
                                    Closing Date;

                           (iii)    any obligation of Spectrian to indemnify any
                                    Person by reason of the fact that such
                                    Person was a director, officer, employee or
                                    agent of Spectrian or was serving at the
                                    request of Spectrian as a partner, trustee,
                                    director, officer, employee or agent of
                                    another entity;

                           (iv)     any liability of Spectrian for costs and
                                    expenses incurred in connection with this
                                    Agreement and the other Transaction
                                    Agreements and the transactions contemplated
                                    hereby and thereby;

                           (v)      any liability or obligation of Spectrian
                                    under this Agreement or any other
                                    Transaction Agreement;

                           (vi)     any liability or obligation of Spectrian
                                    relating to the Excluded Assets;

                           (vii)    subject to Section 2.2(c), any liability or
                                    obligation arising from or relating to any
                                    Contract for which assignment to Newco is
                                    provided herein which is not assignable to
                                    Newco without the consent of another party
                                    and to which other party's consent to
                                    assignment is not obtained and no other
                                    arrangements have been made to provide for
                                    Newco the benefits intended to be assigned
                                    to Newco under such Contracts;

                           (viii)   any liability or obligation of Spectrian or
                                    an Affiliate thereof, or any liability or
                                    obligation that may be imposed on Newco or
                                    Parent, arising out of, in connection with,
                                    or relating to any Environmental Condition,
                                    existing as of and/or prior to the Closing
                                    Date (even if not discovered until after the
                                    Closing Date), relevant to: (i) the Property
                                    (as that term is defined in Section 7.22(a)
                                    below) or (ii) any leases, contracts or
                                    agreements relating to the Property. As used
                                    herein the term "Environmental Condition"
                                    shall mean any condition with respect to the
                                    soil, ambient air, surface waters or
                                    groundwaters at, from, on or under the
                                    Property, whether or not yet discovered,
                                    which could or does result in any damage,
                                    loss, cost, expense or claim to or against
                                    Newco or Parent; and

                           (ix)     any liability or obligation of Spectrian not
                                    incurred in the ordinary course of business
                                    attributable to any assets, properties or
                                    Contracts which are not included in the
                                    Acquired Assets.


                                       13
<PAGE>   15

                                   ARTICLE 3
                                 PURCHASE PRICE

         Section 3.1 The Purchase Price.

                  (a) The Purchase Price for the Acquired Assets shall consist
of the Stock Consideration, the Immediately Available Consideration and the
Escrow Consideration. The Stock Consideration shall be paid by delivery at the
Closing to Spectrian of a stock certificate evidencing the Stock Consideration.
The Immediately Available Consideration shall be paid either (a) by wire
transfer to an account designated by Spectrian of $30 million in immediately
available, freely transferable, cleared funds at the Closing, or (b) by delivery
at the Closing to Spectrian of a number of shares of Parent Common Stock equal
to (x) $30 million divided by (y) the average closing price of a share of Parent
Common Stock on the NASDAQ National Market for the five (5) consecutive trading
days immediately preceding the Closing Date which shares may then be sold by
Spectrian through a registered market maker designated by Parent (and whose
commission shall be paid by Parent) within five (5) Business Days of the
Closing; provided, however, that in the event Spectrian elects to sell such
shares during the five (5) Business Day period referred to above and the
aggregate proceeds of such sale are less than $30 million, Parent agrees that it
shall pay the difference (which amount shall be prorated on a basis consistent
with the percentage of such shares actually sold) in immediately available,
freely transferable, cleared funds by wire transfer to an account designated by
Spectrian within six (6) business days of the Closing. The Escrow Consideration
shall be paid by delivery at the Closing to the Escrow Agent of a stock
certificate evidencing the Escrow Consideration.

                  (b) If, between the date of this Agreement and the Closing,
the shares of Parent Common Stock shall be changed into a different number or
class of shares by reason of any reclassification, recapitalization, split-up,
spin-off, stock-split, combination, exchange of shares or readjustment or other
similar transaction involving Parent or a stock dividend thereon shall be
declared with a record date within said period, the number of shares of Parent
Common Stock to be issued to Spectrian pursuant to Section 3.1(a) shall be
appropriately and proportionately adjusted. Each of the parties to this
Agreement shall, and shall cause their Affiliates to, use all reasonable efforts
to cause the issuance of the Parent Common Stock to be exempt from registration
under applicable federal and state securities laws by filing as soon as
practicable an application with the Secretary of State of the State of North
Carolina pursuant to N.C. Gen. Stat. Section 78A-30 requesting a hearing upon
the terms and conditions of the transactions contemplated by this Agreement to
be held as soon as practicable after the filing of such application and taking
all actions necessary or appropriate to comply with the requirements set forth
therein. None of the parties to this Agreement shall make at such hearing, or
include in any information supplied with such application or distributed at such
hearing, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

                  (c) Spectrian shall prepare and use commercially reasonable
efforts to deliver within 10 business days after the Closing an unaudited
balance sheet for the Business as of the Closing Date (the "Unaudited Closing
Balance Sheet") to Parent for review and comment, prepared on the same basis as
the unaudited stub period balance sheet as of October 1, 2000


                                       14
<PAGE>   16

delivered by Spectrian to Parent prior to the date of this Agreement and
attached hereto in Schedule 5.4. In addition, Spectrian shall cause
PricewaterhouseCoopers LLP to prepare and deliver to Spectrian within 45 days
after the Closing Date an audited balance sheet for the Business as of the
Closing Date (the "Closing Date Balance Sheet") prepared on the same basis as
the unaudited balance sheet as of October 1, 2000. PricewaterhouseCoopers LLP
shall allow Parent's auditors to review the workpapers at least five (5)
business days prior to delivery of the Closing Date Balance Sheet. If the amount
of the UltraRF Net Assets as of the Closing Date (which shall be calculated
based on the Closing Date Balance Sheet) is less than the amount of the UltraRF
Net Assets as of October 1, 2000, then Spectrian shall pay to Newco, promptly
but within 10 days after delivery of the Closing Date Balance Sheet, an amount
equal to such difference in immediately available, freely transferable, cleared
funds by wire transfer to an account designated by Newco. If the amount of the
UltraRF Net Assets as of October 1, 2000 is less than the UltraRF Net Assets as
of the Closing Date (which shall be calculated based on the Closing Date Balance
Sheet), then Newco shall (and Parent shall cause Newco to) pay to Spectrian,
promptly but within 10 days after delivery of the Closing Date Balance Sheet, an
amount equal to such difference in immediately available, freely transferable,
cleared funds by wire transfer to an account designated by Spectrian.

                  In addition, Spectrian agrees to disburse funds for the trade
accounts payable on behalf of Newco for the 45 days immediately following the
Closing Date. Spectrian shall provide Newco with schedules setting forth all
such disbursements made 15 days after the Closing Date, 30 days after the
Closing Date and 45 days after the Closing Date. Newco agrees to fully reimburse
Spectrian within five (5) days of receipt of each schedule, provided, however,
after receipt of the Closing Date Balance Sheet and the schedule setting forth
the funds disbursed by Spectrian on Newco's behalf during the 45 days after the
Closing Date, Newco and Spectrian agree that Newco shall reimburse Spectrian for
the amount of such trade accounts payable net the external accounts receivable
set forth in the Closing Date Balance Sheet (whether collected or not);
provided, further, all accounts receivable set forth in the Closing Date Balance
Sheet shall be collected and remitted to Spectrian for Spectrian's benefit
whether collected by Spectrian or Parent; provided, further, this paragraph
shall specifically supercede Section 2.2(a)(viii).

                                    ARTICLE 4
                                   THE CLOSING

         Section 4.1 Closing Date. The closing of the sale and transfer of the
Acquired Assets and the assumption of the Assumed Liabilities (hereinafter
called the "Closing") shall take place at the offices of Smith, Anderson,
Blount, Dorsett, Mitchell & Jernigan, LLP, 2500 First Union Capitol Center,
Raleigh, North Carolina 27601, on December 29, 2000, provided all of the
conditions to each party's obligations under Article 8 have been satisfied or
waived, or at such other time, date and place as shall be mutually agreed to by
the parties hereto (such date of the Closing being hereinafter referred to as
the "Closing Date").

         Section 4.2 Transactions To Be Effected At The Closing. At the Closing:

                  (a) Spectrian shall deliver or cause to be delivered to Newco
the documents referred to in Section 8.2(c), in each case appropriately
executed; and

                  (b) Parent or Newco, as appropriate, shall deliver or cause to
be delivered to Spectrian (i) the documents referred to in Section 8.3(c), in
each case appropriately executed and


                                       15
<PAGE>   17

(ii) payment of the Stock Consideration and the Immediately Available
Consideration by the delivery of validly authorized and issued shares of Parent
Common Stock at the Closing, and shall deliver to the Escrow Agent payment of
the Escrow Consideration by the delivery of validly authorized and issued shares
of Parent Common Stock at the Closing.

                                    ARTICLE 5
                   REPRESENTATIONS AND WARRANTIES OF SPECTRIAN

         Spectrian hereby represents and warrants to Newco as follows:

         Section 5.1 Spectrian's Organization; Good Standing. Spectrian is a
corporation, validly existing and in good standing under the laws of the State
of Delaware. Spectrian has the requisite power and authority to own the Acquired
Assets and to carry on the Business as currently conducted. Spectrian is duly
qualified to conduct business as a foreign entity in the State of California.

         Section 5.2 Authority; Execution and Delivery. Spectrian has the
requisite power and authority to enter into the Transaction Agreements and to
consummate the transactions contemplated thereby. The execution and delivery of
the Transaction Agreements by Spectrian, and the consummation of the
transactions contemplated thereby have been duly and validly authorized,
executed and delivered by Spectrian and, assuming the due authorization,
execution and delivery of the Transaction Agreements by the other parties
thereto, constitute the legal, valid and binding obligation of Spectrian,
enforceable against Spectrian in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing) regardless of whether considered in a proceeding in equity or at law.

         Section 5.3 Consents and Approvals; No Violations. The execution and
delivery of the Transaction Agreements by Spectrian and the consummation by
Spectrian of the transactions contemplated thereby will not: (i) violate any
provision of the charter documents or the by-laws of Spectrian; (ii) violate any
Governmental Rule applicable to Spectrian; or (iii) require any filing with, or
permit, consent or approval of, or the giving of any notice to, any governmental
or regulatory body, agency or authority other than the filing of a pre-merger
notification with the Federal Trade Commission and the Department of Justice
under the HSR Act, except where the failure to make such filing, or obtain such
permit, consent or approval, or give such notice would not have a Material
Adverse Effect on the Business.

         Section 5.4 Financial Statements(a). Attached hereto as Schedule 5.4
are the following financial statements of the Business (collectively the
"Financial Information"): (i) unaudited balance sheets as of March 31, 1999 and
2000, (ii) unaudited statement of operations for the fiscal years ended March
31, 1998, 1999 and 2000, (iii) unaudited statement of operations for the six
month period ended October 1, 2000, and (iv) unaudited balance sheet as of
October 1, 2000. The Financial Information has been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
presents fairly the financial condition of the Business as of such dates and the
results of operations of the Business for such periods, is materially correct
and complete, and is consistent with the books and records of the Business and
Spectrian (which books and records are correct and complete in all material
respects); provided, however, that the Financial Information includes the normal
recurring adjustments booked at each quarter end and lacks footnotes, income tax
provisions and other presentation items.

         Section 5.5 Title to Acquired Assets. Except as set forth on Schedule
5.5, Spectrian has good and valid title to all the Acquired Assets, free and
clear of all Liens other than Permitted Liens.


                                       16
<PAGE>   18

         Section 5.6 Absence of Certain Changes or Events. Except as set forth
on Schedule 5.6, since March 31, 2000 there has not been:

                  (a) any damage, destruction, loss or change in or effect on
the Business (whether or not covered by insurance) that would have a Material
Adverse Effect on the Business;

                  (b) any labor dispute, labor law, or labor regulation or any
event or condition of any character relating to labor matters that would have a
Material Adverse Effect on the Business;

                  (c) any sale, assignment, transfer, or disposition of any
material item of property, plant or equipment or Intellectual Property owned by
Spectrian, except in the ordinary course of business;

                  (d) any material change from current practice of Spectrian in
any accounting principle or practice other than changes required as a result of
changes in GAAP;

                  (e) any incurrence of material liabilities with respect to the
Business, other than in the ordinary course of business; or

                  (f) any acceleration, termination, modification or
cancellation of any Contract involving more than $50,000;

                  (g) any capital expenditure (or series of related capital
expenditures) involving more than $50,000;

                  (h) any cancellation, compromise, waiver, or release of any
right or claim (or series of related rights and claims) either involving more
than $50,000 or outside the ordinary course of business; or

                  (i) any agreement to do any of the foregoing.

         Section 5.7 Employment Matters.

                  (a) There are no collective bargaining or similar agreements
with any labor unions or associations representing employees of the Business. To
the knowledge of Spectrian, no executive, key employee or group of employees has
any plans to terminate employment with Spectrian with respect to the Business.

                  (b) Except as set forth on Schedule 5.7, the Business is in
compliance with all applicable laws, regulations and orders relating to the
employment of labor, including all such laws, regulations and orders relating to
wages and hours, labor relations, civil rights, safety and health, workers'
compensation, except for such noncompliance which would not have a Material
Adverse Effect on the Business. To the knowledge of Spectrian, no employee of
the business is subject to any Contract or law which adversely affects or which
might adversely affect such employee's ability to act as an employee of Newco or
Parent following consummation of the transactions contemplated by this
Agreement.

                  (c) Schedule 5.7 sets forth a complete list of the Persons
engaged by Spectrian at any time to render consulting or similar services to the
Business on an independent contractor


                                       17
<PAGE>   19

basis (collectively, the "Spectrian Contractors"). Spectrian has previously
provided to Newco true and complete copies of each and every agreement between
Spectrian and any Spectrian Contractor. To the knowledge of Spectrian, each
Spectrian Contractor is and at all times has been an independent contractor to,
and not an employee of, Spectrian for purposes of all applicable federal and
state income tax withholding requirements and otherwise.

         Section 5.8 Employee Benefit Plans.

                  (a) Schedule 5.8 contains a list and a brief description of
each "employee benefit plan" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), and all other
employee compensation and fringe benefit plans or arrangements (including,
without limitation, all bonus, incentive and stock compensation plans)
maintained or contributed to or by Spectrian or the Business for the benefit of
any employees of the Business (collectively, the "Spectrian Benefit Plans") and
the amount of any unfunded retirement liabilities, including medical coverage,
arising under any plan, fund or arrangement described in this Section and the
identity of the plan, fund or arrangement giving rise thereto. Spectrian has
made available to Parent complete and correct copies of (i) each Spectrian
Benefit Plan (or, in the case of any unwritten Plan, a description thereof) and
(ii) the most recent summary plan description of each Spectrian Benefit Plan (if
such description was required).

                  (b) The execution and delivery of this Agreement by Spectrian
and the consummation of the transactions contemplated hereunder will not result
in any obligation or liability (with respect to accrued benefits or otherwise)
of Newco to any Transferred Employee, any employee or former employee of any
plan or the PBGC. No amendment to, termination of, or withdrawal from, any
Spectrian Benefit Plan (subject to Title IV of ERISA) at any time before or
after the Closing Date by Spectrian or any other corporation or other entity has
or will subject Newco to any liability to any plan, the PBGC or the IRS, to any
current or former employee of Spectrian, or to any other person or party.

                  (c) With respect to any Transferred Employee, Spectrian has
not within five (5) years prior to the Closing Date contributed to (or been
obligated to contribute to) any multiemployer plan (within the meaning of
Section 3(37) of ERISA).

                  (d) Within five (5) years prior to the Closing Date, Spectrian
has neither maintained nor contributed to a defined benefit pension plan (as
defined in Section 3(35) of ERISA).

                  (e) Spectrian has complied in all respects with ERISA, the
Code and the regulations thereunder and all other applicable federal or state
statutes or regulations.

         Section 5.9 Litigation. Except as set forth on Schedule 5.9, there are
no actions, suits, claims, proceedings or investigations which have been served
and are pending or, to the knowledge of Spectrian, are threatened against
Spectrian or the Acquired Assets, nor any outstanding judgments, orders, writs,
injunctions or decrees of any Governmental Entity against Spectrian or the
Acquired Assets, which (i) would have a Material Adverse Effect on the Business,
(ii) seek to prevent or materially restrict or delay the consummation of the
transactions contemplated by the Transaction Agreements or (iii) would
materially and adversely affect the ability of Spectrian to consummate the
transactions contemplated by the Transaction Agreements.

         Section 5.10 Compliance with Laws.


                                       18
<PAGE>   20

                  (a) Except as set forth on Schedule 5.10, Spectrian is in
compliance with all Governmental Rules applicable to it which relate primarily
to the Acquired Assets and the Facility, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect on the
Business. Except as set forth in Schedule 5.10, there is no investigation or
review by any Governmental Entity with respect to the Business or the Facility
pending and Spectrian has not received any written notice since January 1, 2000
that any such investigation or review is contemplated, except where the outcome
of such investigation or review if adversely determined would not reasonably be
expected to have a Material Adverse Effect on the Business.

                  (b) Schedule 5.10 attached hereto contains an accurate and
complete list of all Permits used, or anticipated to be used, in the operation
of the Business. All of the Permits are in full force and effect, not subject to
any current default or right of cancellation, termination or revocation.

         Section 5.11 Contracts.

                  (a) As of the date hereof, except for Contracts listed on
Schedule 5.11 and Contracts relating to Excluded Assets, Spectrian is not a
party to or bound by any contract primarily relating to the Acquired Assets or
the Assumed Liabilities which is:

                           (i)      an indenture, note, loan or credit agreement
                                    or other Contract relating to the borrowing
                                    of money by Spectrian or to the direct or
                                    indirect guarantee or assumption by
                                    Spectrian of the obligation of any other
                                    person in excess of $50,000;

                           (ii)     a lease or similar agreement under which
                                    Spectrian is a lessee of, or holds or
                                    operates, any real property owned by any
                                    third party;

                           (iii)    a Contract involving future payment for
                                    goods or services by Spectrian of more than
                                    $50,000 (unless terminable without payment
                                    or penalty upon no more than sixty (60)
                                    days' notice);

                           (iv)     a Contract involving the obligation of
                                    Spectrian to deliver in the future products
                                    or services for payment of more than $50,000
                                    (unless terminable without payment or
                                    penalty upon no more than sixty (60) days'
                                    notice);

                           (v)      a Contract evidencing any Lien on the
                                    Acquired Assets (other than Permitted Liens
                                    or Liens created in the ordinary course of
                                    business);

                           (vi)     a Contract with or Permit by or from any
                                    Governmental Entity, the loss of which would
                                    materially interfere with the operation of
                                    the Business as presently conducted;

                           (vii)    a Contract concerning confidentiality or
                                    noncompetition;


                                       19
<PAGE>   21

                           (viii)   any Contract under which the consequences of
                                    a default or termination could have a
                                    Material Adverse Effect on the business,
                                    financial condition, operations, results of
                                    operations or prospects of the Business; or

                           (ix)     any other Contract (or group of related
                                    Contracts) the performance of which involves
                                    consideration in excess of $50,000.

                  (b) Except as disclosed in Schedule 5.11, each Contract listed
thereon (i) is a valid and binding obligation of Spectrian and is in full force
and effect and (ii) will continue to be valid and binding and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby. Except as disclosed in Schedule 5.11, Spectrian has not
received any notice of default or of the intention of any party to any such
Contract to terminate such Contract. Complete and correct copies of all
contracts referred to in Schedule 5.11, together with all modifications and
amendments thereto, have been made available to Purchaser.

         Section 5.12 No Brokers. Except for Dain Rauscher Wessels, the fees and
expenses of which will be paid by Spectrian, Spectrian has not entered into any
agreement, arrangement or understanding with any person or firm which will
result in the obligation to pay any finder's fee, brokerage commission or
similar payment in connection with the transactions contemplated hereby. Section
5.13 Intellectual Property.

                  (a) Except as disclosed on Schedule 5.13(a), Spectrian is the
owner of, or has a valid license or otherwise possesses legally enforceable
rights to use, free and clear of any Lien and without obligation for the payment
of any royalty, all Intellectual Property necessary for the conduct of the
Business as now conducted (such Intellectual Property owned by or licensed to
Spectrian, collectively, the "Spectrian Rights").

                  (b) Except as disclosed on Schedule 5.13(b), the Subject
Rights transferred and licensed to Newco and pursuant to the Assignment and
License Agreement include all Intellectual Property necessary for the conduct of
the Business as now conducted. The Assigned Rights transferred pursuant to the
Assignment and License Agreement, together with the Licensed Patent Rights with
Extended Sublicense Rights include all of the Spectrian Rights that relate
primarily to the Semiconductor Field or the Business. Except as disclosed on
Schedule 5.13(b), Spectrian owns all of the Assigned Rights, free and clear of
any Lien and without obligation for the payment of any royalty, and has the
right to transfer the Assigned Rights to Newco. Except as disclosed on Schedule
5.13(b), Spectrian owns or otherwise possesses rights in the Licensed Rights
sufficient to grant Newco the licenses therein granted pursuant to the
Assignment and License Agreement, free and clear of any Lien and without
obligation for the payment of any royalty.

                  (c) The Annexes to the Assignment and License Agreement sets
forth a complete list of all patents, registered and unregistered trademarks,
registered copyrights, and any applications therefor, included in the Subject
Rights, and specifies, where applicable, the jurisdictions in which each such
Subject Right has been issued or registered or in which an application for such
issuance and registration has been filed, including the respective registration
or application numbers and the names of all registered owners. Schedule 5.13(c)
sets forth a


                                       20
<PAGE>   22

complete list of all licenses, sublicenses and other agreements, if any,
pursuant to which Spectrian or any other person is authorized to use any of the
Subject Rights and includes the identity of all parties thereto, a description
of the nature and subject matter and terms thereof. The transfer or license of
Subject Rights pursuant to the Assignment and License Agreement will neither
cause Spectrian to be in violation or default under any such license, sublicense
or agreement, nor entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement, except
as disclosed in Schedule 5.13(c).

                  (d) To the knowledge of Spectrian, Spectrian's rights in the
Subject Rights are valid and enforceable.

                  (e) Spectrian has not received any demand, claim or notice
from any Person in respect of the Subject Rights which challenges the validity
of, or the rights of Spectrian in, any such Subject Rights.

                  (f) To the knowledge of Spectrian, no Person, including any
employee or former employee of Spectrian, is infringing any Subject Rights. Each
current and former employee, consultant or contractor of Spectrian involved with
the development of the Spectrian Rights has executed a proprietary information
and confidentiality agreement substantially in the form of Spectrian's standard
forms.

                  (g) No claims have been asserted nor, to Spectrian's
knowledge, have any such claims been threatened by any person except as
disclosed on Schedule 5.13(g), nor to Spectrian's knowledge are there any valid
grounds for any claims, (i) to the effect that the manufacture, use, sale, offer
to sell, import or licensing of any of the products of the Business infringes or
violates any Intellectual Property of any other Person or (ii) against the use
by Spectrian of any Intellectual Property used in or necessary for the conduct
of the Business as now conducted.

                  (h) To Spectrian's knowledge, Spectrian, in the conduct of the
Business, has not infringed or violated, and the Business as currently conducted
does not infringe, any Intellectual Property of any other Person.

         Section 5.14 Accredited Investor Status. Spectrian is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D of the
Securities Act.

         Section 5.15 Reliance on Exemptions. Spectrian understands that the
Parent Common Stock is being offered and sold to it in reliance on specific
exemptions from the registration requirements of the United States federal and
state securities laws and that Parent is relying in part upon the truth and
accuracy of, agreements, acknowledgments and understandings of Spectrian set
forth herein in order to determine the availability of such exemptions and the
eligibility of Spectrian to acquire the Parent Common Stock.

         Section 5.16 Transfer or Resale. Spectrian understands that the Parent
Common Stock has not been and is not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned,
or transferred unless (i) subsequently registered thereunder or (ii) Spectrian
shall have delivered to Parent an opinion of counsel, in a reasonably


                                       21
<PAGE>   23

acceptable form, to the effect that such Parent Common Stock to be sold,
assigned, or transferred may be sold, assigned, or transferred pursuant to an
exemption from such registration.

         Section 5.17 Legends. Spectrian understands that the certificates or
other instruments representing the Parent Common Stock shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                  1933, AS AMENDED (THE "1933 ACT"), OR APPLICABLE
                  STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
                  ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR
                  SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN THE
                  ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
                  THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE
                  STATE SECURITIES LAWS, OR (2) IN THE ABSENCE OF AN
                  OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM,
                  THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT
                  OR (3) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT
                  TO RULE 144 UNDER SAID ACT.

The legend set forth above shall be removed and Parent shall issue a certificate
without such legend to the holder of the Parent Common Stock upon which it is
stamped, if, unless otherwise required by state securities laws, (i) the Parent
Common Stock is registered for sale under the Securities Act, (ii) in connection
with a sale transaction, such holder provides Parent with an opinion of counsel,
in a reasonably acceptable form, to the effect that a public sale, assignment or
transfer of the Parent Common Stock may be made without registration under the
Securities Act, or (iii) such holder provides the Parent with reasonable
assurances that the Parent Common Stock can be sold pursuant to Rule 144 of the
Securities Act without any restriction as to the number of securities acquired
as of a particular date that can then be immediately sold.

         Section 5.18 Environmental Compliance.

                  (a) For purposes of this Section 5.18, "Hazardous Substance"
means any of the following: (i) a "hazardous substance" as defined in 42 U.S.C.
Section 9601(14), as amended, and all rules, regulations and orders promulgated
thereunder, in each case, as in effect on the date hereof, (ii) a "hazardous
waste," as defined in 42 U.S.C. Section 6903(5), as amended, and all rules,
regulations and orders promulgated thereunder, in each case, as in effect on the
date hereof, (iii) if not included in (i) or (ii) above, "hazardous waste
constituents" as defined in 40 C.F.R. Section 260.10, including, without
limitation, those substances listed in Appendix VII and VIII of Subpart D of 40
C.F.R. Section 261, in each case, as in effect on the date hereof, (iv)
"source," "special nuclear" or "by-product material," as defined in 42 U.S.C.
Sections 3011, et seq., as amended, and all rules, regulations and orders
promulgated thereunder, in each case, as in effect on the date hereof, and (v)
any other waste, substance or material, the generation, transportation,
treatment, storage, release, or disposal of which is regulated under or by
applicable laws as in effect on the date hereof, including without limitation
petroleum and


                                       22
<PAGE>   24

petroleum products, asbestos and asbestos-containing materials, and low-level
radioactive substances and wastes.

                  (b) Except as set forth in Schedule 5.18, the Business, the
Facility and the Acquired Assets are in compliance, in all material respects,
with all applicable laws relating to Hazardous Substances. Without limiting the
foregoing, (i) the operations of the Business do not violate, and have not
violated, in any material respect, any law relating to the generation, storage,
processing, utilization, labeling, transportation, treatment, disposal, release,
discharge, emission or other disposition of Hazardous Substances, and (ii)
neither Spectrian nor, to the knowledge of Spectrian, any current or former
owner, occupant or operator of any property owned, leased or operated by
Spectrian in connection with the Business, has ever utilized any such property
or any portion thereof in violation of any law relating to the generation,
storage, processing, utilization, labeling, transportation, disposal, treatment,
emission, release, discharge, or other disposition of Hazardous Substances.
Schedule 5.18 thereto contains a true list of all environmental audits and
assessments in the possession of Spectrian relating to the Business and Acquired
Assets.

                  (c) With respect to the Business, the Facility and the
Acquired Assets, Spectrian has not and does not utilize, store, dispose of,
treat, generate, process, transport, release or own any Hazardous Substance in
material violation of any applicable law.

                  (d) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has, in a timely
manner, obtained all material licenses, permits, consents and approvals from any
foreign, federal, state, local or other Governmental Entity and filed all
material reports required to be filed under or pursuant to any applicable law
related to any Hazardous Substance.

                  (e) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has not received
any written notice of any writ, injunction, claim, decree, order or judgment
outstanding or of any action instituted or threatened under or pursuant to, or
of any violations of, any environmental, health or safety law applicable to any
operations or property of the Business, the Facility and the Acquired Assets,
including, without limitation, any notice from any Governmental Entity or other
Person advising Spectrian that, in connection with the Business, the Facility or
the Acquired Assets, it is or is potentially responsible for response costs
under the Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9601 et seq.) (together with the regulations promulgated
thereunder, "CERCLA"), or any other law with respect to a release or threatened
release of any Hazardous Substances.

                  (f) With respect to the Business, the Facility and the
Acquired Assets except as listed on Schedule 5.18, Spectrian has not received
any written notice of any violation of any environmental, zoning, worker safety
or land use law, including without limitation, under CERCLA, the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), the Emergency Planning and
Community Right-to-Know Act, as amended (42 U.S.C. Section 11001, et seq.), the
Clean Water Act, as amended (33 U.S.C. Section 3121, et seq.), the Clean Air
Act, as amended (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act, as amended (15 U.S.C. section 2601 et seq), Occupational Safety and Health
Act, as amended (29 U.S.C. section 651, et seq.), together


                                       23
<PAGE>   25

with the regulations promulgated under each respective law, and any state or
local similar laws and regulations and any so-called local, state or federal
"superfund" or "superlien" law.

                  (g) Except as listed on Schedule 5.18, there are no under- or
aboveground storage tanks, piping or facilities located on or under the Facility
or any Acquired Assets.

                  (h) Except as set forth on Schedule 5.18, there are no
Hazardous Substances present on, in or under the Facility or any Acquired
Assets, regardless of how such Hazardous Substances came to be there, in a
concentration or amount that would be reasonably expected to have a Material
Adverse Effect on the Business.

         Section 5.19 All Assets of Business; Condition of Acquired Assets. The
Acquired Assets constitute all of the material assets used and necessary to
conduct the Business as presently conducted by Spectrian and as presently
proposed to be conducted. All of the tangible assets included in the Acquired
Assets are, taken as a whole, in reasonably good repair and operating condition
(except for normal wear and tear).

         Section 5.20 Taxes. Except as set forth on Schedule 5.20:

                  (a) All Tax Returns relating to the Business or the Acquired
Assets have been timely filed, and all such Tax Returns are correct and complete
in all material respects. Spectrian has paid, or where payment is not yet
required, has established an adequate accrual for the payment of, all Taxes due
with respect to the Business or the Acquired Assets for Pre-Closing Periods.
Spectrian has not secured an extension of time within which to file any Tax
Return relating to the Business or the Acquired Assets.

                  (b) Spectrian has not received written notice of: (i) any
action, suit, investigation, audit or claim currently pending or threatened or
(ii) any deficiency claimed, proposed or asserted, in each case regarding
property (or other ad valorem) Taxes applicable to the Acquired Assets.

                  (c) There are no Tax Liens (other than for property Taxes not
yet due and payable or delinquent) on any of the Acquired Assets.

                  (d) None of the Acquired Assets is property that (i) Spectrian
or Newco is or will be required to treat as owned by another person pursuant to
the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986, (ii) is "tax-exempt use property" within the meaning of Section 168(h)
of the Code, or (iii) is "tax-exempt bond financed property" within the meaning
of Section 168(g)(5) of the Code.

         Section 5.21 Inventory. The Inventory of the Business is merchantable
and fit for the purpose for which it was procured or manufactured.

         Section 5.22 Manufacturing Yields. The reports of manufacturing yields
furnished to Parent by Spectrian after October 1, 2000 were accurate in all
material respects.


                                       24

<PAGE>   26

                                   ARTICLE 6
               REPRESENTATIONS AND WARRANTIES OF NEWCO AND PARENT

         Newco and Parent jointly and severally represent and warrant to
Spectrian as follows:

         Section 6.1 Organization and Qualification. Each of Newco and Parent is
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is in good standing and duly qualified to do
business in each jurisdiction in which the transaction of its business makes
such qualification necessary, except where the failure to be so organized,
existing, qualified and in good standing or to have such power or authority
would not have a Material Adverse Effect on Newco or Parent and its Subsidiaries
taken as a whole. True and complete copies of the Newco and Parent Charters and
the Newco and Parent By-Laws, as amended to date, and Certificate of
Incorporation and By-Laws of each their Subsidiaries, as amended to date and
currently in full force and effect, have been made available to Spectrian.

         Section 6.2 Capitalization. As of the Date of this Agreement, the
authorized capital stock of Parent consists of 100,000,000 shares of common
stock, par value $0.0025 per share, of Parent (the "Parent Common Stock") and
3,000,000 shares of preferred stock, par value $0.01 per share (the "Parent
Preferred Stock"). The Board of Directors of Parent on October 30, 2000 approved
an amendment of the Articles of Incorporation of Parent, to become effective
December 1, 2000, and upon the effectiveness of such amendment (i) each
outstanding share of Parent Common Stock will become two shares of common stock,
par value $0.00125 per share, and (ii) the authorized capital stock of Parent
will consist of 200,000,000 shares of common stock, par value $0.00125 per
share, and 3,000,000 shares of Parent Preferred Stock. As of the close of
business on November 17, 2000, 35,782,502 shares of Parent Common Stock were
issued and outstanding and no shares of Parent Preferred Stock were issued and
outstanding. All outstanding shares of Parent Common Stock are validly issued,
fully paid and nonassessable and, to Parent's knowledge, are not subject to
preemptive rights. As of the date of this Agreement, 3,056,744 shares of Parent
Common Stock are reserved for issuance in respect of future grants of stock
options (exclusive of 243,377 shares reserved for issuance pursuant to the
Parent's 1999 Employee Stock Purchase Plan).

         Section 6.3 Authority; Execution and Delivery. Newco and Parent have
the requisite power and authority to enter into the Transaction Agreements and
to consummate the transactions contemplated thereby. The execution and delivery
of the Transaction Agreements by Newco and Parent, and the consummation of the
transactions contemplated hereby have been duly and validly authorized. The
Transaction Agreements have been duly executed and delivered by Newco and/or
Parent, as the case may be, and, assuming the due authorization, execution and
delivery of the Transaction Agreements by Spectrian, constitute the legal, valid
and binding obligation of Newco, enforceable against Newco in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing) regardless of whether considered in a proceeding in
equity or at law.

         Section 6.4 Consents And Approvals; No Violations. The execution and
delivery of the Transaction Agreements by Parent and Newco and the consummation
by Parent and Newco of the transactions contemplated thereby will not: (i)
violate any provision of the charter documents or the by-laws of Parent or
Newco; (ii) violate any Governmental Rule applicable to Parent or Newco; or
(iii) require any filing with, or permit, consent or approval of, or the giving


                                       25
<PAGE>   27

of any notice to, any governmental or regulatory body, agency or authority other
than the filing of a pre-merger notification with the Federal Trade Commission
("FTC") and the Department of Justice ("DOJ") under the HSR Act, except where
the failure to make such filing, or obtain such permit, consent or approval, or
give such notice would not have a Material Adverse Effect on Parent or Newco,
respectively.

         Section 6.5 SEC Documents. Parent has filed all required forms,
reports, schedules, statements and other documents (including exhibits and other
information incorporated therein) with the SEC since April 20, 1995 through the
date hereof (collectively, the "Parent SEC Reports"). As of their respective
dates, or, if amended, as of the date of the last such amendment, each Parent
SEC Report, (i) was prepared in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder applicable to such Parent SEC Reports and (ii) at the
time they were filed did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.

         Section 6.6 Compliance with Law; Permits. Neither Parent nor any of its
Subsidiaries are in violation of any applicable statute, rule, regulation,
decree or order of any Governmental Entity applicable to Parent, except for
violations which would not have a Material Adverse Effect on Parent taken as a
whole.

         Section 6.7 Litigation. Except as set forth in the Parent SEC Reports,
as of the date hereof, there are no claims, actions, proceedings or governmental
investigations pending or, to the knowledge of Parent, threatened against Parent
or its Subsidiaries which, if adversely determined, would have a Material
Adverse Effect on Parent or its Subsidiaries taken as a whole or prevent the
consummation of the transactions contemplated hereby. Parent is not subject to
any outstanding and unsatisfied order, writ, judgment, injunction or decree or
settlement or consent agreement by or with a Governmental Entity which would
have a Material Adverse Effect on Parent and its Subsidiaries taken as a whole
or prevent the transactions contemplated hereby.

         Section 6.8 Brokers and Finders. Except for CIBC World Markets Corp.
whose fees shall be borne by Parent in connection with the transactions
contemplated hereby, no broker, finder or investment bank has acted directly or
indirectly for Parent or Newco, and neither Parent nor Newco has incurred any
obligation to pay any brokerage, finder's or other fee or commission to any
person.

                                   ARTICLE 7
                        CERTAIN COVENANTS AND AGREEMENTS

         Section 7.1 Covenants of Spectrian Relating to Conduct of Business.
During the period from the date of this Agreement and continuing until the
Closing, Spectrian agrees (except as expressly provided in this Agreement or
Schedule 7.1 or to the extent that Parent shall otherwise consent in writing)
that:

                  (a) Ordinary Course. Spectrian shall carry on the Business and
operate the Acquired Assets in the ordinary course of business in substantially
the same manner as presently conducted, maintain the business records of the
Business in substantially the same manner as presently maintained and use
commercially reasonable efforts to preserve intact the Business' present
business organization, keep available the services of the Business' present
employees and preserve the Business' relationships with customers, suppliers and
others having business dealings with the Business; provided, however, that
nothing contained herein shall be deemed to require the expenditures of any
funds outside the ordinary course of business.


                                       26
<PAGE>   28

                  (b) No Dispositions. Spectrian shall not sell, lease, or
transfer, or agree to sell, lease, or transfer, any of the Acquired Assets,
except in the ordinary course of business.

                  (c) No Salary Increases. Spectrian shall not increase the
salary of any employee of the Business, except pursuant to existing employment
contracts or in the ordinary course of business consistent with prior practice.

                  (d) No Additional Material Contracts. Spectrian shall not
enter into any Contract that would be required to be listed on Schedule 5.11 if
it were in effect on the date hereof, including any such Contract for the
purchase of capital assets, without the prior written consent of Parent (which
consent shall not be unreasonably withheld or delayed); provided, however,
Spectrian shall not be required to obtain Parent's consent with respect to
contracts that would be required to be listed pursuant to Section 5.11(a)(iii)
or Section 5.11(a)(iv) if such contracts are entered into during the ordinary
course of business.

                  (e) Other Actions. Spectrian shall not knowingly take any
action that would reasonably be expected to result in any of the representations
and warranties of Spectrian set forth in this Agreement becoming untrue in any
material respect or in any of the conditions of the Closing set forth in Article
VIII not being satisfied.

         Section 7.2 Newco's Access to Information. Spectrian shall afford to
Parent and its accountants, counsel and other representatives reasonable access
upon reasonable advance notice and during normal business hours during the
period prior to the Closing to all the properties, books, contracts,
commitments, Tax Returns and records of the Business (other than any of the
foregoing relating primarily to the Excluded Assets). Newco and Parent
acknowledge that any information being provided to it or its representatives by
Spectrian pursuant to this Agreement is subject to the terms of a
confidentiality agreement between Parent and Spectrian, dated October 5, 2000,
(the "Confidentiality Agreement"), which terms are incorporated herein by
reference.

         Section 7.3 Preservation of Records.

                  (a) At its own expense, Parent shall cause Newco to (i)
preserve and keep the books, contracts, commitments and records included in the
Acquired Assets for a period of not less than seven (7) years from the Closing
Date, or for any longer periods as may be required by any Governmental Entity or
as may be made prudent by the circumstances of any ongoing audit or litigation,
and (ii) provide Spectrian with reasonable access to the foregoing upon
reasonable notice and during normal business hours during such period. In the
event Newco wishes to destroy such copies and records after the time specified
above, it shall first give 60 days' prior written notice to Spectrian, and
Spectrian shall have the right, at its option and expense, and upon prior
written notice given to Newco within such 60 day period, to take possession of
all or any portion of such copies and records.

                  (b) At its own expense, Spectrian (i) shall preserve and keep
the books, contracts, commitments and records included in the Excluded Assets,
to the extent also relating to the Acquired Assets, for a period of not less
than seven (7) years from the Closing Date, or for any longer periods as may be
required by any Governmental Entity or as may be made prudent by the
circumstances of any ongoing litigation, and (ii) shall provide Parent and Newco
with reasonable


                                       27
<PAGE>   29

access to the foregoing upon reasonable notice and during normal business hours
during such period.

                  (c) Newco acknowledges and agrees that Spectrian shall retain
copies of certain personnel records included in the Acquired Assets which relate
to Spectrian's liabilities in respect of the acquired employees' post-employment
benefits.

                  (d) All information received or retained by Spectrian or Newco
or any representative of either party pursuant to paragraph (a) or (b) of this
Section 7.3 shall be treated as confidential by such party and by such party's
representatives and shall be subject to other confidentiality arrangements as
may be mutually agreed, and, except to the extent such information is or becomes
generally available, each party and its representatives shall use all
commercially reasonable efforts to maintain the confidentiality of such
information. If either party or any of its representatives is required to
disclose any such information by or to any Governmental Entity, such party
shall, to the extent feasible, prior to such disclosure, notify the other party
of such requirement. Parent or Spectrian shall have the right, at its own
expense, to seek confidential treatment of any information to be so disclosed.

         Section 7.4 Legal Conditions to Closing. Each of Spectrian, Parent and
Newco agrees to take all commercially reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
the Closing (including the prompt filing of the premerger notification report
under the HSR Act and the furnishing of all information required under the HSR
Act), and to satisfy all applicable conditions to Closing and consummate and
make effective the transactions contemplated by this Agreement, and shall
cooperate with and furnish information to each other and to other parties in
connection with any such legal requirements.

         Section 7.5 Employee Benefits.

                  (a) Effective as of the Closing, Newco shall offer to employ
all persons listed in Schedule 7.5 (the "Spectrian Employees"). Each such offer
of employment shall be on terms and conditions, including employee benefit
plans, that, taken as a whole, are comparable to the terms and conditions of
employment, including employee benefit plans, provided to employees of Parent as
of the date hereof. Each Spectrian Employee who accepts an offer of employment
from Newco effective as of the Closing shall be referred to herein as a
"Transferred Employee." The provisions of this Section 7.5(a) represent the
present intent of Newco and Newco will exercise good faith efforts to comply
with the provisions of this Section 7.5(a). Notwithstanding anything to the
contrary contained herein, it is understood that Newco and Parent retain
discretion to manage their respective business in the best interests of their
respective shareholders, and that good faith modifications of or variances from
these provisions in the exercise of such discretion are appropriate and
permitted.

                  (b) From and after the Closing Date, Newco shall recognize any
prior accrued service credit, credit towards satisfying deductible expense
requirements, out-of-pocket expense limits of all Transferred Employees and/or
such Transferred Employees' dependants as of the Closing Date for all purposes
under Newco benefit plans and Newco's benefits and compensation arrangements
(including, but not limited to, eligibility to participate and vesting),


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<PAGE>   30

but excluding benefit accruals. Newco and Spectrian agree that where applicable
with respect to any medical or dental benefit plan of Newco, Newco shall waive,
with respect to any Transferred Employees, any pre-existing condition exclusion
(to the extent such exclusion would not have applied under the applicable plan
of Spectrian or any of its subsidiaries).

                  (c) Newco shall provide continuation health care coverage to
all Transferred Employees and their qualified beneficiaries who incur a
"qualifying event" after the Closing Date in accordance with and to the extent
required, under the continuation health care coverage requirements of Section
4980D of the Code and Sections 601 through 608 of ERISA ("COBRA"). Spectrian
shall be responsible for providing continuation coverage and all related notices
to the extent required by law to any Transferred Employees (or qualified
beneficiary) who incurs a "qualifying event" under COBRA on or before the
Closing Date.

                  (d) Newco agrees to provide any required notice under the
Worker Adjustment and Retraining Notification Act, as amended (the "WARN Act"),
and to otherwise comply with the WARN Act with respect to any "plant closing" or
"mass layoff" (as defined in the WARN Act), affecting Transferred Employees and
occurring on or after the Closing Date. Newco shall indemnify and hold harmless
Spectrian and its Affiliates with respect to any liability under the WARN Act
arising from the actions of Newco or its Affiliates on or after the Closing
Date.

         Section 7.6 Tax Matters.

                  (a) All real property, personal property and ad valorem taxes
that are attributable to the Acquired Assets shall be apportioned and prorated
between Spectrian and Newco as of the Closing Date. If, at the time of Closing,
tax rates for the then current year have not been published, then the proration
of real and personal property taxes shall be made on the basis of the tax rate
for the preceding tax year applied to the latest assessed valuation of the
Acquired Assets, and when the tax rate is fixed for the tax year in which the
Closing occurs, Spectrian and Newco agree to adjust such prorations and, if
necessary, to refund or pay such sums to the other party as necessary to effect
such readjustment.

                  (b) Subject to the provisions of Section 7.2 of this
Agreement, Newco and Spectrian each agrees that it will, and will cause its
Affiliates to, (i) make available all such information, employees and records of
or relating to the Business or the Acquired Assets to the other party and its
employees and advisors as the other party may reasonably request with respect to
matters relating to Taxes (including, without limitation, Tax Returns, Tax
compliance packages and any other relevant information collected in connection
with the filing of Tax Returns and/or reports relating to Taxes), (ii) provide
to the other party copies of such information and records as the other party may
reasonably request, and (iii) cooperate as reasonably requested by the other
party with respect to all matters relating to Taxes (including, without
limitation, the preparation of Tax compliance packages, the filing of Tax
Returns, the filing of any amended Tax Return if reasonably requested by the
other party, audits, and proceedings).

                  (c) Subject to the provisions of Section 10 of this Agreement,
Spectrian shall indemnify and hold Newco harmless against all Taxes relating to
the Business or the Acquired Assets for Pre-Closing Periods; provided, however,
that in the event that a Tax matter arises that


                                       29
<PAGE>   31

could give rise to liability of Spectrian pursuant to this Section 7.6(c), Newco
shall promptly provide written notice thereof to Spectrian, Spectrian, at its
option and expense, shall control all actions taken in connection with such Tax
matter, and neither Parent nor Newco shall agree to or settle such Tax matter
without Spectrian's prior written consent. Any Tax refunds relating to the
Business or the Acquired Assets for Pre-Closing Periods that are received by
Newco, and any amounts credited against any Tax to which Newco becomes entitled
that relate to Pre-Closing Periods or are attributable to any adjustment by a
Taxing Authority to Taxable income, loss or Tax liability for Pre-Closing
Periods, shall be for the account of Spectrian. Newco shall pay over to
Spectrian any such refund or the amount of any such credit within five (5)
business days after the earlier of the receipt thereof by Newco in the case of a
refund or, in the case of a credit, within five (5) business days of the due
date of the Tax Return for the Tax to which the credit is applied.

                  (d) Notwithstanding any other provision of this Agreement, all
transfer, registration, stamp, documentary, sales, use and similar Taxes
(including, but not limited to, all applicable real estate transfer or gains
Taxes) incurred in connection with this Agreement and the transactions
contemplated hereby shall be the responsibility of and be paid by Spectrian. The
parties shall cooperate in the timely making of all filings, Tax Returns,
reports and forms as may be required in connection therewith. At the Closing,
Spectrian and Newco shall deliver to each other such properly completed resale
exemption certificates and other similar certificates or instruments as are
necessary to claim available exemptions from the payment of sales, transfer, use
or other similar Taxes under applicable law.

                  (e) If Newco or Spectrian or either of their Affiliates
receives any written notice from any Taxing Authority proposing any adjustment
that could affect the liability of the other party under this Agreement for any
Tax relating to the Business or the Acquired Assets, such party shall give
prompt written notice thereof to the other party, which notice shall describe in
detail each proposed adjustment.

                  (f) The "consideration" (within the meaning of Code Section
1060) paid by Newco pursuant to the terms hereof shall be allocated among the
assets acquired by Newco hereunder in the manner required by Code Section 1060
and the Treasury Regulations thereunder. Newco shall prepare and deliver a
schedule setting forth the fair market value of the assets and the amount of the
liabilities taken into account under Treasury Regulations sections 1.1060-1T,
1.338-4T, -5T and -6T for review and comment by Spectrian within thirty (30)
days after the Closing Date, and Spectrian shall be deemed to have accepted such
determination unless Spectrian notifies Newco in writing of an objection within
thirty (30) days after receipt of Newco's schedule. If Spectrian gives such
notice of objection to Newco's schedule, and if Newco and Spectrian are unable
to resolve such objection through commercially reasonable efforts within thirty
(30) days of Newco's receipt of Spectrian's notice, then the objection shall be
submitted to and reviewed by an internationally recognized firm of independent
public accountants mutually chosen and jointly engaged by Newco and Spectrian
(the "Resolution CPA Firm"), whose determination shall be conclusive and binding
upon Newco and Spectrian. In connection with the foregoing, Newco and Spectrian
shall make readily available to the Resolution CPA Firm all relevant items
reasonably requested by the Resolution CPA Firm. Further, Newco and Spectrian
shall instruct the Resolution CPA Firm to deliver its written determination to
Newco and Spectrian no later than thirty (30) days after the matter is referred
to


                                       30
<PAGE>   32

the Resolution CPA Firm. The fees and expenses of the Resolution CPA Firm shall
be borne equally by Newco and Spectrian. Newco and Spectrian agree that (i)
Newco and Spectrian shall file with their respective federal income Tax Returns
(and applicable foreign, state and local Tax Returns) consistent IRS Forms 8594
(and comparable foreign, state and local forms), including any required
amendments thereto, which shall reflect the allocation determined in accordance
herewith, and (ii) such allocation (subject to appropriate adjustments to
reflect any subsequent change in the consideration hereunder) shall be binding
on Newco and Spectrian for all federal, state, local and foreign Tax purposes.

                  (g) Notwithstanding any other provision of this Agreement, the
covenants contained in Section 7.6 (relating to Taxes) shall survive
indefinitely.

         Section 7.7 Expenses. Whether or not the Closing occurs and except as
otherwise provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses. Any finders' or investment
banking fee due by Spectrian in connection with this Agreement or the
transactions contemplated hereby shall be paid by Spectrian directly, and not
out of the Business. Notwithstanding the foregoing or any other provisions of
this Agreement, Newco and Spectrian agree that all fees incurred in connection
with any filing made pursuant to the HSR Act shall be paid by Newco or Parent.

         Section 7.8 Financial Information. Subject to the provisions of Section
7.2 and 7.6(b) and after the Closing, upon reasonable written notice, Newco and
Spectrian shall furnish or cause to be furnished to each other and their
respective accountants, counsel and other representatives reasonable access,
during normal business hours, to such information (including records pertinent
to the Business) and assistance relating to the Business as is reasonably
necessary for financial reporting and accounting matters, the preparation and
filing of any returns, reports or forms or the defense of any Tax audit,
proceeding, claim or assessment.

         Section 7.9 Bulk Transfer Laws. Newco hereby waives compliance by
Spectrian with the provisions of any so-called "bulk transfer law" (including,
without limitation, bulk transfer laws relating to Taxes) of any jurisdiction in
connection with the sale of the Acquired Assets to Newco. Spectrian shall
indemnify and hold harmless Newco against any and all liabilities, including
applicable interest and penalties, that may be asserted by third parties
(including any Taxing Authority) against Newco as a result of noncompliance with
any such bulk transfer law.

         Section 7.10 Actions of Newco and Spectrian. Neither party shall
knowingly take any action that would reasonably be expected to result in any of
the representations or warranties made by such party in the Transaction
Agreements becoming untrue in any material respect or in any of the conditions
of the Closing set forth in Article VIII not being satisfied.

         Section 7.11 No Additional Representations. Newco acknowledges that it
and its representatives have been permitted full and complete access to the
Acquired Assets that it and its representatives have desired or requested to see
or review, and that its representatives have had a full opportunity to meet with
Spectrian and representatives of Spectrian and employees of the Business to
discuss the Business. Newco acknowledges that it and its representatives have
received or have had an opportunity to review prior to the date hereof all
written materials which Spectrian is required to deliver or make available, as
the case may be, to Newco pursuant to this Agreement on or prior to the date
hereof. Newco acknowledges that neither Spectrian nor any other person has made
any representation or warranty, express or implied, as to the accuracy or


                                       31
<PAGE>   33

completeness of any information regarding the Business or the Acquired Assets
except as expressly set forth in this Agreement and the schedules attached
hereto, and that neither Spectrian nor any other person will be subject to any
liability to Newco or any other person resulting from the distribution to Newco,
or Newco's use of, any such information in any form, including the preliminary
Private Placement Memorandum dated June 9, 2000 relating to the Business, any
documents or materials made available to Newco in any "data room," and any
management presentation in expectation of the transactions contemplated hereby
(subject to the provisions of Section 11.3). Spectrian acknowledges that it and
its representatives have received or have had an opportunity to review prior to
the date hereof all written materials which Parent or Newco is required to
deliver or make available, as the case may be, to Spectrian pursuant to this
Agreement on or prior to the date hereof. Spectrian acknowledges that neither
Parent, Newco nor any other person has made any representation or warranty,
express or implied, as to the accuracy or completeness of any information
regarding the business of either Parent or Newco except as expressly set forth
in this Agreement and the schedules attached hereto, and that neither Parent,
Newco nor any other person will be subject to any liability to Spectrian or any
other person resulting from the distribution to Spectrian, or Spectrian's use
of, any such information in any form (subject to the provisions of Section
11.3).

         Section 7.12 Hart-Scott-Rodino Act. As soon as possible after the
execution of this Agreement, but in no event later than ten business days
thereafter, Spectrian and Parent shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice as are
required to comply with the HSR Act. Spectrian and Parent shall use commercially
reasonable efforts to respond as promptly as reasonably practicable to any
inquiries received from the FTC and the DOJ for additional information or
documentation and to respond as promptly as reasonably practicable to all
inquiries and requests from any Governmental Entity in connection with antitrust
matters. Spectrian and Parent shall use its commercially reasonable efforts to
overcome any objections which may be raised by the FTC, DOJ or any Governmental
Entity having jurisdiction over antitrust matters. Notwithstanding anything to
the contrary in this Agreement, if Spectrian, in its reasonable business
judgment, considers the imposition of a condition upon the transactions by a
Governmental Entity to be materially adverse to Spectrian or any of its
affiliates, Spectrian may terminate this Agreement.

         Section 7.13 Lease. As of the Closing Date, Newco and Spectrian shall
enter into a sublease with respect to the Facility under terms and conditions
substantially similar to the terms and conditions set forth in the Lease (as
defined below) which are applicable to the Facility; provided, however, the
parties agree that the economic terms and conditions which are applicable to the
Facility shall be the same with respect to the sublease as those set forth in
the Lease. Such sublease shall, in any event, (i) be subject and subordinate to,
and be made in accordance with, the terms of the Lease, (ii) provide for
cross-indemnities (with customary carve-outs) pursuant to which Newco shall
indemnify Spectrian with respect to events, matters and circumstances occurring
or arising from and after the date of such sublease, and Spectrian shall
indemnify Newco with respect to events, matters and circumstances occurring or
arising prior to the date of such sublease, and (iii) provide for such other
terms and conditions as Newco and Spectrian may agree. For purposes of this
Section 7.13, the term "Lease" means that certain Spectrian Lease Agreement,
dated as of November 19, 1996, by and between SPEC (CA) QRS 12-20, Inc., a
California corporation, as lessor ("SPEC"), and Spectrian, as lessee. After
Spectrian and Newco enter into such sublease, Spectrian agrees to use
commercially reasonable


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<PAGE>   34

efforts to obtain a non-disturbance agreement from SPEC with terms acceptable to
SPEC, Spectrian and Newco.

         Section 7.14 Delivery of Audited Financial Statements. Spectrian agrees
to use commercially reasonable efforts to deliver to Parent the financial
statements of the Business prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP for each of the fiscal years ended March 31, 2000,
March 31, 1999 and March 31, 1998 (but excluding a balance sheet for the fiscal
year ended March 31, 1998) (the "Audited Financial Statements") at the earlier
of (i) three (3) days prior to the Closing Date or (ii) within 30 days of the
date hereof. The Audited Financial Statements shall present fairly the financial
condition of the Business as of such dates and the results of operations of the
Business for such periods will be correct and complete in all material respects,
and will be consistent with the books and records of the Business and Spectrian
(which books and records will be correct and complete in all material respects)
and shall be consistent, in all material respects, with Financial Information.

         Section 7.15 Stub Period Financial Information. Spectrian agrees to use
commercially reasonable efforts to deliver to Parent unaudited financial
information of the Business as required of the Parent for its Form 8-K filing
requirements for the six month period ended October 1, 2000 (the "Unaudited Stub
Period Financial Information") at the earlier of (i) three (3) days prior to the
Closing Date or (ii) within 30 days of the date hereof. The unaudited financial
information will be prepared from the books and records of Spectrian and the
Business on a basis consistent with the Audited Financial Statements.

         Section 7.16 Listing of Additional Shares. Promptly following the date
hereof, Parent shall use its reasonable best efforts to file with the NASDAQ
National market, to the extent required, a Notification Form for Listing of
Additional Shares with respect to the Shares of Parent Common Stock to be issued
at the Closing by Parent as a result of the Acquisition.

         Section 7.17 Non-Competition; Non-Solicitation.

                  (a) For a period of two (2) years following the Closing Date,
Spectrian shall not directly or indirectly engage in the business of developing,
manufacturing and supplying radio frequency power semiconductors in the
Semiconductor Field (the "Competing Business"). For purposes of this Section
7.17, Spectrian shall be deemed to engage in a business if it, directly or
indirectly, engages or invests in, owns, manages, operates, controls or
participates in the ownership, management, operation or control of, or renders
services or advice to, any business engaged in the Business; provided, however,
that Spectrian may invest in the securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if (i) such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934 and
(ii) Spectrian does not beneficially own (as defined Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in excess of 5% of the outstanding
equity of such enterprise. The foregoing shall not prevent Spectrian from either
(A) working with venders of semiconductor components to develop such components
for use in amplifiers and amplifier subsystems manufactured by Spectrian, or (B)
being acquired by a company or a subsidiary, division or business unit of a
company (each, a "Separate Unit") where the Separate Unit itself is not engaged
in the Competing Business and where Spectrian has no business relationship with
any other parts of the company that are engaged in the Competing


                                       33
<PAGE>   35

Business and where Spectrian is not involved, directly or indirectly, in any
part of the company's (or any other Separate Unit's) Competing Business
activities.

                  (b) During the same period as the restrictions of paragraph
(a) above shall apply, neither Spectrian, Parent or Newco shall (i) request,
induce or attempt to influence any distributor or supplier of goods or services
to any other party to curtail or cancel any business they may transact with the
other party, (ii) request, induce or attempt to influence any customers of any
other party that have done business with or potential customers which have been
in contact with the other party to curtail or cancel any business they may
transact with the other party, (iii) request, induce or attempt to influence any
employee of any other party to terminate his or her employment or consulting
agreement with such other party or (iv) request, induce or attempt to influence
any Governmental Entity or regulatory authority to terminate, revoke or
materially and adversely alter or impair any license held, owned, used or
reserved for the other party.

         Section 7.18 Orderly Disposition of Stock Consideration. Spectrian
agrees that during the five (5) business days immediately after the Closing
Date, it shall not (without the consent of Parent) sell into the public markets
in excess of 25,000 shares of Parent Common Stock during any one business day.
Spectrian agrees that during the next 55 days, it shall not sell into the public
markets in excess of 75,000 shares of Parent Common Stock during any one (1)
business day, nor shall it sell more than an aggregate of 300,000 shares of
Parent Common Stock during any one (1) calendar week. In addition, Spectrian
agrees that it shall make all public sales of Parent Common Stock through a
registered market maker and otherwise in accordance with Rule 145 under the
Securities Act. This Section 7.18 shall not apply to the Immediately Available
Consideration.

         Section 7.19 Exclusivity. From the date hereof until the earlier of the
Closing Date or such time as this Agreement is terminated pursuant to Article 9
herein, Spectrian agrees that it will not, and will cause its affiliates,
directors, officers, employees and representatives not to, directly or
indirectly, (i) initiate, solicit, encourage, discuss, negotiate, entertain or
accept any inquiries, proposals or offers (whether initiated by them or
otherwise) with respect to (A) the acquisition of any shares of capital stock or
any other voting securities or debt securities of the Business or Spectrian or
any interest therein, (B) the acquisition of all or a material portion of the
assets and properties of the Business or Spectrian or any interest therein (C)
the merger, consolidation or combination of the Business or Spectrian, (D) the
liquidation, dissolution or reorganization of the Business or Spectrian (each of
the foregoing, a "Potential Transaction"), (ii) provide information relating to
the Business in connection with a Potential Transaction or (iii) enter into any
contract, agreement arrangement or understanding concerning or relating to a
Potential Transaction, in each case with a third party other than Parent. In the
event that Spectrian or the Business, or any of their respective affiliates,
directors, officers, employees or representatives, receives an unsolicited
inquiry, proposal or offer with respect to a Potential Transaction or obtains
information that such an inquiry, proposal or offer is likely to be made,
Spectrian or the Business or such affiliate director officer employee or
representative, will provide Parent with immediate notice thereof, subject to
the confidentiality provisions contained herein, which notice shall include the
terms of and the identity of the person or persons making such inquiry proposal
or offer; provided, however, that Spectrian shall not be subject to this
paragraph to the extent a Potential Transaction involves Spectrian alone and
does not


                                       34
<PAGE>   36

contemplate the inclusion of the Business unless such Potential Transaction
would impair or otherwise affect the consummation of the Acquisition.

         Section 7.20 Registration Rights. In the event the shares of Parent
Common Stock issuable pursuant to this Agreement (the "Registrable Securities")
do not become exempt from registration under applicable federal and state laws
for any reason prior to the Closing Date, Parent hereby agrees to enter into a
Registration Rights Agreement in the form attached hereto.

         Section 7.21 Parent's Investigation Period.

                  (a) As used herein, the term "Parent's Investigation Period"
shall mean the period commencing on the date hereof and ending on the Closing
Date. As used herein, the term "Parent's Investigation" shall mean Parent's
right, prior to the expiration of the Parent's Investigation Period and at
Parent's sole expense, to conduct any inspections and investigations reasonably
requested by Parent with respect to the physical or environmental condition of
the Facility or the Acquired Assets (collectively referred to hereinafter from
time to time as the "Property") as shall be deemed desirable by Parent,
including conducting and taking studies, surveys, tests (including specifically
soil and/or groundwater testing), sampling and borings on or under the Property
(including without limitation the performance of Phase I and Phase II
environmental audits of the Property).

                  (b) Parent, its agents, employees, contractors or other
representatives, shall have the rights of access to the Property at all
reasonable times during the Parent's Investigation Period for the purpose of
conducting any and all above-referenced inspections and investigations.
Spectrian hereby agrees to cooperate with and assist Parent in inspecting and
investigating the Property during Parent's Investigation Period. Within three
(3) business days of the date hereof, Spectrian shall deliver to Parent copies
of all surveys, engineering reports, appraisals, environmental audits,
construction documents (including without limitation all related plans and
specifications), governmental permits, access agreements, and utility
agreements, if any, relating to the Property in Spectrian's possession, as well
as any other agreements to be assigned to Parent under the terms of this
Agreement.

                  (c) Parent shall be responsible for the management and
disposal of any investigation-derived waste (including, without limitation,
drill cuttings and purge water), and shall properly close all soil borings and
groundwater wells in compliance with all applicable requirements of law. Parent
shall provide Spectrian split samples from each sampling point properly packaged
and preserved and copies of all sampling logs and related information necessary
for independent analysis of such samples by Spectrian.

                  (d) Except to the extent caused by the negligence or
misconduct of Spectrian, its Affiliates, employees, contractors or agents,
Parent agrees to indemnify and hold harmless Spectrian and all of its officers,
directors, employees, representatives and agents (the "Indemnified Parties")
from and against all damages to the Property (and all improvements and personal
property thereon) caused by the Parent's Investigation, and Parent agrees to
indemnify and hold harmless the Indemnified Parties from and against any and all
liability, cost and expense (including, without limitation, attorneys' fees and
expenses of any of the Indemnified Parties) arising from the handling,
transportation, treatment, storage or disposal of samples of


                                       35
<PAGE>   37

environmental media generated in connection with the Parent's Investigation.
This Section 7.21(d) shall survive the termination of this Agreement and shall
be subject to the indemnification procedures set forth in Article 10.

                  (e) Parent shall provide Spectrian with copies of all reports
(including, without limitation, analysis results) prepared in connection with
the Parent's Investigation. Parent shall use any reports prepared or information
generated in connection with the Parent's Investigation solely in connection
with the transactions contemplated by Parent and Spectrian, and Parent shall not
disclose or permit the disclosure of such reports or information to any person
(other than agents and representatives of Parent and Newco which persons shall
be subject to confidentiality agreements) for any reason at any time; provided,
however, that, after providing written notice thereof to Spectrian, Parent may
disclose such reports or information as required by law or court order. This
Section 7.21(e) shall survive the termination of this Agreement.

                  (f) In the event Parent's investigation identifies any
Environmental Condition that would constitute a breach by Spectrian of Section
5.18 herein, then Parent shall have the right to give written notice thereof to
Spectrian and elect to terminate this Agreement. If Parent provides such notice
to Spectrian and does not elect to terminate, Spectrian may either (i) cure any
problems or defects noted by Parent (at Spectrian's sole cost and expense), (ii)
provide for the cure of any such problems or defects (at Spectrian's sole cost
and expense), or (iii) refuse to cure any such problems or defects. In the event
Spectrian elects to cure, or provide for the cure, of any such noted problems or
defects, Spectrian shall so notify Parent of such election within 10 business
days of Spectrian's receipt of such notice. If Spectrian (i) elects not to cure
said problems or defects, or provide for the cure of said problems or defects,
or (ii) fails to timely notify Parent of such election, or (iii) fails for any
reason to cure said problems or defects within a mutually agreed upon cure
period, then Parent shall have the option of either accepting the Property in
its then-present condition or terminating this Agreement, in which case Parent
shall have no further obligations hereunder, except as may otherwise be provided
herein.

                  (g) Neither Parent's performance of any additional due
diligence activities hereunder nor anything else contained in this Section 7.21
shall diminish, waive or have any impact or effect on the warranties and
representations of Spectrian contained herein, or on any rights or remedies to
which Parent or Newco may be entitled hereunder.

         Section 7.22 Employee Benefits. No later than 10 calendar days after
the Closing Date, Spectrian shall provide to the employees of the Business the
benefits, including any payments due, in accordance with the terms and
conditions of Schedule 7.22.

                                   ARTICLE 8
                              CONDITIONS PRECEDENT

         Section 8.1 Conditions to Each Party's Obligations. The obligation of
Newco and Parent to purchase the Acquired Assets and assume the Assumed
Liabilities and the obligation of Spectrian to sell, assign, convey and deliver
the Acquired Assets to Newco shall be subject to the satisfaction prior to the
Closing of the following conditions:


                                       36
<PAGE>   38

                  (a) HSR. Any applicable waiting period under the HSR Act shall
have expired or been terminated.

                  (b) No Litigation, Injunctions, or Restraints. No temporary
restraining order, preliminary or permanent injunction or other legal restraint
or prohibition preventing the consummation of the transactions contemplated by
this Agreement shall be in effect.

         Section 8.2 Conditions to Obligations of Parent and Newco. The
obligation of Parent and Newco to purchase the Acquired Assets and assume the
Assumed Liabilities is subject to the satisfaction on and as of the Closing of
each of the following additional conditions:

                  (a) Representations and Warranties. The representations and
warranties of Spectrian set forth in the Transaction Agreements shall be true
and correct as of the Closing as though made on and as of the Closing, except
(i) to the extent such representations and warranties relate to an earlier date
(in which case such representations and warranties shall be true and correct as
of such earlier date with the exception of the Schedule 5.11 which shall be
updated as of the Closing Date) and (ii) except for breaches of representations
and warranties that are not qualified as to "materiality", "Material Adverse
Effect" or a similar term which shall be true as to matters that, individually
or in the aggregate are not reasonably likely to have a Material Adverse Effect
on the Business and the Acquired Assets (representations and warranties that are
qualified as to "materiality", "Material Adverse Effect" or a similar term shall
be true and correct when made at and as of the Closing as if made as at and as
of such time), and Newco shall have received a certificate of Spectrian to such
effect.

                  (b) Performance of Obligations of Spectrian. Spectrian shall
have performed or complied in all material respects with all obligations,
conditions and covenants required to be performed by it under the Transaction
Agreements at or prior to the Closing, and Newco shall have received a
certificate of Spectrian to such effect.

                  (c) Deliveries. Spectrian shall have delivered to Parent the
Audited Financial Statements, the Unaudited Stub Period Financial Information, a
certified copy of its charter and a certificate of good standing from the State
of Delaware. Spectrian shall have executed and delivered to Newco (i) bills of
sale conveying the personal property included in the Acquired Assets, (ii) the
Transaction Agreements, and (iii) any required transfer tax forms and
affidavits.

                  (d) FIRPTA Compliance. On the Closing Date, Spectrian shall
deliver to Newco a properly executed statement pursuant to Treasury Regulations
Section 1.1445-2(b)(2) for purposes of satisfying Newco's obligation under
Section 1445 of the Code and the regulations thereunder.

                  (e) Lease. The lessor shall have consented to the sub-lease of
the Lease in accordance with the provisions of Section 7.13.

                  (f) Absence of Changes. There shall not have occurred after
the date hereof any change in or effect on the Business that could have a
Material Adverse Effect on the Business or Spectrian; provided, however, that in
no case shall a decrease in Spectrian's share price or a


                                       37
<PAGE>   39

general decline in the industry as a whole constitute a Material Adverse Effect
for the purpose of this Section 8.2(f).

                  (g) Third Party Consents. Spectrian shall have received
consent to the assignment of the Contracts listed on Schedule 8.2(g).

                  (h) Legal Opinion. Parent and Newco shall have received an
opinion addressed to Parent and Newco from legal counsel to Spectrian reasonably
acceptable to Parent and Newco as to such matters as Parent and Newco shall
reasonably request.

                  (i) Patent Opinion. Parent and Newco shall have received an
opinion addressed to Parent and Newco from Townsend and Townsend and Crew LLP,
or other counsel of Spectrian reasonably acceptable to Parent, as described in
Schedule 8.2(i).

                  (j) Employees. At least ninety percent (90%) of the employees
listed in Schedule 7.5 hereto shall have accepted employment with Newco.

                  (k) Liens. All Liens on the Acquired Assets will have been
terminated or released by the holders of the Liens and evidence of such release
or termination shall have been provided.

         Section 8.3 Conditions to the Obligations of Spectrian. The obligations
of Spectrian to sell, assign, convey, and deliver the Acquired Assets, or to
cause the Acquired Assets to be sold, assigned, conveyed or delivered, as
applicable, is subject to the satisfaction on and as of the Closing of each of
the following conditions:

                  (a) Representations and Warranties. The representations and
warranties of Parent and Newco set forth in the Transaction Agreements shall be
true and correct in all material respects as of the Closing as though made on
and as of the Closing, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct as of such earlier date), and Spectrian
shall have received a certificate signed by authorized officers of Parent and
Newco to such effect.

                  (b) Performance of Obligations of Newco. Parent and Newco
shall have performed in all material respects all obligations required to be
performed by each under the Transaction Agreements at or prior to the Closing,
and Spectrian shall have received a certificate signed by authorized officers of
Parent and Newco to such effect.

                  (c) Deliveries. Parent and Newco shall have delivered to
Spectrian a certified copy of its charter and a certificate of good standing
from the State of North Carolina, and Parent and Newco shall have executed and
delivered the Transaction Agreements and any required transfer tax forms and
affidavits.

                  (d) Absence of Changes. There shall not have occurred after
the date hereof any change in or effect on the Parent that could have a Material
Adverse Effect on the Parent; provided, however, that in no case shall a
decrease in Parent's share price or a general decline in the industry as a whole
constitute a Material Adverse Effect for the purpose of this Section 8.3(d).


                                       38
<PAGE>   40

                  (e) Legal Opinion. Spectrian shall have received an opinion
addressed to Spectrian from Smith, Anderson, Dorsett, Mitchell & Jernigan L.L.P.
as to such matters as Spectrian shall reasonably request.

                                   ARTICLE 9
                        TERMINATION, AMENDMENT AND WAIVER

         Section 9.1 Termination.

                  (a) Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing:

                           (i)      by mutual written consent of Spectrian and
                                    Parent;

                           (ii)     by Spectrian if the condition set forth in
                                    Section 3.1(b) is met or if any of the
                                    conditions set forth in Sections 8.1 or 8.3
                                    shall have become incapable of fulfillment
                                    and shall not have been waived by Spectrian;
                                    or

                           (iii)    by Newco if any of the conditions set forth
                                    in Sections 8.1 or 8.2 shall have become
                                    incapable of fulfillment and shall not have
                                    been waived by Newco; or

                           (iv)     by Spectrian or Newco if the Closing does
                                    not occur on or prior to February 1, 2001;

provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not in breach in any material respects of any of its
representations, warranties, covenants or agreements contained in this Agreement
or whose action or failure to act shall have been a principal cause of or
resulted in the failure of the transactions contemplated by this Agreement or
such conditions having become incapable of fulfillment.

                  (b) In the event of termination by Spectrian, on the one hand,
or Newco, on the other hand, pursuant to this Section 9.1, written notice
thereof shall forthwith be given to the other party and the transactions
contemplated by this Agreement shall be terminated, without further action by
any party. If the transactions contemplated by this Agreement are terminated as
provided herein:

                           (i)      Newco shall return all documents and other
                                    material received from Spectrian relating to
                                    the Business and to the transactions
                                    contemplated hereby, whether so obtained
                                    before or after the execution hereof, to
                                    Spectrian; and

                           (ii)     all confidential information received by
                                    Newco with respect to Spectrian or the
                                    Business shall be treated in accordance with
                                    the Confidentiality Agreement, which shall
                                    remain in full force and effect
                                    notwithstanding the termination of this
                                    Agreement.


                                       39
<PAGE>   41

                  (c) Notwithstanding Section 7.7 above, and without limiting
the availability of any other remedy, in the event of termination of this
Agreement by Spectrian under Section 9.1(a)(ii) on the basis of a material
uncured breach by Parent or Newco or of termination by Parent or Newco under
Section 9.1(a)(iii) on the basis of a material uncured breach by Spectrian, the
breaching party shall reimburse, within five (5) business days after
termination, the terminating party's out-of-pocket costs and expenses incurred
in connection with this Agreement and the transactions contemplated solely
hereby; provided, however, the aggregate amount of such out-of-pocket costs and
expenses shall in no case be deemed to exceed $750,000.

                  (d) If this Agreement is terminated and the transactions
contemplated hereby are abandoned, this Agreement shall become null and void and
of no further force and effect, except for the provisions of Sections 7.7, 9.1,
11.7 and 11.8. Nothing in this Section 9.1 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this Agreement.

         Section 9.2 Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. By an instrument in writing, Parent, on the one hand, or Spectrian, on
the other hand, may waive compliance by the other party with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform.

                                   ARTICLE 10
                                 INDEMNIFICATION

         Section 10.1 Indemnification by Spectrian.

                  (a) Spectrian hereby agrees to indemnify, defend and hold
Parent, Newco and its Affiliates and their respective officers, directors and
employees (the "Newco Indemnified Parties") against, and agrees to hold them
harmless from, any Loss to the extent such Loss arises from or in connection
with:

                           (i)      any breach by Spectrian of any
                                    representation or warranty contained in this
                                    Agreement or any other agreement or
                                    documents delivered in connection herewith;

                           (ii)     any breach by Spectrian of any of its
                                    covenants contained in this Agreement; or

                           (iii)    any Excluded Liability.

                  (b) Notwithstanding the foregoing, the indemnification in
favor of the Newco Indemnified Parties contained in this Section 10.1 (i) shall
not be effective until the aggregate dollar amount of all Losses indemnified
against under this Section 10.1 exceeds one (1) half of one (1) percent (0.5%)
of the Purchase Price ("Spectrian's Threshold Amount"), and then only to the
extent such aggregate amount exceeds Spectrian's Threshold Amount; and (ii)
shall terminate once the aggregate dollar amount of all Losses indemnified
against under this Section 10.1 aggregates 25% of the Purchase Price
("Spectrian's Cap Amount"), and Spectrian shall thereafter have no further
obligations or liabilities with respect to any of such losses; provided,
however,


                                       40
<PAGE>   42

that in the event there are Losses asserted against, imposed upon or incurred by
the Newco Indemnified Parties resulting from breaches of Sections 5.13, 5.18,
5.20, 7.6 or 7.21 of this Agreement, there shall be no Spectrian Threshold
Amount and Spectrian's Cap Amount shall be unlimited, with respect to Losses
asserted against, imposed upon or incurred by the Newco Indemnified Parties
resulting from breaches of Sections 5.13, 5.18, 5.20, 7.6 and 7.21 of this
Agreement, only; provided, further, that the foregoing limitations on
Spectrian's indemnification obligations pursuant to this Section 10.1 shall not
apply to any indemnification by Spectrian for any Losses asserted against,
imposed upon or incurred by the Newco Indemnified Parties resulting from any
Excluded Liability or from fraud or willful misconduct.

                  (c) Parent, Newco and Spectrian acknowledge and agree that
their sole and exclusive remedy with respect to any and all claims relating to
the subject matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Section 10.1 (with respect to Parent and Newco) and
Section 10.2 (with respect to Spectrian). In furtherance of the foregoing,
Parent and Newco hereby waive, to the fullest extent permitted under applicable
law, any and all rights, claims and causes of action each may have against
Spectrian arising under or based upon any Governmental Rule; provided, however,
Spectrian acknowledges that money damages would not be sufficient or adequate
remedy for any breach or violation of, or default under Section 7.17, 7.19 or
9.1(c) of this Agreement, and Spectrian agrees that with respect to Section
7.17, 7.19 or 9.1(c) of this Agreement Parent shall be entitled to the fullest
extent permitted by law to an injunction restraining such breach, violation or
default or threatened breach, violation or default and to any other equitable
relief, including, without limitation, specific performance.

                  (d) Amounts payable to Parent for indemnification claims under
this Section 10.1 shall first be paid from the escrow account under the Escrow
Agreement. To the extent the foregoing is not sufficient to pay such claim, such
claim shall be paid by Spectrian.

         Section 10.2 Indemnification by Parent and Newco.

                  (a) Newco and Parent hereby agree to indemnify Spectrian and
its Affiliates and their respective officers, directors and employees (the
"Spectrian Indemnified Parties") against, and agrees to hold them harmless from,
any Loss to the extent such Loss arises from or in connection with:

                           (i)      any breach by Newco or Parent of any
                                    representation or warranty contained in this
                                    Agreement or any other agreement or document
                                    (other than the Purchase and Supply
                                    Agreement) delivered in connection herewith;

                           (ii)     any breach by Newco or Parent of any
                                    covenant contained in this Agreement;

                           (iii)    the operation of the Business after the
                                    Closing Date; or

                           (iv)     any Assumed Liability.

                  (b) Notwithstanding the foregoing, the indemnification in
favor of the Spectrian Indemnified Parties contained in this Section 10.2 (i)
shall not be effective until the aggregate


                                       41
<PAGE>   43

dollar amount of all Losses indemnified against under this Section 10.2 exceeds
one (1) half of one (1) percent (0.5%) of the Purchase Price ("Parent's
Threshold Amount"), and then only to the extent such aggregate amount exceeds
Parent's Threshold Amount; and (ii) shall terminate once the aggregate dollar
amount of all Losses indemnified against under this Section 10.2 aggregates 25%
of the Purchase Price, and Parent shall thereafter have no further obligations
or liabilities with respect to any of such losses

         Section 10.3 Losses Net of Insurance, etc. The amount of any Loss for
which indemnification is provided under this Article 10 shall be net of any
actual cash insurance recoveries or recoveries of indemnities from any third
parties. Neither party shall have an obligation to seek an insurance recovery or
third party indemnification and if a party does so and obtains a recovery, the
party's indemnity claim shall not be offset to the extent of the party's
expenses in obtaining such recovery and an amount equal to anticipated premium
increases for the following three (3) years.

         Section 10.4 Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (a) pursuant to Sections 10.1(a)(i) and
10.2(a), shall terminate when the applicable representation or warranty
terminates pursuant to Section 11.3, and (b) pursuant to the other clauses of
Sections 10.1 and 10.2 shall not terminate.

         Section 10.5 Procedure.

                  (a) For an indemnified party (the "indemnified party") to be
entitled to any indemnification provided for under this Agreement, such
indemnified party shall, following the discovery of the matters giving rise to
any Loss, notify the indemnifying party (the "indemnifying party") in writing of
its claim for indemnification for such Loss, specifying in reasonable detail the
nature of such Loss and the amount of the liability estimated to accrue
therefrom; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the indemnified party failed to give such
notice). Thereafter, the indemnified party shall deliver to the indemnifying
party, within five business days after the indemnified party's receipt of such
notice, all information and documentation reasonably requested by the
indemnifying party with respect to such Loss.

                  (b) If the indemnification sought pursuant hereto involves a
claim made by a third party against the indemnified party (a "Third Party
Claim"), the indemnifying party shall be entitled to participate in the defense
of such Third Party Claim and, if it so chooses, to assume the defense of such
Third Party Claim with counsel selected by the indemnifying party. Should the
indemnifying party so elect to assume the defense of a Third Party Claim, the
indemnifying party shall not be liable to the indemnified party for any legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the indemnified
party shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the


                                       42
<PAGE>   44

defense thereof (other than during any period in which the indemnified party
shall have failed to give notice of the Third Party Claim as provided above). If
the indemnifying party chooses to defend or prosecute a Third Party Claim, all
of the parties hereto shall cooperate in the defense or prosecution thereof.
Such cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
which are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. If the indemnifying party
chooses to defend or prosecute any Third Party Claim, the indemnified party will
agree to any settlement, compromise or discharge of such Third Party Claim which
the indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim. Whether or not the indemnifying party shall have assumed
the defense of a Third Party Claim, the indemnified party shall not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party's prior written consent.

                                   ARTICLE 11
                               GENERAL PROVISIONS

         Section 11.1 Notices. All notices, requests and other communications
hereunder shall be in writing and shall be sent, delivered or mailed, addressed
as follows:

if to Parent, to:
Cree, Inc.
4600 Silicon Drive
Durham, North Carolina  27703
Attention: Adam H. Broome, General Counsel and Secretary
Fax: (919) 313-5456

with a copy (which shall not constitute notice) to:
Smith, Anderson, Dorsett, Mitchell & Jernigan L.L.P.
2500 First Union Capitol Center
Raleigh, North Carolina  27601
Attention: Gerald F. Roach
Fax: (919) 821-6800
and
if to Spectrian, to:
Spectrian Corporation
350 West Java Drive
Sunnyvale, California  94809
Attention: Michael D. Angel
Fax: (408) 541-0262

with a copy (which shall not constitute notice) to:
Dewey Ballantine LLP
800 Menlo Ave., Suite 215
Menlo Park, California  94025
Attention:  Robert M. Smith
Fax: (650) 462-7499


                                       43
<PAGE>   45

Each such notice, request or other communication shall be given (i) by hand
delivery, (ii) by certified mail or (iii) by nationally recognized courier
service. Each such notice, request or communication shall be effective when
delivered at the address specified in this Section 11.1 (or in accordance with
the latest unrevoked direction from the receiving party).

         Section 11.2 Headings. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

         Section 11.3 Survival of Representations and Warranties. All
representations and warranties of Spectrian and Newco and Parent contained
herein or made pursuant hereto shall survive the Closing Date for a period of 18
months after the Closing Date, notwithstanding any investigation or examination
of or knowledge with respect to, the subject matter thereof by or on behalf of
Spectrian, Newco or Parent; provided, however, such representations and
warranties shall survive for the applicable statute of limitations in the event
of fraud or intentional misrepresentation with respect thereto; provided,
further, the representations and warranties made pursuant to Section 5.13 shall
survive for a period of 24 months after the Closing Date; provided, further, the
representations and warranties made pursuant to Sections 5.18 and 5.20 shall
survive for the applicable statute of limitations. Any right of indemnification
pursuant to Article 10 hereof with respect to a claimed breach of a
representation or warranty shall expire at the date of termination of the
representation or warranty claimed to be breached (the "Termination Date"),
unless on or prior to the Termination Date the party from whom indemnification
is sought shall have received notice in accordance with the provisions of
Section 10.5 herein and the Escrow Agreement.

         Section 11.4 Severability. If any provision of this Agreement, or the
application thereof to any person, place or circumstances, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect; provided,
however, that in the event that the terms and conditions of this Agreement are
materially altered as a result of this paragraph, the parties hereto will
renegotiate the terms and conditions of this Agreement to resolve any
inequities.

         Section 11.5 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.

         Section 11.6 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof. Except as
specifically provided herein or therein, such agreements are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder or thereunder.


                                       44
<PAGE>   46

         Section 11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law.

         Section 11.8 Publicity. Except as may be required by applicable
securities laws upon the advice of counsel, neither Spectrian, on the one hand,
nor Newco or Parent, on the other hand, shall issue or cause the publication of
any press release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld.

         Section 11.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Parent may assign its rights, interests and obligations hereunder to a
wholly-owned subsidiary of Parent without the prior written consent of
Spectrian, provided that, prior to any such assignment, Parent executes and
delivers to Spectrian a written guaranty, in form reasonably satisfactory to
Spectrian, of the performance of all of Newco's obligations under this
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, in the event Spectrian sells all
or substantially all of its assets, Spectrian shall cause the buyer thereof to
assume Spectrian's obligations hereunder and, subject to the confidentiality
provisions contained herein, shall notify Parent in writing of the proposed sale
and provide evidence of the assumption of Spectrian's obligations by the buyer
of its assets.

                        *           *            *



                      [THIS SPACE LEFT INTENTIONALLY BLANK]


                                       45
<PAGE>   47





         IN WITNESS WHEREOF, Parent, Newco and Spectrian have caused this
Agreement to be signed by their respective parties thereunto duly authorized,
all of the date first written above.

                                   CREE, INC.

                                   By:  /s/ F. Neal Hunter
                                        ------------------
                                        F. Neal Hunter
                                        Chairman and Chief Executive Officer

                                   ZOLTAR ACQUISITION, INC.

                                   By:  /s/ F. Neal Hunter
                                        ------------------
                                        F. Neal Hunter
                                        Chief Executive Officer

                                   SPECTRIAN CORPORATION

                                   By:   /s/ Garrett A. Garrettson
                                         -------------------------
                                         Garrett A. Garrettson
                                         Chairman of the Board

LIST OF OMITTED EXHIBITS AND ATTACHMENTS

The following schedules and attachments have been omitted from this filing:

Schedule 2.2(a)(ii), Software
Schedule 2.2(a)(ii), Business Equipment
Schedule 2.2(a)(v), Acquired Contracts
Schedule 2.3(a)(ii)(A), Business Accounts Payable
Schedule 5.4(i), UltraRF Statement of Business Assets and Liabilities as of
March 31, 1999 and March 31, 2000 (Unaudited)
Schedule 5.4(ii), UltraRF Statement of Operations, Fiscal Years Ending March 31,
1998, March 31, 1999, and March 31, 2000 (Unaudited)
Schedule 5.4(iii), UltraRF Statement of Operations
for Six Month Period Ended October 1, 2000 (Unaudited)
Schedule 5.4(iv), UltraRF Statement of Business Assets and Liabilities as of
October 1, 2000 (Unaudited)
Schedule 5.5, Title to Acquired Assets
Schedule 5.6, Absence of Certain Changes or Events
Schedule 5.7, Employment Matters
Schedule 5.8, Employee Benefit Plans and Amounts of Unfunded Retirement
Liabilities
Schedule 5.9, Litigation
Schedule 5.10, Compliance with Laws
Schedule 5.11, Contracts


                                       46
<PAGE>   48

Schedule 5.13, Intellectual Property
Schedule 5.18, Environmental Compliance
Schedule 5.20, Taxes
Schedule 7.1, Covenants of Spectrian Relating to Conduct of Business
Schedule 7.5, Employee Benefits
Schedule 7.22, Employee Benefits
Schedule 8.2(g), Required Third Party Consents
Schedule 8.2(i), Patent Opinion

Annex I:
         Form of Escrow Agreement
         Form of Development Agreement
         Employment Agreement with Johan Darmawan
         Employment Agreement with Joe Hornung
         Employment Agreement with John P. Quinn
         Employment Agreement with Christopher Tubis
         Employment Agreement with Jay Vyas
         Form of Transition Services Agreement
         Form of Purchase and Supply Agreement
         Form of Registration Rights Agreement
         Form of Assignment and License Agreement

Cree hereby agrees to furnish supplementally to the Commission a copy of any
omitted exhibit or attachment upon request.


                                       47
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.01
<SEQUENCE>3
<FILENAME>g66404ex10-01.txt
<DESCRIPTION>SUBLEASE AGREEMENT
<TEXT>

<PAGE>   1


                                                                   EXHIBIT 10.01



                            ZOLTAR ACQUISITION, INC.
                               SUBLEASE AGREEMENT



                               160 Gibraltar Court
                           Sunnyvale, California 94089


                                December 29, 2000


                                       1



<PAGE>   2



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                  Page
<S>      <C>                                                                                                      <C>
1        Demise of Premises..........................................................................................1
2        Certain Definitions.........................................................................................1
3        Title and Condition.........................................................................................8
4        Use of Leased Premises; Quiet Enjoyment....................................................................10
5        Term.......................................................................................................10
6        Basic Rent.................................................................................................11
7        Additional Rent............................................................................................12
8        Net Lease; Non-Terminability...............................................................................13
9.       Payment of Impositions.....................................................................................14
10.      Compliance with Laws and Easement Agreements; Environmental Matters........................................15
11.      Liens; Recording...........................................................................................16
12.      Maintenance and Repair.....................................................................................17
13.      Alterations and Improvements...............................................................................17
14.      Permitted Contests.........................................................................................18
15.      Indemnification............................................................................................19
16.      Insurance..................................................................................................22
17.      Casualty and Condemnation..................................................................................26
18.      Termination Events.........................................................................................27
19.      Restoration................................................................................................29
20.      Procedures Upon Purchase...................................................................................30
21.      Assignment and Subletting; Prohibition against Leasehold Financing.........................................30
22.      Events of Default..........................................................................................32
23.      Remedies and Damages Upon Default..........................................................................33
24.      Notices....................................................................................................36
25.      Estoppel Certificate.......................................................................................36
26.      Surrender..................................................................................................37
27.      No Merger of Title.........................................................................................37
28.      Books and Records..........................................................................................37
29.      Determination of Value.....................................................................................38
30.      Non-Recourse as to Landlord................................................................................40
31.      Financing..................................................................................................41
32.      Subordination..............................................................................................41
33.      Financial Covenants........................................................................................41
34.      Right to Vacate; Rejectable Offer Upon Vacation............................................................41
35.      Tax Treatment; Reporting...................................................................................42
36.      Right of First Refusal.....................................................................................42
37.      Security Deposit...........................................................................................42
38.      Miscellaneous..............................................................................................43
</TABLE>


                                       i

<PAGE>   3

<TABLE>
<CAPTION>
EXHIBITS
--------
<S>               <C> <C>
Exhibit "A"       -   Premises
Exhibit "B"       -   Machinery and Equipment
Exhibit "B-1"     -   Tenant's Property
Exhibit "C"       -   Schedule of Permitted Encumbrances
Exhibit "D"       -   Rent Schedule
Exhibit "E"       -   Acquisition Costs
Exhibit "F"       -   Approved Investments
Exhibit "G"       -   Covenants
Exhibit "H"       -   Form of Guaranty of Lease
</TABLE>


                                       ii

<PAGE>   4


         This SUBLEASE AGREEMENT (this "Sublease") is made as of December 29,
2000, between SPECTRIAN CORPORATION, a California corporation ("Landlord"), with
an address at 350 West Java Drive, Sunnyvale, California 94089, and ZOLTAR
ACQUISITION, INC., a North Carolina corporation to be known as UltraRF, Inc.
("Tenant"), with an address of 160 Gibraltar Court, Sunnyvale, California 94089.

                                    RECITALS

         A.       SPEC (CA) QRS 12-20, INC., a California corporation ("Master
Landlord") and Landlord are parties to that certain Spectrian Lease Agreement
dated November 19, 1996, as amended by that certain First Amendment to Lease
dated March 26, 1997 (as amended, the "Master Lease"), with regard to certain
premises comprised of two (2) distinct parcels of real property, one of which is
located at 350 W. Java Drive, Sunnyvale, California 94089 (as more particularly
described in the Master Lease, the "West Java Premises"), and the other located
at 160 Gibraltar Court, Sunnyvale, California 94089 (as more particularly
described in the Master Lease, the "Gibraltar Premises").

         B.       Pursuant to that certain Asset Purchase Agreement dated as of
November 20, 2000 (the "Asset Purchase Agreement"), by and among Landlord,
Tenant and Cree, Inc., a North Carolina corporation ("Cree"), Landlord has
agreed to sell a portion of its business and assets to Tenant and Cree. As part
of such contemplated sale (the "Sale Transaction"), Landlord intends to sublease
to Tenant, and Tenant intends to sublease from Landlord, all of Landlord's
right, title and interest under the Master Lease in and to the Gibraltar
Premises, all in accordance with the terms of this Sublease.

         In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:

         1. Demise of Premises. Landlord hereby demises and lets to Tenant, and
Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property (hereinafter
referred to as the "Leased Premises", which premises is more particularly
described in the applicable description in Exhibit "A" attached hereto and made
a part hereof and shall include the portions of items (a), (b) and (c) of this
Paragraph 1 located thereon or therein and appertaining thereto): (a) the
premises described in Exhibit "A" hereto, together with the Appurtenances
(collectively, the "Land"); (b) the buildings, structures and other improvements
now or hereafter constructed on the Land (collectively, the "Improvements"); and
(c) the fixtures, machinery, equipment and other property described in Exhibit
"B" hereto (collectively, the "Equipment").

         2. Certain Definitions.

                  "Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.

                  "Adjoining Property" shall mean all sidewalks, driveways,
curbs, gores and vault spaces adjoining the Leased Premises.

                  "Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or


                                       1
<PAGE>   5

replacements for any of the Improvements or Equipment, both interior and
exterior, structural and non-structural, and ordinary and extraordinary.

                  "Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including (a)
easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.

                  "Assignment" shall mean any assignment of rents and leases
from Landlord or Master Landlord to a Lender which (a) encumbers any of the
Leased Premises and (b) secures Landlord's obligation to repay a Loan, as the
same may be amended, supplemented or modified from time to time.

                  "Basic Rent" shall mean Basic Rent as defined in Paragraph 6.

                  "Basic Rent Adjustment Date" shall mean Basic Rent Adjustment
Date as defined in Exhibit "D" hereto.

                  "Basic Rent Payment Dates" shall mean the Basic Rent Payment
Dates as defined in Paragraph 6.

                  "Casualty" shall mean any injury to or death of any person or
any loss of or damage to any property (including the Leased Premises) included
within or related to the Leased Premises or arising from the Adjoining Property.

                  "Commencement Date" shall mean December 29, 2000.

                  "Condemnation" shall mean a Taking.

                  "Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.

                  "Costs" of a Person or associated with a specified transaction
shall mean all reasonable costs and expenses incurred by such Person or
associated with such transaction, including without limitation, attorneys' fees
and expenses, court costs, brokerage fees, escrow fees, title insurance
premiums, mortgage commitment fees, mortgage points, recording fees and transfer
taxes, as the circumstances require.

                  "Covenants" shall mean the covenants and agreements described
on Exhibit "G" hereto.

                  "CPI" shall mean CPI as defined in Exhibit "D" hereto.

                  "Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(v).

                  "Default Termination Amount" shall mean the greater of (a)
Fair Market Value or (b) the sum of the Floor Amount and any Prepayment Premium
which Landlord will be required to pay in prepaying any Loan with the proceeds
of the Default Termination Amount.


                                       2
<PAGE>   6

                  "Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may, hereafter affect any Leased Premises.

                  "Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous Condition
or Hazardous Activity, in each case as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations or
injuries or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. The term Environmental
Law includes, without limitation, the federal Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act, the federal Clean
Air Act, the federal Clean Water Act, the federal Resource Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to
RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control
Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and Health Act of 1970, the federal National Environmental
Policy Act and the federal Hazardous Materials Transportation Act, each as
amended and as now or hereafter in effect and any similar state or local Law.

                  "Environmental Violation" shall mean (a) any direct or
indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within the Leased Premises, or from
the Leased Premises to the environment, in violation of any Environmental Law or
which results in any liability to or any claim against Landlord, Tenant or
Lender, any Federal, state or local government or any other Person for the costs
of any removal or remedial action or natural resources damage or for bodily
injury or property damage, (b) any deposit, storage, dumping, placement or use
of any Hazardous Substance at, upon, under or within the Leased Premises or
which extends to any Adjoining Property in violation of any Environmental Law or
which results in any claim or liability to any Federal, state or local
government or to any other Person for the costs of any removal or remedial
action or natural resources damage or for bodily injury or property damage, (c)
the abandonment or discarding of any barrels, containers or other receptacles
containing any Hazardous Substances in violation of any Environmental Laws, (d)
any activity, occurrence or condition which results in any claim, liability,
cost or expense to Landlord or Lender or any other owner or occupier of the
Leased Premises, or which could result in a creation of a lien on the Leased
Premises (or any portion thereof or interest therein) under any Environmental
Law or (e) any violation of or noncompliance with any Environmental Law.

                  "Equipment" shall mean the Equipment as defined in Paragraph
1.


                                       3
<PAGE>   7

                  "Escrow Holder" shall mean a nationally recognized title
insurance company or any Person that would otherwise qualify as a Lender.

                  "Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).

                  "Facility Representations" means, collectively, only the
following: (i) each of the express representations and warranties made by
Landlord under Sections 5.10(a) and 5.18 of the Asset Purchase Agreement to the
extent that, under the terms of the Asset Purchase Agreement, they expressly
apply to the Leased Premises, and (ii) each of the express representations and
warranties made by Landlord under Sections 5.5, 5.6(c), 5.9, 5.10, 5.11, 5.18,
5.19 and 5.20 of the Asset Purchase Agreement to the extent that, under the
terms of the Asset Purchase Agreement, they expressly apply to: (A) Equipment,
and (B) that portion of Improvements which constitute leasehold improvements.

                  "Fair Market Value" shall mean the fair market value of the
Leased Premises as of the Relevant Date as affected and encumbered by this
Sublease. For all purposes of this Sublease, Fair Market Value shall be
determined in accordance with the procedure specified in Paragraph 29.

                  "Fair Market Rental Value" shall mean the fair market rental
value of the Leased Premises as of the Relevant Date for the relevant Renewal
Term determined in accordance with the procedure specified in Paragraph 29.

                  "Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.

                  "Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are legal tender for the payment of
public and private debts in the United States of America.

                  "Floor Amount" shall mean the amount set forth on Exhibit "E"
hereto.

                  "Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in the release, seepage, spill,
leak, flow, discharge or emission of any Hazardous Substance into the
environment (including the air, ground water, watercourses or water systems),
(iii) involves the containment or storage of any Hazardous Substance; or (iv)
would cause any of the Leased Premises or any portion thereof to become a
hazardous waste treatment, recycling, reclamation, processing, storage or
disposal facility within the meaning of any Environmental Law.

                  "Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the presence of
underground storage tanks.

                  "Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the


                                       4
<PAGE>   8

environment or public health or safety or (ii) any substance supporting a claim
under any Environmental Law, whether or not defined as hazardous as such under
any Environmental Law. Hazardous Substances include, without limitation, any
toxic or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.

                  "Impositions" shall mean the Impositions as defined in
Paragraph 9(a).

                  "Improvements" shall mean the Improvements as defined in
Paragraph 1.

                  "Initial Term" shall mean Initial Term as defined in Paragraph
5(a).

                  "Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Sublease.

                  "Land" shall mean the Land as defined in Paragraph 1.

                  "Landlord Indemnitee" shall mean a Landlord Indemnitee as
defined in Paragraph 15.

                  "Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, requirement or
administrative, or judicial determination, even if unforeseen or extraordinary,
of every duly constituted governmental authority, court or agency, now or
hereafter enacted or in effect.

                  "Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.

                  "Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.

                  "Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws) and
all covenants, restrictions and conditions now or hereafter of record which may
be applicable to Tenant or to any of the Leased Premises, or to the use, manner
of use, occupancy, possession, operation, maintenance, alteration, repair or
restoration of any of the Leased Premises, even if compliance therewith
necessitates structural changes or improvements or results in interference with
the use or enjoyment of any of the Leased Premises.

                  "Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or Master Landlord or is the holder of any Note and which is a bank,
insurance company, bank affiliate or wholly-owned subsidiary of any such bank,
credit company, public or private pension plan, investment bank, institutionally
managed fund or any other Person that is in the business of, directly or
indirectly, making commercial mortgage loans and whose Mortgage provides that
any Net Award shall be held and applied in accordance with the terms of this
Sublease.


                                       5
<PAGE>   9

                  "Loan" shall mean any loan made by one or more Lenders to
Landlord or Master Landlord, which loan is secured by a Mortgage and an
Assignment and evidenced by a Note.

                  "Master Lease" shall mean as defined in Recital A of this
Sublease.

                  "Master Lease Basic Rent" shall mean, collectively, the sum of
the Basic Rent (as defined in the Master Lease) due from Landlord to Master
Landlord for the Gibraltar Premises and the West Java Premises.

                  "Master Lease Term" shall mean the term of the Master Lease as
defined in Paragraph 5 and other applicable provisions thereof.

                  "Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Sublease to Landlord, to any third party on behalf
of Landlord or to any Indemnitee.

                  "Mortgage" shall mean any first leasehold mortgage or
leasehold deed of trust from Landlord and/or Master Landlord to a Lender which
(a) encumbers Landlord's or Master Landlord's interest in the Leased Premises or
this Sublease, and (b) secures Landlord's or Master Landlord's obligation to
repay a Loan, as the same may be amended, supplemented or modified.

                  "Net Award" shall mean (a) the entire award payable to Master
Landlord, Landlord or Lender by reason of a Condemnation whether pursuant to a
judgment or by agreement or otherwise, or (b) the entire proceeds of any
insurance required under clauses (i), (ii) (to the extent payable to Master
Landlord, Landlord or Lender), (iv), (v) or (vi) of Paragraph 16(a), as the case
may be, less any expenses incurred by Master Landlord, Landlord and Lender in
collecting such award or proceeds.

                  "Note" shall mean any promissory note evidencing Landlord's or
Master Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.

                  "Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.

                  "Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.

                  "Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).

                  "Person" shall mean an individual, partnership, association,
corporation or other entity.

                  "Prepayment Premium" shall mean any payment (other than a
payment of principal and/or interest) which Landlord or Master Landlord is
required to make under a Note or a Mortgage by reason of any prepayment by
Landlord or Master Landlord of any principal up to and including but not in
excess of Ten Million Dollars ($10,000,000), due under a Note or


                                       6
<PAGE>   10

Mortgage, and which may be (in lieu of such prepayment premium or prepayment
penalty) a "make whole" clause requiring a prepayment premium in an amount
sufficient to compensate the Lender for the loss of the benefit of the Loan due
to prepayment.

                  "Prime Rate" shall mean the interest rate per annum as
published, from time to time, in the Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event the Wall
Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the "Prime Rate" as published by Bank
of America, or if not published, the "Prime Rate" shall be the average per annum
discount rate (the "Discount Rate") on ninety-one (91) day bills ("Treasury
Bills") issued from time to time by the United States Treasury at its most
recent auction, plus three hundred (300) basis points. If no such 91-day
Treasury Bills are then being issued, the Discount Rate shall be the discount
rate on Treasury Bills then being issued for the period of time closest to
ninety-one (91) days.

                  "Relevant Date" shall mean (a) the date immediately prior to
the event which gives rise to an Event of Default for the purpose of determining
the Default Termination Amount under Paragraph 23, (b) the date when Fair Market
Value is redetermined, in the event of a redetermination of Fair Market Value
pursuant to Paragraph 20(c), and (c) the first day of the applicable Renewal
Term.

                  "Renewal Term" shall mean Renewal Term as defined in Paragraph
5.

                  "Rent" shall mean, collectively, Basic Rent and Additional
Rent.

                  "Security Deposit" shall mean Security Deposit as defined in
Paragraph 37.

                  "Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).

                  "State" shall mean the State of California.

                  "Surviving Obligations" shall mean any obligations of Tenant
or Landlord under this Sublease, actual or contingent, which arise on or prior
to the expiration or prior termination of this Sublease or which survive such
expiration or termination by their own terms.

                  "Taking" shall mean any taking or damaging of all or a portion
of any of the Leased Premises (i) in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or (ii) by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means.
The Taking shall be considered to have taken place as of the later of the date
actual physical possession is taken by the condemnor, or the date on which the
right to compensation and damages accrues under the law applicable to the Leased
Premises.

                  "Tenant Indemnitee" shall mean a Tenant Indemnitee as defined
in Paragraph 15.

                  "Tenant's Property" shall mean the Tenant's Property as
defined in Exhibit B-1.


                                       7
<PAGE>   11

                  "Term" shall mean the Term as defined in Paragraph 5.

                  "Termination Amount" shall mean the sum of the Floor Amount
and any Prepayment Premium which Landlord will be required to pay in its or the
Master Landlord's prepaying of any Loan with proceeds of the Termination Amount.

                  "Termination Date" shall mean the Termination Date as defined
in Paragraph 18.

                  "Termination Event" shall mean a Termination Event as defined
in Paragraph 18.

                  "Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).

                  "Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(g).

         3. Title and Condition.

                  (a) The Leased Premises are demised and let subject to (i) the
Mortgage and Assignment presently in effect, (ii) the rights of any Persons in
possession of the Leased Premises, (iii) the existing state of title of any of
the Leased Premises, including any Permitted Encumbrances, (iv) any state of
facts which an accurate survey or physical inspection of the Leased Premises
might show, (v) all Legal Requirements, including any existing violation of any
thereof, and (vi) the condition of the Leased Premises as of the commencement of
the Term, without representation or warranty by Landlord. In addition, this
Sublease is and shall be at all times subject to all of the terms, covenants and
conditions of the Master Lease and shall in all respects be limited to the
estate granted to Landlord by Master Landlord pursuant to the Lease. Excluding
only the obligations with regard to the payment of Rent (which obligations are
governed by this Sublease), Tenant assumes and agrees to be bound by the terms
of and to perform all of the obligations and duties of Landlord under the Master
Lease with respect to the Leased Premises. Tenant shall not commit or permit to
be committed any act or omission which shall violate any terms, covenants or
conditions of the Lease. Each of Landlord and Tenant agrees that it shall
promptly forward to the other any and all notices or other communications it
receives from the Master Landlord under the Lease. Where any approval or consent
shall be required of Master Landlord pursuant to the provisions of the Lease,
Landlord may, without limitation, condition its approval or consent upon
Landlord's obtaining the approval or consent of the Master Landlord. Landlord
agrees to use commercially reasonable efforts to request such consent from the
Master Landlord; provided, however, that in no event shall Landlord be obligated
to file any judicial, administrative or other proceeding in connection with
requesting or obtaining any consent from Master Landlord. To the extent that the
terms of this Sublease are more restrictive than the terms of the Lease, the
terms of this Sublease shall prevail.

                  (b) Tenant acknowledges that the Leased Premises are in good
condition and repair at the inception of this Sublease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR


                                       8
<PAGE>   12

REPRESENTATION; EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv)
LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii)
LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii)
DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT.
TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS
SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND
ARE SATISFACTORY TO IT. IN AGREEING TO ENTER INTO THIS SUBLEASE, TENANT IS
RELYING SOLELY ON ITS OWN JUDGMENT WITH RESPECT TO THE RESULTS OF ITS INSPECTION
OF THE LEASED PREMISES. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE
LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE
ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF
THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE
EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING
OTHERWISE.

                  (c) Tenant represents to Landlord that Tenant has examined the
title to the Leased Premises prior to the execution and delivery of this
Sublease and has found the same to be satisfactory for the purposes contemplated
hereby. Tenant acknowledges and agrees that (i) Tenant has only the subleasehold
right of possession and use of the Leased Premises as provided herein, (ii) the
Improvements conform to all material Legal Requirements and all Insurance
Requirements, (iii) all easements necessary or appropriate for the use or
operation of the Leased Premises have been obtained, (iv) all contractors and
subcontractors who have performed work on or supplied materials to the Leased
Premises have been fully paid, and all materials and supplies have been fully
paid for, (v) the Improvements have been fully completed in all material
respects in a workmanlike manner, and (vi) all Equipment necessary or
appropriate for the use or operation of the Leased Premises has been installed
and is presently fully operative in all material respects.

                  (d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, all warranties, guaranties, indemnities and similar rights
which Landlord may have against any manufacturer, seller, engineer, contractor
or builder in respect of any of the Leased Premises. Such assignment shall
remain in effect until an Event of Default occurs or until the expiration or
earlier termination of this Sublease, whereupon such assignment shall cease and
all of said warranties, guaranties, indemnities and other rights shall
automatically revert to Landlord.

                  (e) Landlord and Tenant acknowledge and agree that nothing in
this Sublease (including, without limitation, Sections 3(a) through 3(d)) is
intended, nor shall any provision of


                                       9
<PAGE>   13

this Sublease be construed, to supersede, limit or otherwise adversely affect or
expand in scope any of the Facility Representations; provided, however, that
each Facility Representation shall, for purposes of this Sublease, cease to have
legal force and effect from and after the expiration of the survival period
applicable to and designated for such Facility Representation under Section 11.3
of the Asset Purchase Agreement.

         4. Use of Leased Premises; Quiet Enjoyment.


                  (a) Tenant may occupy and use the Leased Premises for office,
research and development, assembly, manufacturing (including without limitation
semi-conductor wafer fabrication and electronics manufacturing), storage,
warehousing and all related uses, and, subject to Landlord's consent, which
consent shall not be unreasonably withheld, any other use permitted by Law.
Tenant shall not use or occupy or permit any of the Leased Premises to be used
or occupied, nor do or permit anything to be done in or on any of the Leased
Premises, in a manner which would (i) violate any Law or Legal Requirement, (ii)
make void or voidable or cause any insurer to cancel any insurance required by
this Sublease, or make it impossible to obtain any such insurance at
commercially reasonable rates, (iii) cause structural injury to any of the
Improvements or (iv) constitute a public or private nuisance or waste.

                  (b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall have the right to quietly
hold, occupy and enjoy the Leased Premises throughout the Term, without any
hindrance, ejection or molestation by Landlord with respect to matters that
arise after the date hereof, provided that Landlord or Master Landlord, or their
respective agents may enter upon and examine any of the Leased Premises at such
reasonable times as Landlord or Master Landlord may select and upon reasonable
notice to Tenant (except in the case of any emergency, in which event no notice
shall be required) for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof. When showing the Leased Premises to prospective Lenders and purchasers,
Landlord agrees to use reasonable efforts to minimize disruption to Tenant's
business and operations on the Leased Premises. Landlord shall indemnify Tenant
for any damages, losses, and costs and expenses caused directly by Landlord's
failure to use reasonable efforts to minimize disruption to Tenant's business
and operations in connection with Landlord's inspections of the Leased Premises.

         5. Term.

                  (a) Subject to the provisions hereof, Tenant shall have and
hold the Leased Premises for an initial term (the "Initial Term") (the Initial
Term, as extended or renewed in accordance with the provisions hereof, being
called the "Term") commencing on the Commencement Date and ending on the date
which is one calendar day prior to the Expiration Date (as defined in the Master
Lease) of the Initial Term (as defined in the Master Lease) of the Master Lease
(the "Expiration Date"). Accordingly, the Expiration Date of the Initial Term
(as defined in this Sublease) is November 29, 2011.


                                       10
<PAGE>   14

                  (b) Provided that if, on or prior to the Expiration Date or
any other Renewal Date (as hereinafter defined) this Sublease shall not have
been terminated pursuant to any provision hereof, then on the Expiration Date
and on the fifth (5th) and tenth (10th) anniversaries of the Expiration Date
(the Expiration Date and each such anniversary being a "Renewal Date"), the Term
shall be extended for an additional period of five (5) years (a "Renewal Term"),
so long as (i) Tenant shall have notified Landlord in writing in recordable form
at least one (1) year prior to the next Renewal Date that Tenant is electing to
so extend this Sublease as of the next Renewal Date, and (ii) on or before the
applicable Renewal Date, Landlord shall have extended the term of the Master
Lease by a period of time that is equal to or greater than the time period of
the applicable Renewal Term, Landlord having the right but not the obligation to
so extend the term of the Master Lease. Any such extension of the Term shall be
subject to all of the provisions of this Sublease, as the same may be amended,
supplemented or modified. Each Renewal Term shall expire one calendar day prior
to the corresponding Renewal Term (as defined in the Master Lease) under the
Master Lease.

                  (c) If Tenant fails to exercise its option pursuant to
Paragraph 5(b) to extend the Term, or if Landlord fails to extend the term of
the Master Lease by a period of time equal to or greater than any particular
Renewal Term to which Tenant desires to extend the Term under this Sublease, or
if an Event of Default has occurred and is continuing, then Landlord shall have
the right during the remainder of the Term then in effect and, in any event,
Landlord shall have the right during the last year of the Term, to (i) advertise
the availability of any of the Leased Premises for sale or reletting and to
erect upon any of the Leased Premises signs indicating such availability and
(ii) show any of the Leased Premises to prospective purchasers or tenants or
their agents at such reasonable times as Landlord may select.

         6. Basic Rent. Tenant shall pay to Landlord in advance, as annual rent
for the Leased Premises during the Term, the amounts determined in accordance
with Exhibit "D" hereto ("Basic Rent"), commencing on the Commencement Date, and
continuing on the first day of each March, June, September and December
thereafter during the Term (each such day being a "Basic Rent Payment Date").
Each such rental payment shall be made, at Landlord's sole discretion, (a) to
Landlord at its address set forth above and/or to such one or more other
Persons, at such addresses and in such proportions as Landlord may direct by
fifteen (15) days' prior written notice to Tenant (in which event Tenant shall
give Landlord notice of each such payment concurrent with the making thereof),
and (b) by a check mailed at least seven (7) days before the applicable Basic
Rent Payment Date, or in Federal Funds. Pro rata Basic Rent for the period from
the Commencement Date through the last calendar day of February, 2001 shall be
paid on the Commencement Date.


                                       11
<PAGE>   15

         7. Additional Rent.

                  (a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):

                           (i) except as otherwise specifically provided herein,
all out-of-pocket costs and expenses of Tenant and Landlord which are reasonably
incurred by Landlord or Tenant in connection or associated with (A) the
ownership, use, non-use, occupancy, possession, operation, condition, design,
construction, maintenance, alteration, repair or restoration of any of the
Leased Premises (except payments on any Loan, third party management fees,
replacement reserves for the Equipment and Improvements, real estate
commissions, costs related to the sale of the Leased Premises to any Person and
costs related to obtaining and closing any Loan or any other loan unless such
costs are part of any other Cost of Landlord unrelated to the Leased Premises
and Impositions (which are governed by Paragraph 9 hereof)), (B) the performance
of any of Tenant's obligations under this Sublease, (C) any transfer of any of
the Leased Premises to Tenant under this Sublease, (D) any Condemnation
proceedings, (E) the adjustment, settlement or compromise of any insurance
claims involving or arising from any of the Leased Premises, (F) the
prosecution, defense or settlement of any litigation involving or arising from
any of the Leased Premises, this Sublease, or the sale of the Leased Premises to
Landlord excluding litigation by Tenant against Landlord in which Tenant is the
prevailing party and excluding litigation or any proceeding concerning any Loan
or any other loan secured by the Leased Premises unless such litigation or
proceeding arises out of any action or non-action by Tenant under this Sublease,
(G) the exercise or enforcement by Landlord, its successors and assigns, of any
of its rights under this Sublease if Landlord is the prevailing party, (H) any
amendment to or modification or termination of this Sublease made at the request
of Tenant, (I) Costs of Landlord's counsel incurred in connection with any act
undertaken by Landlord (or its counsel) at the request of Tenant, or incurred in
connection with any act of Landlord performed at the request of Tenant or if
Tenant fails to perform its obligations under this Sublease, and (J) any other
items specifically required to be paid by Tenant under this Sublease;

                           (ii) payments to be made to or on behalf of any
Landlord pursuant to Paragraph 15 hereof;

                           (iii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to three percent
(3%) of the amount of such unpaid installment or portion thereof, provided,
however, that with respect to the first late payment of all or any portion of
any installment of Basic Rent in any Lease Year, the Late Charge shall not be
due and payable unless the Basic Rent has not been paid within seven (7) days
following the due date thereof;

                           (iv) a sum equal to any late charge or default
penalties in excess of the amount of Late Charge and Default Rate paid by Tenant
on that portion of the Basic Rent equal to payments of principal and interest
payable by Master Landlord and/or Landlord on any Note then in effect and legal
fees and expenses of Lender, which are payable by Master Landlord and/or
Landlord to any Lender under any Note by reason of Tenant's late payment or
non-payment of Basic Rent or by reason of an Event of Default; and


                                       12
<PAGE>   16

                           (v) interest at the rate (the "Default Rate") of
three percent (3%) over the Prime Rate per annum on the following sums until
paid in full: (A) all overdue installments of Basic Rent from the respective due
dates thereof and (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord.

                  (b) Tenant shall pay and discharge (i) any Additional Rent
referred to in Paragraph 7(a)(i) when the same shall become due, provided that
amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within seven (7) days after Tenant's receipt of Landlord's written
demand for payment thereof, and (ii) any other Additional Rent, within seven (7)
days after Tenant's receipt of Landlord's written demand for payment thereof.

                  (c) In no event shall amounts payable under Paragraph
7(a)(iii), (iv) and (v) exceed the maximum amount permitted by applicable Law.

         8. Net Lease; Non-Terminability.

                  (a) This is a net lease and, except as otherwise specifically
provided herein, all Monetary Obligations shall be paid without notice or demand
(provided that notice of increases in Basic Rent payments shall be given as
required under Exhibit "D" and in accordance with the provisions of Paragraph
24) and without set-off, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction, reduction or defense (collectively, a
"Set-Off").

                  (b) Except as otherwise expressly provided herein, this
Sublease and the rights of Landlord and the obligations of Tenant hereunder
shall not be affected by any event or for any reason, including the following:
(i) any damage to or theft, loss or destruction of any of the Leased Premises,
(ii) any Condemnation, (iii) Tenant's acquisition of ownership of any of the
real property upon which the Leased Premises are situated, (iv) any default on
the part of Master Landlord under any Note, Mortgage, Assignment or any other
agreement, (v) any latent or other defect in any of the Leased Premises, (vi)
the breach of any warranty of any seller or manufacturer of any of the
Equipment, (vii) any violation of Paragraph 4(b) or any other provision of this
Sublease by Landlord, (viii) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution or winding-up of, or other
proceeding affecting Master Landlord or Landlord, (ix) the exercise of any
remedy, including foreclosure, under any Mortgage or Assignment, (x) any action
with respect to this Sublease (including the disaffirmance hereof) which may be
taken by Landlord, any trustee, receiver or liquidator of Landlord or any court
under the Federal Bankruptcy Code or otherwise, (xi) any interference with
Tenant's use of the Leased Premises, (xii) market or economic changes, (xiii)
any default under the Master Lease by Master Landlord or Landlord, or (xiv) any
other cause, whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding. The foregoing shall not limit
Tenant's right to recover damages or obtain any equitable remedy in the event of
a default by Landlord, subject in any event to the provisions, of Paragraph
30(a).

                  (c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have


                                       13
<PAGE>   17

been terminated pursuant to an express provision of this Sublease. All Rent
payable by Tenant hereunder shall constitute "rent" for all purposes (including
Section 502 (b)(6) of the Bankruptcy Code).

                  (d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Sublease or any of the Leased Premises,
or (ii) to any Set-Off of any Monetary Obligations.

         9. Payment of Impositions.

                  (a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to any of the Leased
Premises, and all other public charges whether of a like or different nature,
even if unforeseen or extraordinary, imposed upon or assessed against (i)
Tenant, (ii) Tenant's possessory interest in the Leased Premises, (iii) any of
the Leased Premises, (iv) Landlord as a result of or arising in respect of the
acquisition, ownership, occupancy, leasing, use, possession or sale of any of
the Leased Premises, any activity conducted on any of the Leased Premises, or
the Rent, or (v) any Lender by reason of any tax or charge payable to or on
behalf of Lender which is not imposed as of the date hereof, is customarily paid
by tenants or by borrowers pursuant to then prevailing mortgage practices and
which is a substitute for any ad valorem tax payable on the Leased Premises or
any portion thereof and (as to this clause (v)) which Landlord has agreed to pay
(collectively, the "Impositions"); provided, that nothing in this Sublease shall
obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or
Lender) which are determined on the basis of Landlord's (or Lender's) net income
or net worth, (B) any estate, inheritance, succession, gift or similar tax
imposed on Landlord or (C) any capital gains or transfer tax imposed on Landlord
in connection with the sale of the Leased Premises to any Person except for a
sale of the Leased Premises or any part thereof to Tenant or to any nominee or
designee of Tenant. If any Imposition may be paid in installments without
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord (1) copies of all settlements and notices
pertaining to the Impositions which may be issued by any governmental authority
within ten (10) days after Tenant's receipt thereof, (2) receipts for payment of
all taxes required to be paid by Tenant hereunder within thirty (30) days after
the due date thereof and (3) receipts for payment of all other Impositions
within ten (10) days after Landlord's request therefor.

                  (b) Landlord shall have the right during the occurrence of an
Event of Default to require Tenant to pay to Landlord an additional monthly sum
(each an "Escrow Payment") sufficient to pay the Escrow Charges (as hereinafter
defined) as they become due. As used herein, "Escrow Charges" shall mean real
estate taxes on the Leased Premises or payments in lieu thereof and premiums on
any insurance required by this Sublease. Landlord shall determine, in a
commercially reasonable manner, the amount of the Escrow Charges and of each
Escrow Payment. The Escrow Payments may be commingled with other funds of
Landlord or other


                                       14
<PAGE>   18

Persons and no interest thereon shall be due or payable to Tenant. Landlord
shall apply the Escrow Payments to the payment of the Escrow Charges in such
order or priority as Landlord shall determine or as required by law. If at any
time the Escrow Payments theretofore paid to Landlord shall be insufficient for
the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.

         10. Compliance with Laws and Easement Agreements; Environmental
Matters.

                  (a) Subject to Landlord's indemnity obligations set forth in
Section 15(c) of this Sublease, Tenant shall, at its expense, comply with and
conform to, and cause the Leased Premises and any other Person occupying any
part of the Leased Premises to comply with and conform to, all Insurance
Requirements and Legal Requirements (including all applicable Environmental
Laws) and shall maintain in full force and effect all permits, licenses and
utility services required for the use and occupancy of the Leased Premises.
Tenant shall not at any time (i) cause, permit or suffer to occur any
Environmental Violation or (ii) permit any sublessee, assignee or other Person
occupying the Leased Premises under or through Tenant to cause, permit or suffer
to occur any Environmental Violation.

                  (b) Tenant, at its sole cost and expense, will at all times
promptly and faithfully abide by, discharge and perform all of the covenants,
conditions and agreements contained in any Easement Agreement on the part of
Landlord or the occupier to be kept and performed thereunder. Tenant will not
alter, modify, amend or terminate any Easement Agreement, give any consent or
approval thereunder, or enter into any new Easement Agreement without, in each
case, prior written consent of Landlord, which will not be unreasonably
withheld.

                  (c) Upon prior written notice from Landlord and/or Master
Landlord, Tenant shall permit such persons as Landlord and/or Master Landlord
may designate ("Site Reviewers") to visit the Leased Premises and perform,
environmental site investigations and assessments ("Site Assessments") on the
Leased Premises for the purpose of determining whether there exists on the
Leased Premises any Environmental Violation or any condition which could result
in any Environmental Violation. Such Site Assessments may include both above and
below the ground testing for Environmental Violations and such other tests as
may be necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments, and shall
make available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. The cost of performing and reporting any Site
Assessment which discloses an Environmental Violation that first occurs or
arises on or after the Commencement Date shall be paid by Tenant. The cost of
performing and evaluating any Site Assessment that fails to disclose an
Environmental Violation that first occurred or arose on or after the
Commencement Date shall be paid by Landlord.

                  (d) If an Environmental Violation first arises or occurs
during the Term of this Sublease and, in Landlord's reasonable judgment, the
cost of remediation of the same is likely to exceed $100,000, Tenant shall
provide to Landlord, within ten (10) days after Landlord's request therefor,
adequate financial assurances that Tenant will effect such remediation in
accordance with applicable Environmental Laws.


                                       15
<PAGE>   19

                  (e) Notwithstanding any other provision of this Sublease, if
an Environmental Violation first arises or occurs on or after the Commencement
Date, the Term would otherwise terminate or expire and Landlord, after good
faith efforts, shall have been unable to relet the Leased Premises solely
because of the existence of such Environmental Violation, then, at the option of
Landlord, the Term shall be automatically extended beyond the date of
termination or expiration and this Sublease shall remain in full force and
effect beyond such date until the earliest to occur of (i) the completion of
remedial action to the extent necessary to make the Leased Premises relettable,
(ii) the date specified in a written notice from Landlord to Tenant terminating
this Sublease or (iii) the date on which Tenant obtains a bona-fide replacement
tenant for the Leased Premises on terms reasonably satisfactory to Master
Landlord and Landlord (and in this regard Landlord and its broker shall
reasonably cooperate with Tenant with respect to Tenant's marketing efforts).

                  (f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which first
occurs or arises on or after the Commencement Date, Landlord and/or the Master
Landlord shall have the right (but no obligation) to take any and all actions as
the Site Reviewers shall deem necessary in order to cure such Environmental
Violation.

                  (g) Tenant shall notify Landlord immediately alter becoming
aware of any Environmental Violation (or alleged Environmental Violation) or
noncompliance with any of the covenants contained in this Paragraph 10 and shall
forward to Landlord immediately upon receipt thereof copies of all orders,
reports, notices, permits, applications or other communications relating to any
such violation or noncompliance.

         11. Liens; Recording.

                  (a) Tenant shall not, directly or indirectly, create or permit
to be created or to remain and shall promptly discharge or remove any lien, levy
or encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Sublease, other than any Mortgage or Assignment,
the Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord or Master
Landlord. NOTICE IS HEREBY GIVEN THAT NEITHER LANDLORD NOR MASTER LANDLORD SHALL
NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED
TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH
OR UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD OR
MASTER LANDLORD IN AND TO ANY OF THE LEASED PREMISES. LANDLORD OR MASTER
LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD OR MASTER LANDLORD.

                  (b) Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord, Master Landlord and Tenant in any of the Leased Premises, and shall
cause a memorandum of this Sublease (or, if such a memorandum


                                       16
<PAGE>   20

cannot be recorded, this Sublease), and any supplement hereto or thereto, to be
recorded in such manner and in such places as may be required or permitted by
any present or future Law in order to protect the validity and priority of this
Sublease.

         12. Maintenance and Repair.

                  (a) Tenant shall at all times maintain the Leased Premises and
the Adjoining Property in as good repair and appearance as each is in on the
date hereof and fit to be used for their intended use in accordance with the
better of the practices generally recognized as then acceptable by other
companies in its industry, or observed by Tenant with respect to the other real
properties owned or operated by it, and, in the case of the Equipment, in as
good mechanical condition as it was on the later of the date hereof or the date
of its installation, except for ordinary wear and tear. Tenant shall take every
other action necessary or appropriate for the preservation and safety of the
Leased Premises. Tenant shall promptly make all Alterations of every kind and
nature, whether foreseen or unforeseen, which may be required to comply with the
foregoing requirements of this Paragraph 12(a). Landlord shall not be required
to make any Alteration, whether foreseen or unforeseen, or to maintain the
Leased Premises or Adjoining Property in any way, and Tenant hereby expressly
waives any right which may be provided for in any Law now or hereafter in effect
to make Alterations at the expense of Landlord or to require Landlord to make
Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12 shall
be made in conformity with the provisions of Paragraph 13.

                  (b) If any Improvement, now or hereafter constructed by
Tenant, shall (i) encroach upon any setback or any property, street or
right-of-way adjoining any of the Leased Premises, (ii) violate the provisions
of any restrictive covenant affecting any of the Leased Premises, (iii) hinder
or obstruct any easement or right-of-way to which any of the Leased Premises is
subject or (iv) impair the rights of others in, to or under any of the
foregoing, Tenant shall, promptly after receiving notice or otherwise acquiring
knowledge thereof, either (A) obtain from all necessary parties waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, hindrance, obstruction or impairment, whether the same
shall affect Landlord, Tenant or both, or (B) take such action as shall be
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.

         13. Alterations and Improvements.

                  (a) Tenant shall have the right, without having obtained the
prior written consent of Landlord, Master Landlord and Lender, to make (i)
non-structural Alterations to the Leased Premises, (ii) structural Alterations
or a series of related structural Alterations that, as to any such Alterations
or series of related Alterations, do not cost in excess of $250,000 with respect
to the Leased Premises and (iii) to install Equipment in the Improvements or
accessions to the Equipment that, as to such Equipment or accessions, do not
cost in excess of $250,000, so long as at the time of construction or
installation of any such Equipment or Alterations no Event of Default exists and
the value and utility of the Leased Premises is not materially diminished
thereby. For any other Alterations or Equipment or accessions thereto the cost
of which is in excess of $250,000, the prior written approval of Landlord,
Master Landlord and Lender shall be required, such approval not to be
unreasonably withheld, delayed or conditioned and such


                                       17
<PAGE>   21

approval shall not, in any event, include any requirement that the space to be
improved must be returned to its original condition at the end of the Term if
the Alterations are of general utility and do not adversely affect the value of
the Leased Premises. Tenant shall not construct upon the Land any additional
buildings without having first obtained the prior written consent of Landlord,
Master Landlord and Lender.

                  (b) If Tenant makes any Alterations pursuant to this Paragraph
13 or as required by Paragraph 12 or 17 (such Alterations and actions being
hereinafter collectively referred to as "Work"), then (i) the market value of
the Leased Premises shall not be lessened in any material respect by any such
Work or its usefulness impaired, (ii) all such Work shall be performed by Tenant
or its contractors in a good and workmanlike manner, (iii) all such Work shall
be expeditiously completed in compliance with all Legal Requirements, (iv) all
such Work shall comply with the requirements of all insurance policies required
to be maintained by Tenant hereunder, (v) if any such Work involves the
replacement of Equipment or parts thereto, all replacement Equipment or parts
shall have a value and useful life equal to the greater of (A) the value and
useful life on the date hereof of the Equipment being replaced or (B) the value
and useful life of the Equipment being replaced immediately prior to the
occurrence of the event which required its replacement (assuming such Replaced
Equipment was then in the condition required by this Sublease), (vi) Tenant
shall promptly discharge or remove all liens filed against any of the Leased
Premises arising out of such Work, (vii) Tenant shall procure and pay for all
permits and licenses required in connection with any such Work, (viii) all such
Work shall be the property of Landlord and shall be subject to this Sublease,
and Tenant shall execute and deliver to Landlord any document requested by
Landlord evidencing the assignment to, Landlord of all estate, right, title and
interest (other than the leasehold estate created hereby) of Tenant or any other
Person thereto or therein, and (ix) Tenant shall comply, to the extent requested
by Landlord or required by this Sublease, with the provisions of Paragraph
19(a), whether or not such Work involves restoration of the Leased Premises.

                  (c) Tenant shall have the right at any time during the Term to
install and remove Tenant's Property which shall remain Tenant's Property
(subject to Tenant's obligations to repair and restore).

         14. Permitted Contests. Notwithstanding any other provision of this
Sublease, Tenant shall not be required to (a) pay any Imposition, (b) discharge
or remove any lien referred to in Paragraph 11 or 13, (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b), or (d) comply with any Legal Requirements (such
non-compliance with the terms hereof being hereinafter referred to collectively
as "Permitted Violations"), so long as at the time of such non-compliance no
Event of Default exists and so long as Tenant shall contest, in good faith, the
existence, amount or validity thereof or the manner in which compliance with
Legal Requirements is to be achieved, the amount of the damages caused thereby,
or the extent of its or Landlord's liability therefor by appropriate proceedings
which shall operate during the pendency thereof to prevent or stay (i) the
collection of, or other realization upon, the Permitted Violation so contested,
(ii) the sale, forfeiture or loss of any of the Leased Premises or any Rent to
satisfy or to pay any damages caused by any Permitted Violation, (iii) any
material interference with the use or occupancy of any of the Leased Premises,
(iv) any interference with the payment of any Rent, (v) the cancellation or
increase in the rate of any insurance policy or a statement by the carrier that


                                       18
<PAGE>   22

coverage will be denied or (vi) the enforcement or execution of any injunction,
order or Legal Requirement with respect to the Permitted Violation. Tenant shall
provide Landlord and Master Landlord security which is required by Law or, if
not required, which is satisfactory, in Landlord's and Master Landlord's
reasonable judgment (which shall be based, among other things, on an analysis of
Tenant's creditworthiness), to assure that such Permitted Violation is
corrected, including all Costs, interest and penalties that may be incurred or
become due in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord and Master Landlord, neither Landlord nor Master Landlord shall have
the right to correct any Permitted Violation thereby being contested unless
Landlord or Master Landlord is required by law to correct such Permitted
Violation and Tenant's contest does not prevent or stay such requirement as to
Landlord or Master Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord or Master
Landlord to the risk of any civil or criminal liability.

         15. Indemnification.

                  (a) Tenant shall pay, protect, indemnify, defend, save and
hold harmless Landlord, Master Landlord, Lender and all other Persons described
in Paragraph 30 (each a "Landlord Indemnitee") from and against, any and all
liabilities, losses, damages (including punitive damages), penalties, Costs
(including reasonable attorneys' fees and costs), causes of action, suits,
claims, demands or judgments of any nature whatsoever, howsoever caused, without
regard to the form of action and whether based on strict liability, gross
negligence, negligence or any other theory of recovery at law or in equity,
arising, directly or indirectly, from any of the following matters, events,
circumstances, conditions or occurrences: (i) any matter, event, occurrence,
condition or circumstance that occurs during the Term of this Sublease (as such
Term may be extended from time to time in accordance with the terms of this
Sublease) pertaining to the ownership, leasing, use, non-use, occupancy,
operation, management, condition, design, construction, maintenance, repair or
restoration of any of the Leased Premises or Adjoining Property, (ii) any claim
by a third party based on personal injury or property damage where such injury
or damage occurs during the Term and is caused, directly or indirectly, by any
casualty, event, or circumstances in any manner arising from any of the Leased
Premises or Adjoining Property, (iii) any violation by Tenant of any provision
of this Sublease (and/or any act or omission by Tenant that directly or
indirectly causes a violation of the Master Lease), any contract or agreement to
which Tenant is a party, any Legal Requirement or any Permitted Encumbrance,
(iv) any alleged, threatened or actual Environmental Violation and/or Hazardous
Activity first arising or occurring during the Term of this Sublease, including
(A) liability for response costs and for costs of removal and remedial action
incurred by the United States Government, any state or local governmental unit
or any other Person, or damages from injury to or destruction or loss of natural
resources, including the reasonable costs of assessing such


                                       19
<PAGE>   23

injury, destruction or loss, incurred pursuant to Section 107 of CERCLA, or any
successor section or act or provision of any similar state or local Law, (B)
liability for costs and expenses of abatement, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any of
the other Environmental Laws and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity; (v) any migration of Hazardous Substances from the
Leased Premises to the West Java Premises; (vi) any latent defects within the
Leased Premises or Adjoining Property first arising or occurring at any time on
or after the Commencement Date of the Term; (vii) any patent defects within the
Leased Premises or Adjoining Property first arising or occurring at any time on
or after the Commencement Date of the Term; (viii) any latent and/or patent
defect arising or occurring at any time prior to the Commencement Date of the
Term to the extent the same does not constitute a breach by Landlord of any
Facility Representation; and (ix) any act or omission of Tenant during the Term
of this Sublease. Notwithstanding the foregoing, Tenant's indemnification and
other obligations under the foregoing provisions of this Subparagraph 15(a)
shall not be applicable with respect to (1) any Landlord Indemnitee due to the
gross negligence or willful misconduct of such Landlord Indemnitee or its
agents, employees or contractors, (2) Landlord for any matter caused solely by
Landlord's breach of this Sublease or any document evidencing or securing a Loan
(so long as such breach is not caused by Tenant's breach of this Sublease), (3)
any Landlord Indemnitee with respect to any misrepresentation made by such
Landlord Indemnitee, (4) any Lender for non-payment of principal, interest or
penalties due on any Loan, or (5) any claim brought or threatened in writing
against Landlord prior to the Commencement Date of the Term; provided, however,
that Tenant's indemnification and other obligations under this Subparagraph
15(a) shall continue to apply to the extent such claim arises, directly or
indirectly, from any act or omission of Tenant. The term "actual knowledge" as
used in this Sublease means the actual, conscious (and not imputed) knowledge of
the officers of Landlord and of the persons listed on Schedule 1 hereof as of
the Commencement Date, without making any investigation or inquiry, and without
any duty or obligation to make any investigation or inquiry. Landlord represents
to Tenant that the persons listed on Schedule 1 are the persons employed by
Landlord that are most familiar with the daily business and operations of the
Leased Premises as of the last calendar day immediately preceding the
Commencement Date. As used in this Sublease, the terms "latent defect" and
"patent defect" shall have the meanings ascribed to such terms under California
statutory and common laws; provided, however, that patent defects shall be
deemed to include any defects which are discoverable or could have been
discovered by Tenant through reasonable inspection.

                  (b) In case any action or proceeding is brought against any
Landlord Indemnitee by reason of any such claim, (i) Tenant may, except in the
event of a conflict of interest or a dispute between Tenant and any such
Landlord Indemnitee or during the continuance of an Event of Default, retain its
own counsel and defend such action (it being understood that Landlord may employ
counsel of its choice to monitor the defense of any such action at its cost) and
(ii) such Landlord Indemnitee shall notify Tenant to resist or defend such
action or proceeding by retaining counsel reasonably satisfactory to such
Landlord Indemnitee, and such Landlord Indemnitee will cooperate and assist in
the defense of such action or proceeding if reasonably requested to do so by
Tenant. In the event of a conflict of interest or dispute or during the
continuance of an Event of Default, Landlord shall have the right to select
counsel, and the cost of such counsel shall be paid by Tenant.


                                       20
<PAGE>   24

                  (c) Landlord shall pay, protect, indemnify, defend, save and
hold harmless Tenant and any director, officer, general partner, limited
partner, employee or agent of Tenant, or any general partner of Tenant, any of
its general partners or shareholders (or any legal representative, heir, estate,
successor or assign of any thereof), any predecessor or successor partnership or
corporation (or other entity) of Tenant or any of its general partners, either
directly or through Tenant or its general partners or any predecessor or
successor partnership or corporation or their shareholders, officers, directors,
employees or agents (or other entity) (each a "Tenant Indemnitee") from and
against, any and all liabilities, losses, damages (including punitive damages),
penalties, Costs (including reasonable attorneys' fees and costs), causes of
action, suits, claims, demands or judgments of any nature whatsoever, howsoever
caused, without regard to the form of action and whether based on strict
liability, gross negligence, negligence or any other theory of recovery at law
or in equity, arising, directly or indirectly, from any of the following
matters, events, circumstances, conditions or occurrences: (i) any matter,
event, occurrence, condition or circumstance that occurs during the period of
time from the commencement date of the Master Lease Term through the date which
is one (1) calendar day immediately prior to the Commencement Date (such period
being the "Pre-Existing Period"), pertaining to the leasing, use, non-use,
occupancy, operation, management, construction, maintenance, repair or
restoration of any of the Leased Premises, Adjoining Property, but only to the
extent such matter, event, occurrence or circumstance would also constitute a
breach of any Facility Representation, (ii) any claim by a third party based on
personal injury or property damage where such injury or damage occurs during the
Pre-Existing Period and is caused, directly or indirectly, by any casualty,
event or circumstances in any manner arising from any of the Leased Premises or
Adjoining Property; (iii) any violation by Landlord of any provision of this
Sublease, or any other contract or agreement to which Landlord is a party
(including the Master Lease), (iv) any violation by Landlord during the
Pre-Existing Term of any Legal Requirement or any Permitted Encumbrance; (v) any
alleged, threatened or actual Environmental Violation and/or Hazardous Activity
arising or occurring during the Pre-Existing Term, including (A) liability for
response costs and for costs of removal and remedial action incurred by the
United States Government, any state or local governmental unit or any other
Person, or damages from injury to or destruction or loss of natural resources,
including the reasonable costs of assessing such injury, destruction or loss,
incurred pursuant to Section 107 of CERCLA, or any successor section or act or
provision of any similar state or local Law, (B) liability for costs and
expenses of abatement, correction or clean-up, fines, damages, response costs or
penalties which arise from the provisions of any of the other Environmental
Laws, and (C) liability for personal injury or property damage arising under any
statutory or common-law tort theory, including damages assessed for the
maintenance of a public or private nuisance or for carrying on of a dangerous
activity; and (vi) any migration of Hazardous Substances from the West Java
Premises to the Leased Premises. Notwithstanding the foregoing, Landlord's
indemnification and other obligations under the foregoing provisions of this
Subparagraph 15(c) shall not be applicable with respect to (i) any Tenant
Indemnitee due to the gross negligence or willful misconduct of such Tenant
Indemnitee or its agents, employees or contractors, (ii) Tenant for any matter
caused solely by Tenant's breach of this Sublease or any document evidencing or
securing a Loan (so long as such breach is not caused by Landlord's breach of
this Sublease), (iii) any Tenant Indemnitee with respect to any
misrepresentation made by such Tenant Indemnitee, (iv) any latent defects within
the Leased Premises arising at any time for which Landlord has no actual
knowledge, (vi) any latent defects within the Leased Premises arising


                                       21
<PAGE>   25

during the Pre-Existing Term for which Landlord has actual knowledge and which
Landlord discloses in writing to Tenant prior to the Commencement Date, or (vii)
any patent defects within the Leased Premises arising at any time. To the extent
based or triggered by any matter, event, occurrence or circumstance which
constitutes a breach of a Facility Representation or any other representation or
warranty made by Landlord hereunder, the indemnity and other obligations of
Landlord under Subparagraph 15(c) hereof shall terminate when the survival
period applicable to any such representation or warranty (including, but not
limited to, any Facility Representation) expires.

                  (d) In case any action or proceeding is brought against any
Tenant Indemnitee by reason of any such claim, (i) Landlord may, except in the
event of a conflict of interest or a dispute between Landlord and any such
Tenant Indemnitee or during the continuance of an Event of Default, retain its
own counsel and defend such action (it being understood that Landlord may employ
counsel of its choice to monitor the defense of any such action at its cost) and
(ii) such Tenant Indemnitee shall notify Landlord to resist or defend such
action or proceeding by retaining counsel reasonably satisfactory to such Tenant
Indemnitee, and such Tenant Indemnitee will cooperate and assist in the defense
of such action or proceeding if reasonably requested to do so by Landlord. In
the event of a conflict of interest or dispute, Tenant shall have the right to
select counsel, and the cost of such counsel shall be paid by Landlord.

                  (e) The obligations of Tenant and Landlord under this
Paragraph 15 shall survive any termination, expiration or rejection in
bankruptcy of this Sublease with respect to any indemnified matter, including
any condition, that existed, occurred or arose out of a matter or condition that
existed or occurred prior to the date of such termination, expiration or
rejection, whether or not known or actionable at such date.

         16. Insurance.

                  (a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:

                           (i)      (A) Insurance against physical loss or
damage to the Improvements and Equipment as provided under a standard "All Risk"
property policy (but excluding earthquake and flood coverage) in amounts not
less than the actual replacement cost of the Improvements and Equipment and (B)
subject to the provisions of the last two (2) sentences of this Paragraph 16 (a)
(i) , earthquake and flood coverage in the amount of $5,000,000. The policies
described in clause (A) above shall contain Replacement Cost and Agreed Amount
Endorsements and shall contain deductibles not more than $100,000 per occurrence
and the earthquake and flood policy described in clause (B) shall contain
deductibles of not more than $1,000,000. The amount of such insurance shall not
be reduced and the amount of such deductible shall not be increased as long as
such insurance is available. If such insurance is not available, the amounts of
coverage and deductibles may be reduced or increased, respectively, as
applicable.

                           (ii)     Commercial general liability insurance
against claims for personal and bodily injury, death or property damage
occurring on, in or as a result of the use of the Leased Premises, in an amount
not less than $10,000,000 per occurrence/annual aggregate


                                       22
<PAGE>   26

including but not limited to incidental medical malpractice, and all other
coverage extensions that are usual and customary for properties of this size and
type; provided, however, that Landlord shall have the right to require such
higher limits as may be reasonable and customary for properties of this size and
type.

                           (iii)    Worker's compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such worker's compensation insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State
or States in which the Leased Premises are located.

                           (iv)     If applicable, comprehensive boiler and
machinery insurance on any of the Equipment or any other equipment on or in the
Leased Premises, including but not limited to service interruption, expediting
expenses, ammonia contamination, hazardous clean-up and comprehensive object
definition, in an amount not less than $5,000,000 for damage to property, bodily
injury or death resulting from such covered perils as found in a standard
comprehensive boiler & machinery policy. Such policies shall contain a
deductible not to exceed $100,000.

                           (v)      Loss of rents insurance on an actual loss
sustained basis with a period of indemnity not less than one year from the time
of loss.

                           (vi)     During any period in which substantial
Alterations at the Leased Premises are being undertaken, builder's risk
insurance covering the total completed value including any "soft costs" with
respect to the Improvements being altered or repaired (on a completed value,
non-reporting basis), replacement cost of work performed and equipment, supplies
and materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and such
other endorsements as Landlord may reasonably require and general liability,
worker's compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.

                           (vii)    Such other insurance (or other terms with
respect to any insurance required pursuant to this Paragraph 16 except for the
earthquake coverage described in Paragraph 16 (a)(i), including without
limitation amounts of coverage, deductibles and form of mortgagee clause) on or
in connection with any of the Leased Premises as Landlord or Lender may
reasonably require, which at the time is usual and commonly obtained in
connection with properties similar in type of building size, use and location to
the Leased Premises.

                  (b) The insurance required by Paragraph 16(a) shall be written
by companies which have a Best's rating of at least A:X (unless a lesser rating
is approved by Landlord) and are admitted in, and approved to write insurance
policies by, the State Insurance Department for the states in which the Leased
Premises are located. The insurance policies (i) shall be on such terms as
Landlord may reasonably approve and (ii) shall be in amounts sufficient at all
times to satisfy any coinsurance requirements thereof. The insurance referred to
in Paragraphs 16 (a)(i), 16(a)(iv) and 16(a)(vi) shall name Master Landlord and
Landlord as additional insureds and Lender as loss payee and Tenant as its
interest may appear. The insurance referred to in


                                       23
<PAGE>   27

Paragraph 16(a)(ii) shall name Master Landlord, Landlord and Lender as
additional insureds, and the insurance referred to in Paragraph 16(a)(v) shall
name Tenant as insured and Lender, Master Landlord and Landlord as loss payee.
If said insurance or any part thereof shall expire, be withdrawn, become void,
voidable, unreliable or unsafe for any reason, including a breach of any
condition thereof by Tenant or the failure or impairment of the capital of any
insurer, or if for any other reason whatsoever said insurance shall become
reasonably unsatisfactory to Landlord, Tenant shall immediately obtain new or
additional insurance reasonably satisfactory to Landlord.

                  (c) Each insurance policy referred to in clauses (i), (iv),
(v) and (vi) of Paragraph 16 (a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16 (a), except clause (iii) thereof, shall provide
that it may not be cancelled except after thirty (30) days' prior notice to
Landlord and Lender. Each such policy shall also provide that any loss otherwise
payable thereunder shall be payable notwithstanding (i) any act or omission of
Landlord or Tenant which might, absent such provision, result in a forfeiture of
all or a part of such insurance payment, (ii) the occupation or use of any of
the Leased Premises for purposes more hazardous than those permitted by the
provisions of such policy, (iii) any foreclosure or other action or proceeding
taken by Lender pursuant to any provision of the Mortgage, Note, Assignment or
other document evidencing or securing the Loan upon the happening of an event of
default therein or (iv) any change in title to or ownership of any of the Leased
Premises.

                  (d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord all original policies or
certified copies thereof. In the event that, within seven (7) calendar days
after Tenant's receipt of Landlord's demand, Tenant fails to deliver to Landlord
such evidence of the payment of the full premium of any insurance policy
required hereunder, and/or the original of such insurance policy or a certified
copy thereof, then Landlord shall have the right, but not the obligation, to
obtain such insurance policy in the form required hereunder and pay the premiums
and commissions associated with such insurance policy, in which event Tenant
shall reimburse landlord for all costs and expenses incurred by Landlord in
connection with obtaining such policy, including, without limitation, insurance
premiums, commissions and reasonable attorneys' fees and costs.

                  (e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16 and provided further that such policies shall provide for a
reserved amount thereunder with respect to the Leased Premises so as to assure
that the amount of insurance required by this Paragraph 16 will be available
notwithstanding any losses with respect to other property covered by such
blanket policies. The amount of the total insurance allocated to the Leased
Premises, which amount shall be not less than the amounts required pursuant to
this Paragraph 16, shall be specified either (i) in each such "blanket" or
umbrella policy or (ii) in a written statement, which Tenant shall deliver to
Landlord, from the insurer thereunder. The original or a certified copy of each
such "blanket" or umbrella policy shall promptly be delivered to Landlord.


                                       24
<PAGE>   28
         (f) Tenant shall have the replacement cost and insurable value of the
Improvements and Equipment determined from time to time as required by the
replacement cost and agreed amount endorsements and shall deliver to Landlord
the new replacement cost and agreed amount endorsement or certificate evidencing
such endorsement promptly upon Tenant's receipt thereof.

         (g) Tenant shall promptly comply with and conform to (i) all provisions
of each insurance policy required by this Paragraph 16 and (ii) all requirements
of the insurers thereunder applicable to Landlord, Tenant or any of the Leased
Premises or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Leased Premises, even if such
compliance necessitates Alterations or results in interference with the use or
enjoyment of any of the Leased Premises.

         (h) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph 16
unless (i) Landlord and Lender are included therein as named insureds, with loss
payable as provided herein, and (ii) such separate insurance complies with the
other provisions of this Paragraph 16. Tenant shall immediately notify Landlord
of such separate insurance and shall deliver to Landlord the original policies
or certified copies thereof.

         (i) All policies shall contain effective waivers by the carrier against
all claims for insurance premiums against Landlord and shall contain full
waivers of subrogation against Landlord.

         (j) All proceeds of any insurance required under Paragraph 16(a) shall
be payable as follows:

                  (i)      Except for proceeds payable to a Person other than
Master Landlord, Landlord, Tenant or Lender, all proceeds of insurance required
under clauses (ii), (iii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds
attributable to the general liability coverage provisions of Builder's Risk
insurance under clause (vi) of Paragraph 16(a) shall be payable to Escrow Holder
or, if required by the Mortgage, to Lender who shall apply such proceeds to the
Persons legally entitled thereto for the benefit of the named insureds as their
interests appear.

                  (ii)     Proceeds of insurance required under clause (i) of
Paragraph 16 (a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16 (a) shall be payable to Escrow Holder (or Lender) and applied as set forth in
Paragraph 17 or Paragraph 18, as applicable. If Tenant is obligated to restore
the Leased Premises, then Escrow Holder or Lender, as the case may be, shall
make the proceeds available to Tenant in accordance with the applicable
provisions hereof and Tenant shall apply the Net Award to restoration of the
Leased Premises in accordance with the applicable provisions of this Sublease.

                  (iii)    Each insurer is hereby authorized and directed to
make payment under said policies directly to Escrow Holder or, if required by
the Mortgage, to Lender instead


                                       25
<PAGE>   29

of to Master Landlord, Landlord and Tenant jointly, and Tenant hereby appoints
each of Escrow Holder and Lender as Tenant's attorneys-in-fact to endorse any
draft therefor.

         17. Casualty and Condemnation.

                  (a) If any Casualty to the Leased Premises occurs, Tenant
shall give Master Landlord, Landlord and Lender immediate notice thereof. So
long as no Event of Default has occurred and is continuing Tenant is hereby
authorized to adjust, collect and compromise all claims under any of the
insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Master Landlord,
Landlord or Lender) and to execute and deliver on behalf of Master Landlord and
Landlord all necessary proofs of loss, receipts, vouchers and releases required
by the insurers and Master Landlord and Landlord shall have the right to join
with Tenant therein. Any final adjustment, settlement or compromise of any such
claim shall be subject to the prior written approval of Master Landlord and
Landlord, which shall not be unreasonably withheld or delayed, and Master
Landlord and Landlord shall have the right to prosecute or contest, or to
require Tenant to prosecute or contest, any such claim, adjustment, settlement
or compromise. If an Event of Default has occurred and is continuing, Tenant
shall not be entitled to adjust, collect or compromise any such claim or to
participate with Master Landlord or Landlord in any adjustment, collection and
compromise of the Net Award payable in connection with a Casualty. Tenant agrees
to sign, upon the request of Master Landlord or Landlord, all such proofs of
loss, receipts, vouchers and releases. The rights of Master Landlord and
Landlord under this Paragraph 17(a) shall be extended to Lender if and to the
extent that any Mortgage so provides.

                  (b) Tenant, immediately upon receiving a Condemnation Notice,
shall notify Master Landlord, Landlord and Lender thereof. So long as no Event
of Default has occurred and is continuing, Tenant is authorized to collect,
settle and compromise the amount of any Net Award and Master Landlord and
Landlord shall have the right to join with Tenant herein. If an Event of Default
has occurred and is continuing, Master Landlord and Landlord shall be authorized
to collect, settle and compromise the amount of any Net Award and Tenant shall
not be entitled to participate with Master Landlord and Landlord in any
Condemnation proceeding or negotiations under threat thereof or to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Master Landlord and Landlord, which shall
not be unreasonably withheld. Subject to the provisions of this Paragraph 17(b),
Tenant hereby irrevocably assigns to Master Landlord and Landlord any award or
payment to which Tenant is or may be entitled by reason of any Condemnation,
whether the same shall be paid or payable for Tenant's leasehold interest
hereunder or otherwise; but nothing in this Sublease shall impair Tenant's right
to any award or payment on account of Tenant's trade fixtures, equipment or
other tangible property which is not part of the Equipment, moving expenses or
loss of business, if available, to the extent that and so long as (i) Tenant
shall have the right to make, and does make, a separate claim therefor against
the condemnor and (ii) such claim, does not in any way reduce either the amount
of the award otherwise payable to Master Landlord and Landlord for the
Condemnation of Master Landlord's fee interest in, and Landlord's leasehold
interest in, the Leased Premises or the amount of the award (if any) otherwise
payable for the Condemnation of Tenant's leasehold interest hereunder. The
rights of Master Landlord and Landlord under this


                                       26
<PAGE>   30

Paragraph 17(b) shall also be extended to Lender if and to the extent that any
Mortgage so provides.

                  (c)      If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur to the Leased Premises, this
Sublease shall continue, notwithstanding such event, and there shall be no
abatement or reduction of any Monetary Obligations, except to the extent of
proceeds received by Landlord from the insurance described in Paragraph 16(a)(v)
hereof. Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraph 12 (a), shall commence and diligently continue to restore
the Leased Premises as nearly as possible to their value, condition and
character immediately prior to such event (assuming the Leased Premises to have
been in the condition required by this Sublease). So long as no Event of Default
has occurred and is continuing, any Net Award up to and including $250,000 shall
be paid by Escrow Holder to Tenant and Tenant shall restore the Leased Premises
in accordance with the requirements of Paragraph 13(b)of this Sublease. Any Net
Award in excess of $250,000 shall (unless such Casualty resulting in the Net
Award is a Termination Event) be made available by Escrow Holder (or Lender if
the terms of the Mortgage so require) to Tenant for the restoration of any of
the Leased Premises pursuant to and in accordance with and subject to the
provisions of Paragraph 19 hereof. If any Casualty or Condemnation which is not
a Partial Casualty or Partial Condemnation shall occur, Tenant shall comply with
the terms and conditions of Paragraph 18.

         18.      Termination Events.

                  (a)      If (i) all the Leased Premises shall be taken by a
Taking, or (ii) (A) any substantial portion of the Leased Premises shall be
taken by a Taking (and provided that the Taking of such portion would materially
adversely affect Tenant's use and occupation of the Leased Premises and its
operations thereon) or (B) all or any substantial portion of the Leased Premises
shall be damaged or destroyed by a Casualty (and provided that the damage caused
by such casualty would materially adversely affect Tenant's use and occupation
of the Leased Premises and its operations thereon), and (1) as to such Casualty
Tenant shall provide evidence satisfactory to Master Landlord, Landlord and
Lender that it shall be unable to rebuild the Leased Premises by the beginning
of the ninth (9th) calendar month following the date of such Casualty, or (2)
the Casualty was an earthquake or the insurer is insolvent so that proceeds
(exclusive of the required deductible) sufficient to rebuild the Leased Premises
are not available and, in any such case, Tenant certifies and covenants to
Master Landlord and Landlord that it will forever abandon operations at the
Leased Premises, (each of the events described in the above clauses (i) and (ii)
shall hereinafter be referred to as a "Termination Event"), then (x) in the case
of (i) above, Tenant shall be obligated, within thirty (30) days after Tenant
receives a Condemnation Notice, and (y) in the case of (ii) above Tenant shall
have the option within thirty (30) days after Tenant receives a Condemnation
Notice or thirty (30) days after the Casualty, as the case may be, to give to
Master Landlord and Landlord written notice (a "Termination Notice") of Tenant's
election to terminate this Sublease as to the Leased Premises in the form
described in Paragraph 18(b).

                  (b)      A Termination Notice shall contain (i) notice of
Tenant's intention to terminate this Sublease as to the Leased Premises on the
first Basic Rent Payment Date which occurs at least sixty (60) days after the
date of the Termination Notice (the "Termination Date"),


                                       27
<PAGE>   31

(ii) a binding and irrevocable offer of Tenant to pay the Termination Amount,
and (iii) if the Termination Event is an event described in Paragraph 18(a)(ii),
the certification and covenant described therein and a certified resolution of
the Board of Directors of Tenant authorizing the same.

                  (c)      Upon the Termination Date, Tenant shall pay the
Termination Amount and all unpaid Monetary Obligations to Landlord, and this
Sublease shall terminate as to the Leased Premises; provided that, if Tenant has
not satisfied all Monetary Obligations as to the Leased Premises (collectively,
"Remaining Obligations") on or prior to the Termination Date, then Master
Landlord and/or Landlord may, at its option, extend the date on which this
Sublease may terminate as to the Leased Premises to a date which is no later
than the first Basic Rent Payment Date after the Termination Date on which
Tenant has satisfied all Remaining Obligations; provided, however, the parties
acknowledge that if this Sublease Lease is terminated pursuant to this Paragraph
18(c) the Tenant has no obligation to repair or restore any damage to the Leased
Premises. Upon such termination (i) all obligations of Tenant hereunder as to
the Leased Premises shall terminate except for any Surviving Obligations, (ii)
Tenant shall immediately vacate and shall have no further right, title or
interest in or to any of the Leased Premises and (iii) the Net Award shall be
retained by Landlord. Notwithstanding anything to the contrary hereinabove
contained, if on the date when this Sublease would otherwise terminate as
provided above, Landlord shall not have received the full amount of the Net
Award payable by reason of the applicable Termination Event, then the date on
which this Sublease is to terminate automatically shall be extended to the first
Basic Rent Payment Date after the receipt by Landlord of the full amount of the
Net Award; provided that, if Tenant has not satisfied all Remaining Obligations
on such date, then Landlord may, at its option, extend the date on which this
Sublease shall terminate to a date which is no later than the first Basic Rent
Payment Date after such date on which Tenant has satisfied all such Remaining
Obligations.

                  (d)      Landlord and Tenant acknowledge and agree, that
pursuant and subject to the terms of Section 18(d) of the Master Lease, Master
Landlord may be required to convey the West Java Premises and/or Gibraltar
Premises to Landlord. In the event that, pursuant to the provisions of Section
18 of the Master Lease, Master Landlord conveys the Gibraltar Premises to
Landlord, Landlord shall promptly thereafter convey the Gibraltar Premises to
Tenant pursuant to a quitclaim deed. Notwithstanding the foregoing, such
conveyance by Landlord to Tenant is and shall be contingent upon: (i) Tenant not
being in default under this Sublease at the time of such conveyance, and (ii)
the payment by Tenant to Landlord of a sum equal to the Termination Amount plus
any other amounts paid by Landlord to Master Landlord under Section 18, Section
20 and other applicable provisions of the Master Lease with respect to the
Gibraltar Premises (i.e., if Master Landlord conveys only the Gibraltar Premises
to Landlord, then Tenant shall pay to Landlord a sum equal to the aggregate
amounts and other moneys paid by Landlord to Master Landlord with respect to the
Gibraltar Premises under the Master Lease, and if Master Landlord conveys both
the West Java Premises and Gibraltar Premises to Landlord, then Tenant shall pay
to Landlord a sum equal to 45% of the aggregate amounts and other moneys paid by
Landlord to Master Landlord with respect to the West Java Premises and Gibraltar
Premises under the Master Lease).


                                       28
<PAGE>   32

         19. Restoration.

                  (a)      Escrow Holder (or Lender if required by any Mortgage)
shall hold any Net Award in excess of $250,000 in a fund (the "Restoration
Fund") and disburse amounts from the Restoration Fund only in accordance with
the following conditions:

                           (i)      prior to commencement of restoration, (A)
the architects, general construction contract, general contractor and plans and
specifications for the restoration shall have been approved by Master Landlord
and Landlord, such approval not to be unreasonably withheld, (B) Master
Landlord, Landlord and Lender shall be provided with mechanics' lien insurance
(if available) and performance and payment bonds reasonably acceptable to Master
Landlord and Landlord which insure satisfactory completion of and payment for
the restoration, are in an amount and form and have a surety acceptable to
Master Landlord and Landlord, and name Master Landlord, Landlord and Lender as
additional dual obligees, and (C) appropriate waivers of mechanics' and
materialmen's liens shall have been filed;

                           (ii)     at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged;

                           (iii)    disbursements shall be made from time to
time in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and (E) other evidence of cost and payment so that Master
Landlord, Landlord and Lender can verify that the amounts disbursed from time to
time are represented by work that is completed, in place and free and clear of
mechanics' and materialmen's lien claims;

                           (iv)     each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Sublease;

                           (v)      Master Landlord or Landlord may retain ten
percent (10%) of the Restoration Fund until the restoration is fully completed;

                           (vi)     the Restoration Fund shall not be commingled
with other funds and shall bear interest at the short term rate of interest then
generally available from Lender or through Escrow Agent for such escrow
arrangements; and

                           (vii)    such other reasonable conditions as Lender
may impose.


                                       29
<PAGE>   33

                  (b)      Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Master Landlord and Landlord,
exceeds the amount of the Net Award available for such restoration, the amount
of such excess shall, upon demand by Master Landlord or Landlord, be paid by
Tenant to Escrow Holder to be added to the Restoration Fund. Any sum so added by
Tenant which remains in the Restoration Fund upon completion of restoration
shall be refunded to Tenant. For purposes of determining the source of funds
with respect to the disposition of funds remaining after the completion of
restoration, the Net Award shall be deemed to be disbursed prior to any amount
added by Tenant.

                  (c)      If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum shall be retained by Master Landlord or Landlord or, if required
by a Note or Mortgage, paid by Master Landlord or Landlord to a Lender.

         20. Intentionally Omitted.

         21. Assignment and Subletting; Prohibition against Leasehold Financing.

                  (a)      (i) Tenant shall have the right, upon thirty (30)
days prior written notice to Master Landlord, Landlord and Lender, with no
consent of Master Landlord or Landlord or Lender being required or necessary
("Preapproved Assignment") to assign this Sublease (A) as specifically permitted
in Section 1 of Exhibit "G" or (B) to any Person that, immediately following
such assignment has a publicly traded unsecured senior debt rating of "BBB" or
better from Moody's Investors Services, Inc. or a rating of "Baa" or better from
Standard & Poor's Corporation, and in the event all of such rating agencies
cease to furnish such ratings, then a comparable rating by any rating agency
reasonably acceptable to Master Landlord, Landlord and Lender.

                           (ii)     Any assignment or sublease of this Sublease
except for a Preapproved Assignment shall require the prior written consent of
Master Landlord, Landlord and Lender. Such prior written consent by Landlord
shall not be unreasonably withheld. Tenant shall, not less than ninety (90) days
prior to the date on which it desires to make an assignment or sublease, submit
to Master Landlord, Landlord and Lender information regarding the following with
respect to the assignee or sublessee (the "Criteria") : (i) credit, (ii) capital
structure, (iii) management, (iv) operating history, (v) proposed use of the
Leased Premises, and (vi) risk factors associated with the proposed use of the
Leased Premises by the proposed assignee or sublessee, taking into account
factors such as environmental concerns, product liability and the like. Master
Landlord, Landlord and Lender shall review the Criteria, advise Tenant no later
than the fifteenth (15th) day following receipt of the Criteria if additional
information is required and shall approve or disapprove the assignee no later
than the thirtieth (30th) day following receipt of all required information, and
Master Landlord, Landlord and Lender shall be deemed to have acted reasonably in
granting or withholding consent if such grant or disapproval is based on their
review of the Criteria. Any purported assignment that is not a Preapproved
Assignment or otherwise consented to under this Paragraph 21(a) shall be null
and void. Landlord shall have no liability for Master Landlord's failure to
review the Criteria or provide any consent required hereunder by the due dates
set forth above.


                                       30
<PAGE>   34

                  (b)      Tenant shall have the right, without obtaining the
consent of Master Landlord or Landlord, to have under sublease at any time up to
and including but not in excess of twenty-five percent (25%) of the net
leaseable space in the Leased Premises. Any sublease that, when added to all
other subleases then in effect, would result in more than twenty-five percent
(25%) of the leaseable area of the Leased Premises being under sublease at any
one time shall require the prior written approval of Master Landlord, Landlord
and Lender which shall not be unreasonably withheld.

                  (c)      If Tenant assigns all its rights and interest under
this Sublease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder, actual or contingent, including obligations of
Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Master Landlord and Landlord at the time of such
assignment. Each sublease of the Leased Premises shall be subject and
subordinate to the provisions of this Sublease and the Master Lease and shall be
for a term that expires no later than one (1) day prior to the expiration of the
Term and two (2) days prior to the expiration of the Master Lease Term. No
assignment or sublease shall affect or reduce any of the obligations of Tenant
hereunder, and all such obligations shall continue in full force and effect as
obligations of a principal and not as obligations of a guarantor, as if no
assignment or sublease had been made. No assignment or sublease shall impose any
additional obligations on Landlord under this Sublease.

                  (d)      Tenant shall, within ten (10) days after the
execution and delivery of any assignment or sublease, deliver a duplicate
original copy thereof to Master Landlord and Landlord which, in the event of an
assignment, shall be in recordable form.

                  (e)      As security for performance of its obligations under
this Sublease, Tenant hereby grants, conveys and assigns to Landlord all right,
title and interest of Tenant in and to all subleases now in existence or
hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, that Landlord shall have the absolute right at any
time following the occurrence of an Event of Default to revoke said license and
to collect such rents and sums of money and to retain the same. Tenant shall not
consent to, cause or allow any modification or alteration of any of the terms,
conditions or covenants of any of the subleases or the termination thereof,
without the prior written approval of Landlord, which approval shall not be
unreasonably withheld, nor shall Tenant accept any rents more than thirty (30)
days in advance of the accrual thereof nor do nor permit anything to be done,
the doing of which, nor omit or refrain from doing anything, the omission of
which, will or could be a breach of or default in the terms of any of the
subleases.

                  (f)      Tenant shall not have the power to mortgage, pledge
or otherwise encumber its interest under this Sublease or any sublease of the
Leased Premises, and any such mortgage, pledge or encumbrance made in violation
of this Paragraph 21 shall be void.

                  (g)      Landlord may transfer its interest in this Sublease
at any time without Tenant's consent to any third party (each a "Third Party
Purchaser"). In the event of any such transfer, Tenant shall attorn to any Third
Party Purchaser as Landlord so long as such Third Party


                                       31
<PAGE>   35

Purchaser and Landlord notify Tenant in writing of such transfer and the Third
Party Purchaser agrees to be bound by the terms of this Sublease applicable to
Landlord. At the request of Landlord, Tenant will execute such documents
confirming the agreement referred to above and such other agreements as Landlord
may reasonably request, provided that such agreements do not increase the
liabilities and obligations of Tenant hereunder.

         22.      Events of Default.

                  (a)      The occurrence of any one or more of the following
(after expiration of any applicable cure period as provided in Paragraph 22 (b))
shall, at the sole option of Landlord, constitute an "Event of Default" under
this Sublease:

                           (i)      a failure by Tenant to make any payment of
any Monetary Obligation, regardless of the reason for such failure;

                           (ii)     a failure by Tenant duly to perform and
observe, or a violation or breach of, any other provision hereof not otherwise
specifically mentioned in this Paragraph 22(a);

                           (iii)    any representation or warranty made by
Tenant herein or in any certificate, demand or request made pursuant hereto
proves to be materially incorrect, now or hereafter, in any material respect;

                           (iv)     Tenant shall (A) voluntarily be adjudicated
a bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for the Leased Premises, (C) file a petition seeking
relief under the bankruptcy or other similar laws of the United States, any
state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) admit in writing its inability to pay its debts as they
mature;

                           (v)      a court shall enter an order, judgment or
decree appointing, without the consent of Tenant, a receiver or trustee for it
or for the Leased Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed sixty (60) days after it is entered;

                           (vi)     the Leased Premises shall have been vacated
for a period of more than one (1) year or the Leased Premises shall have been
abandoned;

                           (vii)    Tenant shall be liquidated or dissolved or
shall begin proceedings towards its liquidation or dissolution;

                           (viii)   the estate or interest of Tenant in the
Leased Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within sixty (60) days after it is made;

                           (ix)     a failure by Tenant to perform or observe,
or a violation or breach of, or a misrepresentation by Tenant under, any
provision of any Assignment or any other written


                                       32
<PAGE>   36

document between Tenant and Lender or specifically for the benefit of Lender
that is executed by Tenant, if such failure, violation, breach or
misrepresentation gives rise to a default beyond any applicable cure period with
respect to any Loan and the Lender commences to exercise its remedies under the
documents evidencing and securing such Loan;

                           (x)      a failure by Tenant to maintain in effect
any license or permit necessary for the use, occupancy or operation of the
Leased Premises; or

                           (xi)     The breach of any Covenant shall occur.

                  (b) No notice or cure period shall be required in any one or
more of the following events: (A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below) , (iii), (iv), (v), (vi),
(vii), (viii), (ix), or (xi) of Paragraph 22 (a); (B) the default consists of a
failure to provide any insurance as required by and in accordance with Paragraph
16 (a) (i) or (a) (iv) that does not substantially comply with the requirements
thereof or an assignment or sublease entered into in violation of Paragraph 21;
or (C) the default is such that any delay in the exercise of a remedy by
Landlord could reasonably be expected to cause material and irreparable harm to
Landlord. If the default consists of the failure to pay any Monetary Obligation
under clause (i) of Paragraph 22(a), the applicable cure period shall be three
(3) days from the date on which notice is received by Tenant, but Landlord shall
not be obligated to give notice of, or allow any cure period for, any default in
the payment of Basic Rent more than one (1) time within any consecutive twelve
(12) month period. If the default consists of a default under clause (ii) or (x)
of Paragraph 22 (a) , other than the events specified in clauses (B) and (C) of
the first sentence of this Paragraph 22(b), the applicable cure period shall be
twenty (20) days from the date on which notice is received by Tenant or, if the
default cannot be cured within such twenty (20) day period and delay in the
exercise of a remedy would not cause any material adverse harm to Landlord or
any of the Leased Premises, the cure period shall be extended for the period
required to cure the default (but such cure period, including any extension,
shall not in the aggregate exceed one hundred twenty (120) days), provided that
Tenant shall commence to cure the default within the said twenty-day period and
shall actively, diligently and in good faith proceed with and continue the
curing of the default until it shall be fully cured. The notices described in
this Paragraph 22 (b) are in lieu of and not in addition to the notice under
California Civil Code 1161.

         23. Remedies and Damages Upon Default.

                  (a)      If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22 (b) and this Paragraph 23.

                           (i)      Landlord may give Tenant notice of
Landlord's intention to terminate this Sublease on a date specified in such
notice and upon such date, this Sublease, the estate hereby granted and all
rights of Tenant hereunder shall expire and terminate, provided, that if and
only if the Event of Default that gave rise to such notice is the failure to pay
Rent as and when due such termination shall be of no force and effect if Tenant
cures such Event of Default


                                       33
<PAGE>   37

within three (3) days after receipt of such notice from Landlord. Upon such
termination, Tenant shall immediately surrender and deliver possession of the
Leased Premises to Landlord in accordance with Paragraph 26. If Tenant does not
so surrender and deliver possession of all of the Leased Premises, Landlord may
repossess any of the Leased Premises not surrendered, with legal process, by
summary proceedings, ejectment or any other lawful means or procedure. Upon or
at any time after taking possession of any of the Leased Premises, Landlord may,
by peaceable means or legal process, remove any Persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. Notwithstanding such entry or repossession, Landlord
may collect the damages set forth in Paragraph 23(c).

                           (ii)     After repossession of any of the Leased
Premises pursuant to clause (i) above, Landlord shall have the right to relet
any of the Leased Premises to such tenant or tenants, for such term or terms,
for such rent, on such conditions and for such uses as Landlord in its sole
discretion may determine, and collect and receive any rents payable by reason of
such reletting. Landlord may make such Alterations in connection with such
reletting as it may deem advisable in its sole discretion. Notwithstanding any
such reletting, Landlord may collect the damages set forth in Paragraph 23(c).

                  (b) In addition to its other rights under this Sublease,
Landlord has the remedy described in California Civil Code Section 1951.4 which
provides substantially as follows: Landlord may continue the Master Lease in
effect after Tenant's breach and abandonment and recover the Rent as it becomes
due, if Tenant has the right to sublet or assign, subject only to reasonable
limitations. In accordance with California Civil Code Section 1951.4 (or any
successor statute), Tenant acknowledges that in the event Tenant breaches this
Sublease and abandons the Leased Premises, this Sublease shall continue in
effect for so long as Landlord does not terminate Tenant's right to possession,
and Landlord may enforce all of its rights and remedies under this Sublease,
including the right to recover the Rent as it becomes due under this Sublease.
Tenant acknowledges that the limitations on subletting and assignment set forth
in Paragraph 21 are reasonable. Acts of maintenance or preservation or efforts
to relet the Leased Premises or the appointment of a receiver upon initiative of
Landlord to protect Landlord's interest under this Sublease shall not constitute
a termination of Tenant's right to possession.

                  (c) If Landlord elects to terminate this Sublease upon the
occurrence of an Event of Default, Landlord may collect from Tenant damages
computed in accordance with the following provisions in addition to Landlord's
other remedies under this Sublease:

                           (i)      the worth at the time of award of any unpaid
Rent which has been earned at the time of such termination; plus

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

                           (iii)    the worth at the time of award of the amount
by which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; plus


                                       34
<PAGE>   38

                           (iv)     any other reasonable cost necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Sublease or which in the ordinary course
of things would be likely to result therefrom including, without limitation,
brokerage commissions, the cost of repairing and reletting the Leased Premises
and reasonable attorneys' fees; plus

                           (v)      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 state law. Damages shall be due and payable from the date of
termination.

         For purposes of clauses (i) and (ii) of this Paragraph, the "worth at
the time of award" shall be computed by adding interest at the Default Rate to
the past due Rent. For the purposes of clause (iii) of this Paragraph 23 (c),
the "worth at the time of award" shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1%).

                  (d)      Landlord shall be entitled to apply the Security
Deposit to any amounts due under Paragraph 23 (a) or 23 (c) if this Sublease
shall be terminated, or, if this Sublease shall remain in full force and effect,
to any amounts due under Paragraph 23 (b) and in either event in the following
order (i) to past due Basic Rent and (ii) to cure any other monetary Event of
Default.

                  (e)      Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available to
it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.

                  (f)      If any Law shall validly limit the amount of any
damages provided for herein to an amount which is less than the amount agreed to
herein, Landlord shall be entitled to the maximum amount available under such
Law.

                  (g)      No termination of this Sublease, repossession or
reletting of any of the Leased Premises, exercise of any remedy or collection of
any damages pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.

                  (h)      WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, LANDLORD AND TENANT WAIVE ANY RIGHT TO A TRIAL BY JURY. Landlord and
Tenant agree that this Sublease constitutes a written consent to waiver of trial
by jury pursuant to the provisions of California Code of Civil Procedure Section
631, and each of Landlord and Tenant does appoint the other Person as its true
and lawful attorney-in-fact, which appointment is coupled with an interest, and
does hereby authorize and empower the other Person, in its name, place and
stead, to file this Sublease with the clerk of any court of competent
jurisdiction as statutory written consent to waiver of trial by jury.

                  (i)      Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such


                                       35
<PAGE>   39

act requires that Landlord enter the Leased Premises, Landlord may enter the
Leased Premises for such purpose.,

                  (j)      No failure of Landlord (i) to insist at any time upon
the strict performance by Tenant of any provision of this Sublease or (ii) to
exercise any option, right, power or remedy contained in this Sublease shall be
construed as a waiver, modification or relinquishment thereof. A receipt by
Landlord of any sum in satisfaction of any Monetary Obligation with knowledge of
the breach of any provision hereof shall not be deemed a waiver of such breach,
and no waiver by Landlord of any provision hereof shall be deemed to have been
made unless expressed in a writing signed by Landlord. No failure of Tenant (i)
to insist at any time upon the strict performance by Landlord of any provision
of this Sublease or (ii) to exercise any option, right, power or remedy
contained in this Sublease shall be construed as a waiver, modification or
relinquishment thereof EXCEPT with respect to Tenant's extension option(s) under
Paragraph 5(b) of this Sublease or EXCEPT as otherwise expressly provided to the
contrary elsewhere in this Sublease.

                  (k)      Tenant hereby waives and surrenders, for itself and
all those claiming under it, including creditors of all kinds, (i) any right and
privilege which it or any of them may have under any present or future Law to
redeem any of the Leased Premises or to have a continuance of this Sublease
after termination of this Sublease or of Tenant's right of occupancy or
possession pursuant to any court order or any provision hereof if the Event of
Default is an Event of Default under Paragraph 22 (a) (iv) or 22 (a)(xi), and
(ii) the benefits of any present or future Law which exempts property from
liability for debt or for distress for rent.

                  (l)      Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.

         24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Sublease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above or when delivery is
refused. A copy of any notice given by Tenant to Landlord shall simultaneously
be given by Tenant to Dewey Ballantine LLP, 333 South Hope Street, 30th Floor,
Los Angeles, California 90071, Attention: Rafael A. Stone, Esq. A copy of any
notice given by Landlord to Tenant shall simultaneously be given by Landlord to
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., 2500 First Union
Capitol Center, Raleigh, North Carolina 27601, Attention: Stephen T.
Parascandola, Esq. For the purposes of this Paragraph, any party may substitute
another address stated above (or substituted by a previous notice) for its
address by giving fifteen (15) days' notice of the new address to the other
party, in the manner provided above.

         25. Estoppel Certificate. At any time upon receipt of not less than ten
(10) days' prior written request by either Landlord or Tenant (the "Requesting
Party") to the other party (the


                                       36
<PAGE>   40

"Responding Party"), the Responding Party shall deliver to the Requesting Party
a statement in writing, executed by an authorized officer of the Responding
Party, certifying (a) that, except as otherwise specified, this Sublease is
unmodified and in full force and effect, (b) the dates to which Basic Rent,
Additional Rent and all other Monetary Obligations have been paid, (c) that, to
the knowledge of the signer of such certificate and except as otherwise
specified, no default by either Landlord or Tenant exists hereunder, (d) such
other matters as the Requesting Party may reasonably request, and (e) if Tenant
is the Responding Party, that, except as otherwise specified, there are no
proceedings pending or, to the knowledge of the signer, threatened, against
Tenant before or by any court or administrative agency which, if adversely
decided, would materially and adversely affect the financial condition and
operations of Tenant. Any such statements by the Responding Party may be relied
upon by the Requesting Party, any Person whom the Requesting Party notifies the
Responding Party in its request for the certificate is an intended recipient or
beneficiary of the certificate, Master Landlord, any Lender or their assignees
and by any prospective purchaser or mortgagee of any of the Leased Premises. Any
certificate required under this Paragraph 25 and delivered by Tenant shall state
that, in the opinion of each person signing the same, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to the subject matter of such certificate, and shall briefly
state the nature of such examination or investigation.

         26. Surrender. Upon the expiration or earlier termination of this
Sublease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Sublease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Sublease,
and except for ordinary wear and tear and damage by Casualty or a Taking if
Landlord rejects Tenant's offer under Paragraph 18 hereof. Upon such surrender,
Tenant shall (a) remove from the Leased Premises all property which is owned by
Tenant or third parties other than Landlord and (b) repair any damage caused by
such removal. Property not so removed shall become the property of Landlord, and
Landlord may thereafter cause such property to be removed from the Leased
Premises. The cost of removing and disposing of such property and repairing any
damage to any of the Leased Premises caused by such removal shall be paid by
Tenant to Landlord upon demand. Landlord shall not in any manner or to any
extent be obligated to reimburse Tenant for any such property which becomes the
property of Landlord pursuant to this Paragraph 26.

         27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Sublease with the fee estate in any of the Leased
Premises by reason of the fact that the same Person may acquire or hold or own,
directly or indirectly, (a) the leasehold estate created hereby or any part
thereof or interest therein and (b) the fee estate in any of the Leased Premises
or any part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.

         28. Books and Records.

                  (a)      Tenant shall keep adequate records and books of
account with respect to the finances and business of Tenant generally and with
respect to the Leased Premises, in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and


                                       37
<PAGE>   41

shall permit Master Landlord, Landlord and Lender by their respective agents,
accountants and attorneys, upon reasonable notice to Tenant, to visit and
inspect the Leased Premises and examine (and make copies of) the records and
books of account and to discuss the finances and business with the officers of
Tenant, at such reasonable times as may be requested by Master Landlord,
Landlord or Lender. Upon the request of Master Landlord, Landlord or Lender
(either telephonically or in writing), Tenant shall provide the requesting party
with copies of any information to which such party would be entitled in the
course of a personal visit.

                  (b)      Tenant shall deliver to Master Landlord, Landlord and
to Lender, within ninety (90) days of the close of each fiscal year, annual
audited financial statements of Tenant prepared by a firm of nationally
recognized independent certified public accountants. Tenant shall also furnish
to Landlord within forty-five (45) days after the end of each of the three
remaining quarters unaudited financial statements and all other quarterly
reports of Tenant, certified by Tenant's chief financial officer, and all
filings, if any, of Form 10-K, Form 10-Q and other required filings with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Exchange Act of 1934, as amended, or any other Law. All financial statements of
Tenant shall be prepared in accordance with GAAP consistently applied. All
annual financial statements shall be accompanied (i) by an opinion of said
accountants stating that (A) there are no qualifications as to the scope of the
audit and (B) the audit was performed in accordance with GAAP and (ii) by the
affidavit of the president or a vice president of Tenant, dated within five (5)
days of the delivery of such statement, stating that (C) the affiant knows of no
Event of Default, or event which, upon notice or the passage of time or both,
would become an Event of Default which has occurred and is continuing hereunder
or, if any such event has occurred and is continuing, specifying the nature and
period of existence thereof and what action Tenant has taken or proposes to take
with respect thereto and (D) except as otherwise specified in such affidavit,
that Tenant has fulfilled all of its obligations under this Sublease which are
required to be fulfilled on or prior to the date of such affidavit.

         29. Determination of Value.

                  (a)      Whenever a determination of Fair Market Value is
required pursuant to any provision of this Sublease, or under the Master Lease
with respect to the Leased Premises, such Fair Market Value shall be determined
in accordance with the following procedure:

                           (i)      Landlord and Tenant shall endeavor to agree
upon such Fair Market Value within thirty (30) days after the date (the
"Applicable Initial Date") on which Landlord provides Tenant with notice of its
intention to redetermine Fair Market Value pursuant to Paragraph 20(c). Landlord
and Tenant shall endeavor to agree on Fair Market Rental Value on the date
(also, an "Applicable Initial Date") which is six (6) calendar months prior to
the expiration of the then current Term unless Tenant has failed to previously
exercise its option to extend the Term pursuant to Paragraph 5(b). Upon reaching
such agreement, the parties shall execute an agreement setting forth the amount
of such Fair Market Value or Fair Market Rental Value.

                           (ii)     If the parties shall not have signed such
agreement within thirty (30) days after the Applicable Initial Date, Tenant
shall within fifty (50) days after the Applicable Initial Date select an
appraiser and notify Landlord in writing of the name, address


                                       38
<PAGE>   42

and qualifications of such appraiser. Within twenty (20) days following
Landlord's receipt of Tenant's notice of the appraiser selected by Tenant,
Landlord shall select an appraiser and notify Tenant of the name, address and
qualifications of such appraiser. Such two appraisers shall endeavor to agree
upon Fair Market Value or Fair Market Rental Value based on a written appraisal
made by each of them as of the Relevant Date (and given to Landlord by Tenant).
If such two appraisers shall agree upon a Fair Market Value or Fair Market
Rental Value, the amount of such Fair Market Value or Fair Market Rental Value
as so agreed shall be binding and conclusive upon Landlord and Tenant.

                           (iii)    If such two appraisers shall be unable to
agree upon a Fair Market Value or Fair Market Rental Value within twenty (20)
days after the selection of an appraiser by Landlord, then such appraisers shall
advise Landlord and Tenant of their respective determinations of Fair Market
Value or Fair Market Rental Value and shall select a third appraiser to make the
determination of Fair Market Value or Fair Market Rental Value. The selection of
the third appraiser shall be binding and conclusive upon Landlord and Tenant.

                           (iv)     If such two appraisers shall be unable to
agree upon the designation of a third appraiser within ten (10) days after the
expiration of the twenty (20) day period referred to in clause (iii) above, or
if such third appraiser does not make a determination of Fair Market Value or
Fair Market Rental Value within twenty (20) days after his selection, then such
third appraiser or a substituted third appraiser, as applicable, shall, at the
request of either party hereto (with respect to the other party), be appointed
by the President or Chairman of the American Arbitration Association in New
York, New York. The determination of Fair Market Value or Fair Market Rental
Value made by the third appraiser appointed pursuant hereto shall be made within
twenty (20) days after such appointment.

                           (v)      If a third appraiser is selected, Fair
Market Value or Fair Market Rental Value shall be the average of the
determination of Fair Market Value or Fair Market Rental Value made by the third
appraiser and the determination of Fair Market Value or Fair Market Rental Value
made by the appraiser (selected pursuant to Paragraph 29(a)(ii) hereof) whose
determination of Fair Market Value or Fair Market Rental Value is closest to the
total dollar value to that of the third appraiser. Such average shall be binding
and conclusive upon Landlord and Tenant.

                           (vi)     All appraisers selected or appointed
pursuant to this Paragraph 29(a) shall (A) be independent qualified MAI
appraisers, (B) have no right, power or authority to alter or modify the
provisions of this Sublease, (C) utilize the definition of Fair Market Value or
Fair Market Rental Value hereinabove set forth, and (D) be licensed in the State
if the State provides for or requires such registration.

                           (vii)    The Cost of the procedure described in this
Paragraph 29(a) above shall be borne by Tenant.

                  (b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises to the date specified for termination in the
particular provision of this Sublease pursuant to which the


                                       39
<PAGE>   43

determination of Fair Market Value is being made. If, by virtue of any delay,
Fair Market Rental Value is not determined by the expiration or termination of
the then current Term, then until Fair Market Rental Value is determined, Tenant
shall continue to pay Basic Rent during the succeeding Renewal Term in the same
amount which it was obligated under this Sublease to pay prior to the
commencement of the Renewal Term. When Fair Market Rental Value is determined,
the appropriate Basic Rent shall be calculated retroactive to the commencement
of the Renewal Term and Tenant shall either receive a refund from Landlord (in
the case of an overpayment) or shall pay any deficiency to Landlord (in the case
of an underpayment).

                  (c)      In determining Fair Market Value as defined in clause
(b) of the definition of Fair Market Value, the appraisers shall add (a) the
present value of the Basic Rent for the remaining Term then in effect (with
assumed increases in the CPI to be determined by the appraisers) using a
discount rate (which may be, but shall not be required to be, determined by an
investment banker retained by any appraiser electing to seek such opinion) based
on the creditworthiness of Tenant and (b) the present value of the Leased
Premises as of the end of such Term (without assuming the Term has been
extended). The appraisers shall further assume that no default then exists under
the Lease, that Tenant has complied (and will comply) with all provisions of the
Lease, and that Tenant has not violated (and will not violate) any of the
Covenants.

                  (d)      In determining Fair Market Rental Value, the
appraisers shall determine with respect to the Leased Premises the amount that a
willing tenant would pay for, and a willing landlord of the Leased Premises
would accept, at arm's length for the Leased Premises, taking into account
comparable buildings and also taking into account: (a) the age, quality and
condition (as required by the Lease) of the Improvements; (b) that the Leased
Premises will be leased as a whole or substantially as a whole to single user;
(c) a lease term of five (5) years; (d) an absolute triple net lease; and (e)
such other items that professional real estate appraisers customarily consider.

         30. Non-Recourse as to Landlord.

                  (a)      Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Sublease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (a) Landlord, (b) any
affiliate, director, officer, shareholder, general partner, limited partner,
principal, employee, attorney, or agent of Landlord (or any legal
representative, heir, estate, successor or assign of any of them), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of its general partners, either directly or through Landlord or
its general partners or any predecessor or successor partnership or corporation
or their shareholders, officers, directors, employees or agents (or other
entity), (d) Master Landlord or any of its directors, officers, shareholders,
general partners, limited partners, principals, employees, attorneys, or agents
(or any legal representative, heir, estate, successor or assign of any of them),
or (e) any other Person.

                  (b)      Notwithstanding the foregoing, Tenant shall not be
precluded from instituting legal proceedings for the purpose of making a claim
against Landlord on account of an alleged


                                       40
<PAGE>   44

violation of Landlord's obligation under this Sublease, subject, however, to
Paragraph 30(a) above.

                  (c)      The provisions of this Section 30 shall not terminate
or otherwise limit Landlord's liability for breaches of its obligations under
the Asset Purchase Agreement.

         31. Financing. If Master Landlord or Landlord desires to obtain or
refinance any Loan, Tenant shall negotiate in good faith with Master Landlord
and/or Landlord concerning any request made by any Lender or proposed Lender for
changes or modifications in this Sublease. With respect to any Loan obtained or
refinanced by Landlord, Tenant shall be obligated to negotiate in good faith
changes or modifications in this Sublease to the extent that such changes or
modifications do not have a material adverse effect on Tenant's rights or
liabilities under this Sublease. In particular, Tenant shall agree, upon request
of Master Landlord and/or Landlord, to supply any such Lender with such notices
and information as Tenant is required to give to Master Landlord or Landlord
hereunder and to extend the rights of Master Landlord and Landlord hereunder to
any such Lender and to consent to such financing if such consent is requested by
such Lender. Tenant shall provide any other reasonable consent or statement and
shall execute any and all other reasonable documents that such Lender requires
in connection with such financing, including any environmental indemnity
agreement (so long as it is not more burdensome than the provisions relating to
environmental matters set forth in this Sublease) and subordination,
non-disturbance and attornment agreement, so long as the same do not adversely
affect any right, benefit or privilege of Tenant under this Sublease or increase
Tenant's obligations under this Sublease. Such subordination, non-disturbance
and attornment agreement may require Tenant to confirm that (a) Lender and its
assigns will not be liable for any misrepresentation, act or omission of Master
Landlord or Landlord and (b) Lender and its assigns will not be subject to any
counterclaim, demand or offset which Tenant may have against Master Landlord or
Landlord.

         32. Subordination. This Sublease and Tenant's interest hereunder shall
be subordinate to any Mortgage or other security instrument securing a Loan
hereafter placed upon the Leased Premises by Master Landlord or Landlord, and to
any and all advances made or to be made thereunder, to the interest thereon, and
all renewals, replacements and extensions thereof, provided that any such
Mortgage or other security instrument (or a separate instrument in recordable
form such as a subordination, non-disturbance and attornment agreement duly
executed by the holder of any such Mortgage and Tenant and delivered to Tenant)
shall provide for the recognition of this Sublease and all of Tenant's rights
hereunder, including, without limitation, application of the Net Award in
accordance with the terms of this Sublease unless and until an Event of Default
has occurred and is continuing or Landlord shall have the right to terminate
this Sublease pursuant to any applicable provision hereof.

         33. Financial Covenants. Tenant hereby covenants and agrees to comply
with the Covenants.

         34. Right to Vacate. Tenant shall have the right to vacate the Leased
Premises; provided that (i) Tenant shall notify Landlord and Lender within ten
(10) days after vacation of the Leased Premises by Tenant, (ii) Tenant shall
make reasonable good faith efforts to sublet the Leased Premises, which sublease
or subleases shall be subject to the provisions of Paragraph 21(b)


                                       41
<PAGE>   45

hereof, and (iii)Tenant shall continue to perform all of its obligations under
this Lease, including its obligation to maintain the Leased Premises and to pay
all Rent as and when due hereunder. If at any time during the Term the Leased
Premises shall be vacant for twelve (12) consecutive months, then on the first
day of the thirteenth (13th) month that the Leased Premises is vacant Tenant
shall cause the Leased Premises to cease to be vacant.

         35. Tax Treatment; Reporting. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a lease for Federal income tax purposes. For
Federal income tax purposes each shall report this Sublease as a true lease with
Landlord as the owner of the Leased Premises and Equipment and Tenant as the
lessee of such Leased Premises and Equipment including: (1) treating Landlord as
the owner of the property eligible to claim depreciation deductions under
Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.

         36. Intentionally Omitted.

         37. Security Deposit.

                  (a)      Concurrently with the execution of this Sublease,
Tenant shall deliver to Landlord cash (U.S. dollars) in the amount of One
Hundred Fifty One Thousand One Hundred Sixty Four and 08/100ths Dollars
($151,164.08) (the "Security Deposit"). The Security Deposit shall be security
for the payment by Tenant of the Rent and all other charges or payments to be
paid hereunder and the performance of the covenants and obligations contained
herein and shall be held by Landlord or, if applicable, any Lender of Landlord,,
as security for Tenant's obligations under this Sublease. Landlord or such
Lender, as the case may be, shall invest the Security Deposit in such investment
vehicle as is designated by Tenant and approved by Landlord and such Lender,
which approval shall not be unreasonably withheld, subject to the following: (i)
attached to this Sublease as Exhibit "F" is a list of approved investments and
each such investment is deemed to be approved by Landlord and such Lender; (ii)
the Security Deposit shall be invested in one investment vehicle that is held in
the name of the Landlord or such Lender; (iii) Tenant may require that the
Security Deposit be transferred or reinvested from one approved investment
vehicle to another, but no more frequently than one time in any 12-month period
during the term of the Lease; (iv) if Landlord or such Lender reasonably
determine at any time that the liquidation value of the investment vehicle in
which the Security Deposit has been invested is less than the required principal
amount of the Security Deposit, then within two (2) business days after demand
therefor, Tenant shall deposit in cash with the holder of the Security Deposit
an amount in cash which, when added to the reasonably estimated liquidation
value of the investment vehicle, is equal to the required amount of the Security
Deposit, which cash deposit shall be returned to Tenant when the liquidation
value of the investment equals or exceeds the required amount of the Security
Deposit; and (v) Tenant shall pay all transaction costs reasonably incurred by
Landlord or such Lender in investing the Security Deposit in accordance with the
instructions of Tenant.

                  (b)      Landlord shall have the right to assign the Security
Deposit to its Lender or any other holder of a Mortgage during the term of the
applicable Loan, so long as such Lender or


                                       42
<PAGE>   46

such other holder of a Mortgage agrees in writing that it shall have all of the
rights and obligations of Landlord with respect to the Security Deposit,
provided that any portion of the Security Deposit applied by such Lender shall,
with respect to Tenant, be deemed applied as provided in Paragraph 23 (d)
hereof. Tenant covenants and agrees to execute such agreements, consents and
acknowledgments as may be reasonably requested by Landlord and such Lender from
time to time to acknowledge and perfect such assignment.

         38. Miscellaneous.

                  (a)      The Paragraph headings in this Sublease are used only
for convenience in finding the subject matters and are not part of this Sublease
or to be used in determining the intent of the parties or otherwise interpreting
this Sublease.

                  (b)      As used in this Sublease, the singular shall include
the plural and any gender shall include all genders as the context requires and
the following words and phrases shall have the following meanings: (i)
"including" shall mean "including without limitation"; (ii) "provisions" shall
mean "provisions, terms, agreements, covenants and/or conditions"; (iii) "lien"
shall mean "lien, charge, encumbrance, title retention agreement, pledge,
security interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".

                  (c)      Any act which Landlord is permitted to perform under
this Sublease may be performed at any time and from time to time by Landlord or
any person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except with respect to any assignment of this Sublease or sublet that
is not otherwise specifically permitted hereunder or for which a reasonableness
standard is not specifically required for Landlord's consent, Landlord shall not
unreasonably withhold or delay its consent whenever such consent is required
under this Sublease. Time is of the essence with respect to the performance by
Tenant of its obligations under this Sublease.

                  (d)      Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or license of Tenant with respect to any of
the Leased Premises or otherwise in the conduct of their respective businesses.

                  (e)      This Sublease and any documents which may be executed
by Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Sublease and have each fully participated in the negotiation and
drafting of this Sublease.


                                       43
<PAGE>   47

Accordingly, this Sublease shall be construed without regard to the rule that
ambiguities in a document are to be construed against the drafter.

                  (f)      This Sublease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.

                  (g)      The covenants of this Sublease shall run with the
land and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.

                  (h)      Notwithstanding any provision in this Sublease to the
contrary, all Surviving Obligations of Tenant shall survive the expiration or
termination of this Sublease with respect to the Leased Premises.

                  (i)      If any one or more of the provisions contained in
this Sublease shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Sublease, but this Sublease shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

                  (j)      All exhibits attached hereto are incorporated herein
as if fully set forth.

                  (k)      This Sublease shall be governed by and construed and
enforced in accordance with the Laws of the State.

                  (l)      Tenant hereby waives the provisions of California
Civil Code Sections 1941 and 1942. Landlord and Tenant waive the provisions of
California Civil Code Sections 1932 and 1933, and of California Code of Civil
Procedure Section 1265.130.

                  (m)      As a condition precedent to the effectiveness of this
Sublease and to the performance by Landlord of its obligations hereunder, Tenant
shall cause Cree to concurrently herewith execute and deliver to and for the
benefit of Landlord a Guaranty of Lease in the form attached hereto as Exhibit
"H".

                  (n)      Tenant acknowledges and agrees that it is subleasing
the Leased Premises from Landlord subject to all of the rights and interests of
the Master Landlord in and to the Leased Premises arising under the Lease,
including, without limitation, rights of inspection and rights to notice of
various matters, events, circumstances and materials, all as granted to Master
Landlord under the Lease. In no event shall Tenant prohibit or otherwise limited
the Master Landlord from exercising or receiving the benefit of any of its
rights arising under the Master Lease with respect to the Leased Premises,
including, without limitation, Master Landlord's rights to inspection of the
Leased Premises and information related thereof, regardless of whether or not
rights are provided for under this Sublease.

                  (o)      Notwithstanding any provision set forth herein that
may be construed to the contrary, in no event may Tenant renew or extend the
Term of this Sublease for a period which is longer than the Term (as defined in
the Lease) of the Lease.


                                       44
<PAGE>   48

                  (p)      Landlord represents and warrants to Tenant the
following: (a) Landlord is a corporation duly formed, validly existing and in
good standing under the laws of the State of California, (ii) Landlord has all
requisite corporate power and authority to execute and deliver this Sublease and
perform Landlord's obligations hereunder, and this Sublease has been duly
executed and delivered by Landlord and constitutes the valid and binding
agreement of Landlord enforceable in accordance with its terms, (iii) the
execution and performance of this Sublease will not conflict with or constitute
a default by Landlord under any other agreement to which Landlord is a party or
is otherwise bound, or any order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Landlord,
except where such conflict or default would not have a material adverse effect
on the ability of Landlord to perform its obligations hereunder, (iv) no consent
from or notice to any federal, state or local court or federal, state, or local
governmental bureau, department, commission or agency, or any person or entity
whether or not governmental in character (other than Master Landlord and the
Lender of Master Landlord), is required to permit Landlord to execute, deliver
and perform under this Sublease in accordance with its terms, (v) the Master
Lease has not been amended or supplemented other than as disclosed to Tenant,
(vi) to Landlord's actual knowledge (as defined in Section 15 of this Sublease),
the Master Lease has not been terminated and is in full force and effect, and
(vii) to Landlord's actual knowledge (as defined in Section 15 of this
Sublease), Landlord has not received any written notice from Master Landlord of
any uncured default on Landlord's part under the Master Lease. Tenant represents
and warrants to Landlord the following: (a) Tenant is a corporation duly formed,
validly existing and in good standing under the laws of the State of North
Carolina, (b) Tenant is in good standing and is qualified to conduct business
under the laws of the State of California, (c) Tenant has all requisite
corporate power and authority to execute and deliver this Sublease and perform
Tenant's obligations hereunder, and this Sublease has been duly executed and
delivered by Tenant and constitutes the valid and binding agreement of Tenant
enforceable in accordance with its terms, (d) the execution and performance of
this Sublease will not conflict with or constitute a default by Tenant under any
agreement to which Tenant is a party or is otherwise bound, or any order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over Tenant, except where such conflict or default
would not have a material adverse effect on the ability of Tenant to perform its
obligations hereunder, and (e) no consent from or notice to any federal, state
or local court or federal, state, or local governmental bureau, department,
commission or agency, or any person or entity whether or not governmental in
character (other than Master Landlord), is required to permit Tenant to execute,
deliver and perform under this Sublease in accordance with its terms.


                            [SIGNATURES ON NEXT PAGE]


                                       45
<PAGE>   49

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Sublease to be
duly executed under seal as of the day and year first above written.

                                    LANDLORD:

                                    SPECTRIAN CORPORATION,
                                    a California corporation


                                    By: /s/ Michael Angel
                                       -----------------------------------------
                                    Name: Michael Angel
                                         ---------------------------------------
                                    Title: Executive Vice President and Chief
                                           Financial Officer
                                          --------------------------------------

                                    TENANT:

                                    ZOLTAR ACQUISITION, INC.,
                                    a North Carolina corporation
                                    to be known as UltraRF, Inc.


                                    By: /s/ Adam H. Broome
                                       -----------------------------------------
                                    Name: Adam H. Broome
                                         ---------------------------------------
                                    Title: Secretary
                                          --------------------------------------


                                       46
<PAGE>   50

                                                                       EXHIBIT A

                                 LEASED PREMISES

                         (160 Gibraltar Court Premises)

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

         Parcel B, as shown on that Parcel Map filed for record in the office of
the Recorder of the County of Santa Clara, State of California on January 31,
1977, in Book 388 of Maps, page(s) 32.


                                       47
<PAGE>   51

                                                                       EXHIBIT B

                             MACHINERY AND EQUIPMENT

         All fixtures, machinery, apparatus, equipment, fittings and appliances
of every kind and nature whatsoever now or hereafter affixed or attached to or
installed in any of the Leased Premises (except as hereafter provided),
including all electrical, anti-pollution, heating, lighting (including hanging
fluorescent lighting), incinerating, power, air cooling, air conditioning,
humidification, sprinkling, plumbing, lifting, cleaning, fire prevention, fire
extinguishing and ventilating systems, devices and machinery and all engines,
pipes, pumps, tanks (including exchange tanks and fuel storage tanks), motors,
conduits, ducts, steam circulation coils, blowers, steam lines, compressors, oil
burners, boilers, doors, windows, loading platforms, lavatory facilities,
stairwells, fencing (including cyclone fencing), passenger and freight
elevators, overhead cranes and garage units, together with all additions
thereto, substitutions therefor and replacements thereof required or permitted
by this Sublease which were leased by Master Landlord to Landlord under the
Master Lease and are situated upon the Leased Premises as of the Commencement
Date.


                                       48
<PAGE>   52

                                                                     EXHIBIT B-1

                                TENANT'S PROPERTY


         Tenant's Property shall mean all "Acquired Assets" (as defined in the
Asset Purchase Agreement).

         Tenant's Property shall not include any of the following:

         (a)      Mechanical/HVAC equipment including Scrubber, Acid
Neutralization System, Water Deionization System, Chiller, Emergency Generator
and CO2 tank;

         (b)      Water, environmental and piping systems which are and shall be
Equipment; and

         (c)      any Equipment owned by Landlord or owned by Master Landlord
and not leased to Landlord under the Master Lease (whether or not described on
Exhibit B).


                                       49
<PAGE>   53

                                                                       EXHIBIT C

                             PERMITTED ENCUMBRANCES

         1.       General and Special City and/or County taxes for the fiscal
year 2000-2001, payable but not yet due.

         2.       Lien of supplemental taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.

         3.       Easement Deed to the City of Sunnyvale, recorded October 9,
1964 in Book 6695, page 415.

         4.       Easement Deed to the City of Sunnyvale, recorded October 9,
1964 in Book 6695, page 437.

         5.       Easement Deed to the City of Sunnyvale, recorded September 2,
1966 in Book 7494, page 638, as modified by Quitclaim Deed from the City of
Sunnyvale to Moffett Park Associates, recorded October 24, 1967 in Book 7903,
page 280.

         6.       Agreement between the City of Sunnyvale and Moffett Park
Associates, recorded November 2, 1966 in Book 7552, page 688; as amended,
recorded April 21, 1967 in Book 7700, page 638; and as amended, recorded
February 23, 1968 in Book 8034, page 631.

         7.       Declaration of Protective Covenants by Moffett Industrial Park
No. 1, recorded January 5, 1968 in Book 7985, page 605; as amended, recorded
September 27, 1968 in Book 8277, page 704; and as assigned, recorded January 17,
1977 in Book C541, page 367.

         8.       Easement to Pacific Gas and Electric Company, recorded January
31, 1973 in Book O217, page 330.

         9.       Notice Affecting Real Property - Waiver of Construction
Credits, recorded September 28, 1976 in Book C307, page 346.

         10.      Ingress and Egress for Driveway Easement which have not been
reserved or conveyed of record.

         11.      Easement Deed to the City of Sunnyvale, recorded January 28,
1977 in Book C565, page 679.

         12.      Access easement shown on plat recorded in Maps 388, page 32.

         13.      Easement Deed to Santa Clara County Transit District, recorded
April 8, 1997 as Instrument No. 13664365.


                                       50
<PAGE>   54

         14.      The following matters shown on the ALTA/ALCM Land Title Survey
prepared by Kier & Wright Civil Engineers & Surveyors, Inc., dated November
1996, last revised April 10, 1997, and bearing Job No. 85020-3.

                  a.       The fact that a concrete curb encroach onto said
lands 1.08 feet. Affects the Southeasterly portion of Parcel One.

                  b.       The fact that there is a sign located near the most
Southerly corner of Parcel One.

                  c.       The fact that there are water valve, fire service
box, water meter and anti syph valves located on or near the Southeasterly
boundary of Parcel One.

                  d.       The fact that there are traffic signals and traffic
boxes located near the most Easterly corner of Parcel One.

                  e.       The fact that there are P.G. & E; Pacific Telephone
and Telegraph, Telephone, Transformer and Street Light Boxes located on or near
the Northeasterly boundary of Parcel One.

                  f.       The fact that there is a service pedestal located in
the Northeasterly portion of Parcel One.

                  g.       The fact that there are two 0.7 wide walls located in
the Northeasterly portion of Parcel One.

                  h.       The fact that there is an electrolier located in the
Northwesterly portion of Parcel One.

                  i.       The fact that there are irrigation boxes located in
the Northwesterly portion of Parcel One.

                  j.       The fact that there is a nitrogen line located in the
Northerly and Westerly portion of Parcel Two.

                  k.       The fact that there is a gas line located in the
Northerly portion of Parcel Two.

         15.      Deed of Trust to Spec (CA) QRS 12-20, Inc., recorded April 14,
1997 under Serial No. 13671353.

         16.      Assignment of Rents to State Farm Life Insurance Company,
recorded April 14, 1997 as Instrument No. 13671354.

         17.      Unrecorded Lease between Spec (CA) QRS 12-20, Inc. and
Spectrian Corporation, recorded November 19, 1996 under Serial No. 13528640, by
the provision of an Agreement between Spectrian Corporation, Spec (CA) QRS
12-20, Inc. and State Farm Life Insurance Company, recorded April 14, 1997 as
Instrument No. 13671355.


                                       51
<PAGE>   55

         18.      Easement Deed by and between Gibraltar Court Associates, LLC
and Site One, LLC, recorded December 16, 1999 as Instrument No. 15092766.


                                       52
<PAGE>   56

                                                                       EXHIBIT D

                               BASIC RENT PAYMENTS

         1.       Basic Rent.

                  (a)      Initial Term. Subject to the adjustments provided for
in Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Term shall
be $906,984.48 per annum, payable quarterly in advance on each Basic Rent
Payment Date, in equal installments of $226,746.12 each.

                  (b)      Renewal Term. Subject to the adjustments provided for
in Paragraphs 2, 3 and 4 below, per annum Basic Rent for each Renewal Term shall
be an amount equal to the greater of $18.03 per sq. ft. triple-net (which shall
be not less than 50,311 square feet for the Leased Premises) or the Fair Market
Rental Value as of the first day of the applicable Renewal Term, as determined
in accordance with Paragraph 29 of the Lease.

         2.       CPI Adjustments to Basic Rent; Arbitration of Disputes. The
Basic Rent shall be subject to adjustment, in the manner hereinafter set forth,
for increases in the index known as United States Department of Labor, Bureau of
Labor Statistics, Consumer Price Index, All Urban Consumers, United States City
Average, All Items (1982-84=100) ("CPI") or the successor index that most
closely approximates the CPI. If the CPI shall be discontinued with no successor
or comparable successor index, Landlord and Tenant shall attempt to agree upon a
substitute index or formula, but if they are unable to so agree, then the matter
shall be determined by arbitration in accordance with the rules of the American
Arbitration Association then prevailing in New York City. Any decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the Basic Rent as adjusted by the CPI adjustment
be less than the Basic Rent in effect for the three (3) year period immediately
preceding such adjustment or, with respect to each Renewal Term, be less than
the Basic Rent determined for such Renewal Term (as described in Paragraph 1(b)
above).

         3.       Arbitration of Disputes. NOTICE: BY INITIALLING IN THE SPACE
BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED
IN PARAGRAPH 2 ABOVE DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA
LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL UNLESS THOSE RIGHTS ARE
SPECIFICALLY INCLUDED IN PARAGRAPH 2 ABOVE. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.


                                       53
<PAGE>   57

         WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN PARAGRAPH 2 ABOVE TO NEUTRAL
ARBITRATION."

         /s/ Michael Angel                  /s/ AHB
         -----------------                  ----------------
         LANDLORD                           TENANT

         4.       Effective Date of CPI Adjustments. Basic Rent shall not be
adjusted to reflect changes in the CPI until the third (3rd) anniversary of the
Basic Rent Payment Date (as defined in the Master Lease) on which the first full
quarterly installment of Master Lease Basic Rent was due and payable from
Landlord to Master Landlord under the Master Lease (the "First Full Basic Rent
Payment Date"). As of the third (3rd) anniversary of the First Full Basic Rent
Payment Date under the Master Lease and thereafter on the sixth (6th), ninth
(9th) and twelfth (12th) anniversaries of the First Full Basic Rent Payment Date
under the Master Lease, Basic Rent (as defined in this Sublease) shall be
adjusted to reflect increases in the CPI during the most recent three (3) year
period immediately preceding each of the foregoing dates (each such date being
hereinafter referred to as "Basic Rent Adjustment Date"). If the Initial Term of
the Sublease is renewed, then as of the third (3rd) anniversary of the date on
which the first full quarterly installment of Master Lease Basic Rent shall be
due and payable for the corresponding Renewal Term (as defined in the Master
Lease) under the Master Lease (each such date also a "First Full Basic Rent
Payment Date"), Basic Rent (as defined under this Sublease) shall be adjusted to
reflect increases in the CPI during the first three (3) years of applicable
Renewal Term under this Sublease (each such date also a "Basic Rent Adjustment
Date").

         5.       Method of Adjustment for CPI Adjustment.

                  (a)      As of each Basic Rent Adjustment Date, the Basic Rent
in effect immediately prior to such date shall be multiplied by seventy-five
percent (75%) of the Aggregate CPI Increase (as hereinafter defined) and the
product of such multiplication shall be added to the Basic Rent in effect
immediately prior to such Basic Rent Adjustment Date.

         "Aggregate CPI Increase" shall mean the product of the sums of one (1)
plus each of the compounded increases (but not decreases) in the Relevant CPI
(as hereinafter defined) for each of the three (3) 12-month periods ending on
the first, second and third anniversaries (each such anniversary being a
"Calculation Date") of the first full Basic Rent Payment Date (in the case of
the First Basic Rent Adjustment Date) or the preceding Basic Rent Adjustment
Date (in the case of each subsequent Basic Rent Adjustment Date) over the
Relevant CPI for the previous 12-month period (each an "Annual Increase") from
which product shall be subtracted one (1); provided, that if the Annual Increase
for any 12-month period is greater than 4.5%, then the Annual Increase for such
12-month period shall be deemed to be 4.5%. The Relevant CPI for the 12-month
period ending on any Calculation Date shall be equal to the average CPI for the
three (3) calendar months published on or before the forty-fifth day preceding
such Calculation Date (the "Prior Months"), and the Relevant CPI for each of the
preceding 12-month periods shall be equal to the average CPI for the three (3)
months of such 12-month period which correspond to the Prior Months.


                                       54
<PAGE>   58

         By way of example and not of limitation, if, immediately prior to the
Basic Rent Adjustment Date occurring on the ninth (9th) anniversary of the First
Full Basic Rent Payment Date, Basic Rent is $100 and the increases in the
Relevant CPI for the three (3) preceding years are 2%, 0% and 12%, respectively,
the Aggregate CPI Increase will be as follows: (1.02 x 1.0 x 1.045) = 1.0659 - 1
= .0659 x .75 or .0494; then, .0494 x $100 = $4.94; then $100 + $4.94 = $104.94,
which is the new Basic Rent. Said another way, .0494 + 1 = 1.0494; then, $100 x
1.0494 = $104.94, which is the new Basic Rent.

         (b)      Notice of the new annual Basic Rent shall be delivered to
Tenant on or before the tenth (10th) day preceding each Basic Rent Adjustment
Date.

         6.       Basic Rent Corresponds to Master Lease Basic Rent.
Notwithstanding anything set forth in this Sublease that may be construed to the
contrary, in no event shall the Basic Rent due from Tenant during the Term of
this Sublease, including, without limitation, any Renewal Term, as such Basic
Rent may be adjusted from time to time by the CPI adjustment provided for
hereunder, be less than forty-five percent (45%) of the Master Lease Basic Rent
(as the same may be adjusted from time to time under the Master Lease) due from
Landlord to Master Landlord for the Gibraltar Premises and the West Java
Premises under the Master Lease for the corresponding portion of the Term (as
defined in the Master Lease) thereunder, including, without limitation, any
Renewal Term (as defined under the Master Lease) thereunder.


                                       55
<PAGE>   59


                                                                       EXHIBIT E
                                  FLOOR AMOUNT

<TABLE>
<CAPTION>
                             Prior to             From and after
                             12/1/2001              12/1/2001

<S>                          <C>                  <C>
Leased Premises              $7,939,791             $7,312,500
</TABLE>


                                       56
<PAGE>   60


                                                                       EXHIBIT F
                              APPROVED INVESTMENTS



                  (A)      U.S. government obligations.

                  (B)      Certificates of Deposit issued by one of the twenty
                           (20) largest U.S. banks.

                  (C)      Corporate bonds having an AAA or better rating.


                                       57
<PAGE>   61


                                                                       EXHIBIT G

                               FINANCIAL COVENANTS

         1.       Mergers and Sale of Assets.

                  (a)      Tenant shall not consolidate with or merge with any
other corporation unless, immediately following such consolidation or merger,
the surviving corporation shall have, on a pro-forma basis and, after giving
effect thereto, an Adjusted Consolidated Tangible Net Worth of not less than the
Adjusted Consolidated Tangible Net Worth of Tenant and its Consolidated
Subsidiaries immediately prior to such merger or consolidation.

                  (b)      Tenant shall not, in a single transaction or a series
of related transactions, sell, convey, transfer, abandon or lease all or
substantially all of its assets to any Person except for a sale, transfer,
conveyance, lease or other disposition to a Person that shall assume the
obligations and liabilities of Tenant under this Sublease and that, immediately
following such sale, transfer or conveyance, and after given effect thereto, has
an Adjusted Consolidated Tangible Net Worth of not less than Thirty Million
Dollars ($30,000,000).

         2.       Restricted Payments. Tenant will not, directly or indirectly
make, or cause or permit any Subsidiary of Tenant to make, any Restricted
Payment, unless at the time thereof, and after giving effect thereto:

                  (a)      no Event of Default shall have occurred and be
continuing; and

                  (b)      Tenant's Adjusted Consolidated Tangible Net Worth
equals or exceeds $40,150,000 at the end of the month preceding such payment.

         3.       Definitions. For the purpose of this Exhibit "G" the following
terms shall have the following meanings:

                  "Adjusted Consolidated Tangible Net Worth" shall mean, at any
date, the tangible net worth of any Person and its consolidated Subsidiaries on
a consolidated basis, determined in accordance with GAAP.

                  "GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America, applied on a
consistent basis.

                  "Person" shall mean an individual, partnership, association,
corporation or other entity.

                  "Restricted Payment" shall mean and include (a) any direct or
indirect purchase, redemption or other acquisition or retirement for value of
any equity security of Tenant or any option, warrant or right to acquire any
such equity security, or any security convertible into or exchangeable for any
such equity security by any Person other than Cree, and (b) any dividend,
distribution, whether in cash or property and whether direct or indirect, to or
for the benefit any Person (other than Cree) holding an equity interest in the
Tenant or any affiliate of any such Person (other than Cree).


                                       58
<PAGE>   62

                  "Subsidiary" of any Person means a corporation a majority of
the capital stock of which is at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or intermediaries, or
both, by such Person.


                                       59
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.01
<SEQUENCE>4
<FILENAME>g66404ex99-01.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>

<PAGE>   1
                                                                   EXHIBIT 99.01

FOR IMMEDIATE RELEASE
CONTACT:
Fran Barsky
Investor Relations Manager
Cree, Inc.
(T) 919-313-5397
(F) 919-313-5452
email: fran_barsky@cree.com

                      CREE COMPLETES ACQUISITION OF ULTRARF
                 SEMICONDUCTOR DIVISION OF SPECTRIAN CORPORATION

Durham, NC, January 2, 2001 - Cree, Inc. (Nasdaq: CREE) today announced it
completed the acquisition of UltraRF, formerly a division of Spectrian
Corporation (Nasdaq: SPCT) on December 29, 2000. UltraRF designs, manufactures
and markets a complete line of LDMOS and bipolar radio frequency (RF) power
semiconductors, the critical component utilized in building power amplifiers for
wireless infrastructure applications. UltraRF, which will operate as a
wholly-owned Cree subsidiary, plans to expand its product offerings to include
RF power semiconductors based on Cree's proprietary silicon carbide (SiC)
technology.

At closing, Cree's UltraRF subsidiary acquired the assets of the UltraRF
business from Spectrian and assumed certain liabilities of the business. In
exchange, Cree issued to Spectrian 1,815,402 shares of Cree common stock plus
additional Cree shares worth $30 million. In addition, UltraRF entered into a
two-year supply agreement with Spectrian under which Spectrian will purchase
UltraRF products representing a significant portion of its anticipated needs.
Cree, UltraRF and Spectrian also entered into a one-year development agreement
under which Cree and UltraRF will work to develop high gain driver modules and
high efficiency power modules based on LDMOS materials and high power MESFET
components based on SiC materials. The acquisition will be accounted for as a
purchase transaction.

Neal Hunter, Chairman and CEO stated, "The combination of UltraRF and Cree
enables us to offer customers a range of high performance RF power components.
It gives us a broad technology platform, with LDMOS, SiC and gallium nitride
(GaN) capabilities unmatched in the industry today, from which to develop new RF
and microwave devices. The acquisition also strengthens Cree by adding a new
source of product revenues and by providing additional design, packaging and
distribution capabilities for our SiC-based products and the new SiC and
GaN-based devices we have under development."

North Carolina-based Cree, Inc. develops and manufactures semiconductor
materials and devices based on silicon carbide (SiC), gallium nitride (GaN) and
related compounds. The company's products include blue and green LEDs, RF power
transistors for use in wireless infrastructure applications, SiC crystals used
in the production of unique gemstones and SiC wafers sold for use in research
and development. Cree has new product initiatives based on its experience in SiC
and GaN-based semiconductors, including blue laser diodes for optical storage
applications, high frequency microwave devices for radar and other
communications systems, and power devices for power conditioning and switching.
For more information on Cree, visit http://www.cree.com.

This press release contains forward-looking statements involving risks and
uncertainties that may cause actual results to differ materially from those
indicated. Actual results may differ materially due to a number of factors,
including our ability to integrate the operations of the combined companies
successfully, the risk that the combined companies may not achieve the results
expected, the risk that the costs of integrating the companies may be greater
than expected, continued growth in wireless communication and pauses in such
growth as are periodically experienced in the market, our ability to manufacture
new or existing products in sufficient quantity or quality, worldwide economic
conditions and other factors discussed in our report on Form 10-K for the year
ended June 25, 2000 and subsequent reports filed with the Securities and
Exchange Commission.

</TEXT>
</DOCUMENT>
</SUBMISSION>
