BASIC LEASE INFORMATION



LEASE DATE:                         December 19, 1997


TENANT:                             Spectrian Corporation
                                    a Delaware corporation

TENANT'S ADDRESS:                   350 West Java Drive
                                    Sunnyvale, CA  94089


LANDLORD:                           Stanford Ranch I, LLC
                                    a Delaware limited liability company

LANDLORD'S ADDRESS:                 P.O. Box 1200
                                    Rocklin, CA  95677-1200


Project:                            Atherton Tech Center, Lot 10
                                    Rocklin, CA  95765


Building Description:               An approximate 40,000 SF single-story
                                    concrete tilt-up building.



Premises:                           Approximately  20,858 square feet of office,
                                    tech,  and warehouse  space  situated on the
                                    western  side  of  the   building   commonly
                                    referred  to as  Suite  500  located  within
                                    Atherton  Tech Center on Lot 10 and outlined
                                    on the floor plan attached hereto as Exhibit
                                    A.



Permitted Use:                      General office, manufacturing, storage and
                                    shipping



Parking Density:                    Tenant shall have the right to 83 parking
                                    spaces.


Estimated Term
Commencement Date:                  June 1, 1998


Length of Term:                     Five (5) years.


Base Rent:                          Shall be $17,729.30 per month or $0.85 per
                                    SF NNN


Landlord's Expense:                 Net, Net, Net


Security Deposit:                   None



Tenant's Proportionate Share:       52.1%



Broker:                             Cornish & Carey Commercial
                                    1601 Response Road, Suite 160
                                    Sacramento, CA  95815



The foregoing Basic Lease  Information is  incorporated  into and made a part of
this Lease.  Each reference in this Lease to any of the Basic Lease  Information
shall  mean  the  respective   information  above  and  shall  be  construed  to
incorporate  all of the terms  provided  under the  particular  Lease  paragraph
pertaining to such  information.  In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.

                                        i

<PAGE>



                                TABLE OF CONTENTS

                  Basic Lease Information......................................i
                  Table of Contents...........................................ii
         1.       Premises ....................................................1
         2.       Possession and Lease Commencement............................1
         3.       Term.........................................................1
         4.       Use..........................................................1
         5.       Rules and Regulations........................................2
         6.       Rent ........................................................2
         7.       Basic Operating Cost.........................................3
         8.       Insurance and Indemnification................................4
         9.       Waiver of Subrogation .......................................6
         10.      Landlord's Repairs and Services..............................6
         11.      Tenant's Repairs.............................................6
         12.      Alterations..................................................6
         13.      Signs........................................................7
         14.      Inspection/Posting Notices...................................7
         15.      Utilities....................................................7
         16.      Subordination................................................7
         17.      Financial Statements.........................................8
         18.      Estoppel Certificate.........................................8
         19.      Security Deposit.............................................8
         20.      Tenant's Remedies............................................8
         21.      Assignment and Subletting....................................8
         22.      Authority of Parties ........................................9
         23.      Condemnation.................................................9
         24.      Casualty Damage............................................. 9
         25.      Holding Over................................................10
         26.      Default ....................................................10
         27.      Liens.......................................................12
         28.      Substitution................................................12
         29.      Transfers by Landlord.......................................12
         30.      Right of Landlord to Perform Tenant's Covenants.............12
         31.      Waiver......................................................12
         32.      Notices.....................................................12
         33.      Attorneys' Fees.............................................13
         34.      Successors and Assigns......................................13
         35.      Force Majeure...............................................13
         36.      Brokerage Commission........................................13
         37.      Miscellaneous...............................................13
         38.      Additional Provisions.......................................14
                  Signatures..................................................14

         First Addendum to Lease

         Exhibits:
         Exhibit A...................................................  Site Plan
         Exhibit B.................................................  Work Letter
         Exhibit C.....................................  Standard Specifications
         Exhibit D.................................................  Sign Policy
         Exhibit E.......................................  Rules and Regulations
         Exhibit F...............................  Permitted Hazardous Materials

                                       ii

<PAGE>
                                      LEASE

         THIS  LEASE  is made as of this  19th  day of  December,  1997,  by and
between  STANFORD RANCH I, LLC  (hereinafter  called  "Landlord")  and SPECTRIAN
CORPORATION (hereinafter called "Tenant").

1.       PREMISES.

         Landlord  leases to Tenant and Tenant  leases from  Landlord,  upon the
terms and conditions  hereinafter  set forth,  those  premises (the  "Premises")
depicted on the floor plan dated November 6, 1997,  attached hereto as Exhibit A
and described in the Basic Lease Information. The Premises may be all or part of
the  building  (the  "Building")  or of the project  (the  "Project")  which may
consist  of more than one  building.  The  Building  and  Project  are  depicted
respectively on Exhibit A.

2.       POSSESSION AND LEASE COMMENCEMENT.

         A. Intentionally Omitted.

         B. Construction  of  Improvements.  The term  commencement  date ("Term
Commencement  Date") shall be the earlier of the date on which: (1) Tenant takes
possession of some or all of the Premises,  or (2) the improvements  constructed
or to be constructed in the Premises shall have been substantially  completed in
accordance  with the plans and  specifications  described on Exhibits A, B and C
attached  hereto,  whether or not substantial  completion of the Building itself
shall have occurred,  and Landlord has delivered to Tenant a copy of a temporary
or permanent  occupancy  permit.  In no event shall the Term  Commencement  Date
occur  sooner than June 1, 1998,  unless  Tenant  agrees to the earlier  date in
writing. If for any reason Landlord cannot deliver possession of the Premises to
Tenant on the Estimated Term Commencement Date, Landlord shall not be subject to
any liability therefor, nor shall Landlord be in default hereunder. In the event
of any dispute as to substantial  completion of work performed or required to be
performed  by  Landlord,  the  certificate  of  Landlord's  architect or general
contractor  shall be  conclusive.  Substantial  completion  shall have  occurred
notwithstanding  Tenant's  submission  of a punchlist to Landlord,  which Tenant
shall submit,  if at all,  within  thirty (30) days after the Term  Commencement
Date. As of the Term Commencement  Date,  Tenant  acknowledges that Tenant shall
have  inspected the Premises and will accept the Premises in their then existing
"as is"  condition,  broom  clean,  as  suitable  for the  purpose for which the
Premises are leased, and Tenant agrees that said Premises and other improvements
are in good and satisfactory  condition as of when possession was taken, subject
only to the punchlist. Tenant further acknowledges that no representations as to
the  condition  or repair of the  Premises  nor  promises  to alter,  remodel or
improve the Premises  have been made by Landlord  unless such are  expressly set
forth in this Lease. Tenant shall, upon demand,  execute and deliver to Landlord
a letter of  acceptance  of delivery of the  Premises.  In no event,  subject to
Paragraph 35, shall the Term Commencement Date be later than December 31, 1998.

3.       TERM.  The Term of this Lease shall  commence on the Term  Commencement
Date and continue in full force and effect for the number of months specified as
the  Length  of Term in the  Basic  Lease  Information  or until  this  Lease is
terminated as otherwise provided herein. If the Term Commencement Date is a date
other than the first day of the calendar month,  the Term shall be the number of
months of the Length of Term in addition to the remainder of the calendar  month
following the Term Commencement Date.

4.       USE.

         A. General. Tenant shall use the Premises for the Permitted Use and for
no other use or  purpose.  Tenant  shall  control  Tenant's  employees,  agents,
customers, visitors, invitees, licensees, contractors,  assignees and subtenants
(collectively,  "Tenant's  Parties")  in such a manner that Tenant and  Tenant's
Parties  cumulatively do not exceed the Parking Density at any time.  Tenant and
Tenant's Parties shall have the nonexclusive  right to use, in common with other
parties  occupying  the Building or Project,  the parking areas and driveways of
the Project,  subject to such rules and regulations as Landlord may from time to
time prescribe.

         B. Limitations.  Tenant shall not permit any odors,  smoke,  dust, gas,
substances,  noise or  vibrations  to emanate  from the  Premises,  nor take any
action which would constitute a nuisance or would disturb,  obstruct or endanger
any other  tenants of the Building or Project in which the Premises are situated
or interfere with their use of their  respective  premises.  Storage outside the
Premises  of  materials,  vehicles  or any  other  items is  prohibited,  unless
Landlord approves thereof in writing, which approval may be withheld by Landlord
in its sole and absolute discretion.  Tenant shall not use or allow the Premises
to be used for any improper,  immoral,  unlawful or objectionable  purpose,  nor
shall  Tenant  cause or  maintain  or permit  any  nuisance  in, on or about the
Premises.  Tenant shall not commit or suffer the  commission of any waste in, on
or about the  Premises.  Tenant  shall not  allow any sale by  auction  upon the
Premises,  or place any loads upon the floors,  walls or ceilings which endanger
the  structure,  or place any  harmful  liquids  in the  drainage  system of the
Building  or  Project.  No waste,  materials  or refuse  shall be dumped upon or
permitted  to remain  outside the  Premises  except in trash  containers  placed
inside  exterior  enclosures  designated for that purpose by Landlord.  Landlord
shall not be responsible to Tenant for the non-compliance by any other tenant or
occupant of the Building or

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<PAGE>


Project with any of the above-referenced  rules or any other terms or provisions
of such tenant's or occupant's  lease or other contract.  Landlord agrees to use
reasonable  efforts to cause other  tenants  and  occupants  of the  Building to
comply with the above-referenced rules; however, Landlord shall not be obligated
to litigate in connection therewith.

         C. Compliance  with   Regulations.  By entering  the  Premises,  Tenant
accepts  the  Premises in the  condition  existing as of the date of such entry,
subject to all existing or future  applicable  municipal,  state and federal and
other governmental statutes, regulations, laws and ordinances,  including zoning
ordinances  and  regulations  governing  and relating to the use,  occupancy and
possession  of the Premises  and the use,  storage,  generation  and disposal of
Hazardous  Materials  (hereinafter  defined)  in,  on  and  under  the  Premises
(collectively "Regulations").  Except for pre-existing violations, Tenant shall,
at Tenant's sole expense,  strictly  comply with all Regulations now in force or
which may  hereafter  be in force  relating to the  Premises  and the use of the
Premises and/or the use, storage,  generation of Hazardous  Materials in, on and
under the Premises.  Tenant shall,  at its sole cost and expense  obtain any and
all licenses or permits necessary for Tenant's use of the Premises. Tenant shall
promptly comply with the requirements of any board of fire underwriters or other
similar  body  now or  hereafter  constituted.  Tenant  shall  not do or  permit
anything  to be done in,  on, or about the  Premises  or bring or keep  anything
which will in any way  increase  the rate of any  insurance  upon the  Premises,
Building or Project,  or upon any contents  therein or cause a  cancellation  of
said insurance or otherwise  affect said  insurance in any manner.  Tenant shall
indemnify, defend, protect and hold Landlord harmless from and against any loss,
cost, expense,  damage,  attorneys' fees or liability arising out of the failure
of Tenant to comply with any applicable law or comply with the  requirements  as
set forth herein.

         D. Hazardous  Wastes.  Tenant shall not cause, or allow any of Tenant's
Parties to cause,  any  Hazardous  Materials  to be used,  generated,  stored or
disposed of on or about the  Premises,  the Building or the Project,  except for
those Hazardous Materials listed on Exhibit "F" attached hereto,  which shall be
permitted so long as Tenant uses, stores and handles the same in compliance with
all laws. As used in this Lease, "Hazardous Materials" shall include, but not be
limited to,  hazardous,  toxic and  radioactive  materials and those  substances
defined as "hazardous  substances,"  "hazardous  materials," "hazardous wastes,"
"toxic  substances,"  or other similar  designations  in any federal,  state, or
local  law,  regulation,  or  ordinance.  Landlord  shall  have the right at all
reasonable times to inspect the Premises and to conduct tests and investigations
to determine whether Tenant is in compliance with the foregoing provisions,  and
if  same  indicate  Tenant  has  violated  any  laws,  breached  this  Lease  or
contaminated  the  Premises,  Building or Project in any way, in addition to any
and all rights and  remedies  of  Landlord,  the costs of all such  inspections,
tests and investigations to be borne by Tenant. Tenant shall indemnify,  defend,
protect and hold  Landlord  harmless from and against all  liabilities,  losses,
costs and expenses,  demands,  causes of action, claims or judgments directly or
indirectly arising out of the use, generation,  storage or disposal of Hazardous
Materials by Tenant or any of Tenant's  Parties,  which indemnity shall include,
without  limitation,  the cost of any required or necessary  repair,  cleanup or
detoxification,  and the  preparation  of any closure or other  required  plans,
whether  such  action  is  required  or  necessary  prior  to or  following  the
termination of this Lease.  Neither the written  consent by Landlord to the use,
generation, storage or disposal of Hazardous Materials nor the strict compliance
by Tenant with all laws  pertaining to Hazardous  Materials  shall excuse Tenant
from Tenant's  obligation of  indemnification  pursuant to this  Paragraph  4.D.
Tenant's  obligations  pursuant to the  foregoing  indemnity  shall  survive the
termination of this Lease.

5. RULES AND REGULATIONS.  Tenant shall  faithfully  observe and comply with any
rules and  regulations  Landlord may from time to time  prescribe in writing for
the purpose of maintaining the proper care,  cleanliness,  safety,  traffic flow
and  general  order of the  Premises  or Project.  Tenant  shall cause  Tenant's
Parties  to  comply  with  such  rules and  regulations.  Landlord  shall not be
responsible to Tenant for the  non-compliance by any other tenant or occupant of
the Building or Project with any of the rules and  regulations.  Landlord agrees
to use  reasonable  efforts to cause other tenants and occupants of the Building
to  comply  with the  above-referenced  rules;  however,  Landlord  shall not be
obligated to litigate in connection therewith.

6.       RENT.

         A. Base Rent.  Tenant shall pay to Landlord,  without demand throughout
the Term,  Base Rent as  specified  in the Basic Lease  Information,  payable in
monthly  installments  in advance  on or before  the first day of each  calendar
month,  in  lawful  money of the  United  States,  without  deduction  or offset
whatsoever,  at the address  specified in the Basic Lease Information or to such
other  place as Landlord  may from time to time  designate  in  writing.  If the
obligation  for payment of Base Rent  commences on other than the first day of a
month,  then Base Rent shall be prorated and the prorated  installment  shall be
paid  on  the  first  day  of  the  calendar  month  next  succeeding  the  Term
Commencement Date.

         B. Additional Rent. All monies other than Base Rent required to be paid
by Tenant hereunder, including, but not limited to, the interest and late charge
described in Paragraph 26.D., any monies spent by Landlord pursuant to Paragraph
30, and Tenant's  Proportionate  Share of Basic  Operating Cost, as specified in
Paragraph 7 of this Lease,  shall be  considered  additional  rent  ("Additional
Rent"). "Rent" shall mean Base Rent and Additional Rent.

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<PAGE>

7.       BASIC OPERATING COST.

         A. Basic  Operating  Cost.  In addition to the Base Rent required to be
paid  hereunder,  Tenant shall pay as Additional  Rent,  Tenant's  Proportionate
Share, as defined in the Basic Lease Information, of Basic Operating Cost in the
manner set forth below.  Landlord shall account for each item of Basic Operating
Cost as  either  a cost  attributable  to the  Building  or to the  Project,  as
determined by Landlord in Landlord's sole discretion, and unless provided to the
contrary in this Lease, Tenant shall pay the applicable  Tenant's  Proportionate
Share of each  such  Basic  Operating  Cost,  as set  forth in the  Basic  Lease
Information.  Basic  Operating  Cost shall mean all  expenses and costs of every
kind and nature which Landlord shall pay or become  obligated to pay, because of
or in connection with the management, maintenance, preservation and operation of
the  Project  and its  supporting  facilities  (determined  in  accordance  with
generally accepted accounting  principles,  consistently  applied) including but
not limited to the following:

                  (1) Taxes. All real property taxes, possessory interest taxes,
business  or license  taxes or fees,  service  payments in lieu of such taxes or
fees, annual or periodic license or use fees, excises,  transit charges, housing
fund  assessments,  open space charges,  assessments,  levies,  fees or charges,
general and special, ordinary and extraordinary, unforeseen as well as foreseen,
of any kind (including  fees "in-lieu" of any such tax or assessment)  which are
assessed,  levied,  charged,  confirmed, or imposed by any public authority upon
the Project,  its  operations or the Rent (or any portion or component  thereof)
(all of the  foregoing  being  hereinafter  collectively  referred  to as  "real
property taxes"),  or any tax imposed in substitution,  partially or totally, of
any tax previously included within the definition of real property taxes, or any
additional tax the nature of which was previously included within the definition
of real property  taxes,  except (a) inheritance or estate taxes imposed upon or
assessed against the Project,  or any part thereof or interest therein,  and (b)
taxes  computed  upon the basis of net  income of  Landlord  or the owner of any
interest therein, except as otherwise provided in the following sentence.  Basic
Operating  Cost shall also  include  any taxes,  assessments,  or any other fees
imposed by any public  authority upon or measured by the monthly rental or other
charges payable hereunder,  including,  without limitation, any gross income tax
or excise tax levied by the local governmental authority in which the Project is
located, the federal government,  or any other governmental body with respect to
receipt  of  such  rental,  or  upon,  with  respect  to or  by  reason  of  the
development,    possession,   leasing,   operation,   management,   maintenance,
alteration,  repair,  use or  occupancy by Tenant of the Premises or any portion
thereof,  or upon this  transaction  or any  document to which Tenant is a party
creating or transferring an interest or an estate in the Premises.  In the event
that it shall not be lawful for Tenant to reimburse Landlord for all or any part
of such taxes,  the monthly rental payable to Landlord under this Lease shall be
revised to net to  Landlord  the same net rental  after  imposition  of any such
taxes by Landlord as would have been payable to Landlord prior to the payment of
any such taxes.

                  (2) Insurance. All insurance premiums and costs, including but
not limited to, any deductible amounts,  premiums and cost of insurance incurred
by Landlord, as more fully set forth in Paragraph 8.A. herein.

                  (3)  Repairs  and  Improvements.   Repairs,  replacements  and
general  maintenance  for the Premises,  Building and Project  (except for those
repairs expressly made the financial  responsibility of Landlord pursuant to the
terms of this Lease,  repairs to the extent paid for by proceeds of insurance or
by Tenant or other third parties, and alterations attributable solely to tenants
of the Project  other than  Tenant).  Such  repairs,  replacements,  and general
maintenance  shall  include  the  cost of any  capital  improvements  made to or
capital assets  acquired for the Project,  Building,  or Premises after the Term
Commencement  Date that reduce any other Basic  Operating  Cost,  are reasonably
necessary for the health and safety of the occupants of the Project, or are made
to the Building by Landlord  after the date of this Lease and are required under
any governmental law or regulation,  such costs or allocable portions thereof to
be amortized over such reasonable  period as Landlord shall determine,  together
with interest on the unamortized balance at the "prime rate" charged at the time
such  improvements  or capital assets are constructed or acquired by Wells Fargo
Bank, N.A. (San Francisco), plus two (2) percentage points, but in no event more
than the maximum rate permitted by law.

                  (4) Services. All expenses relating to maintenance, janitorial
and service agreements and services, and costs of supplies and equipment used in
maintaining the Premises, Building and Project and the equipment therein and the
adjacent sidewalks,  driveways,  parking and service areas,  including,  without
limitation,  alarm service,  window  cleaning,  elevator  maintenance,  Building
exterior maintenance and landscaping.

                  (5) Utilities. Utilities which benefit all or a portion of the
Premises, Building or Project.

                  (6) Management  Fee. A management and accounting cost recovery
fee equal to three  percent  (3%) of the sum of Base  Rent and  Basic  Operating
Cost.

                  (7)  Legal  and  Accounting.  Legal  and  accounting  expenses
relating  to the  Project,  including  the cost of  audits by  certified  public
accountants.

In the event that the Building is not fully  occupied  during any fiscal year of
the Term as determined by Landlord, an adjustment shall be made in computing the
Basic  Operating  Cost for such year so that Tenant pays Tenant's  Proportionate
Share of Basic Operating Cost, with variable costs increased on an

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<PAGE>
extrapolated basis to what they would be if the Building was fully occupied,  as
reasonably  determined by Landlord;  provided,  however,  that in no event shall
Landlord be entitled to collect in excess of one hundred  percent  (100%) of the
total Basic  Operating  Cost from all of the tenants in the  Building  including
Tenant.

Basic  Operating Cost shall not include  specific costs incurred for the account
of, separately billed to and paid by specific tenants.

         B. Payment  of   Estimated  Basic  Operating  Cost.   "Estimated  Basic
Operating Cost" for any particular  year shall mean  Landlord's  estimate of the
Basic  Operating  Cost for such fiscal year made prior to  commencement  of such
fiscal year as hereinafter provided.  Landlord shall have the right from time to
time to revise its fiscal  year and  interim  accounting  periods so long as the
periods as so revised  are  reconciled  with prior  periods in  accordance  with
generally accepted accounting  principles applied in a consistent manner. During
the last month of each  fiscal year during the Term,  or as soon  thereafter  as
practicable,  Landlord shall give Tenant  written notice of the Estimated  Basic
Operating  Cost  for  the  ensuing  fiscal  year.   Tenant  shall  pay  Tenant's
Proportionate  Share of the Estimated Basic Operating Cost with  installments of
Base  Rent for the  fiscal  year to which the  Estimated  Basic  Operating  Cost
applies in monthly  installments  on the first day of each calendar month during
such year,  in  advance.  If at any time  during the course of the fiscal  year,
Landlord determines that Basic Operating Cost is projected to vary from the then
Estimated Basic Operating Cost by more than ten percent (10%),  Landlord may, by
written  notice to Tenant,  revise the Estimated  Basic  Operating  Cost for the
balance of such fiscal year, and Tenant's monthly installments for the remainder
of such year shall be adjusted so that by the end of such fiscal year Tenant has
paid to Landlord  Tenant's  Proportionate  Share of the revised  Estimated Basic
Operating Cost for such year.

         C. Computation  of Basic Operating Cost  Adjustment.  "Basic  Operating
Cost  Adjustment"  shall mean the difference  between  Estimated Basic Operating
Cost and Basic  Operating  Cost for any fiscal year  determined  as  hereinafter
provided.  Within one  hundred  twenty  (120) days after the end of each  fiscal
year,  Landlord shall deliver to Tenant a statement of Basic  Operating Cost for
the fiscal year just ended, accompanied by a computation of Basic Operating Cost
Adjustment.  It such statement shows that Tenant's  payment based upon Estimated
Basic  Operating  Cost  is less  than  Tenant's  Proportionate  Share  of  Basic
Operating Cost,  then Tenant shall pay to Landlord the difference  within thirty
(30) days after receipt of such statement. If such statement shows that Tenant's
payments of Estimated Basic Operating Cost exceed Tenant's  Proportionate  Share
of Basic Operating Cost, then (provided that Tenant is not in default under this
Lease) Landlord shall pay to Tenant the difference within thirty (30) days after
delivery of such statement to Tenant.  If this Lease has been  terminated or the
Term  hereof has  expired  prior to the date of such  statement,  then the Basic
Operating Cost Adjustment  shall be paid by the appropriate  party within thirty
(30)  days  after the date of  delivery  of the  statement.  Should  this  Lease
commence or  terminate  at any time other than the first day of the fiscal year,
Tenant's  Proportionate  Share of the Basic Operating Cost  adjustment  shall be
prorated by reference  to the exact  number of calendar  days during such fiscal
year that this Lease is in effect.

         D. Net Lease.  This shall be a net Lease and Base Rent shall be paid to
Landlord  absolutely  net of all costs  and  expenses,  except  as  specifically
provided  to the  contrary in this Lease,  The  provisions  for payment of Basic
Operating Cost and the Basic  Operating Cost  Adjustment are intended to pass on
to Tenant  and  reimburse  Landlord  for all costs and  expenses  of the  nature
described  in  Paragraph  7.A.   incurred  in  connection  with  the  ownership,
maintenance  and  operation  of the  Building  or  Project  and such  additional
facilities  now and in  subsequent  years as may be determined by Landlord to be
necessary to the Building or Project.

         E. Tenant Audit.  In the event that Tenant shall dispute the amount set
forth in any statement  provided by Landlord under Paragraph 7.B. or 7.C. above,
Tenant  shall have the right,  not later than  thirty  (30) days  following  the
receipt of such statement and upon the condition that Tenant shall first deposit
with Landlord the full amount in dispute,  to cause Landlord's books and records
with  respect  to Basic  Operating  Cost for such  fiscal  year to be audited by
certified  public  accountants  selected  by Tenant and  subject  to  Landlord's
reasonable  right of approval.  The Basic  Operating  Cost  Adjustment  shall be
appropriately  adjusted  on the basis of such audit.  If such audit  discloses a
liability for a refund in excess of ten percent (10%) of Tenant's  Proportionate
Share of the Basic Operating Cost Adjustment  previously  reported,  the cost of
such audit shall be borne by Landlord; otherwise the cost of such audit shall be
paid by Tenant.  If Tenant  shall not  request an audit in  accordance  with the
provisions  of this  Paragraph,  i.e.,  within thirty (30) days after receipt of
Landlord's statement provided pursuant to Paragraph 7.B. or 7.C., such statement
shall be final and binding for all purposes hereof.

8.       INSURANCE AND INDEMNIFICATION.

         A. Landlord's Insurance. Landlord agrees to maintain insurance insuring
the  Building  against  fire,   lightning,   vandalism  and  malicious  mischief
(including,  if Landlord elects, "All Risk" coverage,  earthquake,  and/or flood
insurance),  in an amount not less than eighty percent (80%) of the  replacement
cost thereof, with deductibles and the form and endorsements of such coverage as
selected by Landlord.  Such  insurance may also include,  at Landlord's  option,
insurance  against loss of Base Rent and Additional  Rent, in an amount equal to
the amount of Base Rent and Additional Rent payable by Tenant for a period of at
least twelve (12) months commencing on the date of loss. Such insurance shall be
for the sole benefit of Landlord and under  Landlord's  sole  control.  Landlord
shall not be obligated to insure any furniture,  equipment,  machinery, goods or
supplies which Tenant may keep or maintain in the

                                        4
<PAGE>

Premises,  or any leasehold  improvements,  additions or alterations  within the
Premises.  Landlord  may also carry such other  insurance  as Landlord  may deem
prudent or advisable, including, without limitation, liability insurance in such
amounts and on such terms as Landlord shall determine.

         B.       Tenant's insurance.

                  (1) Property Insurance.  Tenant shall procure at Tenant's sole
cost and expense and keep in effect from the date of this Lease and at all times
until the end of the Term,  insurance on all  personal  property and fixtures of
Tenant and all improvements made by or for Tenant to the Premises, insuring such
property for the full replacement value of such property.

                  (2) Liability Insurance. Tenant shall procure at Tenant's sole
cost and expense and keep in effect from the date of this Lease and at all times
until the end of the Term either  Comprehensive  General Liability  insurance or
Commercial General Liability  insurance applying to the use and occupancy of the
Premises  and the  Building,  and any part of  either,  and any  areas  adjacent
thereto,  and the business  operated by Tenant,  or by any other occupant on the
Premises.   Such  insurance  shall  include  Broad  Form  Contractual  Liability
Insurance  coverage  insuring all of Tenant's  indemnity  obligations under this
Lease.  Such coverage shall have a minimum combined single limit of liability of
at least Two Million Dollars  ($2,000,000.00),  and a general aggregate limit of
Three Million  Dollars  ($3,000,000.00).  All such policies  shall be written to
apply to all bodily injury,  property damage or loss,  personal injury and other
covered loss,  however  occasioned,  occurring  during the policy term, shall be
endorsed to add Landlord  and any party  holding an interest to which this Lease
may be  subordinated  as an  additional  insured,  and shall  provide  that such
coverage shall be primary and that any insurance maintained by Landlord shall be
excess  insurance  only.  Such  coverage  shall also contain  endorsements:  (i)
deleting any employee  exclusion on personal  injury  coverage;  (ii)  including
employees as additional insureds; (iii) deleting any liquor liability exclusion;
and  (iv)  providing  for  coverage  of  employer's  automobile  non-  ownership
liability. All such insurance shall provide for severability of interests; shall
provide that an act or omission of one of the named insureds shall not reduce or
avoid coverage to the other named  insureds;  and shall afford  coverage for all
claims based on acts,  omissions,  injury and damage,  which claims  occurred or
arose (or the onset of which  occurred  or arose) in whole or in part during the
policy  period.  Said coverage  shall be written on an  "occurrence"  basis,  if
available. If an "occurrence" basis form is not available.  Tenant must purchase
"tail"  coverage  for the most number of years  available,  and Tenant must also
purchase "tail" coverage if the retroactive  date of an "occurrence"  basis form
is  changed so as to leave a gap in  coverage  for  occurrences  that might have
occurred in prior years. If a "claims made" policy is ever used, the policy must
be endorsed so that  Landlord  is given the right to  purchase  "tail"  coverage
should  Tenant for any reason not do so or if the policy is to be  canceled  for
nonpayment of premium.

                  (3) General Insurance Requirements. All coverages described in
this Paragraph 8.B. shall be endorsed to provide Landlord with thirty (30) days'
notice of  cancellation  or change in terms.  If at any time during the Term the
amount or coverage  of  insurance  which  Tenant is required to carry under this
Paragraph 8.B. is, in Landlord's  reasonable judgment,  materially less than the
amount or type of insurance  coverage  typically carried by owners or tenants of
properties  located in the general area in which the Premises are located  which
are similar to and operated for similar purposes as the Premises, Landlord shall
have the right to require  Tenant to increase  the amount or change the types of
insurance  coverage  required under this  Paragraph 8.B. All insurance  policies
required to be carried under this Lease shall be written by companies  rated A +
XII or better in "Best's  Insurance  Guide" and  authorized  to do  business  in
California.  Any  deductible  amounts  under  any  insurance  policies  required
hereunder shall be subject to Landlord's  prior written  approval.  In any event
deductible amounts shall not exceed Ten Thousand Dollars ($10,000.00), provided,
however,  that the original Tenant may have a deductible of up to Fifty Thousand
Dollars  ($50,000.00).  Tenant  shall  deliver to Landlord on or before the Term
Commencement  Date,  and  thereafter  at  least  thirty  (30)  days  before  the
expiration  dates  of  the  expiring  policies,  certified  copies  of  Tenant's
insurance policies,  or a certificate  evidencing the same issued by the insurer
thereunder, showing that all premiums have been paid for the full policy period;
and, in the event  Tenant shall fail to procure  such  insurance,  or to deliver
such  policies  or  certificates,  Landlord  may,  at  Landlord's  option and in
addition  to  Landlord's  other  remedies  in the event of a  default  by Tenant
hereunder,  procure  the same for the  account of Tenant,  and the cost  thereof
shall be paid to Landlord as Additional Rent.

         C. Indemnification. Landlord shall not be liable to Tenant for any loss
or damage to person or property  caused by theft,  fire,  acts of God, acts of a
public enemy, riot, strike, insurrection, war, court order, requisition or order
of governmental  body or authority or for any damage or inconvenience  which may
arise  through  repair or  alteration  of any part of the Building or Project or
failure to make any such  repair,  except as  expressly  otherwise  provided  in
Paragraph 10. Tenant shall indemnify,  defend by counsel acceptable to Landlord,
protect and hold  Landlord  harmless  from and against any and all  liabilities,
losses,  costs, damages,  injuries or expenses,  including reasonable attorneys'
fees and court  costs,  arising out of or related to: (1) claims of injury to or
death of  persons or damage to  property  occurring  or  resulting  directly  or
indirectly  from the use or occupancy of the  Premises,  or from  activities  of
Tenant,  Tenant's Parties or anyone in or about the Premises or Project, or from
any cause whatsoever;  (2) claims for work or labor performed,  or for materials
or  supplies  furnished  to or at the  request  of  Tenant  in  connection  with
performance  of any work done for the account of Tenant  within the  Premises or
Project; and (3) claims arising from any breach or default on the part of Tenant
in the  performance  of any  covenant  contained  in this Lease.  The  foregoing
indemnity  shall not be applicable to claims arising from the active  negligence
or willful misconduct of Landlord. The provisions of this

                                        5

<PAGE>

Paragraph shall survive the expiration or termination of this Lease with respect
to any claims or liability occurring prior to such expiration or termination.

9.       WAIVER OF  SUBROGATION.  To the  extent  permitted  by law and  without
affecting  the  coverage  provided  by  insurance  to be  maintained  hereunder,
Landlord  and Tenant each waive any right to recover  against the other for: (a)
damages for injury to or death of persons; (b) damages to property;  (c) damages
to the  Premises or any part  thereof;  and (d) claims  arising by reason of the
foregoing  due to  hazards  covered  by  insurance  to the  extent  of  proceeds
recovered  therefrom.  This  provision is intended to waive  fully,  and for the
benefit of each party, any rights and/or claims which might give rise to a right
of subrogation in favor of any insurance carrier.  The coverage obtained by each
party  pursuant to this Lease shall  include,  without  limitation,  a waiver of
subrogation by the carrier which conforms to the provisions of this paragraph.

10.      LANDLORD'S REPAIRS AND SERVICES. Landlord shall, at Landlord's expense,
maintain  the  structural  soundness  of  the  structural  beams  of  the  roof,
foundations  and exterior walls of the Building in good repair,  reasonable wear
and tear excepted.  The term  "exterior  walls" as used herein shall not include
windows,  glass or plate glass,  doors,  special store fronts or office entries.
Landlord shall perform on behalf of Tenant and other tenants of the Project,  as
an item of Basic Operating Cost, the maintenance of the Building,  Project,  and
public and common areas of the Project,  including  but not limited to the roof,
pest extermination,  the landscaped areas, parking areas,  driveways,  the truck
staging areas, rail spur areas, fire sprinkler systems, sanitary and storm sewer
lines,  utility  services,   electric  and  telephone  equipment  servicing  the
Building(s),  exterior  lighting,  and anything  which affects the operation and
exterior  appearance of the Project,  which determination shall be at Landlord's
sole  discretion.   Except  for  the  expenses  directly   involving  the  items
specifically  described in the first sentence of this Paragraph 10, Tenant shall
reimburse Landlord for all such costs in accordance with Paragraph 7. Any damage
caused by or  repairs  necessitated  by any act of  Tenant  may be  repaired  by
Landlord at Landlord's option and at Tenant's expense.  Tenant shall immediately
give  Landlord  written  notice of any  defect or need of  repairs  after  which
Landlord  shall  have  a  reasonable  opportunity  to  repair  same.  Landlord's
liability  with  respect  to any  defects,  repairs,  or  maintenance  for which
Landlord  is  responsible  under any of the  provisions  of this Lease  shall be
limited to the cost of such repairs or maintenance.

11.      TENANT'S  REPAIRS.  Tenant shall at Tenant's expense maintain all parts
of the Premises in a good,  clean and secure  condition  and  promptly  make all
necessary  repairs and  replacements,  including but not limited to all windows,
glass, doors, walls and wall finishes, floor covering, heating,  ventilating and
air conditioning  systems,  truck doors, dock bumpers, dock plates and levelers,
plumbing work and fixtures,  downspouts,  electrical and lighting  systems,  and
fire sprinklers. Tenant shall, at Tenant's expense, also perform regular removal
of trash and debris. If required by the railroad company,  Tenant agrees to sign
a joint maintenance agreement governing the use of the rail spur, if any. Tenant
shall,  at Tenant's own  expense,  enter into a regularly  scheduled  preventive
maintenance/service contract with a maintenance contractor for servicing all hot
water,  heating and air conditioning systems and equipment within or serving the
Premises.  The  maintenance  contractor  and the  contract  must be  approved by
Landlord.  The service  contract  must  include all  services  suggested  by the
equipment manufacturer within the  operation/maintenance  manual and must become
effective and a copy thereof delivered to Landlord within thirty (30) days after
the Term Commencement Date. Tenant shall not damage any demising wall or disturb
the integrity and support  provided by any demising wail and shall,  at its sole
expense,  immediately repair any damage to any demising wall caused by Tenant or
Tenant's Parties.

12.      ALTERATIONS.   Tenant  shall  not  make,  or  allow  to  be  made,  any
alterations or physical additions in, about or to the Premises without obtaining
the prior written  consent of Landlord,  which consent shall not be unreasonably
withheld with respect to proposed  alterations and additions  which:  (a) comply
with  all  applicable  laws,  ordinances,  rules  and  regulations;  (b)  are in
Landlord's  opinion  compatible with the Project and its  mechanical,  plumbing,
electrical,  heating/ventilation/air  conditioning  systems;  and (c)  will  not
interfere  with the use and  occupancy  of any other  portion of the Building or
Project by any other  tenant or its  invitees.  Notwithstanding  the  foregoing,
Tenant  shall  have the right to make  interior,  nonstructural  alterations  or
additions  to the  Premises  that do not exceed in the  aggregate  Ten  Thousand
Dollars ($10,000.00) per occurrence without Landlord's prior written consent, so
long  as  same do not  affect  utilities,  HVAC or  other  building  systems  or
equipment.  Tenant shall, however,  provide Landlord with advance written notice
of such  interior,  nonstructural  alterations  or additions as required in this
Lease. If Landlord's consent is required for any alterations or additions, then,
without limiting the generality of the foregoing,  Landlord shall have the right
of written consent for all plans and specifications for the proposed alterations
or  additions,  construction  means and  methods,  all  appropriate  permits and
licenses,  any  contractor  or  subcontractor  to be  employed  on the  work  of
alteration or additions, and the time for performance of such work. Tenant shall
also supply to Landlord any documents and  information  reasonably  requested by
Landlord in connection with Landlord's  consideration  of a request for approval
hereunder.  Tenant shall  reimburse  Landlord  for all costs which  Landlord may
incur in connection  with granting  approval to Tenant for any such  alterations
and  additions,  including  any costs or expenses  which  Landlord  may incur in
electing  to have  outside  architects  and  engineers  review  said  plans  and
specifications.  All such alterations,  physical additions or improvements shall
remain the property of Tenant  until  termination  of this Lease,  at which time
they  shall be and  become the  property  of  Landlord  if  Landlord  so elects;
provided, however, that Landlord may, at Landlord's option, require that Tenant,
at Tenant's expense, remove any or all alterations,  additions, improvements and
partitions  made by Tenant and restore the Premises by the  termination  of this
Lease, whether by lapse of time, or otherwise, to their condition existing prior
to the construction of any such alterations,  additions, partitions or leasehold
improvements. All such removals and restoration shall be

                                        6

<PAGE>

accomplished in a good and  workmanlike  manner so as not to cause any damage to
the  Premises  or  Project  whatsoever.  If  Tenant  fails  to  so  remove  such
alterations,  additions,  improvements  and  partitions or Tenant's  fixtures or
furniture,  Landlord  may keep and use them or remove any of them and cause them
to be stored  or sold in  accordance  with  applicable  law,  at  Tenant's  sole
expense.  In  addition  to and wholly  apart  from  Tenant's  obligation  to pay
Tenant's   Proportionate   Share  of  Basic  Operating  Cost,  Tenant  shall  be
responsible  for and shall pay prior to  delinquency  any taxes or  governmental
service fees,  possessory  interest  taxes,  fees or charges in lieu of any such
taxes,  capital levies, or other charges imposed upon, levied with respect to or
assessed  against  its  personal  property,  on the  value  of the  alterations,
additions or improvements within the Premises, and on Tenant's interest pursuant
to this Lease. To the extent that any such taxes are not separately  assessed or
billed to Tenant,  Tenant shall pay the amount  thereof as invoiced to Tenant by
Landlord.

13.      SIGNS.  All signs,  notices and  graphics  of every kind or  character,
visible in or from public view or corridors, the common areas or the exterior of
the Premises,  shall be subject to Landlord's  prior  written  approval.  Tenant
shall not place or maintain any banners  whatsoever or any window decor in or on
any exterior  window or window fronting upon any common areas or service area or
upon any truck doors or man doors without Landlord's prior written approval. Any
installation  of signs or graphics on or about the Premises and Project shall be
subject to any applicable governmental laws, ordinances,  regulations and to any
other requirements  imposed by Landlord.  Tenant shall remove all such signs and
graphics prior to the termination of this Lease. Such installations and removals
shall be made in such manner as to avoid injury or  defacement  of the Premises,
Building or Project and any other  improvements  contained  therein,  and Tenant
shall  repair  any  injury  or  defacement,   including,   without   limitation,
discoloration caused by such installation or removal.

14.      INSPECTION  /  POSTING  NOTICES.  After  reasonable  notice,  except in
emergencies  where no such notice shall be required,  Landlord,  and  Landlord's
agents  and  representatives,  shall  have the  right to enter the  Premises  to
inspect the same, to clean, to perform such work as may be permitted or required
hereunder, to make repairs or alterations to the Premises or Project or to other
tenant spaces therein, to deal with emergencies,  to post such notices as may be
permitted  or  required  by law to  prevent  the  perfection  of  liens  against
Landlord's  interest in the Project or to exhibit  the  Premises to  prospective
tenants,  purchasers,  encumbrancers  or  others,  or for any other  purpose  as
Landlord may deem necessary or desirable; provided, however, that Landlord shall
use reasonable  efforts not to  unreasonably  interfere  with Tenant's  business
operations.  Tenant shall not be entitled to any  abatement of Rent by reason of
the exercise of any such right of entry. At any time within six (6) months prior
to the end of the Term,  Landlord  shall have the right to erect on the Premises
and/or  Project a suitable sign  indicating  that the Premises are available for
lease.  Tenant shall give  written  notice to Landlord at least thirty (30) days
prior to  vacating  the  Premises  and  shall  meet  with  Landlord  for a joint
inspection  of the Premises at the time of vacating for purposes of  determining
Landlord's  and  Tenant's  responsibility  for  repairs and  restorations.  Upon
completion  and/or payment,  as applicable,  of repair and restoration  items by
Tenant which are approved of by Landlord in writing, Tenant shall be relieved of
all further repair and restoration obligations, except those subsequently caused
by Tenant or Tenant's agents, employees, contractors,  subtenants or assigns. In
the event of Tenant's  failure to give such notice or  participate in such joint
inspection,  Landlord's  inspection at or after  Tenant's  vacating the Premises
shall  conclusively  be deemed  correct  for  purposes of  determining  Tenant's
responsibility for repairs and restoration.

15.      UTILITIES.  Tenant  shall pay directly for all water,  gas,  heat,  air
conditioning,  light,  power,  telephone,  sewers,  sprinkler  charges and other
utilities and services  used on or from the  Premises,  together with any taxes,
penalties,  surcharges or the like pertaining  thereto,  and maintenance charges
for utilities and shall  furnish all electric  light bulbs,  ballasts and tubes.
Landlord  shall at  Landlord's  sole cost and expense  separately  meter gas and
electricity for the Premises. If any such services are not separately metered to
Tenant, Tenant shall pay a reasonable proportion,  as determined by Landlord, of
all charges jointly serving other premises. Landlord shall not be liable for any
damages  directly or indirectly  resulting from nor shall the Rent or any monies
owed Landlord  under this Lease herein  reserved be abated by reason of: (a) the
installation,  use or  interruption  of use of any equipment  used in connection
with the  furnishing  of any such  utilities  or  services;  (b) the  failure to
furnish or delay in furnishing  any such utilities or services when such failure
or delay is caused by acts of God or the  elements,  labor  disturbances  of any
character,  or any other  accidents or other  conditions  beyond the  reasonable
control  of  Landlord;  or  (c)  the  limitation,   curtailment,   rationing  or
restriction on use of water, electricity, gas or any other form of energy or any
other service or utility  whatsoever  serving the Premises or Project.  Landlord
shall be entitled to cooperate  voluntarily and in a reasonable  manner with the
efforts of national,  state or local governmental  agencies or utility suppliers
in  reducing  energy  or other  resource  consumption.  The  obligation  to make
services  available  hereunder  shall be subject to the  limitations of any such
voluntary, reasonable program.

16.      SUBORDINATION. Without the necessity of  any additional  document being
executed by Tenant for the purpose of effecting a subordination, the Lease shall
be subject and  subordinate at all times to: (a) all ground leases or underlying
leases  which may now exist or  hereafter  be executed  affecting  the  Premises
and/or the land upon which the Premises and Project are situated,  or both;  and
(b) any  mortgage  or deed of trust  which may now exist or be placed  upon said
Project,  land, ground leases or underlying  leases,  or Landlord's  interest or
estate in any of said items which is specified as security.  Notwithstanding the
foregoing,  Landlord  shall  have  the  right  to  subordinate  or  cause  to be
subordinated  any such ground leases or  underlying  leases or any such liens to
this Lease.  In the event that any ground lease or underlying  lease  terminates
for any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding

                                        7

<PAGE>

any subordination,  attorn to and become the Tenant of the successor in interest
to Landlord at the option of such  successor in  interest.  Within ten (10) days
after  request by  Landlord,  Tenant  shall  execute and deliver any  additional
documents evidencing Tenant's attornment or the subordination of this Lease with
respect to any such ground leases or  underlying  leases or any such mortgage or
deed of trust,  in the form  requested  by Landlord  or by any ground  landlord,
mortgagee, or beneficiary under a deed of trust.

17.      FINANCIAL STATEMENTS.  At the request of Landlord, Tenant shall provide
to Landlord Tenant's current financial statement or other information discussing
financial worth of Tenant,  which Landlord shall use solely for purposes of this
Lease and in connection  with the ownership,  management and  disposition of the
Project.

18.      ESTOPPEL  CERTIFICATE.  Tenant agrees from time to time, within fifteen
(15) days after  request of  Landlord,  to deliver to  Landlord,  or  Landlord's
designee,  an estoppel  certificate stating that this Lease is in full force and
effect,  the date to which Rent has been  paid,  the  unexpired  portion of this
Lease,  and such other  matters  pertaining  to this Lease as may be  reasonably
requested by Landlord. Failure by Tenant to execute and deliver such certificate
shall constitute an acceptance of the Premises and acknowledgment by Tenant that
the statements  included are true and correct  without  exception.  Landlord and
Tenant intend that any  statement  delivered  pursuant to this  Paragraph may be
relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of
the Project or any interest therein.  The parties agree that Tenant's obligation
to  furnish  such  estoppel  certificates  in a  timely  fashion  is a  material
inducement  for  Landlord's  execution  of the  Lease,  and shall be an event of
default if Tenant fails to fully comply.

19.      SECURITY DEPOSIT.  Intentionally Omitted.


20.      TENANT'S REMEDIES.  The liability of Landlord to Tenant for any default
by Landlord  under the terms of this Lease are not personal  obligations  of the
individual or other partners,  directors, officers and shareholders of Landlord,
and Tenant agrees to look solely to  Landlord's  interest in the Project for the
recovery  of any amount  from  Landlord,  and shall not look to other  assets of
Landlord,  nor seek  recourse  against  the  assets of the  individual  or other
partners, directors, officers and shareholders of Landlord. Any lien obtained to
enforce any such judgment and any levy of execution thereon shall be subject and
subordinate to any lien, mortgage or deed of trust on the Project.

21.      ASSIGNMENT AND SUBLETTING.

         A. General.  Tenant shall not assign or sublet the Premises or any part
thereof without  Landlord's prior written approval except as provided herein. If
Tenant desires to assign this Lease or sublet any or all of the Premises, Tenant
shall give Landlord written notice forty-five (45) days prior to the anticipated
effective date of the assignment or sublease.  Landlord shall then have a period
of thirty (30) days following receipt of such notice to notify Tenant in writing
that  Landlord  elects  either:  (1) to terminate  this Lease as to the space so
affected  as of the date so  requested  by  Tenant;  or (2) to permit  Tenant to
assign this Lease or sublet such space,  subject,  however,  to Landlord's prior
written  approval  of the  proposed  assignee  or  subtenant  and of any related
documents or agreements  associated with the assignment or sublease. If Landlord
should fail to notify  Tenant in writing of such  election  within said  period,
Landlord shall be deemed to have waived option (1) above,  but written  approval
by Landlord of the proposed assignee or subtenant shall be required. If Landlord
does not exercise the option provided in subitem (1) above,  Landlord's  consent
to a proposed assignment or sublet shall not be unreasonably  withheld.  Without
limiting  the other  instances  in which it may be  reasonable  for  Landlord to
withhold Landlord's consent to an assignment or subletting,  Landlord and Tenant
acknowledge  that it shall be  reasonable  for  Landlord to withhold  Landlord's
consent in the  following  instances:  The use of the Premises by such  proposed
assignee or subtenant would not be a permitted use or would increase the Parking
Density of the  Project;  the  proposed  assignee or  subtenant  is not of sound
financial  condition;  the  proposed  assignee or  subtenant  is a  governmental
agency;  the proposed assignee or subtenant does not have a good reputation as a
tenant of  property;  the  proposed  assignee or subtenant is a person with whom
Landlord  is  negotiating  to lease  space in the  Project;  the  assignment  or
subletting  would  entail any  alterations  which would  lessen the value of the
leasehold  improvements  in the  Premises;  or if  Tenant is in  default  of any
obligation of Tenant under this Lease,  or Tenant has defaulted under this Lease
on three (3) or more occasions  during any twelve (12) months preceding the date
that Tenant  shall  request  consent.  Failure by Landlord to approve a proposed
assignee  or  subtenant  shall not cause a  termination  of this  Lease.  Upon a
termination  under this Paragraph 21.A.,  Landlord may lease the Premises to any
party,  including  parties  with whom Tenant has  negotiated  an  assignment  or
sublease, without incurring any liability to Tenant.

         B. Bonus Rent. Any Rent or other consideration realized by Tenant under
any such sublease or assignment in excess of the Rent payable  hereunder,  after
amortization of a reasonable  brokerage  commission,  shall be divided and paid,
fifty  percent  (50%)  to  Tenant,  fifty  percent  (50%)  to  Landlord.  In any
subletting or assignment  undertaken by Tenant,  Tenant shall diligently seek to
obtain  the  maximum  rental  amount  available  in  the  marketplace  for  such
subletting or assignment.

         C.  Corporation.  If Tenant is a  corporation,  a transfer of corporate
shares by sale,  assignment,  bequest,  inheritance,  operation  of law or other
disposition (including such a transfer to or by a receiver or trustee in federal
or state  bankruptcy,  insolvency  or other  proceedings),  so as to result in a
change  in the  present  control  of  such  corporation  or  any  of its  parent
corporations by the person or

                                        8

<PAGE>
persons  owning  a  majority  of said  corporate  shares,  shall  constitute  an
assignment for purposes of this Lease.

         D.  Partnership.  If Tenant is a  partnership,  joint  venture or other
incorporated  business  form,  a transfer of the  interest of persons,  firms or
entities  responsible  for  managerial  control  of Tenant by sale,  assignment,
bequest, inheritance,  operation of law or other disposition, so as to result in
a change in the present  control of said entity  and/or a change in the identity
of the persons  responsible  for the general credit  obligations of said entity,
shall constitute an assignment for all purposes of this Lease.

         E. Liability.  No  assignment  or  subletting  by  Tenant shall relieve
Tenant of any obligation  under this Lease.  Any assignment or subletting  which
conflicts with the provisions hereof shall be void.

22.      AUTHORITY OF PARTIES.  Landlord  represents  and warrants  that  it has
full  right and  authority  to enter  into  this  Lease  and to  perform  all of
Landlords's  obligations  hereunder.  Tenant represents and warrants that it has
full right and authority to enter into this Lease and to perform all of Tenant's
obligations hereunder.

23.      CONDEMNATION.

         A. Condemnation  Resulting  In  Termination.   If   the  whole  or  any
substantial part of the Project of which the Premises are a part should be taken
or condemned for any public use under governmental law, ordinance or regulation,
or by right of eminent domain,  or by private purchase in lieu thereof,  and the
taking would  prevent or  materially  interfere  with the  Permitted  Use of the
Premises,  this Lease shall  terminate  and the Rent shall be abated  during the
unexpired  portion of this Lease,  effective  when the  physical  taking of said
Premises shall have  occurred.  If more than five percent (5%) of the floor area
of the Premises or thirty percent (30%) of the land area of the Project which is
not occupied by any building is taken by  condemnation,  Tenant may, at Tenant's
option,  terminate this Lease as of the date the condemning authority takes such
possession,  which  option is to be  exercised,  if at all,  by  written  notice
thereof to Landlord within ten (10) days after Landlord has given Tenant written
notice of such  taking (or in the absence of such  notice,  within ten (10) days
after the condemning authority shall have taken possession).

         B. Condemnation  Not  Resulting   In  Termination.  If a portion of the
Project of which the Premises  are a part should be taken or  condemned  for any
public use under any governmental law, ordinance, or regulation,  or by right of
eminent domain,  or by private  purchase in lieu thereof,  and this Lease is not
terminated as provided in Paragraph 23.A. above, this Lease shall not terminate,
but the Rent payable  hereunder during the unexpired  portion of the Lease shall
be reduced,  beginning on the date when the physical taking shall have occurred,
to such amount as may be fair and reasonable under all of the circumstances.

         C. Award.  Landlord  shall be entitled to any and all payment,  income,
rent,  award, or any interest  therein  whatsoever  which may be paid or made in
connection  with such  taking or  conveyance,  and  Tenant  shall  have no claim
against  Landlord or otherwise  for the value of any  unexpired  portion of this
Lease.  Notwithstanding  the foregoing,  any compensation  specifically  awarded
Tenant for loss of business, Tenant's personal property, moving costs or loss of
goodwill shall be and remain the property of Tenant.

24.      CASUALTY DAMAGE.

         A. General.  If the Premises or Building should be damaged or destroyed
by fire,  tornado or other casualty,  Tenant shall give immediate written notice
thereof to Landlord.  Within thirty (30) days after  Landlord's  receipt of such
notice,  Landlord shall notify Tenant whether in Landlord's opinion such repairs
can  reasonably be made either:  (1) within  ninety (90) days;  (2) in more than
ninety (90) days but in less than one hundred  eighty (180) days; or (3) in more
than one  hundred  eighty  (180) days from the date of such  notice.  Landlord's
determination shall be binding on Tenant.

         B. Less Than 90 Days. If the Premises or Building  should be damaged by
fire,  tornado or other  casualty,  but only to such extent that  rebuilding  or
repairs can in Landlord's  estimation be reasonably completed within ninety (90)
days after the date of such damage, this Lease shall not terminate, and provided
that insurance proceeds are available to fully repair the damage, Landlord shall
proceed to rebuild and repair the Premises in the manner determined by Landlord,
except that  Landlord  shall not be  required to rebuild,  repair or replace any
part of the partitions,  fixtures,  additions and other  leasehold  improvements
which may have been placed in, on or about the  Premises.  If the  Premises  are
untenantable  in whole  or in part  following  such  damage,  the  Rent  payable
hereunder  during  the  period in which  they are  untenantable  shall be abated
proportionately, to the extent the Premises are unfit for occupancy.

         C. Greater Than 90 Days. If the Premises or Building  should be damaged
by fire,  tornado or other casualty,  but only to such extent that rebuilding or
repairs can in Landlord's estimation be reasonably completed in more than ninety
(90) days but in less than one hundred eighty 180 days, then Landlord shall have
the option of either:  (1)  terminating the Lease effective upon the date of the
occurrence  of such damage,  in which event the Rent shall be abated  during the
unexpired  portion  of the  Lease;  or (2)  electing  to  rebuild  or repair the
Premises to substantially the condition in which they existed

                                        9
<PAGE>
prior to such damage,  provided that insurance proceeds are available,  to fully
repair the damage, except that Landlord shall not be required to rebuild, repair
or  replace  any  part  of  the  partitions,   fixtures,   additions  and  other
improvements  which may have been  placed in, on or about the  Premises.  If the
Premises are  untenantable  in whole or in part following such damage,  the Rent
payable  hereunder  during the period in which  they are  untenantable  shall be
abated  proportionately,  to the extent the Premises are unfit for occupancy. In
the event that  Landlord  should fail to complete  such  repairs and  rebuilding
within one hundred  eighty days (180) days after the date upon which Landlord is
notified by Tenant of such damage, such period of time to be extended for delays
caused by the fault or  neglect  of Tenant or  because  of acts of God,  acts of
public agencies,  labor disputes,  strikes,  fires, freight embargoes,  rainy or
stormy weather,  inability to obtain materials,  supplies or fuels, or delays of
the contractors or  subcontractors  or any other causes or contingencies  beyond
the  reasonable  control of Landlord,  Tenant may at Tenant's  option within ten
(10) days after the  expiration of such one hundred  eighty (180) day period (as
such may be  extended),  terminate  this Lease by delivering  written  notice of
termination  to Landlord  as Tenant's  exclusive  remedy,  whereupon  all rights
hereunder shall cease and terminate thirty (30) days after Landlord's receipt of
such termination notice.

         D. Greater  Than 180 Days.  If the  Premises or  Building  should be so
damaged by fire,  tornado or other casualty that rebuilding or repairs cannot in
Landlord's  estimation be completed  within one hundred  eighty (180) days after
such damage,  this Lease shall terminate and the Rent shall be abated during the
unexpired  portion of this Lease,  effective  upon the date of the occurrence of
such damage.

         E. Tenant's Fault. If the Premises or any other portion of the Building
are damaged by fire or other casualty resulting from the fault,  negligence,  or
breach  of this  Lease by  Tenant  or any of  Tenant's  Parties,  Base  Rent and
Additional  Rent shall not be  diminished  during the repair of such  damage and
Tenant  shall be liable to  Landlord  for the cost and expense of the repair and
restoration  of the Building  caused thereby to the extent such cost and expense
is not covered by insurance proceeds.

         F. Uninsured Casualty. Notwithstanding anything herein to the contrary,
in the event that the Premises or Building are damaged or destroyed  and are not
fully  covered by the  insurance  proceeds  received by Landlord or in the event
that the  holder of any  indebtedness  secured  by a  mortgage  or deed of trust
covering the Premises  requires that the  insurance  proceeds be applied to such
indebtedness,  then in either case  Landlord  shall have the right to  terminate
this Lease by delivering  written  notice of termination to Tenant within thirty
(30) days after the date of notice to Landlord  that said damage or  destruction
is not  fully  covered  by  insurance  or such  requirement  is made by any such
holder, as the case may be, whereupon all rights and obligations hereunder shall
cease and terminate.

         G. Waiver.  Except as otherwise  provided in this  Paragraph 24, Tenant
hereby waives the provisions of Sections 1932(a),  1933(4), 1941 and 1942 of the
Civil Code of California.

25.      HOLDING  OVER.  If Tenant  shall retain  possession  of the Premises or
any portion thereof without  Landlord's  consent following the expiration of the
Lease or sooner  termination  for any reason,  then Tenant shall pay to Landlord
for each day of such  retention  double the amount of the daily rental as of the
last month prior to the date of  expiration  or  termination.  Tenant shall also
indemnify,  defend,  protect and hold Landlord harmless from any loss, liability
or cost, including reasonable attorneys' fees, resulting from delay by Tenant in
surrendering the Premises, including, without limitation, any claims made by any
succeeding  tenant  founded  on such  delay.  Acceptance  of  Rent  by  Landlord
following  expiration  or  termination  shall not  constitute  a renewal of this
Lease,  and nothing  contained in this Paragraph 25 shall waive Landlord's right
of reentry or any other right.  Unless Landlord  consents in writing to Tenant's
holding  over,  Tenant  shall be only a Tenant  at  sufferance,  whether  or not
Landlord  accepts  any Rent from Tenant  while  Tenant is holding  over  without
Landlord's written consent.  Additionally, in the event that upon termination of
the Lease,  Tenant has not fulfilled its obligation  with respect to repairs and
cleanup of the  Premises or any other  Tenant  obligations  as set forth in this
Lease,  then Landlord shall have the right to perform any such obligations as it
deems  necessary at Tenant's  sole cost and expense,  and Tenant shall be liable
for all damages caused thereby, including, without limitation,  liability to any
new tenant or occupant of the  Premises or any part  thereof and lost rent which
Landlord  will  suffer  due to  delay  in  making  the  Premises  available  for
alterations and/or occupancy by the next tenant or occupant.

26.      DEFAULT.

         A. Events of Default.  The  occurrence  of any of the  following  shall
constitute an event of default on the part of Tenant:

                  (1) Abandonment.  Abandonment of the Premises for a continuous
period in excess of five (5)  days,  unless  Tenant is paying  all Rent when due
hereunder.  Tenant  waives any right to notice  Tenant  may have  under  Section
1951.3 of the Civil Code of the State of California, the terms of this Paragraph
26.A. being deemed such notice to Tenant as required by said Section 1951.3

                  (2) Nonpayment of Rent. Failure to pay any installment of Rent
or any other amount due and payable hereunder upon the date when said payment is
due.
                                       10
<PAGE>

                  (3) Other  Obligations.  Failure  to perform  any  obligation,
agreement  or covenant  under this Lease other than those  matters  specified in
subparagraphs (1) and (2) of this Paragraph 26.A.,  such failure  continuing for
thirty (30) days after written notice of such failure.

                  (4) General Assignment. A general assignment by Tenant for the
benefit of creditors.

                  (5) Bankruptcy.  The  filing  of  any  voluntary  petition  in
bankruptcy  by Tenant,  or the filing of an  involuntary  petition  by  Tenant's
creditors,  which  involuntary  petition  remains  undischarged  for a period of
thirty  (30)  days.  In the event  that  under  applicable  law the  trustee  in
bankruptcy  or Tenant has the right to affirm this Lease and continue to perform
the obligations of Tenant hereunder,  such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant  hereunder  outstanding  as of the date of the  affirmance of
this Lease and provide to Landlord such adequate  assurances as may be necessary
to ensure Landlord of the continued  performance of Tenant's  obligations  under
this Lease.

                  (6) Receivership.  The  employment  of  a  receiver   to  take
possession of  substantially  all of Tenant's  assets or the  Premises,  if such
appointment  remains  undismissed or undischarged  for a period of ten (10) days
after the order therefor.

                  (7) Attachment.  The  attachment,  execution or other judicial
seizure of all or substantially all of Tenant's assets or the Premises,  if such
attachment or other seizure remains  undismissed or undischarged for a period of
ten (10) days after the levy thereof.

         B.       Remedies Upon Default.

                  (1)  Termination.  In the event of the occurrence of any event
of default,  Landlord shall have the right to give a written  termination notice
to  Tenant,  and on the  date  specified  in  such  notice,  Tenant's  right  to
possession shall  terminate,  and this Lease shall terminate unless on or before
such date all arrears of rental and all other sums  payable by Tenant under this
Lease and all costs and expenses incurred by or on behalf of Landlord  hereunder
shall have been paid by Tenant and all other  events of default of this Lease by
Tenant at the time existing shall have been fully  remedied to the  satisfaction
of Landlord. At any time after such termination, Landlord may recover possession
of the  Premises or any part thereof and expel and remove  therefrom  Tenant and
any other person  occupying the same, by any lawful means,  and again  repossess
and enjoy the Premises  without  prejudice to any of the remedies  that Landlord
may have under this Lease, or at law or equity by reason of Tenant's  default or
of such termination.

                  (2)  Continuation  After  Default.  Even  though  an  event of
default may have  occurred,  this Lease shall  continue in effect for so long as
Landlord does not terminate Tenant's right to possession under Paragraph 26.B(1)
hereof,  and Landlord may enforce all of  Landlord's  rights and remedies  under
this  Lease,  including  without  limitation,  the right to  recover  Rent as it
becomes due, and Landlord,  without  terminating this Lease, may exercise all of
the rights and remedies of a landlord  under Section 1951.4 of the Civil Code of
the State of  California or any successor  code  section.  Acts of  maintenance,
preservation  or efforts to lease the Premises or the  appointment of a receiver
upon  application  of Landlord to protect  Landlord's  interest under this Lease
shall not constitute an election to terminate Tenant's right to possession.

         C. Damages After Default. Should Landlord terminate this Lease pursuant
to the provisions of Paragraph  26.B.(1) hereof,  Landlord shall have the rights
and remedies of a Landlord  provided by Section  1951.2 of the Civil Code of the
State of  California,  or successor  code sections.  Upon such  termination,  in
addition  to any other  rights and  remedies to which  Landlord  may be entitled
under applicable law, Landlord shall be entitled to recover from Tenant: (1) the
worth at the time of award of the unpaid Rent and other  amounts  which had been
earned  at the time of  termination,  (2) the  worth at the time of award of the
amount by which the unpaid Rent which would have been earned  after  termination
until the time of award  exceeds the amount of such Rent loss that Tenant proves
could have been  reasonably  avoided;  (3) 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 Rent loss that the  Tenant  proves  could be
reasonably  avoided;  and (4) any other amount necessary to compensate  Landlord
for all the detriment proximately caused by Tenant's failure to perform Tenant's
obligations  under this Lease or which, in the ordinary course of things,  would
be likely to result  therefrom.  The "worth at the time of award" of the amounts
referred  to in (1) and (2) above  shall be computed at the lesser of the "prime
rate," as announced from time to time by Wells Fargo Bank, N.A. (San Francisco),
plus five (5)  percentage  points,  or the maximum  interest rate allowed by law
("Applicable  Interest  Rate").  The  "worth at the time of award" of the amount
referred to in (3) above shall be  computed  by  discounting  such amount at the
Federal  Discount Rate of the Federal  Reserve Bank of San Francisco at the time
of the award.  If this Lease  provides  for any  periods  during the Term during
which Tenant is not required to pay Base Rent or if Tenant otherwise  receives a
Rent concession,  then upon the occurrence of an event of default,  Tenant shall
owe to  Landlord  the full  amount  of such  Base  Rent or  value  of such  Rent
concession,  plus interest at the Applicable Interest Rate,  calculated from the
date that such Base Rent or Rent concession would have been payable.

         D. Late Charge.  If any installment of Rent is not paid within five (5)
working  days  after  same  is due,  such  amount  shall  bear  interest  at the
Applicable Interest Rate from the date on which said

                                       11

<PAGE>

payment  shall be due  until  the  date on which  Landlord  shall  receive  said
payment.  In  addition,  Tenant  shall pay  Landlord a late charge equal to five
percent (5%) of the delinquency,  to compensate Landlord for the loss of the use
of the amount not paid and the  administrative  costs caused by the delinquency,
the parties  agreeing  that  Landlord's  damage by virtue of such  delinquencies
would be  difficult  to  compute  and the  amount  stated  herein  represents  a
reasonable estimate thereof. This provision shall not relieve Tenant of Tenant's
obligation to pay Rent at the time and in the manner herein specified.

         E.        Remedies Cumulative.  All rights, privileges and elections or
remedies  of the  parties  are  cumulative  and not  alternative,  to the extent
permitted by law and except as otherwise provided herein.

27.      LIENS.  Tenant shall keep the Premises  free from liens  arising out of
or related to work  performed,  materials or supplies  furnished or  obligations
incurred by Tenant or in  connection  with work made,  suffered or done by or on
behalf of Tenant in or on the  Premises  or  Project.  In the event that  Tenant
shall not, within ten (10) days following the imposition of any such lien, cause
the same to be  released  of record by  payment  or  posting  of a proper  bond,
Landlord  shall have, in addition to all other remedies  provided  herein and by
law, the right, but not the obligation, to cause the same to be released by such
means as Landlord shall deem proper,  including payment of the claim giving rise
to such lien.  All sums paid by  Landlord  on behalf of Tenant and all  expenses
incurred  by Landlord in  connection  therewith  shall be payable to Landlord by
Tenant on demand with interest at the Applicable  Interest Rate.  Landlord shall
have the right at all times to post and keep posted on the  Premises any notices
permitted  or required  by law, or which  Landlord  shall deem  proper,  for the
protection of Landlord,  the Premises, the Project and any other party having an
interest therein, from mechanics' and materialmen's liens, and Tenant shall give
Landlord  not less  than ten (10)  business  days  prior  written  notice of the
commencement  of any work in the Premises or Project  which could  lawfully give
rise to a claim for mechanics' or materialmen's liens.

28.      SUBSTITUTION.  Intentionally Omitted.

29.      TRANSFERS BY LANDLORD. In the event of a sale or conveyance by Landlord
of the Building or a  foreclosure  by any  creditor of Landlord,  the same shall
operate to release  Landlord  from any  liability  upon and obligate  Landlord's
successor-in-interest to any of the covenants or conditions, express or implied,
herein  contained  in favor of Tenant,  to the extent  required to be  performed
after the  passing of title to  Landlord's  successor-in-interest  during  their
respective period of ownership.  In such event,  Tenant agrees to look solely to
the  responsibility  of the  successor-in-interest  of Landlord under this Lease
with respect to the  performance of the covenants and duties of "Landlord" to be
performed after the passing of title to Landlord's  successor-in-interest.  This
Lease shall not be affected by any such sale and Tenant  agrees to attorn to the
purchaser  or  assignee.  Landlord's  successor(s)-in-interest  shall  not  have
liability  to  Tenant  with  respect  to  the  failure  to  perform  all  of the
obligations of "Landlord",  to the extent  required to be performed prior to the
date such successor(s)-in-interest became the owner of the Building.

30.      RIGHT  OF  LANDLORD  TO  PERFORM  TENANT'S  COVENANTS.   All  covenants
and  agreements  to be  performed by Tenant under any of the terms of this Lease
shall be performed  by Tenant at Tenant's  sole cost and expense and without any
abatement of Rent. If Tenant shall fail to pay any sum of money, other than Base
Rent and Basic Operating Cost,  required to be paid by Tenant hereunder or shall
fail to perform any other act on Tenant's  part to be performed  hereunder,  and
such failure shall  continue for five (5) days after notice thereof by Landlord,
Landlord  may,  but shall not be  obligated  to do so,  and  without  waiving or
releasing  Tenant  from any  obligations  of  Tenant,  make any such  payment or
perform any such act on Tenant's part to be made or performed.  All sums so paid
by Landlord and all necessary  incidental costs,  together with interest thereon
at the Applicable Interest Rate from the date of such payment by Landlord, shall
be payable to Landlord on demand,  and Tenant  covenants  to pay such sums,  and
Landlord  shall have, in addition to any other right or remedy of Landlord,  the
same rights and remedies in the event of the non-payment  thereof by Tenant,  as
in the case of default by Tenant in the payment of Base Rent and Basic Operating
Cost.

31.      WAIVER.  If either  Landlord or  Tenant waives the  performance  of any
term,  covenant or condition  contained in this Lease,  such waiver shall not be
deemed to be a waiver of any  subsequent  breach of the same or any other  term,
covenant or condition contained herein. The acceptance of Rent by Landlord shall
not constitute a waiver of any preceding breach by Tenant of any term,  covenant
or condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord  accepted such Rent.  Failure by Landlord to enforce
any of the terms,  covenants or  conditions of this Lease for any length of time
shall not be  deemed to waive or to  decrease  the right of  Landlord  to insist
thereafter  upon strict  performance by Tenant.  Waiver by Landlord or Tenant of
any term,  covenant or  condition  contained in this Lease may only be made by a
written document signed by Landlord or Tenant, respectively.

32.      NOTICES. Each provision of this Lease or of any applicable governmental
laws, ordinances,  regulations and other requirements with reference to sending,
mailing or  delivery  of any notice or the making of any  payment by Landlord or
Tenant  to the  other  shall  be  deemed  to be  complied  with  when and if the
following steps are taken:

         A. Rent. All Rent and other  payments  required to be made by Tenant to
Landlord  hereunder shall be payable to Landlord at the address set forth in the
Basic Lease Information, or at

                                       12

<PAGE>
such other  address as Landlord may specify from time to time by written  notice
delivered in accordance herewith.  Tenant's obligation to pay Rent and any other
amounts to Landlord under the terms of this Lease shall not be deemed  satisfied
until such Rent and other amounts have been actually received by Landlord.

         B. Other. All notices, demands, consents and approvals which may or are
required to be given by either party to the other  hereunder shall be in writing
and either  personally  delivered,  sent by  commercial  overnight  courier,  or
mailed, certified or registered,  postage prepaid, and addressed to the party to
be  notified  at the  address  for such party as  specified  in the Basic  Lease
Information  or to such other place as the party to be notified may from time to
time  designate  by at least  fifteen (15) days notice to the  notifying  party.
Notices  shall be deemed  served  upon  receipt or  refusal to accept  delivery.
Tenant  appoints as its agent to receive the service of all default  notices and
notice of commencement of unlawful detainer  proceedings the person in charge of
or apparently in charge of occupying the Premises at the time,  and, if there is
no such person,  then such service may be made by attaching the same on the main
entrance of the Premises.

33.      ATTORNEYS'  FEES. In the event that Landlord places the enforcement  of
this Lease, or any part thereof, or the collection of any Rent due, or to become
due  hereunder,  or recovery of  possession  of the  Premises in the hands of an
attorney,  Tenant shall pay to  Landlord,  upon  demand,  Landlord's  reasonable
attorneys'  fees and court costs.  In any action which Landlord or Tenant brings
to enforce its respective rights hereunder, the unsuccessful party shall pay all
costs incurred by the prevailing party, including reasonable attorneys' fees, to
be fixed by the court, and said costs and attorneys' fees shall be a part of the
judgment in said action.

34.      SUCCESSORS  AND ASSIGNS.  This Lease shall be binding upon and inure to
the benefit of Landlord,  its successors and assigns,  and shall be binding upon
and inure to the benefit of Tenant, its successors, and to the extent assignment
is approved by Landlord hereunder, Tenant's assigns.

35.      FORCE  MAJEURE.  Whenever  a period  of time is herein  prescribed  for
action to be taken by  Landlord  or Tenant,  such  party  shall not be liable or
responsible  for, and there shall be excluded from the  computation for any such
period of time,  any delays due to strikes,  riots,  acts of God,  shortages  of
labor or materials,  war, governmental laws,  regulations or restrictions or any
other causes of any kind  whatsoever  which are beyond the control of such party
(financial  inability  to perform  excepted);  provided,  however,  that nothing
contained in this Section 35 shall excuse or delay the proper and timely payment
of Rent by Tenant to Landlord.

36.      BROKERAGE  COMMISSION.  Landlord  shall pay a brokerage  commission  to
Broker in  accordance  with a separate  agreement  between  Landlord and Broker.
Tenant warrants to Landlord that Tenant's sole contact with Landlord or with the
Premises in connection with this transaction has been directly with Landlord and
Broker,  and that no other  broker or  finder  can  properly  claim a right to a
commission or a finder's fee based upon contacts between the claimant and Tenant
with  respect to Landlord or the  Premises.  Tenant shall  indemnify,  defend by
counsel  acceptable  to Landlord,  protect and hold  Landlord  harmless from and
against any loss,  cost or expense,  including,  but not limited to,  attorneys'
fees and costs,  resulting  from any claim for a fee or commission by any broker
or finder  which claims it has dealt with or has a  relationship  with Tenant in
connection with the Premises and this Lease other than Broker.

37.      MISCELLANEOUS.

         A.  General.  The term  "Tenant" or any pronoun  used in place  thereof
shall  indicate and include the  masculine  or feminine,  the singular or plural
number,  individuals,  firms or corporations,  and their respective  successors,
executors,  administrators  and  permitted  assigns,  according  to the  context
hereof.

         B. Time.  Time is of the  essence  regarding  this Lease and all of its
provisions.

         C. Choice of Law.  This Lease shall in all  respects be governed by the
laws of the State of California.

         D. Entire Agreement. This Lease, together with its Exhibits, supersedes
in its entirety the Lease  between  Landlord and Tenant also dated  December 19,
1997, containing typewritten and handwritten inserts and cross-outs. The purpose
of this Lease is to restate said Lease in its entirety,  and this Lease contains
all  the   agreements  of  the  parties   hereto  and  supersedes  any  previous
negotiations.  There  have  been  no  representations  made by the  Landlord  or
understandings made between the parties other than those set forth in this Lease
and its Exhibits.

         E.  Modification.  This Lease may not be  modified  except by a written
instrument by the parties hereto.

         F. Severability.  If, for any reason whatsoever,  any of the provisions
hereof shall be unenforceable or ineffective,  all of the other provisions shall
be and remain in full force and effect.

         G.  Recordation.  Tenant  shall not  record  this Lease or a short form
memorandum hereof.
                                       13
<PAGE>

         H.  Examination  of Lease.  Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective otherwise
until execution and delivery by both Landlord and Tenant.

         I.  Accord and  Satisfaction.  No payment by Tenant of a lesser  amount
than the Rent nor any endorsement on any check or letter  accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies.

         J. Easements.  Landlord may grant easements on the Project and dedicate
for public use portions of the Project without Tenant's  consent;  provided that
no such grant or dedication shall  substantially  interfere with Tenant's use of
the Premises.  Upon  Landlord's  demand,  Tenant shall execute,  acknowledge and
deliver  to  Landlord  documents,  instruments,  maps  and  plats  necessary  to
effectuate Tenant's covenants hereunder.

         K. Drafting and Determination Presumption. The parties acknowledge that
this Lease has been agreed to by both  parties,  that both  Landlord  and Tenant
have  consulted  with or had the  opportunity  to consult  with  attorneys  with
respect  to the terms of this  Lease and that no  presumption  shall be  created
against  Landlord  because  Landlord  drafted  this Lease.  Except as  otherwise
specifically set forth in this Lease, with respect to any consent, determination
or  estimation  of Landlord  required in this Lease or  requested  of  Landlord,
Landlord's consent, determination or estimation shall be made in Landlord's good
faith opinion, whether objectively reasonable or unreasonable.

         L.  Exhibits.  Exhibits A, B, C, D, E and F attached  hereto are hereby
incorporated herein by this reference.

         M. No Light,  Air or View  Easement.  Any diminution or shutting off of
light, air or view by any structure which may be erected on lands adjacent to or
in the vicinity of the Building  shall in no way affect this Lease or impose any
liability on Landlord.

         N. No Third Party Benefit.  This Lease is a contract  between  Landlord
and Tenant and nothing herein is intended to create any third party benefit.


38.      ADDITIONAL PROVISIONS.

         First Addendum to Lease

         Exhibit "A"       Floor Plan
         Exhibit "B"       Work Letter
         Exhibit "C"       Standard Specifications
         Exhibit "D"       Atherton Center Sign Policy
         Exhibit "E"       Rules and Regulations
         Exhibit "F"       Hazardous Materials / Wastes


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


"Landlord"

STANFORD RANCH I, LLC

         By:  _________________________________________________________________
         Name: ________________________________________________________________
         Title: _______________________________________________________________



"Tenant'

SPECTRIAN CORPORATION

By:  __________________________________________________________________________
              Stephen B. Greenspan, Chief Operating Officer


         By: __________________________________________________________________
         Name: ________________________________________________________________
         Title: _______________________________________________________________

                                       14

<PAGE>

                                    EXHIBIT A

                                   FLOOR PLAN



















                                (TO BE ATTACHED)





                                Page 1 of 2 Pages


<PAGE>




                                    EXHIBIT A

                                    SITE PLAN




















                                (TO BE ATTACHED)





                                Page 2 of 2 Pages


<PAGE>
                                    EXHIBIT B

                                   WORK LETTER

         This Work Letter shall set forth the terms and  conditions  relating to
the construction of the tenant improvements in the Premises. This Work Letter is
essentially   organized   chronologically   and  addresses  the  issues  of  the
construction of the Premises,  in sequence, as such issues will arise during the
actual construction of the Premises.

                                    SECTION 1

                     CONSTRUCTION DRAWINGS FOR THE PREMISES

         Landlord  shall cause the  improvements  in the  Premises  (the "Tenant
Improvements") to be constructed,  at Landlord's sole cost and expense, pursuant
to the specifications  outlined in the preliminary  drawings as prepared by CHMD
dated November 6, 1997, as shown on Exhibit "A". Tenant shall make no changes or
modifications to the Approved Working drawings without the prior written consent
of Landlord, which consent may be withheld in Landlord's sole discretion if such
change or  modification  would  directly  or  indirectly  delay the  Substantial
Completion,  as that term is defined in Section 2.1 of this Work Letter,  of the
Premises  or  increase  the  cost  of  designing  or  constructing   the  Tenant
Improvements.  In  the  event  Tenant  makes  changes  to  Exhibit  "A"  causing
allowances  to exceed that in  Paragraph  5 of the First  Addendum  Lease,  such
excess shall be amortized  as noted in Paragraph 5 of the First  Addendum  Lease
contained herein.

                                    SECTION 2

                     COMPLETION OF THE TENANT IMPROVEMENTS:
                                COMMENCEMENT DATE

         2.1 Ready for  Occupancy.  The  Premises  shall be  deemed  "Ready  for
Occupancy" upon the Substantial Completion of the Premises. For purposes of this
Lease,  "Substantial Completion" of the Premises shall occur upon the completion
of  construction  of the Tenant  Improvements  in the  Premises  pursuant to the
Approved  Working  Drawings,  with the exception of any punch list items and any
tenant fixtures, work-stations, built-in furniture, or equipment to be installed
by Tenant or under the supervision of the Contractor.

         2.2 Delay of the  Substantial  Completion  of the  Premises.  Except as
provided in this Section 2.2, the Commencement Date shall occur by June 1, 1998.
If there shall be a delay or there are delays in the  Substantial  Completion of
the Premises or in the  occurrence of any of the other  conditions  precedent to
the Commencement  Date, as set forth in the Base Lease Information of the Lease,
as a direct, indirect,  partial, or total result of the following (collectively,
"Tenant Delays"):

                  2.2.1 Tenant's  failure to timely approve any matter requiring
Tenant's approval;

                  2.2.2 A breach by  Tenant of the terms of this Work  Letter or
the Lease;

                  2.2.3  Tenant's  request for changes in the  Approved  Working
Drawings;

                  2.2.4 Changes in any of the Approved  Working Drawings because
the same do not comply with applicable laws;

                  2.2.5 Tenant's requirement for materials, components, finishes
or improvements which are not available in a commercially  reasonable time given
the  anticipated  Commencement  Date,  as set forth in the  Lease,  or which are
different  from, or not included in,  Landlord's  standard  improvement  package
items for the Building.

                  2.2.6 Changes to the base, shell and core work of the Building
required by the Approved Working Drawings or any changes thereto; or

                  2.2.7 Any other acts or omissions of Tenant, or its agents, or
employees;

then,  notwithstanding  anything to the  contrary set forth in the Lease or this
Work Letter and regardless of the actual date of the  Substantial  Completion of
the  Premises,  the  Commencement  Date  shall  be  deemed  to be the  date  the
Commencement Date would have occurred if no Tenant Delay or Delays, as set forth
above, had occurred, subject to receiving a Temporary Certificate of Occupancy.


                                    SECTION 3

                                  MISCELLANEOUS

         3.1 Tenant's Entry Into the Premises  Prior to Substantial  Completion.
Provided that Tenant and its agents do not interfere with  Contractor's  work in
the Building and the Premises, Contractor shall

                                Page 1 of 2 Pages
<PAGE>


allow Tenant access to the Premises prior to the  Substantial  Completion of the
Premises for the purpose of Tenant installing  equipment or fixtures  (including
Tenant's data and telephone and other items) in the Premises.  Prior to Tenant's
entry into the Premises as permitted by the terms of this Section,  Tenant shall
submit a schedule to Landlord and Contractor, for their approval, which schedule
shall  detail the  timing  and  purpose of  Tenant's  entry.  Tenant  shall hold
Landlord  harmless from and indemnify,  protect and defend Landlord  against any
loss or damage to the  Building  or Premises  and against  injury to any persons
caused by Tenant's actions pursuant to this Section.

         3.2 Tenant's Agents. All  subcontractors,  laborers,  materialmen,  and
suppliers  retained  directly by Tenant shall  conduct  their  activities in and
around the Premises, Building and Property in a harmonious relationship with all
other  subcontractors,  laborers,  materialmen  and  suppliers at the  Premises,
Building and Property.

         3.3  Time  of  the  Essence  in  This  Work  Letter.  Unless  otherwise
indicated,  all references  herein to a "number of days" shall mean and refer to
calendar  days. In all instances  where Tenant is required to approve or deliver
an item, if no written  notice of approval is given or the item is not delivered
within the stated time period,  at  Landlord's  sole option,  at the end of such
period the item shall  automatically  be deemed  approved or delivered by Tenant
and the next succeeding time period shall commence.

         3.4  Tenant's  Lease  Default.  Notwithstanding  any  provision  to the
contrary  contained in the Lease, if a Default by Tenant as described in Section
26 of this Lease, or a default by Tenant under this Work Letter, has occurred at
any time on or before the  Substantial  Completion of the Premises,  then (i) in
addition to all other rights and remedies  granted to Landlord  pursuant to this
Lease,  Landlord  shall  have  the  right  to  cause  Contractor  to  cease  the
construction  of the Premises (in which case Tenant shall be responsible for any
delay in the Substantial Completion of the Premises caused by such work stoppage
as set forth in Section 5 of this Work Letter),  and (ii) all other  obligations
of  Landlord  under the terms of this Work Letter  shall be forgiven  until such
time as such default is cured pursuant to the terms of the Lease.



Agreed and Acknowledged:

LANDLORD:         STANFORD RANCH I, LLC


BY:                                                           DATE:
   ---------------------------------                               -------------
ITS:
   ---------------------------------

TENANT:  SPECTRIAN INC.


BY:                                                           DATE:
   ---------------------------------                               -------------
ITS:
   ---------------------------------

BY:                                                           DATE:
   ---------------------------------                               -------------
ITS:
   ---------------------------------




                                Page 2 of 2 Pages

<PAGE>
                                    Exhibit C

                             Stanford Business Park
                             Standard Specifications

I.       Walls

         A.       Demising Walls

                  1.       Framing

                           a.       Demising  wall shall be framed from finished
                                    floor to the underside of the roof deck. All
                                    demising  walls  shall be attached at top to
                                    the roof deck and to the floor.

                           b.       All  demising  walls  shall be framed with a
                                    stud  of  sufficient  size,  gauge  and at a
                                    spacing  such that  diagonal  bracing is not
                                    required.  Walls to a height of 16'0"  shall
                                    be framed with 3-5/8" 20 GA.  metal studs at
                                    2'-0" on center. Walls to heights from 16'0"
                                    to  25'-4"  shall be  framed  with 6" 18 GA.
                                    metal  studs at 16" on center.  Walls  above
                                    25'-4"  shall be framed with 6" 20 GA. metal
                                    studs at 16" and/or 12" as required  per the
                                    Table For Non-bearing  Screwable Steel Studs
                                    and  Joists  contained  in the  ICBO  Report
                                    #2274.

                  2.       Gypsum Wall Board

                           a.       Wall  shall be 5/8" Type "X"  gypsum  board.
                                    Fine tape finish.  U.O.N.  Gypsum wall board
                                    shall be placed on the opposite side U.O.N.

                           b.       Insulate walls for sound absorption R-11.

         B.       Interior Office Walls

                  1.       Framing

                           a.       Interior  walls shall be framed to either 6"
                                    above the finished ceiling or to the ceiling
                                    grid.  If to the grid,  all walls to receive
                                    edging for uniformity of appearance.

                           b.       Perimeter  office walls shall be framed full
                                    height to roof deck.  Sheetrock applied both
                                    sides to 6" above grid and to warehouse side
                                    only  balance  of the  frame.  See  Demising
                                    Walls above for requirements.


                           c.       Insulate walls for sound absorption R-11.

                  2.       Gypsum Wall Board

                           a.       Walls shall be 5/8" Type "X" gypsum board.

                  3.       Furred Walls

                           a.       Furred walls to be insulated with R-13.

         C.       Wall Finishes

                  1.       All office walls shall be textured with a light spray
                           texture.  Walls shall be scaled and painted  with two
                           coats of latex flat. Paint to be Kelly-Moore, Product
                           #555. Verify color with Tenant and Owner.

                  2.       Restroom  walls shall be textured  with a light spray
                           texture.  Wainscot  at  4'-0"  shall  be  flat  white
                           "Marlite,"  with brushed  aluminum trim. All restroom
                           ceilings  shall be 8' U.O.N.  All restroom  walls and
                           ceilings  shall receive two coats  semi-gloss  enamel
                           finish paint with light spray  texture.  Verify color
                           with Owner.  All restroom walls to be sound insulated
                           with R-11.

         D. All door openings shall use 16-gauge king stud.


                                Page 1 of 6 Pages


<PAGE>

II.      CEILINGS

         A.       Restrooms

                  1.       Framing  shall be 4" 25 GA.  metal  joist at 1'-4" on
                           center.  Maximum  span 8"- 9". For spans in excess of
                           8"-9" refer to the tables shown on the plans.

                  2.       Ceilings  shall be covered  with 5/8" type "X" gypsum
                           board.

                  3.       Finish  shall be light spray  texture  with two coats
                           semi-gloss latex paint.

                  4.       Insulate wall with R-11 insulation.  Insulate ceiling
                           with R-19 insulation.

                  5.       Ceiling height shall be 8'-0" above finished floor.

         B.       Office

                  1.       Ceilings  shall  be  2' x 4'  T-bar  white  suspended
                           ceiling system. 10' above finished floor.

                  2.       Ceiling tiles

                           a.       Standard  shall be Second Look II Acoustical
                                    ceiling  tile by  Armstrong  at 9'-0"  above
                                    finished  floor  in  office  area and 10' in
                                    tech area or at top of storefront if higher.
                                    Provide shims,  routered edges and detailing
                                    per manufacturer's specs.

                           b.       Alternate  shall be Standard  Fissured tiles
                                    for large  work  areas.  This tile  shall be
                                    used only when indicated on the plans.

                  3.       Provide R-19 unfaced fiberglass  insulation above all
                           lay-in  ceilings.  Cut  in  insulation  around  light
                           fixtures. If roof insulation is existing or specified
                           on the plans,  consult with Lincoln  Property Company
                           representatives   to  determine  if  lay-in   ceiling
                           insulation above grid is required.

                  4.       Provide  Seismic  Compression  Posts as  required  by
                           code.  All ceiling  fixtures  shall be supported  per
                           U.B.C. standards.


III.     FLOOR COVERINGS

         A.       Office

                  1.       Carpet shall be either "Shaw" or "Designweave" 26 oz.
                           yarn  weight  textured  loop or 32 oz yarn weight cut
                           pile in lobby area only. Verify color and choice with
                           Owner. All carpet shall receive 2-1/2" rubber top set
                           base U.O.N.

                  2.       Sheet  Vinyl  shall  be  Armstrong   "Classic  Corlon
                           Commercial  Sheet  Flooring"  or approved  equivalent
                           with 6" coving or approved  equal.  Verify color with
                           Owner.

                  3.       Vinyl  Composition Tile shall be Armstrong  "Standard
                           Exoclon" or approved  equivalent  with 2-1/2"  Rubber
                           base or approved equal. Verify color with Owner.

         B.       Warehouse

                  1.       Warehouse  floors shall be sealed with a  chlorinated
                           rubber sealer.  Contractor shall verify the condition
                           of the existing floors prior to submitting proposals.


IV.      DOORS

         A.       Door Frames

                  1.       All door  frames  to be Timely  pre-finished  frames.
                           Finish to match  storefronts  unless otherwise noted.
                           All frames shall be provided with a one (1) hour fire

                                               Page 2 of 6 Pages
<PAGE>

                           rating.  Frames  shall  have a  standard  certificate
                           plate indicating the one (1) hour rating.

         B.       Interior Doors

                  1.       Interior doors shall be 3'-0" x 7'0".  Doors shall be
                           paint  grade  plain by Cal- Wood.  All doors shall be
                           supplied with 20-minute label.

         C.       Hardware

                  1. Latchsets (no lock) to be Schlage  "Levon" "A" series (626)
satin bronze finish.

                  2. Hinges to match  hardware  finish.  Provide  1-1/2 pair for
each door.

                  3.       Doors to be  installed in a rated  condition  (1-hour
                           condition required by code) shall be installed with a
                           closer. Closer shall be 1.CN#1-160#1 aluminum. finish
                           to match door hardware unless otherwise noted.

                  4.       All private  offices  shall receive coat hook on back
                           of door, Ameruck BP 3460- 26.

V.       RESTROOM ACCESSORIES

         A.       All restrooms to include the following accessories:

                  1.       Towel Dispenser  shall be surface  mounted  stainless
                           steel. Provide Bobrich #B262, McKinney Parker #610 or
                           approved equal.

                  2.       Seat  Cover   Dispenser   shall  be  surface  mounted
                           stainless  steel.  Provide  Bobrich  #B221,  McKinney
                           Parker #610 or approved equal.

                  3.       Toilet Paper  Dispenser  shall be Bobrich  #B-2740 or
                           approved equal.

                  4.       Mirror.  Bobrich #B165 or approved equal.  Size shall
                           be 24" x 36".

                  5.       Grab bars.  Bobrich  #B6806,  36" and 42" or approved
                           equal.

                  6.       Feminine  Napkin  Disposal  shall be surface  mounted
                           stainless  steel.  Provide  McKinney  Parker  #610 or
                           approved equal. (Woman's restroom only.)

VI.      PLUMBING

         A.       All water piping shall be copper  U.O.N.  All hot water piping
                  shall be insulated with Armaflex form insulation.

         B.       Water closets to be American  Standard  elongated  water saver
                  Cadet #2108.408 and Olsonite #95 or approved equal.

         C.       Urinals to be American  Standard - water saver Allbrook Urinal
                  #65-40.017  w/Sloan  Royal  #180-15  flush  valve or  approved
                  equal.

         D.       Lavatories to be American  Standard Lucern lavatory  #0355.012
                  wall hung with 2103.620  faucet with 4" wrist blade handles or
                  approved equal.

                  Lavatories in counter top shall be American  Standard "Horizon
                  Lavatory"  #3301.025 with 2103.1459 faucet with 4" wrist blade
                  handles and pop-up drain. Verify color of counter with Owner.

         E.       Hospitality  sink when called for shall be Elkay #1.R-1918 19"
                  x 18" x 7-12" D stainless  steel bar sink with LK-2223  deluxe
                  two handle bar faucet with 9" high traditional swing spout and
                  LK-367  small  basket  strainer.  Sink shall be  installed  in
                  plastic laminate counter unless otherwise noted.

         F.       Drinking  fountain  when called for shall be Haws barrier free
                  water cooler model #11CBF7.

         G.       Service  sink  when  called  for  shall be  American  Standard
                  "Lakewell"  #7692.023  with  8769.018  rim board and  8340.242
                  faucet.

                                Page 3 of 6 Pages


<PAGE>

         H.       All hot water  heaters to be National  Steel  Construction  or
                  approved equal.

         I.       Showers where called for.  Handicapped, prefabricated Kimstock
                  Southwest, Inc. Verify model number with Owner.

         J.       All  toilet  partitions  where  called for shall be Sony Metal
                  Normandie   or   Knicherbocker   New  Yorker,   baked   enamel
                  floor-braced  with coat hook and  bumper.  Verify  color  with
                  owner.

         K.       Breakroom sink to have 1/2 HP (min.) garbage disposal.

         L.       Water main and branch lines to have valve shutoffs.


VII.     ELECTRICAL

         A.       Designed  and  installed  in  accordance  with the  California
                  Energy Act - title 24, 225 amp, 208 volt service  typical,  42
                  circuit distribution panel.

         B.       Power   distributed  as  required  by  Tenant  for  warehouse,
                  assembly and manufacturing equipment,  appliance operating and
                  special  office   machinery   shall  be  ceiling  hung  U.O.N.
                  Subpanels  and  transformers  shall be  located  in the tenant
                  space per code.

         C.       Warehouse.   Flush  mounted  ('296  strip   fluorescent  light
                  fixtures by  Lithonia  or)  approved  equal in areas with open
                  ceiling per Exhibit "A".

         D.       Ceiling mounted fixture at restroom-Lithonia  Wallens, #1.B240
                  120A.

         E.       Other  lighting  as  required  by Tenant or code.  Same  light
                  fixtures to be used as called out in C. above except  provided
                  on  8'  x 8'  centers  for  shipping/receiving  area  will  be
                  provided.

         F.       Provide  ivory  plates  and  covers  for  all  power  outlets,
                  switches  or  plates.  Provide  rings  and  pull  wires at all
                  telephone, computer and cable (C.R.T.) outlets as indicated on
                  plan.  All switches to be at 46" on center,  all outlets to be
                  at 18" on  center,  all  warehouse  outlets  at 26" on center.
                  Provide  stainless steel covers in manufacturing and warehouse
                  areas.

         G.       Illuminated exit signs as required by Tenant or code.

         H.       Office  lighting  is by 2' x 4' recessed  mounted  fluorescent
                  ceiling fixtures,  Lithonia  2GT340A12-277V or equal, approved
                  by Owner, with acrylic prism lens.  Lighting to comply to T-24
                  Energy Standards. Pattern shall be 8' x 8'.

         I.       2-4" PVC chase and pull line for telephone from T.B.B. to T.I.
                  space.  Provide 4' x 8' x 3/4'  backboard at location shown on
                  drawings.

         J.       Any switch gear used in Electric  room that will impede future
                  T.I.  additions  is  not  permissible  without  prior  written
                  permission from Landlord.

         K.       1500 Amps/480 Volt/3-Phase power to be allocated to Spectrian.
                  Of the remaining 500 Amps/480  Volt/3-Phase  power,  Spectrian
                  shall be  entitled  to a pro rata  share  basis of this  power
                  should Spectrian expand into the adjacent space in the future.

VIII.    FINISHES/SPECIALTIES

         A.       Special office wall or floor finishes.  See T.I.  drawings for
                  specifications.

         B.       Lunch room,  conference room,  coffee or wet bar cabinetry and
                  plumbing and appliances as required by Tenant.

         C.       Refer  to  tenant   improvement   plans  for   locations   and
                  specifications.

         D.       All exterior  windows to receive 1"  mini-blinds to be outside
                  mounted on the window mullion. Each mullion to receive one (1)
                  mini-blind from ceiling height to floor.
                  Verify color and brand with Owner.

IX.      FIRE SPRINKLERS

                                Page 4 of 6 Pages


<PAGE>

         A.       Designed in accordance with local codes.  Sprinkler pipe drops
                  are extended from  existing fire lines in the roof  structure.
                  Sprinkler heads are semi-recessed  chrome with chrome color to
                  finish. Fire hoses, extinguisher and detectors are provided as
                  required by code or tenant.  Sprinkler heads shall be centered
                  in 2 x 2 section of 2 x 4 Second Look II ceiling tile.


                            HVAC PERFORMANCE CRITERIA

         1.       Load  calculations  for  standard  office  space/manufacturing
                  space/warehouse space:

                  A.       Use  ASHRAE   fundamentals  summer  design  dry  bulb
                           temperature at 0.5%.

                  B.       Indoor  design   conditions  are  to  be  72  degrees
                           Fahrenheit   50%  R.H.  for  summer  and  70  degrees
                           Fahrenheit for winter.

                  C.       Lighting  internal  load  allowance:  1.5  watts  per
                           square foot.

                  D.       Miscellaneous equipment internal load allowance:  3.0
                           watts per square foot.

                  E.       People load allowance:  120 square foot per person or
                           actual count, whichever is greater.

                  F.       Minimum ventilation allowance:  20CFM per person.

         2.       HVAC  systems  shall be fully  zoned for  exposure,  usage and
                  occupancy.

         3.       All roof  mounted  HVAC units to be  mounted  above a glue-lam
                  unless otherwise approved structurally designed to accommodate
                  load.

         4.       Toilet  rooms to be  exhausted  at 12 air  changes  per  hour,
                  exhausted to exterior.

         5.       Air conditioning equipment to be Carrier or Trane.

         6.       Exhaust fans to be sized properly.

         7.       Supply diffusers to be modular air core type; Titus, Metal-Air
                  or equal.

         8.       HVAC ductwork to be metallic.

         9.       Discharge and intake ductwork at air  conditioning  unit shall
                  be  internally  lined with 1" - 1-1/2 lb. per cubic foot vinyl
                  face,  black matt insulation for sound  attenuation  (designed
                  for proper acoustical attenuation).

         10.      Wrap all unlined  concealed supply and return duct with 2" 3/4
                  lb. per cubic foot insulation and foil vapor barrier.

         11.      Wire  flexible  duct is  ONLY to be used at the  supply/return
                  outlet (maximum length 10').

         12.      Rectangular elbows to be installed with directional vanes.

         13.      Rectangular  taps to be constructed  with a 45 degree upstream
                  side.

         14.      All supply branches to have a manual volume damper.

         15.      Support  for all piping and  ductwork  shall be in  accordance
                  with SMACNA  "Guidelines for Seismic  Restraints of Mechanical
                  Systems."

         16.      Intentionally omitted.

         17.      Basic HVAC  control  system  shall be  Honeywell  programmable
                  timeclock-thermostat configuration.

         18.      Each thermostat is to be installed with a 3-hour by-pass timer
                  for overtime usage.

         19.      Air balance shall be done by the installing  contractor and to
                  provide balance report to Tenant.

                                Page 5 of 6 Pages


<PAGE>

         20.      Mechanical  contractor  is to comply with all ASHRAE,  SMACNA,
                  UBC and local code requirements.

         21.      All material and workmanship provided by mechanical contractor
                  is to be warranted to be free from defects for a period of one
                  (1) year.

         22.      All gas meters to be approved by Landlord prior to selection.

         23.      All duct joints shall be sealed airtight.

         24.      Submit Title 24 plans, calls for permit.

         25.      Provide slot diffusers in lobby.

         26.      Fire/smoke  dampers and detectors to be provided and installed
                  by mechanical contractor. To be constructed as per code.

         27.      Condensate drain to be approved receptacle/location.





                                Page 6 of 6 Pages


<PAGE>



                                    EXHIBIT D

                           ATHERTON CENTER SIGN POLICY

                  Tenant Suite Identification - Window Graphics




Height:                    Tenant: Copy - 4".

General                    Placement:  All copy  centered onto glass area to the
                           left   or   right   of   entrance   door,   whichever
                           appropriate.

Copy                       Placement:  5'0" from  floor to middle of sign.  Copy
                           not to exceed a 3" margin on right and left sides.

Material:                  Vinyl

Color:                     Matte white

Typeface:                  Tenant copy - Century Bold, upper and lower case.

Copy:                      Signage  shall be limited to the name of the  tenant,
                           as detailed in the lease,  or the  publicly  recorded
                           assumed  business  name of the tenant,  and shall not
                           include a descriptive advertisement.

Responsibility:            Tenant: signage shall be paid by the tenant.





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                                   EXHIBIT "E"

                              RULES AND REGULATIONS


1. Lessee shall not obstruct or  interfere  with the rights of other  lessees of
the Project,  or of persons having business in the Project, or in any way injure
or annoy such lessees or persons.

2.  Lessee  shall not commit any act or permit  anything in or about the Project
which shall or might  subject  Lessor to any  liability  or  responsibility  for
injury to any person or property by reason of any  business or  operation  being
carried on, in or about the Project or for any other reason.

3. Lessee shall not use the Project for lodging,  sleeping,  cooking, or for any
immoral or illegal  purpose or for any purpose that will damage the Project,  or
the reputation  thereof,  or for any purposes other than those  specified in the
Lease.

4. Canvassing, soliciting and peddling in the Project are prohibited, and Lessee
shall cooperate to prevent such activities.

5. Lessee  shall not bring or keep  within the  Project  any animal,  bicycle or
motorcycle.

6. Except as expressly provided in this Lease,  Lessee shall not cook or prepare
food,  or place or use any  inflammable,  combustible,  explosive  or  hazardous
fluid, chemical,  device,  substance or material in or about the Project without
the prior  written  consent of Lessor.  Lessee shall  comply with all  statutes,
ordinances,  rules, orders, regulations and requirements imposed by governmental
or  quasi-governmental  authorities in connection with fire and panic safety and
fire prevention and shall not commit any act, or permit any object to be brought
or kept in the  Project,  which  shall  result in a change of the  rating of the
Project by the Insurance Services Office or any similar person or entity. Lessee
shall not  commit  any act or permit  any  object to be  brought  or kept in the
Project  which shall  increase  the rate of fire  insurance on the Project or on
property located therein.  Notwithstanding the foregoing, Lessee may cook with a
microwave oven for personal use of its employees.

7.  Lessee  shall not conduct in or about the  Project  any  auction,  public or
private, without the prior written approval of Lessor.

8. Lessee  shall not install or use in the  Project any air  conditioning  unit,
engine,  boiler,  generator,  machinery,  heating  unit,  stove,  water  cooler,
ventilator,  radiator or any other similar  apparatus  without the express prior
written consent of Lessor, and then only as Lessor may direct.

9. All  equipment and any other device of any  electrical  or mechanical  nature
shall be placed by Lessee in the Premises in settings  approved by Lessor, so as
to absorb or prevent any vibration,  noise or annoyance.  Lessee shall not cause
improper noises, vibrations or odors within the Project.

10.  Lessee  shall not move or install  such  objects in or about the Project in
such a fashion as to unreasonably  obstruct the activities of other lessees, and
all such moving shall be at the sole expense, risk and responsibility of Lessee.

11.  Lessee  shall not place  within the  Project any safes,  copying  machines,
computer  equipment or other objects of unusual size or weight, nor shall Lessee
place   within  the  Project  any  objects   which   exceed  the  floor   weight
specifications  of the  Project  without the express  prior  written  consent of
Lessor.  The placement and  positioning  of all such objects  within the Project
shall be prescribed by Lessor and such objects  shall,  in all cases,  be placed
upon plates or footings of such size as shall be prescribed by Lessor.

12. Lessee shall not deposit trash, refuse,  cigarettes,  or other substances of
any kind within or out of the Project,  except in the refuse containers provided
therefor.  Lessee shall not introduce into the Project any substance which might
add an undue burden to the

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cleaning or  maintenance  of the Premises or the Project.  Lessee shall exercise
its best  efforts to keep the  sidewalks,  entrances,  passages,  courts,  lobby
areas, garages or parking areas, elevators,  escalators,  stairways, vestibules,
public corridors and halls in and about the Project (hereinafter "Common Areas")
clean and free from rubbish.

13. Lessee shall use the Common Areas only as a means of ingress and egress, and
Lessee  shall  permit no loitering by any persons upon Common Areas or elsewhere
within the Project. The Common Areas and roof of the Project are not for the use
of the general public, and Lessor shall in all cases retain the right to control
or prevent  access  thereto by all persons  whose  presence,  in the judgment of
Lessor, shall be prejudicial to the safety,  character,  reputation or interests
of the Project and its lessees. Lessee shall not enter the mechanical rooms, air
conditioning rooms, electrical closets,  janitorial closets, or similar areas or
go upon the roof of the Project  without the express  prior  written  consent of
Lessor.

14.  Lessor  reserves  the right to exclude or expel from the Project any person
who, in the opinion of Lessor,  is  intoxicated or under the influence of liquor
or  drugs  or who  shall  in  any  manner  act in  violation  of the  rules  and
regulations of the Project.

15. Lessor shall have the right to designate the area or areas, if any, in which
Lessee  and  Lessee's  servants,   employees,   contractors,   jobbers,  agents,
licensees,  invitees,  guests and visitors may park vehicles, and Lessee and its
servants, employees,  contractors,  jobbers, agents, licensees, invitees, guests
and visitors and shall observe and comply with all driving and parking signs and
markers  within  and  about the  Project.  All  parking  ramps and areas and any
pedestrian walkways,  plazas or other public areas forming a part of the Project
or the land  upon  which the  Project  is  situated  shall be under the sole and
absolute  control of Lessor who shall have the  exclusive  right to regulate and
control those areas.

16. Lessee shall not use the washrooms,  restrooms, and plumbing fixtures of the
Project, and appurtenances  thereto, for any other purpose than the purposes for
which they were constructed,  and Lessee shall not waste water by interfering or
tampering  with the  faucets  or  otherwise.  If  Lessee or  Lessee's  servants,
employees, contractors, jobbers, agents, licensees, invitees, guests or visitors
cause  any  damage  to  such   washrooms,   restrooms,   plumbing   fixtures  or
appurtenances,  such damage  shall be repaired at Lessee's  expense,  and Lessor
shall not be responsible therefor.

17. Lessee shall not mark,  paint,  drill into, cut, string wires within,  or in
any way  deface any part of the  Project,  without  the  express  prior  written
consent  of  Lessor,  and as  Lessor  may  direct.  Upon  removal  of  any  wall
decorations or  installations  or floor  coverings by Lessee,  any damage to the
walls or floors  shall be repaired by Lessee at Lessee's  sole cost and expense.
Without  limitation upon any of the provisions of the Lease,  Lessee shall refer
all contractor's representatives,  installation technicians,  janitorial workers
and other mechanics,  artisans and laborers  rendering any service in connection
with the  repair,  maintenance  or  improvement  of the  Premises  to Lessor for
Lessor's  supervision,  approval  and  control  before  performance  of any such
service.  This  Paragraph  17 shall apply to all work  performed in the Project,
including  attachments and installations of any nature affecting floors,  walls,
woodwork,  trim,  windows,  ceilings,  equipment  or any  other  portion  of the
Project.  Plans and  specifications  for such work,  prepared at  Lessee's  sole
expense  shall be submitted  to Lessor and shall be subject to Lessor's  express
prior written  approval in each instance  before the  commencement  of work. All
installations,  alterations  and additions  shall be  constructed by Lessee in a
good and  workman-like  manner and only good grades of material shall be used in
connection therewith. The means by which telephone,  telegraph and similar wires
are to be introduced to the Premises and the location of telephones,  call boxes
and other  office  equipment  affixed  to the  Premises  shall be subject to the
express  prior  written  approval of Lessor.  The use of cement or other similar
adhesive material is expressly prohibited.

18. No signs,  awnings,  showcases,  advertising devices or other projections or
obstructions  shall be attached to the outside  walls of the Project or attached
or placed upon any Common Areas  without the express  prior  written  consent of
Lessor.  No window shades,  blinds,  drapes or other window  coverings  shall be
installed in the Project without the express prior written consent of Lessor. No
sign, picture,  advertisement,  window display or other public display or notice
shall be inscribed,  exhibited,  painted or affixed by Lessee upon or within any
part of the Premises in such a fashion as to be seen from the

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outside of the Premises or the Project without the express prior written consent
of Lessor.  In the event of the  violation  of any of the  foregoing  by Lessee,
Lessor may remove the articles  constituting the violation without any liability
and Lessee shall reimburse  Lessor for the expense incurred in such removal upon
demand as additional rent under the Lease.  Interior signs on doors and upon the
Project  directory  shall be subject to the express  prior  written  approval of
Lessor and shall be  inscribed,  painted or affixed by Lessor at the  expense of
Lessee.

19.  Lessee  shall not use the name of the Project or of Lessor in its  business
name,  trademarks,  signs,  advertisements,  descriptive  material,  letterhead,
insignia or any other  similar  item  without  Lessor's  express  prior  written
consent.

20.  Lessee shall be entitled to have its name entered upon the directory of the
Project.  In the event that Lessee wishes to have  additional  entries made upon
the Project  directory  for the names of employees  of Lessee who occupy  office
space  within  the  Premises,  such  entries  may be  allowed  by  Lessor in its
reasonable  discretion,  and Lessor may require that Lessee pay a reasonable fee
for each such additional  entry. All entries upon the Project directory shall be
in uniform print of a size, style and format selected by Lessor.

21. The sashes, sash doors,  skylights,  windows and doors that reflect or admit
light or air into the Common Areas shall not be covered or obstructed by Lessee,
through  placement  of objects  upon window  sills or  otherwise.  Lessee  shall
cooperate with Lessor in obtaining  maximum  effectiveness of the cooling system
of the Project by closing drapes and other window  coverings when the sun's rays
fall upon windows of the Premises.  Lessee shall not obstruct,  alter, or in any
way impair  the  efficient  operation  of  Lessor's  heating,  ventilating,  air
conditioning,  electrical,  fire, safety or lighting  systems,  nor shall Lessee
tamper  with or change the  setting of any  thermostat  or  temperature  control
valves in the Project.

22. Subject to applicable  fire or other safety  regulations,  all doors opening
onto Common Areas and all doors upon the perimeter of the Premises shall be kept
closed and, during non-business hours, locked, except when in use for ingress or
egress.  If  Lessee  uses  the  Premises  after  regular  business  hours  or on
non-business days, Lessee shall lock any entrance doors to the Project or to the
Premises used by Lessee immediately after using such doors.

23.  Employees of Lessor shall not receive or carry messages for or to Lessee or
any other  person,  nor contract with nor render free or paid services to Lessee
or  Lessee's  servants,  employees,   contractors,  jobbers,  agents,  invitees,
licensees,  guests or  visitors.  In the event  that any of  Lessor's  employees
perform any such services,  such  employees  shall be deemed to be the agents of
Lessee  regardless  of whether or how payment is arranged for such  services and
Lessee hereby  indemnifies  and holds Lessor harmless from any and all liability
in  connection  with any such  services and any  associated  injury or damage to
property or injury or death to persons resulting therefrom.

24. All keys to the exterior  doors of the Premises  shall be obtained by Lessee
from Lessor,  and Lessee shall pay to Lessor a reasonable  deposit determined by
Lessor from time to time for such keys.  Lessee shall not make duplicate  copies
of such keys.  Lessee  shall not install  additional  locks or bolts of any kind
upon any of the doors or windows of, or within,  the  Project,  nor shall Lessee
make any changes in existing locks or the mechanisms thereof. Lessee shall, upon
the  termination  of its tenancy,  provide Lessor with the  combinations  to all
combination  locks on safes,  safe cabinets and vaults and deliver to Lessor all
keys to the Project, the Premises,  and all interior doors,  cabinets, and other
key- controlled  mechanisms therein,  whether or not such keys were furnished to
Lessee by  Lessor.  In the event of the loss of any key  furnished  to Lessee by
Lessor, Lessee shall pay to Lessor the cost of replacing the same or of changing
the lock or locks  opened by such last key if Lessor  shall deem it necessary to
make such a change.

25.  Access may be had by Lessee to the Common  Areas and to the Premises at any
time.  At other times  access to the  Project  may be refused  unless the person
seeking  admission is known to the watchman in charge, if any, and/or has a pass
or is properly identified.  Lessee shall be responsible for all persons for whom
Lessee  requests  passes  and shall be  liable  to  Lessor  for all acts of such
persons.  Lessor  shall in no case be liable for  damages for the  admission  or
exclusion of any person from the Project. In case of

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invasion, mob, riot, public excitement, or other commotion,  Lessor reserves the
right to prevent  access to the Project for the safety of lessees and protection
of property in the Project.

26. Lessor shall not be responsible for, and Lessee hereby indemnifies and holds
Lessor  harmless  from any  liability  in  connection  with,  the  loss,  theft,
misappropriation  or other  disappearance of furniture,  furnishings,  fixtures,
machinery,  equipment,  money,  jewelry or other items of personal property from
the Premises or other parts of the Project,  regardless  of whether the Premises
or Project are locked at the time of such loss.

27. For purposes hereof, the terms "Lessor",  "Lessee", "Project" and "Premises"
are  defined as those  terms are  defined in the Lease to which  these Rules and
Regulations  are attached.  Wherever  Lessee is obligated  under these Rules and
Regulations to do or refrain from doing an act or thing,  such obligation  shall
include the  exercise by Lessee of its best  efforts to secure  compliance  with
such  obligation  by the  servants,  employees,  contractors,  jobbers,  agents,
invitees,  licensees,  guests and visitors of Lessee.  The term "Project"  shall
include the Premises, and any obligations of Lessee hereunder with regard to the
Project  shall apply with equal force to the  Premises and to other parts of the
Project.

                                Page 4 of 4 Pages


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                                   EXHIBIT "F"

                               Storage and Use of
                       Permitted Hazardous Material/Wastes



Landlord   will  allow  the  use  and   storage  of  the   following   hazardous
materials/wastes  at the Premises,  so long as Tenant complies with all terms of
the Lease regarding Hazardous Materials:


                                Isopropyl Alcohol
                                   Solder Flux
                                      Wipes
                                      Tips
                                     Gloves
                                   Finger Cots


                  and such other  Hazardous  Material  required  and used in the
                  production  of  Tenant's  Products,  provided  their  use  and
                  disposal adheres to federal and state laws.