<PAGE>
 
                                 LEASE AGREEMENT
                                    (NNN R&D)
                             Basic Lease Information

Lease Date:                   March 9,1998

Landlord:                     LINCOLN-WHITEHALL REALTY, L.L.C.,
                              a Delaware limited liability company

Landlord's Address:           c/o LPC MS, Inc.
                              101 Lincoln Centre Drive, Fourth Floor
                              Foster City, California 94404-1167

Tenant:                       PRI Automation, Inc.,
                              a Massachusetts corporation

Tenant's Address:             805 Middlesex Turnpike
                              Billerica, Massachusetts 01821-3986

                              With a copy to:

                              Foley, Hoag & Eliot LLP
                              One Post Office Square
                              Boston, Massachusetts 02109
                              Attention: Deborah B. Breznay

Premises:                     Approximately 48,411 rentable square feet as shown
                              on Exhibit A

Premises Address:             455 N. Bernardo Avenue
                              Mountain View, California 94043

Building D:                               Approximately 48,411 rentable square
                                          feet
Lot (Building's tax parcel):              APN 165-36-002
Park: Middlefield Bernardo Business Park  Approximately 171,198 rentable square
                                          feet

Term:                         May 1, 1998 ("Commencement Date"), through April
                              30, 2003 ("Expiration Date")

Base Rent (Para. 3):          Seventy seven thousand four hundred fifty-seven
                              and 60/100 Dollars ($77,457.60) per month
                              commencing on the Commencement Date through April
                              30, 1999.

Adjustments to Base Rent:     Effective May 1, 1999, the Base Rent shall
                              increase to $79,394.04 per month;
                              Effective May 1, 2000, the Base Rent shall
                              increase to $81,330.48 per month;
                              Effective May 1, 2001, the Base Rent shall
                              increase to $83,266.92 per month;
                              Effective May 1, 2002, the Base Rent shall
                              increase to $85,203.36 per month.

Security Deposit (Para. 4):   One hundred thousand and 00/100 Dollars
                              ($100,000.00)

*Tenant's Share of Operating Expenses (Para. 6.1):        28.28% of the Park
*Tenant's Share of Tax Expenses (Para. 6.2):              28.28% of the Park
*Tenant's Share of Common Area Utility Costs (Para. 7):   28.28% of the Park
*Tenant's Share of Utility Expenses (Para. 7):            28.28% of the Park
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

Permitted Uses (Para. 9):     The Premises shall be used solely for engineering,
                              research and development and the light
                              manufacturing of factory automation systems, but
                              only to the extent permitted by the City of
                              Mountain View and all agencies and governmental
                              authorities having jurisdiction thereof.

Unreserved
Parking Spaces:               One hundred sixty-nine (169) non-exclusive and
                              non-designated spaces

Broker (Para. 38):            Equus Associates for Tenant

Exhibits:                     Exhibit A - Premises, Building, Lot and/or Park
                              Exhibit B - Tenant Improvements
                              Exhibit C - Rules and Regulations
                              Exhibit D - Covenants, Conditions and Restrictions
                                          (Intentionally Omitted)
                              Exhibit E - Hazardous Materials Disclosure
                                          Certificate - Example
                              Exhibit F - Change of Commencement Date - Example
                              Exhibit G - Tenant's Initial Hazardous Materials
                                          Disclosure Certificate


                                       1
<PAGE>
 
                              Exhibit H - Sign Criteria (Intentionally Omitted)
                              Exhibit I - Form of Subordination, Non-Disturbance
                                          and Attornment Agreement

Addenda:                      Addendum 1:       Option to Extend
                              Addendum 2:       Right of First Offer


                                       2
<PAGE>
 
                                TABLE OF CONTENTS

SECTION                                                                     PAGE
-------                                                                     ----

 1.   PREMISES .............................................................  4

 2.   ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES ...........  4

 3.   RENT .................................................................  5

 4.   SECURITY DEPOSIT .....................................................  5

 5.   TENANT IMPROVEMENTS ..................................................  5

 6.   ADDITIONAL RENT ......................................................  5

 7.   UTILITIES ............................................................  8

 8.   LATE CHARGES .........................................................  8

 9.   USE OF PREMISES ......................................................  9

10.   ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES ................. 10

11.   REPAIRS AND MAINTENANCE .............................................. 10

12.   INSURANCE ............................................................ 11

13.   WAIVER OF SUBROGATION ................................................ 13

14.   LIMITATION OF LIABILITY AND INDEMNITY ................................ 13

15.   ASSIGNMENT AND SUBLEASING ............................................ 14

16.   AD VALOREM TAXES ..................................................... 15

17.   SUBORDINATION ........................................................ 15

18.   RIGHT OF ENTRY ....................................................... 16

19.   ESTOPPEL CERTIFICATE ................................................. 16

20.   TENANT'S DEFAULT ..................................................... 17

21.   REMEDIES FOR TENANT'S DEFAULT ........................................ 18

22.   HOLDING OVER ......................................................... 19

23.   LANDLORD'S DEFAULT ................................................... 19

24.   PARKING .............................................................. 19

25.   SALE OF PREMISES ..................................................... 19

26.   WAIVER ............................................................... 19

27.   CASUALTY DAMAGE ...................................................... 19

28.   CONDEMNATION ......................................................... 21

29.   ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS ............................ 22

30.   FINANCIAL STATEMENTS ................................................. 24

31.   GENERAL PROVISIONS ................................................... 24

32.   SIGNS ................................................................ 26

33.   MORTGAGEE PROTECTION ................................................. 26

34.   QUITCLAIM ............................................................ 26

35.   MODIFICATIONS FOR LENDER ............................................. 26

36.   WARRANTIES OF TENANT ................................................. 26

37.   COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT ...................... 26

38.   BROKERAGE COMMISSION ................................................. 27

39.   QUIET ENJOYMENT ...................................................... 27

40.   LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS ....... 27


                                       3
<PAGE>
 
                                 LEASE AGREEMENT

DATE:       This Lease is made and entered into as of the Lease Date set forth
            on Page 1. The Basic Lease Information set forth on Page 1 and this
            Lease are and shall be construed as a single instrument.

1. Premises: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a license for the
right to use, on a non-exclusive basis, parking areas and ancillary facilities
located within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1. Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all occupants of the Building and/or the Park
(for example an electrical room or telephone room). Tenant further agrees that
the number of rentable square feet of the Building, the Lot and the Park may
subsequently change after the Lease Date commensurate with any modifications to
any of the foregoing by Landlord, and Tenant's Share shall accordingly change.

2. Adjustment of Commencement Date; Condition of the Premises:

      2.1 If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the Lease Term and the obligation
to pay Rent shall commence on the date possession is tendered and the Expiration
Date shall be extended commensurately. In the event the commencement date and/or
the expiration date of this Lease is other than the Commencement Date and/or
Expiration Date specified in the Basic Lease Information, as the case may be,
Landlord and Tenant shall execute a written amendment to this Lease,
substantially in the form of Exhibit F hereto, wherein the parties shall specify
the actual commencement date, expiration date and the date on which Tenant is to
commence paying Rent. The word "Term" whenever used herein refers to the initial
term of this Lease and any extension thereof. By taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises in good condition
and state of repair, however, Landlord shall deliver the Premises with the
existing building operating systems including electrical, mechanical and
plumbing systems in good working condition as of the Commencement Date of the
Lease. Landlord shall also repair, at its sole cost and expense, after receipt
of Tenant's written notice thereof, which notice must be delivered to Landlord
within the first sixty (60) days of the initial term of this Lease, any defects
or deficiencies of the mechanical, plumbing and electrical Systems serving the
Premises which are not in good working order to the extent Tenant has not caused
such systems to not be in good working order. If Tenant fails to timely deliver
to Landlord any such written notice of the aforementioned defects or
deficiencies within said 60-day period, Landlord shall have no obligation to
perform any such work thereafter, except as otherwise specifically provided in
this Lease. In addition, Landlord shall be responsible to provide ceiling tiles
and insulation to the existing ceiling grid and provide mini blinds to all
existing windows. Tenant hereby acknowledges and agrees that neither Landlord
nor Landlord's agents or representatives has made any representations or
warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose. If Landlord does not tender possession to Tenant of the Premises
within ninety (90) days after the Commencement Date (the "Outside Date")
(subject to any Force Majeure Delays or delays attributable to Tenant's or
Tenant's Representatives' acts or omissions ("Tenant Delays"), in which event
such Outside Date shall be extended commensurately by the period of time
attributable to such delays), then either Tenant or Landlord may terminate this
Lease by delivering written notice thereof to the other party no later than the
date which is ten (10) business days after the Outside Date, as extended by the
period of time attributable to any Force Majeure Delays and/or Tenant Delays. If
either party fails to timely terminate the Lease as and when provided herein, or
if Landlord delivers to Tenant possession of the Premises at any time earlier
than the Outside Date (as such Outside Date may be extended due to Force Majeure
Delays or Tenant Delays, as the case may be), then upon the occurrence of any
such events the foregoing right given to Tenant and Landlord to terminate this
Lease as provided herein shall lapse and be null and void upon the occurrence of
such event and the Lease shall remain in full force and effect with Tenant and
Landlord having no further right to terminate this Lease pursuant to the
foregoing provisions.

      2.2 In the event Landlord permits Tenant to occupy the Premises prior to
the Commencement Date, for purposes other than construction of Tenant's
improvements by Tenant, such occupancy shall be at Tenant's sole risk and
subject to all the provisions of this Lease, including, but not limited to, the
requirement to pay Rent and the Security Deposit, and to obtain the insurance
required pursuant to this Lease and to deliver insurance certificates as
required herein. In addition to the foregoing, Landlord shall have the right to
impose such additional conditions on Tenant's early entry as Landlord shall deem
appropriate. If, at any time, Tenant is in default of any term, condition or
provision of this Lease, any


                                       4
<PAGE>
 
such waiver by Landlord of Tenant's requirement to pay rental payments shall be
null and void and Tenant shall immediately pay to Landlord all rental payments
so waived by Landlord. Notwithstanding the above Tenant shall have the right to
access the Premises prior to the Commencement Date for construction of the
Tenant Improvements.

3. Rent: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent specified in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of the Lease. In addition to
the Base Rent set forth in the Basic Lease Information, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month, as set forth in Section 6.3 hereof, throughout the balance of
the Term of this Lease, as Additional Rent, Tenant's Share of Operating
Expenses, Tax Expenses, Common Area Utility Costs, and Utility Expenses. Tenant
shall also pay to Landlord as Additional Rent hereunder, immediately on
Landlord's demand therefor, any and all costs and expenses incurred by Landlord
to enforce the provisions of this Lease, including, but not limited to, costs
associated with the delivery of notices, delivery and recordation of notice(s)
of default, attorneys' fees, expert fees, court costs and filing fees
(collectively, the "Enforcement Expenses"). The term "Rent" whenever used
herein refers to the aggregate of all these amounts. If Landlord permits Tenant
to occupy the Premises without requiring Tenant to pay rental payments for a
period of time, the waiver of the requirement to pay rental payments shall only
apply to waiver of the Base Rent and Tenant shall otherwise perform all other
obligations of Tenant required hereunder. The Rent for any fractional part of a
calendar month at the commencement or termination of the Lease term shall be a
prorated amount of the Rent for a full calendar month based upon a thirty (30)
day month. The prorated Rent shall be paid on the Commencement Date and the
first day of the calendar month in which the date of termination occurs, as the
case may be.

4. Security Deposit: Upon Tenant's execution of this Lease, Tenant shall deliver
to Landlord, as a Security Deposit for the performance by Tenant of its
obligations under this Lease, the amount specified in the Basic Lease
Information. If Tenant is in default, Landlord may, but without obligation to do
so, use the Security Deposit, or any portion thereof, to cure the default or to
compensate Landlord for all damages sustained by Landlord resulting from
Tenant's default, including, but not limited to the Enforcement Expenses. Tenant
shall, immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. As soon as practicable after the termination of this Lease,
Landlord shall return the Security Deposit to Tenant, less such amounts as are
reasonably necessary, as determined reasonably by Landlord, to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to the condition in
which Tenant is required to surrender the Premises hereunder, reasonable wear
and tear excepted. If the cost to restore the Premises exceeds the amount of the
Security Deposit, Tenant shall promptly deliver to Landlord any and all of such
excess sums as reasonably determined by Landlord. Landlord shall not be required
to keep the Security Deposit separate from other funds, and, unless otherwise
required by law, Tenant shall not be entitled to interest on the Security
Deposit. In no event or circumstance shall Tenant have the right to any use of
the Security Deposit and, specifically, Tenant may not use the Security Deposit
as a credit or to otherwise offset any payments required hereunder, including,
but not limited to, Rent or any portion thereof.

5. Tenant Improvements: Tenant hereby accepts the Premises as suitable for
Tenant's intended use and as being in good operating order, condition and
repair, "AS IS", except as specified in Section 2.1 and Exhibit B attached
hereto. Landlord or Tenant, as the case may be, shall install and construct the
Tenant Improvements (as such term is defined in Exhibit B hereto) in accordance
with the terms, conditions, criteria and provisions set forth in Exhibit B.
Landlord and Tenant hereby agree to and shall be bound by the terms, conditions
and provisions of Exhibit B. Tenant acknowledges and agrees that neither
Landlord nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability, fitness or condition of the Premises for
the conduct of Tenant's business or for any other purpose, including without
limitation, any storage incidental thereto. Any exception to the foregoing
provisions must be made by express written agreement by both parties.

6. Additional Rent: It is intended by Landlord and Tenant that this Lease be a
"triple net lease." The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent are to be paid by Tenant to Landlord as additional rent (collectively,
"Additional Rent").


                                       5
<PAGE>
 
      6.1 Operating Expenses: In addition to the Base Rent set forth in Section
3, Tenant shall pay Tenant's Share, which is specified in the Basic Lease
Information, of all Operating Expenses as Additional Rent. The term "Operating
Expenses" as used herein shall mean the total amounts paid or payable by
Landlord in connection with the ownership, maintenance, repair and operation of
the Premises, the Building and the Lot, and where applicable, the common areas
of the Park referred to in the Basic Lease Information. The amount of Tenant's
Share of Operating Expenses shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord if there is a change in the
rentable square footage of the Premises, the Building and/or the Park. These
Operating Expenses may include, but are not limited to:

            6.1.1 Landlord's cost of repairs to, and maintenance of, the roof,
      the roof membrane and the exterior walls of the Building;

            6.1.2 Landlord's cost of maintaining the outside paved area,
      landscaping and other common areas for the Park. The term "Common Areas"
      shall mean all outside areas and facilities within the Park exclusive of
      the Premises and the other portions of the Park leasable exclusively to
      other tenants. The Common Areas include, but are not limited to, parking
      areas, access and perimeter roads, sidewalks, landscaped areas and similar
      areas and facilities;

            6.1.3 Landlord's annual cost of insurance insuring against fire and
      extended coverage (including, if Landlord elects, "all risk" or "special
      purpose" coverage) and all other insurance, including, but not limited to,
      earthquake, flood and/or surface water endorsements for the Building, the
      Lot and the Park (including the Common Areas), rental value insurance
      against loss of Rent in an amount equal to the amount of Rent for a period
      of at least six (6) months commencing on the date of loss, and subject to
      the provisions of Section 27 below, any deductible;

            6.1.4 Landlord's cost of: (i) modifications and/or new improvements
      to the Building, the Common Areas and/or the Park occasioned by any rules,
      laws or regulations effective subsequent to the date on which the Building
      was originally constructed; (ii) reasonably necessary replacement
      improvements to the Building, the Common Areas and the Park after the
      Lease Date; and (iii) new improvements to the Building, the Common Areas
      and/or the Park that reduce operating costs or improve life/safety
      conditions, all as reasonably determined by Landlord, in its sole
      discretion; provided, however, if any of the foregoing are in the nature
      of capital improvements, then the cost of such capital improvements shall
      be amortized on a straight-line basis over a reasonable period, which
      shall not be less than the lesser of fifteen (15) years or the reasonably
      estimated useful life of such modifications, new improvements or
      replacement improvements in question (at an interest rate as reasonably
      determined by Landlord), and Tenant shall pay Tenant's Share of the
      monthly amortized portion of such costs (including interest charges) as
      part of the Operating Expenses herein;

            6.1.5 If Landlord elects to so procure, Landlord's cost of
      preventative maintenance, and repair contracts including, but not limited
      to, contracts for elevator systems and heating, ventilation and air
      conditioning systems, lifts for disabled persons, and trash or refuse
      collection;

            6.1.6 Landlord's cost of security and fire protection services for
      the Building and/or the Park, as the case may be, if in Landlord's sole
      discretion such services are provided;

            6.1.7 Landlord's cost of supplies, equipment, rental equipment and
      other similar items used in the operation and/or maintenance of the Park;

            6.1.8 Landlord's cost for the repairs and maintenance items set
      forth in Section 11.2 below; and

            6.1.9 Landlord's cost for the management and administration of the
      Premises, the Building, the Common Areas and the Park, in the form of a
      property management fee, which shall include accounting, auditing,
      billing, salaries for clerical and supervisory employees (whether located
      within the Park or off-site) and all fees, licenses and permits related to
      the ownership, operation and management of any portion of the Park in an
      amount not to exceed three percent (3%) of the Rent, excluding for
      purposes of calculating this sum, the costs described in this Section
      6.1.9.

      Notwithstanding anything to the contrary provided herein the following
      costs and expenses shall be excluded from Operating Expenses:

            1) principal or interest payments on any mortgages, deeds of trust
      or other debt instrument encumbering the Premises;


                                       6
<PAGE>
 
            2) costs (including permit, license, and inspection fees) incurred
      in renovating, improving, decorating; painting, or redecorating vacant
      space or space for other tenants within the Park;

            3) costs incurred because Landlord or another tenant actually
      violated the terms of any lease for premises within the Park; and

            4) depreciation of the buildings or any other improvements situated
      within the Park.

      6.2 Tax Expenses: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is specified in the Basic Lease Information,
of all real property taxes applicable to the land and improvements included
within the Lot on which the Premises are situated and one hundred percent (100%)
of all personal property taxes now or hereafter assessed or levied against the
Premises or Tenant's personal property. The amount of Tenant's Share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage of
the Premises, the Building and/or the Park. Tenant shall also pay one hundred
percent (100%) of any increase in real property taxes attributable, in
Landlord's sole discretion, to any and all alterations, Tenant Improvements or
other improvements of any kind, which are above standard improvements
customarily installed for similar buildings located within the Building or the
Park (as applicable), whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. The term "Tax Expenses" shall mean
and include, without limitation, any form of tax and assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license fees, license tax,
business license fee, rental tax, transaction tax, levy, or penalty imposed by
authority having the direct or indirect power of tax (including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement district thereof) as against any legal or
equitable interest of Landlord in the Premises, the Building, the Lot or the
Park, as against Landlord's right to rent, or as against Landlord's business of
leasing the Premises or the occupancy of Tenant or any other tax, fee, or
excise, however described, including, but not limited to, any value added tax,
or any tax imposed in substitution (partially or totally) of any tax previously
included within the definition of real property taxes, or any a4ditional tax the
nature of which was previously included within the definition of real property
taxes. The term "Tax Expenses" shall not include any franchise, estate,
inheritance, net income, or excess profits tax imposed upon Landlord.

      6.3 Payment of Expenses: Landlord shall estimate Tenant's Share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant's obligation to
pay Tenant's Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.

      6.4 Annual Reconciliation: By June 30th of each calendar year, or as soon
thereafter as reasonably possible, Landlord shall endeavor to furnish Tenant
with an accounting of actual Operating Expenses and Tax Expenses. Within thirty
(30) days of Landlord's delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date shall not constitute a waiver
by Landlord of its right to collect any of Tenant's underpayment at any time.
Landlord shall credit the amount of any overpayment by Tenant toward the next
estimated monthly installment(s) falling due, or where the Term of the Lease has
expired, refund the amount of overpayment to Tenant. If the Term of the Lease
expires prior to the annual reconciliation of expenses Landlord shall have the
right to reasonably estimate Tenant's Share of such expenses, and if Landlord
determines that an underpayment is due, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's Share of such expenses or to otherwise perform such
reconciliation of expenses, including without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the Term of the Lease or at any time after the expiration or
earlier termination of this Lease.

      6.5 Audit: After delivery to Landlord of at least thirty (30) days prior
written notice, Tenant, at its sole cost and expense through any accountant
designated by it, shall have the right to examine and/or audit the books and
records evidencing such costs and expenses for the previous one (1) calendar
year, during Landlord's reasonable business hours but not more frequently than
once during any calendar year. Any such accounting firm designated by Tenant may
not be compensated on a contingency fee basis. The results of any such audit
(and any negotiations between the parties related thereto) shall be


                                       7
<PAGE>
 
maintained strictly confidential by Tenant and its accounting firm and shall not
be disclosed, published or otherwise disseminated to any other party other than
to Landlord and its authorized agents. Landlord and Tenant shall use their best
efforts to cooperate in such negotiations and to promptly resolve any
discrepancies between Landlord and Tenant in the accounting of such costs and
expenses.

7. Utilities: Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent. In
addition to the Base Rent set forth in Section 3 hereof, Tenant shall pay the
cost of all water, sewer use, sewer discharge fees and sewer connection fees,
gas, heat, electricity, refuse pickup, janitorial service, telephone and other
utilities billed or metered separately to the Premises and/or Tenant. Tenant
shall also pay Tenant's Share of any assessments or charges for utility or
similar purposes included within any tax bill for the Lot on which the Premises
are situated, including, without limitation, entitlement fees, allocation unit
fees, and/or any similar fees or charges, and any penalties related thereto. For
any such utility fees or use charges that are not billed or metered separately
to Tenant, including without limitation, water and refuse pick up charges,
Tenant shall pay to Landlord, as Additional Rent, without prior notice or
demand, on the Commencement Date and thereafter on the first (1st) day of each
month throughout the balance of the Term of this Lease the amount which is
attributable to Tenant's use of the utilities or similar services, as reasonably
estimated and determined by Landlord based upon factors such as size of the
Premises and intensity of use of such utilities by Tenant such that Tenant shall
pay the portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord Tenant's Share of any Common Area utility
costs, fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay
to Landlord one-twelfth (1/12th) of the estimated amount of Tenant's Share of
the Common Area Utility Costs on the Commencement Date and thereafter on the
first (1st) day of each month throughout the balance of the Term of this Lease
and any reconciliation thereof shall be substantially in the same manner as
specified in Section 6.4 above. The amount of Tenant's Share of Common Area
Utility Costs shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. Tenant acknowledges that
the Premises may become subject to the rationing of utility services or
restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof. Notwithstanding
anything to the contrary contained herein, if permitted by applicable Laws,
Landlord shall have the right at any time and from time to time during the Term
of this Lease to either contract for service from a different company or
companies (each such company shall be referred to herein as an "Alternate
Service Provider") other than the company or companies presently providing
electricity service for the Building or the Park (the "Electric Service
Provider") or continue to contract for service from the Electric Service
Provider, at Landlord's sole discretion. Tenant hereby agrees to cooperate with
Landlord, the Electric Service Provider, and any Alternate Service Provider at
all times and, as reasonably necessary, shall allow Landlord, the Electric
Service Provider, and any Alternate Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises.

8. Late Charges: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment (the
fifth day of each month or any time thereafter) by Tenant to Landlord of Base
Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area Utility
Costs, and Utility Expenses or other sums due hereunder, will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Landlord by the terms of any note secured by any encumbrance against
the Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any
other sum due from Tenant is not received by Landlord when due, Tenant shall
promptly pay to Landlord all of the following, as applicable: (a) an additional
sum equal to ten percent (10%) of such delinquent amount plus interest on such
delinquent amount at the rate equal to the prime rate plus three percent (3 %)
for the time period such payments are delinquent as a late charge for every
month or portion thereof that such sums remain unpaid, (b) the amount of
seventy-five dollars ($75) for each three-day notice prepared for, or served on,
Tenant, (c) the amount of fifty dollars ($50) relating to checks for which there
are not sufficient funds. If Tenant delivers to Landlord a check for which there
are not sufficient funds, Landlord may, at its sole option, require Tenant to
replace such check with a cashier's check for the amount of such check and all
other charges payable hereunder. The parties agree that this late charge and the
other charges referenced above


                                       8
<PAGE>
 
represent a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. Acceptance of any late charge or other
charges shall not constitute a waiver by Landlord of Tenant's default with
respect to the delinquent amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord for any other breach of
Tenant under this Lease. If a late charge or other charge becomes payable for
any three (3) installments of Rent within any twelve (12) month period, then
Landlord, at Landlord's sole option, can either require the Rent be paid
quarterly in advance, or be paid monthly in advance by cashier's check or by
electronic funds transfer.

9. Use of Premises:

      9.1 Compliance with Laws, Recorded Matters, and Rules and Regulations: The
Premises are to be used solely for the purposes and uses specified in the Basic
Lease Information and for no other uses or purposes without Landlord's prior
written consent, which consent shall not be unreasonably withheld or delayed so
long as the proposed use (i) does not involve the use of Hazardous Materials
other than as expressly permitted under the provisions of Section 29 below, (ii)
does not require any additional parking in excess of the parking spaces already
licensed to Tenant pursuant to the provisions of Section 24 of this Lease, and
(iii) is compatible and consistent with the other uses then being made in the
Park and in other similar types of buildings in the vicinity of the Park, as
reasonably determined by Landlord. The use of the Premises by Tenant and its
employees, representatives, agents, invitees, licensees, subtenants, customers
or contractors (collectively, "Tenant's Representatives") shall be subject to,
and at all times in compliance with, (a) any and all applicable laws,
ordinances, statutes, orders and regulations as same exist from time to time
(collectively, the "Laws"), (b) any and all documents, matters or instruments,
including without limitation, any declarations of covenants, conditions and
restrictions, and any supplements thereto, each of which has been or hereafter
is recorded in any official or public records with respect to the Premises, the
Building, the Lot and/or the Park, or any portion thereof (collectively, the
"Recorded Matters"), and (c) any and all rules and regulations set forth in
Exhibit C, attached to and made a part of this Lease, and any other reasonable
rules and regulations promulgated by Landlord now or hereafter enacted relating
to parking and the operation of the Premises, the Building and the Park
(collectively, the "Rules and Regulations"). Tenant agrees to, and does hereby,
assume full and complete responsibility to ensure that the Premises are adequate
to fully meet the needs and requirements of Tenant's intended operations of its
business within the Premises, and Tenant's use of the Premises and that same are
in compliance with all applicable Laws throughout the Term of this Lease.
Additionally, Tenant shall be solely responsible for the payment of all costs,
fees and expenses associated with any modifications, improvements or alterations
to the Premises, Building, the Common Areas and/or the Park occasioned by the
enactment of, or changes to, any Laws arising from Tenant's particular use of
the Premises or alterations, improvements or additions made to the Premises
regardless of when such Laws became effective.

      9.2 Prohibition on Use: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Areas, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer to
be committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises for any period of time. Tenant shall not permit any
animals, including, but not limited to, any household pets, to be brought or
kept in or about the Premises. Tenant shall place no loads upon the floors,
walls, or ceilings in excess of the maximum designed load permitted by the
applicable Uniform Building Code or which may damage the Building or outside
areas; nor place any harmful liquids in the drainage systems; nor dump or store
waste materials, refuse or other such materials, or allow such to remain outside
the Building area, except for any non-hazardous or non-harmful materials which
may be stored in refuse dumpsters or in any enclosed trash areas provided.
Tenant shall honor the terms of all Recorded Matters relating to the Premises,
the Building, the Lot and/or the Park. Tenant shall honor the Rules and
Regulations. If Tenant fails to comply with such Laws, Recorded Matters, Rules
and Regulations or the provisions of this Lease, Landlord shall have the right
to collect from Tenant a reasonable sum as a penalty, in addition to all rights
and remedies of Landlord hereunder including, but not limited to, the


                                       9
<PAGE>
 
payment by Tenant to Landlord of all Enforcement Expenses and Landlord's costs
and expenses, if any, to cure any of such failures of Tenant, if Landlord, at
its sole option, elects to undertake such cure.

10. Alterations and Additions; and Surrender of Premises:

      10.1 Alterations and Additions: Tenant shall be permitted to make, at its
sole cost and expense, non-structural alterations and additions to the Premises
without obtaining Landlord's prior Written consent provided the cost of same
does not exceed $20,000 cumulatively in any twelve-month period (the "Permitted
Improvements"). Tenant, however, shall first notify Landlord of such alterations
or additions comprising the Permitted Improvements so that Landlord may post a
Notice of Non-Responsibility on the Premises. Except for the Permitted
Improvements, Tenant shall not install any signs, fixtures, improvements, nor
make or permit any other alterations or additions to the Premises without the
prior written consent of Landlord. If any such alteration or addition is
expressly permitted by Landlord, Tenant shall deliver at least twenty (20) days
prior notice to Landlord, from the date Tenant intends to commence construction,
sufficient to enable Landlord to post a Notice of Non-Responsibility. In all
events, Tenant shall obtain all permits or other governmental approvals prior to
commencing any of such work and deliver a copy of same to Landlord. All
alterations and additions shall be installed by a licensed contractor approved
by Landlord, at Tenant's sole expense in compliance with all applicable Laws
(including, but not limited to, the ADA as defined herein), Recorded Matters,
and Rules and Regulations. Tenant shall keep the Premises and the property on
which the Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by or on behalf of
Tenant. As a condition to Landlord's consent to the installation of any
fixtures, additions or other improvements, Landlord may require Tenant to post
and obtain a completion and indemnity bond for up to one hundred fifty percent
(150%) of the cost of the work.

      10.2 Surrender of Premises: Upon the termination of this Lease, whether by
forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove (the parties hereby agreeing that
certain clean room trade fixtures and/or certain mechanical components thereof
may be retained by Tenant, subject to review between Landlord and Tenant
herein), to Landlord in good condition and repair (including, but not limited
to, replacing all light bulbs and ballasts not in good working condition) and in
the condition in which the Premises existed as of the Commencement Date, except
for reasonable wear and tear. Reasonable wear and tear shall not include any
damage or deterioration to the floors of the Premises arising from the use of
forklifts in, on or about the Premises (including, without limitation, any marks
or stains of any portion of the floors), and any damage or deterioration that
would have been prevented by proper maintenance by Tenant or Tenant otherwise
performing all of its obligations under this Lease. Upon such termination of
this Lease, Tenant shall remove any items that are part of the Tenant
Improvements of which Landlord has notified Tenant, at the time of Tenant's
installation of the Tenant Improvements, that Landlord will require be removed
by Tenant (the "Removed TI's"), all tenant signage, trade fixtures, furniture,
furnishings, personal property, additions, and other improvements unless
Landlord requests, in writing, that Tenant not remove some or all of such
fixtures (other than trade fixtures), additions or improvements installed by, or
on behalf of Tenant or situated in or about the Premises. By the date which is
twenty (20) days prior to such termination of this Lease, Landlord shall notify
Tenant in writing of those fixtures (other than trade fixtures), alterations,
additions and other improvements which Landlord shall require Tenant not to
remove from the Premises. Tenant shall repair any damage caused by the
installation or removal of any Removed TI's and such signs, trade fixtures,
furniture, furnishings, fixtures, additions and improvements which are to be
removed from the Premises by Tenant hereunder. If Landlord fails to so notify
Tenant at least twenty (20) days prior to such termination of this Lease, then
Tenant shall remove all tenant signage, alterations, furniture, furnishings,
trade fixtures, additions and other improvements (other than the Tenant
Improvements) installed in or about the Premises by, or on behalf of Tenant.
Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.

11. Repairs and Maintenance:

      11.1 Tenant's Repairs and Maintenance Obligations: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and the adjacent staging areas in good, clean and safe
condition and repair to the reasonable satisfaction of Landlord including, but
not limited to, repairing any damage caused by Tenant or Tenant's
Representatives and replacing any property so damaged by Tenant or Tenant's
Representatives. Without limiting the generality of the foregoing, Tenant shall
be solely responsible for maintaining, repairing and replacing (a) all
mechanical systems, heating, ventilation and air conditioning systems
exclusively serving the Premises, (b) all plumbing, electrical wiring and
equipment serving the Premises, (c) all interior lighting (including, without
limitation, light


                                       10
<PAGE>
 
bulbs and/or ballasts) and exterior lighting serving the Premises or adjacent to
the Premises, (d) all glass, windows, window frames, window casements,
skylights, interior and exterior doors, door frames and door closers, (e) all
roll-up doors, ramps and dock equipment, including without limitation, dock
bumpers, dock plates, dock seals, dock levelers and dock lights, (f) all tenant
signage, (g) lifts for disabled persons serving the Premises, (h) sprinkler
systems, fire protection systems and security systems, (i) all partitions,
fixtures, equipment, interior painting, and interior walls and floors of the
Premises and every part thereof (including, without limitation, any demising
walls contiguous to any portion of the Premises).

      11.2 Reimbursable Repairs and Maintenance Obligations: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, (ii) the obligations of Landlord set
forth in Section 11.3 below, and (iii) the repairs rendered necessary by the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors/entrances and door closets,
exterior window casements, exterior painting of the Building (exclusive of the
Premises), and underground utility and sewer pipes outside the exterior walls of
the Building. For purposes of this Section 11.2, the term "exterior" shall mean
outside of and not exclusively serving the Premises. Unless otherwise notified
by Landlord, in writing, that Landlord has elected to procure and maintain the
following described contract(s), Tenant shall procure and maintain (a) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s); such contract(s) to be on a bimonthly or quarterly basis, as
reasonably determined by Landlord, and (b) the fire and sprinkler protection
services and preventative maintenance and repair contract(s) (including, without
limitation, monitoring services); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord. Landlord reserves the
right, but without the obligation to do so, to procure and maintain (i) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s), and/or (ii) the fire and sprinkler protection services and
preventative maintenance and repair contract(s) (including, without limitation,
monitoring services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above. If Tenant procures and maintains any of
such contract(s), Tenant will promptly deliver to Landlord a true and complete
copy of each such contract and any and all renewals or extensions thereof, and
each service report or other summary received by Tenant pursuant to or in
connection with such contract(s).

      11.3 Landlord's Repairs and Maintenance Obligations: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or any of Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.

      11.4 Tenant's Failure to Perform Repairs and Maintenance Obligations:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord. If Tenant refuses or neglects to
repair and maintain the Premises and the adjacent areas properly as required
herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs and/or maintenance without
Landlord having any liability to Tenant for any loss or damage that may accrue
to Tenant's merchandise, fixtures or other property, or to Tenant's business by
reason thereof, except to the extent any damage is caused by the willful
misconduct or gross negligence of Landlord or its authorized agents and
representatives. In the event Landlord makes such repairs and/or maintenance,
upon completion thereof Tenant shall pay to Landlord, as additional rent, the
Landlord's costs for making such repairs and/or maintenance, plus twenty percent
(20%) for overhead, upon presentation of a bill therefor, plus any Enforcement
Expenses. The obligations of Tenant hereunder shall survive the expiration of
the Term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or
hereafter in effect respecting the Premises.

12. Insurance:

      12.1 Types of Insurance: Tenant shall maintain in full force and effect at
all times during the Term of this Lease, at Tenant's sole cost and expense, for
the protection of Tenant and Landlord, as their interests may appear, policies
of insurance issued by a carrier or carriers reasonably acceptable to Landlord
and its lender(s) which afford the following coverages: (i) worker's
compensation: statutory limits; (ii) employer's liability, as required by law,
with a minimum limit of $100,000 per employee and


                                       11
<PAGE>
 
$500,000 per occurrence; (iii) commercial general liability insurance
(occurrence form) providing coverage against any and all claims for bodily
injury and property damage occurring in, on or about the Premises arising out of
Tenant's and Tenant's Representatives' use and/or occupancy of the Premises.
Such insurance shall include coverage for blanket contractual liability, fire
damage, premises, personal injury, completed operations, products liability,
personal and advertising, and a plate-glass rider to provide coverage for all
glass in, on or about the Premises including, without limitation, skylights.
Such insurance shall have a combined single limit of not less than One Million
Dollars ($1,000,000) per occurrence with a Two Million Dollar ($2,000,000)
aggregate limit and excess/umbrella insurance in the amount of Two Million
Dollars ($2,000,000). If Tenant has other locations which it owns or leases, the
policy shall include an aggregate limit per location endorsement. If necessary,
as reasonably determined by Landlord, Tenant shall provide for restoration of
the aggregate limit; (iv) comprehensive automobile liability insurance: a
combined single limit of not less than $2,000,000 per occurrence and insuring
Tenant against liability for claims arising out of the ownership, maintenance,
or use of any owned, hired or non-owned automobiles; (v) "all risk" or "special
purpose" property insurance, including without limitation, sprinkler leakage,
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any personal property, trade fixtures, inventory, fixtures and equipment
located in, on or about the Premises, and in addition, coverage for flood,
earthquake, and business interruption of Tenant, together with, if the property
of Tenant's invitees is to be kept in the Premises, warehouser's legal liability
or bailee customers insurance for the full replacement cost of the property
belonging to invitees and located in the Premises. Such insurance shall be
written on a replacement cost basis (without deduction for depreciation) in an
amount equal to one hundred percent (100%) of the full replacement value of the
aggregate of the items referred to in this subparagraph (v); and (vi) such other
insurance as Landlord deems necessary and prudent or as may otherwise be
required by any of Landlord's lenders or joint venture partners.

      12.2 Insurance Policies: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder shall not exceed One Thousand
Dollars ($1,000). Tenant shall deliver to Landlord certificates of insurance and
true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to the parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this
Lease under a blanket insurance policy, provided such blanket policy expressly
affords coverage for the Premises and for Landlord as required by this Lease.

      12.3 Additional Insureds and Coverage: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, and any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park shall be named as additional insureds under all of
the policies required in Section 12.1(iii) above. Additionally, such policies
shall provide for severability of interest. All insurance to be maintained by
Tenant shall, except for workers' compensation and employer's liability
insurance, be primary, without right of contribution from insurance maintained
by Landlord. Any umbrella/excess liability policy (which shall be in "following
form") shall provide that if the underlying aggregate is exhausted, the excess
coverage will drop down as primary insurance. The limits of insurance maintained
by Tenant shall not limit Tenant's liability under this Lease. It is the
parties' intention that the insurance to be procured and maintained by Tenant as
required herein shall provide coverage for any and all damage or injury arising
from or related to Tenant's operations of its business and/or Tenant's or
Tenant's Representatives' use of the Premises and/or any of the areas within the
Park, whether such events occur within the Premises (as described in Exhibit A
hereto) or in any other areas of the Park. It is not contemplated or anticipated
by the parties that the aforementioned risks of loss be borne by Landlord's
insurance carriers, rather it is contemplated and anticipated by Landlord and
Tenant that such risks of loss be borne by Tenant's insurance carriers pursuant
to the insurance policies procured and maintained by Tenant as required herein.

      12.4 Failure of Tenant to Purchase and Maintain Insurance: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the Term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall promptly pay to Landlord as Additional
Rent, the amount so paid by Landlord, upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain


                                       12
<PAGE>
 
any insurance required in this Lease, Tenant shall be liable for all losses,
damages and costs resulting from such failure:

      12.5 Landlord's Insurance: Landlord shall maintain in full force and
effect during the Term of this Lease, subject to reimbursement as provided in
Section 6, policies of insurance which afford such coverages as are commercially
reasonable and as is consistent with other properties in Landlord's portfolio.
Notwithstanding the foregoing, Landlord shall obtain and keep in force during
the Term of this Lease, as an item of Operating Expenses, a policy or policies
in the name of Landlord, with loss payable to Landlord and to the holders of any
mortgages, deeds of trust or ground leases on the Premises ("Lender(s)"),
insuring loss or damage to the Building, including all improvements, fixtures
(other than trade fixtures) and permanent additions. However, all alterations,
additions and improvements made to the Premises by Tenant shall be insured by
Tenant rather than by Landlord. The amount of such insurance procured by
Landlord shall be equal to at least eighty percent (80%) of the full replacement
cost of the Building, including all improvements and permanent additions (other
than the Tenant Improvements) as the same shall exist from time to time, or the
amount required by Lenders. At Landlord's option, such policy or policies shall
insure against all risks of direct physical loss or damage (including, without
limitation, the perils of flood and earthquake), including coverage for any
additional costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building required
to be demolished or removed by reason of the enforcement of any building,
zoning, safety or land use laws as the result of a covered cause of loss. If any
such insurance coverage procured by Landlord has a deductible clause, the
deductible shall not exceed commercially reasonable amounts, and in the event of
any casualty, the amount of such deductible shall be an item of Operating
Expenses as so limited. Notwithstanding anything to the contrary contained
herein, to the extent the cost of maintaining insurance with respect to the
Building and/or any other buildings within the Park is increased as a result of
Tenant's acts, omissions, use or occupancy of the Premises, Tenant shall pay one
hundred percent (100%) of, and for, such increase(s) as Additional Rent.

13. Waiver of Subrogation: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance.

14. Limitation of Liability and Indemnity: Except to the extent of damage
resulting from the active gross negligence or willful misconduct of Landlord or
its authorized representatives, Tenant agrees to protect, defend (with counsel
acceptable to Landlord) and hold Landlord and Landlord's lenders, partners,
members, property management company (if other than Landlord), agents,
directors, officers, employees, representatives, contractors, shareholders,
successors and assigns and each of their respective partners, members,
directors, employees, representatives, agents, contractors, shareholders,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from or in any way related
to, directly or indirectly, (i) Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, (ii) the conduct of Tenant's business, (iii)
from any activity, work or thing done, permitted or suffered by Tenant in or
about the Premises, (iv) in any way connected with the Premises or with the
improvements or personal property therein, including, but not limited to, any
liability for injury to person or property of Tenant, Tenant's Representatives,
or third party persons, and/or (v) Tenant's failure to perform any covenant or
obligation of Tenant under this Lease. Tenant agrees that the obligations of
Tenant herein shall survive the expiration or earlier termination of this Lease.

      Except to the extent of damage resulting from the active gross negligence
or willful misconduct of Landlord or its authorized representatives, to the
fullest extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, members, employees, representatives, legal
representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or the Park. Tenant shall
not, in any event or circumstance, be permitted to offset or otherwise credit
against any payments of Rent required herein for matters for which Landlord may
be liable hereunder.


                                       13
<PAGE>
 
Landlord and its authorized representatives shall not be liable for any
interference with light or air, or for any latent defect in the Premises or the
Building.

15. Assignment and Subleasing:

      15.1 Prohibition: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed subleases or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least thirty (30)
days prior to the proposed commencement of the sublease or assignment (the
"Proposed Effective Date") the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee's or sublessee's
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord's receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of the Premises, Landlord shall deliver to
Tenant a copy of Landlord's standard form of sublease or assignment agreement
(as applicable), which instrument shall be utilized for each proposed sublease
or assignment (as applicable), and such instrument shall include a provision
whereby the assignee or sublessee assumes all of Tenant's obligations hereunder
and agrees to be bound by the terms hereof. As Additional Rent hereunder, Tenant
shall pay to Landlord a fee in the amount of five hundred dollars ($500) plus
Tenant shall reimburse Landlord for actual reasonable legal and other expenses
incurred by Landlord in connection with any actual or proposed assignment or
subletting. In the event the sublease or assignment (1) by itself or taken
together with prior sublease(s) or partial assignment(s) covers or totals, as
the case may be, more than twenty-five percent (25%) of the rentable square feet
of the Premises or (2) is for a term which by itself or taken together with
prior or other subleases or partial assignments is greater than fifty percent
(50%) of the period remaining in the Term of this Lease as of the time of the
Proposed Effective Date, then Landlord shall have the right, to be exercised by
giving written notice to Tenant, to recapture the space described in the
sublease or assignment. If such recapture notice is given, it shall serve to
terminate this Lease with respect to the proposed sublease or assignment space,
or, if the proposed sublease or assignment space covers all the Premises, it
shall serve to terminate the entire term of this Lease in either case, as of the
Proposed Effective Date. However, no termination of this Lease with respect to
part or all of the Premises shall become effective without the prior written
consent, where necessary, of the holder of each deed of trust encumbering the
Premises or any part thereof. If this Lease is terminated pursuant to the
foregoing with respect to less than the entire Premises, the Rent shall be
adjusted on the basis of the proportion of square feet retained by Tenant to the
square feet originally demised and this Lease as so amended shall continue
thereafter in full force and effect. Each permitted assignee or sublessee shall
assume and be deemed to assume this Lease and shall be and remain liable jointly
and severally with Tenant for payment of Rent and for the due performance of,
and compliance with all the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed or complied with, for the term of
this Lease, but only with respect to the common areas of the Building, the
Common Area and the portion of the Premises sublet or portion of the Lease
assigned. No assignment or subletting shall affect the continuing primary
liability of Tenant (which, following assignment, shall be joint and several
with the assignee), and Tenant shall not be released from performing any of the
terms, covenants and conditions of this Lease. Tenant hereby acknowledges and
agrees that it understands that Landlord's accounting department may process and
accept Rent payments without verifying that such payments are being made by
Tenant, a permitted sublessee or a permitted assignee in accordance with the
provisions of this Lease. Although such payments may be processed and accepted
by such accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. For purposes hereof, except as set forth
in 15.4 below, in the event Tenant is a corporation, partnership, joint venture,
trust or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers) which
results in a change of more than fifty percent (50%) in the direct or indirect
ownership of Tenant shall be deemed to be an assignment within the meaning of
this Section 15 and shall be subject to all the provisions hereof; provided,
however, this sentence shall not be applicable to the originally named Tenant


                                       14
<PAGE>
 
hereunder so long as such originally named Tenant is a public company whose
stock is traded on a nationally recognized stock exchange. Any and all options,
first rights of refusal, tenant improvement allowances and other similar rights
granted to Tenant in this Lease, if any, shall not be assignable by Tenant
unless expressly authorized in writing by Landlord.

      15.2 Excess Sublease Rental or Assuagement Consideration: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, seventy-five
percent (75%) of the excess of each such payment of rent or other consideration
in excess of the Rent called for hereunder after the deduction of the actual
brokerage commission (if any) paid by Tenant in connection with such proposed
sublease or assignment.

      15.3 Waiver: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.

      15.4 Related Entities: Notwithstanding anything to the contrary contained
in this Section 15, so long as Tenant delivers to Landlord (1) at least ten (10)
business days prior written notice of its intention to assign or sublease the
Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as Landlord approves, in writing, of any change in
the proposed use of the subject portion of the Premises and such financial
information, then Tenant may assign this Lease or sublease any portion of the
Premises (X) to any Related Entity, or (Y) in connection with any merger,
consolidation or sale of substantially all of the stock or assets of Tenant,
without having to obtain the prior written consent of Landlord thereto. For
purposes of this Lease the term "Related Entity" shall mean and refer to any
corporation or entity which controls, is controlled by or is under common
control with Tenant, as all of such terms are customarily used in the industry,
and with an equal or greater net worth as Tenant has as of the proposed transfer
date.

16. Ad Valorem Taxes: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes are not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.

17. Subordination: Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and this Lease shall be subject and subordinate at all times to: (i)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Notwithstanding the foregoing, Landlord or any
such ground lessor, mortgagee, or any beneficiary 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. If 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 any subordination attorn to and become the Tenant of the
successor in interest to Landlord, provided such successor in interest will not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of the terms and provisions of this Lease. The
successor in interest to Landlord following foreclosure, sale or deed in lieu
thereof shall not be (a) liable for any act or omission of any prior lessor or
with respect to events occurring prior to acquisition of ownership; (b) subject
to any offsets or defenses which Tenant might have against any prior lessor; (c)
bound by prepayment of more than one (1) month's Rent, except in those instances
when Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then
not more than three months' Rent; or (d) liable to Tenant for any Security
Deposit not actually received by such successor in interest


                                       15
<PAGE>
 
to the extent any portion or all of such Security Deposit has not already been
forfeited by, or refunded to, Tenant. Landlord shall be liable to Tenant for all
or any portion of the Security Deposit not forfeited by, or refunded to Tenant,
until and unless Landlord transfers such Security Deposit to the successor in
interest. Tenant covenants and agrees to execute (and acknowledge if required by
Landlord, any lender or ground lessor) and deliver, within seven (7) days of a
demand or request by Landlord and in the form requested by Landlord, ground
lessor, mortgagee or beneficiary, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground leases
or underlying leases or the lien of any such mortgage or deed of trust. Tenant's
failure to timely execute and deliver such additional documents shall, at
Landlord's option, constitute a material default hereunder. It is further agreed
that Tenant shall be liable to Landlord, and shall indemnify Landlord from and
against any loss, cost, damage or expense, incidental, consequential, or
otherwise, arising or accruing directly or indirectly, from any failure of
Tenant to execute or deliver to Landlord any such additional documents, together
with any and all Enforcement Expenses. Tenant hereby acknowledges that as of the
date on which Landlord and Tenant execute this Lease there is a deed of trust
encumbering, and in force against, the Premises, the Building and the Lot in
favor of Pacific Mutual Life Insurance (the "Current Lender"). Simultaneously
with Tenant's execution of this Lease, Tenant shall sign, notarize and deliver a
subordination, non-disturbance and attornment agreement substantially in the
form of Exhibit I attached hereto, entitled "Subordination, Non-Disturbance and
Attornment Agreement." If Landlord at any time during the Term of this Lease
causes the Premises, the Building and the Lot to be encumbered by a new deed of
trust or mortgage pursuant to which the beneficiary of such deed of trust or
mortgage is a party or entity other than the Current Lender, the parties
acknowledge and agree that the form of any non-disturbance and attornment
agreement that may be requested to be executed and delivered by Tenant in
connection therewith will not be the "Subordination, Non-Disturbance and
Attornment Agreement" attached to the Lease as Exhibit I. If the foregoing
occurs and/or if any party which acquires, or otherwise succeeds to, Landlord's
interest in the Premises, the Building or the Lot (including without limitation,
any ground lessee) encumbers or places a lien against the Premises, the Building
or the Lot with a mortgage, deed of trust or similar security instrument and the
beneficiary thereof requires this Lease to be subordinated to such encumbrance
or lien, Landlord or the successor of Landlord will use commercially reasonable
efforts to provide to Tenant a subordination, non-disturbance and attornment
agreement in form reasonably acceptable to Landlord or such successor of
Landlord, the subject beneficiary and Tenant. If said subordination,
non-disturbance and attornment agreement is required and agreed upon by the
aforesaid parties, Landlord or the successor of Landlord, the subject
beneficiary and Tenant shall cause any such subordination, non-disturbance and
attornment agreement to be executed, acknowledged and recorded concurrently
with, or as soon as practicable after, the execution and recordation of any such
lien, deed of trust or mortgage. In addition to the foregoing, if Landlord
enters into a ground lease with regard to the Building and/or the Lot and such
ground lessee requires this Lease to be subordinated to such ground lease, the
ground lessee and ground lessor will use commercially reasonable efforts to
provide to Tenant a subordination, non-disturbance and attornment agreement in
form reasonably acceptable to such ground lessee, ground lessor, any beneficiary
of ground lessee and to Tenant.

18. Right of Entry: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times for purposes of inspection, exhibition, posting
of notices, repair or alteration; provided, however, in the absence of an
emergency, Landlord and its agents shall not enter the Premises until Landlord
or its agents (i) has given Tenant at least twenty-four (24) hours advance
notice thereof, (ii) has afforded Tenant the opportunity to have Tenant's
representative accompany Landlord and/or Landlord's agents while making any such
entry in the Premises (provided, Tenant hereby agrees that if Tenant fails to
have its representative available at the times reasonably requested by Landlord,
then Landlord and/or its agents shall not be required to be accompanied by
Tenant's representative), and (iii) to the extent practicable given the
circumstances for which such entry is being made by Landlord or its agents, has
coordinated the scheduling of such entry with Tenant (provided, Tenant shall not
unreasonably withhold, delay or condition any consent by Tenant to such
scheduling). Any such entry by Landlord or its agents in the Premises (except
for any emergencies) shall be done in such a manner so as to minimize
interference with Tenant's conduct of its operations in the Premises. At
Landlord's option, Landlord shall at all times have and retain a key with which
to unlock all the doors in, upon and about the Premises, excluding Tenant's
vaults and safes. It is further agreed that Landlord shall have the right to use
any and all means Landlord deems necessary to enter the Premises in an
emergency. Landlord shall have the right to place "for rent" or "for lease"
signs on the outside of the Premises, the Building and in the Common Areas.
Landlord shall also have the right to place "for sale" signs on the outside of
the Building and in the Common Areas. Tenant hereby waives any claim from
damages or for any injury or inconvenience to or interference with Tenant's
business, or any other loss occasioned thereby except for any claim for any of
the foregoing arising out of the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives.

19. Estoppel Certificate: Each party shall execute (and acknowledge if required
by any lender or ground lessor) and deliver to the other, within seven (7) days
after receipt of written request therefor,


                                       16
<PAGE>
 
a statement in writing certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification), the
date to which the Rent and other charges are paid in advance, if any,
acknowledging that there are not, to such party's knowledge, any uncured
defaults on the part of the requesting party or specifying such defaults as are
claimed, and such other matters as the requesting party may reasonably require.
Any such statement may be conclusively relied upon by the requesting party and
any prospective purchaser or encumbrancer of the Premises. A party's failure to
deliver such statement within such time shall be conclusive upon the other that
(a) this Lease is in full force and effect, without modification except as may
be represented by the requesting party; (b) there are no uncured defaults in the
requesting party's performance; and (c) not more than one month's Rent has been
paid in advance, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof, then not more than three month's Rent has
been paid in advance. Failure by Tenant to so deliver such certified estoppel
certificate shall be a material default of the provisions of this Lease. Tenant
shall be liable to Landlord, and shall indemnify Landlord from and against any
loss, cost, damage or expense, incidental, consequential, or otherwise, arising
or accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.

20. Tenant's Default: The occurrence of any one or more of the following events
shall, at Landlord's option, constitute a material default by Tenant of the
provisions of this Lease:

      20.1 The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;

      20.2 The failure by Tenant to make any payment of Rent, Additional Rent or
any other payment required hereunder on the date said payment is due. Tenant
agrees to notice and service of notice as provided for in this Lease and waives
any right to any other or further notice or service of notice which Tenant may
have under any statute or law now or hereafter in effect;

      20.3 The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within (i)
thirty (30) days of the date on which Landlord delivers written notice of such
failure to Tenant, complying with the notice requirements of Section 31.10
hereof, for all failures other than with respect to Hazardous Materials, and
(ii) ten (10) days of the date on which Landlord delivers written notice of such
failure to Tenant for all failures in any way related to Hazardous Materials.
However, Tenant shall not be in default of its obligations hereunder if such
failure cannot reasonably be cured within the aforementioned time period (if
any), as determined solely by Landlord, Tenant shall promptly commence the cure
of such failure such thirty (30) or ten (10) day period, as applicable, and
Tenant promptly commences, and thereafter diligently prosecute such cure to
completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than sixty (60) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
reasonable judgment).

      20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

      20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or

      20.6 The making of any material misrepresentation or omission by Tenant in
any materials delivered by or on behalf of Tenant to Landlord pursuant to this
Lease.


                                       17
<PAGE>
 
21. Remedies for Tenant's Default:

      21.1 Landlord's Rights: In the event of Tenant's material default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of
cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from such reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent, Operating Expenses,
Tax Expenses, Common Area Utility Costs, and Utility Expenses; second, all costs
including maintenance, incurred by Landlord in reletting; and, third, Base Rent,
Operating Expenses, Tax Expenses, Common Area Utility Costs, Utility Expenses,
and all other sums due under this Lease. Any and all of the Reletting Costs
shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.

      21.2 Damages Recoverable: If Tenant breaches this Lease and abandons the
Premises before the end of the Term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default under this Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any Tenant Improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the Term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease Term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.

      21.3 Rights and Remedies Cumulative: The foregoing rights and remedies of
Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under
this Lease, any and all Base Rent waived by Landlord under Section 3 above shall
be immediately due and payable to Landlord and all options granted to Tenant
hereunder shall automatically terminate, unless otherwise expressly agreed to in
writing by Landlord.


                                       18
<PAGE>
 
      21.4 Waiver of a Default: The waiver by Landlord of any default of any
provision of this Lease shall not be deemed or construed a waiver of any other
default by Tenant hereunder or of any subsequent default of this Lease, except
for the default specified in the waiver.

22. Holding Over: If Tenant holds possession of the Premises after the
expiration of the Term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease Term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.

23. Landlord's Default: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall not be less than thirty (30) days after
receipt by Landlord of written notice specifying the nature of the obligation
Landlord has not performed; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days, after receipt of written
notice, is reasonably necessary for its performance, then Landlord shall not be
in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.

24. Parking: Tenant shall have a license to use the number of non-designated and
non-exclusive parking spaces specified in the Basic Lease Information. Landlord
shall exercise reasonable efforts to insure that such spaces are available to
Tenant for its use, but Landlord shall not be required to enforce Tenant's right
to use the same.

25. Sale of Premises: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder accruing from
or after the date of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease. For purposes of this
Section 25, the term "Landlord" means only the owner and/or agent of the owner
as such parties exist as of the date on which Tenant executes this Lease. A
ground lease or similar long term lease by Landlord of the entire Building, of
which the Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new owner
does not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so
long as Tenant is not in default of any of the provisions of this Lease, beyond
any applicable cure period.

26. Waiver: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
default by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such default, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

27. Casualty Damage:


                                       19
<PAGE>
 
      27.1 Casualty. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant, including
without limitation, the Tenant Improvements) shall be damaged or destroyed by
fire or other casualty, Tenant shall give immediate written notice thereof to
Landlord ("Tenant's Notice"). Within sixty (60) days after receipt by Landlord
of Tenant's Notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made, as reasonably determined by Landlord:
(a) within ninety (90) days from receipt of Tenant's Notice; (b) in more than
ninety (90) days but in less than one hundred eighty (180) days from receipt of
Tenant's Notice; or (c) in more than one hundred eighty (180) days from receipt
of Tenant's Notice.

            27.1.1 Minor Insured Damage. If the Premises are damaged only to
such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days from receipt of Tenant's Notice, this Lease
shall not terminate and, provided that insurance proceeds are available to fully
repair the damage and/or Tenant otherwise contributes any shortfall thereof to
Landlord, Landlord shall repair the Premises to substantially the same condition
that existed prior to the occurrence of such casualty, except Landlord shall not
be required to rebuild, repair, or replace any alterations or improvements
installed by or for the benefit of Tenant or any part of Tenant's Property,
including without limitation, the Tenant Improvements, Tenant's furniture,
furnishings or trade fixtures and equipment removable by Tenant. If the premises
are not repaired to substantially the same condition that existed prior to the
occurrence of such casualty, within one hundred twenty (120) days after the
receipt by Landlord of Tenant's Notice (such 120-day period to be extended for
Tenant Delays and Force Majeure Delays (defined below)), Tenant may within
twenty (20) days after the expiration of such one hundred twenty (120) day
period (as same may be extended), terminate this Lease by delivering written
notice to Landlord as Tenant's exclusive remedy, whereupon all rights of Tenant
hereunder shall cease and terminate twenty (20) days after Landlord's receipt of
such notice. The Rent payable hereunder shall be equitably abated from the 
date of the occurrence of such insured damage until any and all repairs are
substantially completed to the extent of the portion of the Premises which are
rendered unusable and unfit for occupancy.

            27.1.2 Insured Damage Requiring More Than 90 Days To Repair. If the
Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days from receipt of Tenant's Notice, then
Landlord shall have the option of: (a) terminating the Lease effective upon the
occurrence of such damage, in which event the Rent shall be abated from the date
of the occurrence of such damage, provided Tenant diligently proceeds to vacate
the Premises; or (b) electing to repair the Premises to substantially the same
condition that existed prior to the occurrence of such casualty, provided
insurance proceeds are available to fully repair the damage (except that
Landlord shall not be required to rebuild, repair, or replace any alterations or
improvements installed by or for the benefit of Tenant or any part of Tenant's
Property, including without limitation, the Tenant Improvements, Tenant's
furniture, furnishings or trade fixtures and equipment removable by Tenant). The
Rent payable hereunder shall be equitably abated from the date of the occurrence
of such insured damage until any and all repairs are substantially completed, to
the extent of the portion of the Premises which are rendered unusable and unfit
for occupancy. If Landlord should fail to substantially complete the repairs
contemplated in this Section 27.1.2 within one hundred eighty (180) days after
the receipt by Landlord of Tenant's Notice (such 180-day period to be extended
for Tenant Delays or any force majeure events, which events shall include, but
not be limited to, acts or events beyond Landlord's and/or its contractors'
control, acts of God, earthquakes, strikes, lockouts, riots, boycotts,
casualties not caused by Landlord or Tenant, discontinuance of any utility or
other service required for performance of the work, moratoriums, governmental
agencies and weather, and the lack of availability or shortage of materials
("Force Majeure Delays")), Tenant may within twenty (20) days after expiration
of such one hundred eighty (180) day period (as same may be extended), terminate
this Lease by delivering written notice to Landlord as Tenant's exclusive
remedy, whereupon all rights of Tenant hereunder shall cease and terminate
twenty (20) days after Landlord's receipt of such notice.

            27.1.3 Major Insured Damage. If the Premises are damaged to such
extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days from receipt of Tenant's Notice,
then either Landlord or Tenant may terminate this Lease by giving written notice
within twenty (20) days after notice from Landlord regarding the time period of
repair. If either party notifies the other of its intention to so terminate the
Lease, then this Lease shall terminate and the Rent shall be abated from the
date of the occurrence of such damage, provided Tenant diligently proceeds to
vacate the Premises. If neither party elects to terminate this Lease, Landlord
shall promptly commence and diligently prosecute to completion the repairs to
the Premises, provided insurance proceeds are available to fully repair the
damage and/or Tenant contributes any shortfall thereof to Landlord (except that
Landlord shall not be required to rebuild, repair, or replace any alterations or
improvements installed by or for the benefit of Tenant or any part of Tenant's
property, including without limitation, the Tenant Improvements, Tenant's
furniture, furnishings or trade fixtures and equipment removable by Tenant). If
the premises are not repaired to substantially the same condition that existed
prior to the occurrence of such casualty, within ninety (90) days after the date
on which Landlord has previously notified Tenant that such repairs would be
completed (such 90-day period to be extended for Tenant Delays and Force Majeure
Delays), Tenant may within twenty (20) days after expiration of such ninety (90)
day period (as


                                       20
<PAGE>
 
same may be extended), terminate this Lease by delivering written notice to
Landlord as Tenant's exclusive remedy, whereupon all rights of Tenant hereunder
shall cease and terminate twenty (20) days after Landlord's receipt of such
notice. During the time when Landlord is prosecuting such repairs to completion,
the Rent payable hereunder shall be equitably abated from the date of the
occurrence of such insured damage until any and all repairs are substantially
completed, to the extent of the portion of the Premises which are rendered
unusable and are unfit for occupancy. Notwithstanding anything to the contrary
contained herein, if the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
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 Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.

            27.1.4 Damage Near End of Term. Notwithstanding anything to the
contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are substantially damaged or destroyed during the last
year of then applicable term of this Lease, Landlord or Tenant may, at their
option, cancel and terminate this Lease by giving written notice to the other
party of its election to do so within thirty (30) days after receipt by Landlord
of written notice from Tenant of the occurrence of such casualty. If either
party so elects to terminate this Lease, all rights of Tenant hereunder shall
cease and terminate ten (10) days after Tenant's receipt or delivery of such
notice, as applicable.

      27.2 Tenant's or Tenant's Representative's Fault. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage to the extent
Landlord does not receive rental abatement insurance proceeds, and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.

      27.3 Uninsured Casualty. Tenant shall be responsible for and shall pay to
Landlord, as Additional Rent, its proportionate share of any commercially
reasonable deductible amounts under the insurance policies for the Premises
and/or the Building. So long as Landlord actually maintains the insurance
policies required to be maintained by Landlord under this Lease, if any portion
of the Premises is damaged and is not fully covered by the aggregate of
insurance proceeds received by Landlord and any applicable deductible and/or
Tenant does not contribute voluntarily any shortfall thereof to Landlord, or if
the holder of any indebtedness secured by the Premises requires that the
insurance proceeds be applied to such indebtedness, then Landlord or, in the
event Landlord elects not to restore the Premises, Tenant shall have the right
to terminate this Lease by delivering written notice of termination to the other
within thirty (30) days after the date of Landlord's notice to Tenant of any
such event, whereupon all rights and obligations shall cease and terminate
hereunder, except for those obligations expressly provided for in this Lease to
survive such termination of the Lease.

      27.4 Tenant's Waiver. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unusable and unfit for occupancy as specifically
provided above in this Section 27. With respect to any damage or destruction
which Landlord is obligated to repair or may elect to repair, except as
expressly set forth herein, Tenant hereby waives all rights to terminate this
Lease or offset any amounts against Rent pursuant to rights accorded Tenant by
any law currently existing or hereafter enacted, including but not limited to,
all rights pursuant to the provisions of Sections 1932(2.), 1933(4.), 1941 and
1942 of the California Civil Code, as the same may be amended or supplemented
from time to time.

28. Condemnation: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned") or if more than two
hundred ten (210) days (from the date when physical possession of the Premises
is taken and title vests in such condemning authority) shall be required in
order to restore the Premises as a result of such Condemnation, then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant; provided, however, the foregoing
provisions shall not preclude Tenant, at Tenant's sole cost and expense, from
obtaining any separate awarded to Tenant for loss of or damage to Tenant's trade
fixtures and removable personal property or for damages for cessation or
interruption of Tenant's business provided such award is separate from
Landlord's award and provided further such separate award neither diminishes nor
impairs the award otherwise payable to Landlord. In addition to the foregoing,
Tenant shall be entitled to seek


                                       21
<PAGE>
 
compensation for the relocation costs recoverable by Tenant pursuant to the
provisions of California Government Code Section 7262. If neither party elects
to terminate this Lease, Landlord shall, if necessary, promptly proceed to
restore the Premises or the Building to substantially its same condition prior
to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
reasonably determined by Landlord, for the Rent corresponding to the time during
which, and to the part of the Premises of which, Tenant is deprived on account
of such partial condemnation and restoration. Landlord shall not be required to
spend funds for restoration in excess of the amount received by Landlord as
compensation awarded.

29. Environmental Matters/Hazardous Materials:

      29.1 Hazardous Materials Disclosure Certificate: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord Tenant's initial
Hazardous Materials Disclosure Certificate (the "Initial HazMat Certificate"), a
copy of which is attached hereto as Exhibit G and incorporated herein by this
reference. Tenant covenants, represents and warrants to Landlord that the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
("the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E.

      29.2 Definition of Hazardous Materials: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.

      29.3 Prohibition; Environmental Laws: Tenant shall not be entitled to use
nor store any Hazardous Materials on, in, or about the Premises, the Building,
the Lot and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord's prior written consent thereto. However, Landlord
consents to the presence of those Hazardous Materials in Exhibit G, subject to
the terms and condition of this Lease. If Landlord consents to any such usage or
storage, then Tenant shall be permitted to use and/or store only those Hazardous
Materials that are necessary for Tenant's business and to the extent disclosed
in the HazMat Certificate and as expressly approved by Landlord in writing,
provided that such usage and storage is only to the extent of the quantities of
Hazardous Materials as specified in the then applicable HazMat Certificate as
expressly approved by Landlord and provided further that such usage and storage
is in full compliance with any and all local, state and federal environmental,
health and/or safety-related laws, statutes, orders, standards, courts'
decisions, ordinances, rules and regulations (as interpreted by judicial and
administrative decisions), decrees, directives, guidelines, permits or permit
conditions, currently existing and as amended, enacted, issued or adopted in the
future which are or become applicable to Tenant or all or any portion of the
Premises (collectively, the "Environmental Laws"). Tenant agrees that any
changes to the type and/or quantities of Hazardous Materials specified in the
most recent HazMat Certificate may be implemented only with the prior written
consent of Landlord, which consent may be given or withheld in Landlord's
reasonable discretion. Tenant shall not be entitled nor permitted to install any
tanks under, on or about the Premises for the storage of Hazardous Materials
without the express written consent of Landlord, which may be given or withheld
in Landlord's sole discretion. Landlord shall have the right at all times during
the Term of this Lease to (i) inspect the Premises, (ii) conduct tests and
investigations to determine whether Tenant is in compliance with the provisions
of this Section 29, and (iii) request lists of all Hazardous Materials used,
stored or otherwise located on, under or about any portion of the Premises
and/or the Common Areas. The cost of all such inspections, tests and
investigations shall be borne solely by Tenant, if Landlord reasonably
determines that Tenant or any of Tenant's Representatives are directly or
indirectly responsible in any manner for any contamination revealed by such
inspections, tests and investigations. The aforementioned rights granted herein
to Landlord and its representatives shall not create (a) a duty on Landlord's
part to inspect, test, investigate, monitor or otherwise observe the Premises or
the activities of Tenant and Tenant's Representatives with respect to Hazardous
Materials, including without limitation, Tenant's operation, use and any
remediation related thereto, or (b) liability on the part of Landlord and its
representatives for Tenant's use, storage, disposal or remediation of Hazardous
Materials, it being understood that Tenant shall be solely responsible for all
liability in connection therewith.


                                       22
<PAGE>
 
      29.4 Tenant's Environmental Obligations: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord's prior written consent, which consent shall
not be unreasonably withheld so long as such actions would not potentially have
a material adverse long-term or short-term effect on any portion of the
Premises, the Building, the Lot or the Park. Notwithstanding the foregoing,
Tenant shall be entitled to respond immediately to an emergency without first
obtaining Landlord's prior written consent. Tenant, at its sole cost and
expense, shall conduct and perform, or cause to be conducted and performed, all
closures as required by any Environmental Laws or any agencies or other
governmental authorities having jurisdiction thereof. If Tenant fails to so
promptly investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing, investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.

      29.5 Environmental Indemnity: In addition to Tenant's obligations as set
forth hereinabove, Tenant shall, protect, indemnify, defend (with counsel
acceptable to Landlord) and hold Landlord and the other Indemnitees harmless
from and against any and all claims, judgments, damages, penalties, fines,
liabilities, losses (including, without limitation, diminution in value of any
portion of the Premises, the Building, the Lot or the Park, damages for the loss
of or restriction on the use of rentable or usable space, and from any adverse
impact of Landlord's marketing of any space within the Building and/or Park),
suits, administrative proceedings and costs (including, but not limited to,
attorneys' and consultant fees and court costs) arising at any time during or
after the Term of this Lease in connection with or related to, directly or
indirectly, the use, presence, transportation, storage, disposal, migration,
removal, spill, release or discharge of Hazardous Materials on, in or about any
portion of the Premises, the Common Areas, the Building, the Lot or the Park as
a result (directly or indirectly) of the intentional or negligent acts or
omissions of Tenant or any of Tenant's Representatives. Neither the written
consent of Landlord to the presence, use or storage of Hazardous Materials in,
on, under or about any portion of the Premises, the Building, the Lot and/or the
Park, nor the strict compliance by Tenant with all Environmental Laws shall
excuse Tenant from its obligations of indemnification pursuant hereto. Tenant
shall not be relieved of its indemnification obligations under the provisions of
this Section 29.5 due to Landlord's status as either an "owner" or "operator"
under any Environmental Laws.

      29.6 Survival: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is reasonably determined by Landlord that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease with respect to
Hazardous Materials, including without limitation all Environmental Laws at the
expiration or earlier termination of this Lease, then in Landlord's sole
discretion, Landlord may require Tenant to hold over possession of the Premises
until Tenant can surrender the Premises to Landlord in the condition in which
the Premises existed as of the Commencement Date and prior to the appearance of
such Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.

      29.7 Exculpation of Tenant: Tenant shall not be liable to Landlord for nor
otherwise obligated to Landlord under any provision of the Lease with respect to
the following: (i) any claim, remediation, obligation, investigation,
obligation, liability, cause of action, attorney's fees, consultants' cost,
expense or damage resulting from any Hazardous Materials present in, on or about
the Premises or the Building to the extent not caused or otherwise permitted,
directly or indirectly, by Tenant or Tenant's Representatives; or (ii) the
removal, investigation, monitoring or remediation of any Hazardous Material
present in, on or about the Premises or the Building caused by any source,
including third parties, other than Tenant or Tenant's Representatives;
provided, however, Tenant shall be fully liable for and otherwise obligated to
Landlord under the provisions of this Lease for all liabilities, costs,


                                       23
<PAGE>
 
damages, penalties, claims, judgments, expenses (including without limitation,
reasonable attorneys' and experts' fees and costs) and losses to the extent (a)
Tenant or any of Tenant's Representatives contributes to the presence of such
Hazardous Materials, or Tenant and/or any of Tenant's Representatives
exacerbates the conditions caused by such Hazardous Materials, or (b) Tenant
and/or Tenant's Representatives allows or permits persons over which Tenant or
any of Tenant's Representatives has control, and/or for which Tenant or any of
Tenant's Representatives are legally responsible for, to cause such Hazardous
Materials to be present in, on, under, through or about any portion of the
Premises, the Common Areas, the Building or the Park, or (c) Tenant and/or any
of Tenant's Representatives does not take all reasonably appropriate actions to
prevent such persons over which Tenant or any of Tenant's Representatives has
control and/or for which Tenant or any of Tenant's Representatives are legally
responsible from causing the presence of Hazardous Materials in, on, under,
through or about any portion of the Premises, the Common Areas, the Building or
the Park.

30. Financial Statements: Tenant, for the reliance of Landlord, any lender
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) days after Landlord's request
therefor, but not more often than once annually so long as Tenant is not in
default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant. If
Landlord so requests, Tenant shall deliver to Landlord an opinion of a certified
public accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied. Any and all options granted to
Tenant hereunder shall be subject to and conditioned upon Landlord's reasonable
approval of Tenant's financial condition at the time of Tenant's exercise of any
such option.

31. General Provisions:

      31.1 Time. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.

      31.2 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

      31.3 Recordation. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.

      31.4 Landlord's Personal Liability. The liability of Landlord (which, for
purposes of this Lease, shall include Landlord and the owner of the Building if
other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Premises or the Building, and Tenant agrees
to look solely to the Premises for satisfaction of any liability and shall not
look to other assets of Landlord nor seek any recourse against the assets of the
individual partners, members, directors, officers, shareholders, agents or
employees of Landlord (including without limitation, any property management
company of Landlord); it being intended that Landlord and the individual
partners, members, directors, officers, shareholders, agents and employees of
Landlord (including without limitation, any property management company of
Landlord) shall not be personally liable in any manner whatsoever for any
judgment or deficiency. The liability of Landlord under this Lease is limited to
its actual period of ownership of title to the Building, and Landlord shall be
automatically released from further performance under this Lease upon transfer
of Landlord's interest in the Premises or the Building.

      31.5 Separability. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.

      31.6 Choice of Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.

      31.7 Attorneys' Fees. In the event any dispute between the parties results
in litigation or other proceeding, the prevailing party shall be reimbursed by
the party not prevailing for all reasonable costs and expenses, including,
without limitation, reasonable attorneys' and experts' fees and costs incurred
by the prevailing party in connection with such litigation or other proceeding,
and any appeal thereof.


                                       24
<PAGE>
 
Such costs, expenses and fees shall be included in and made a part of the
judgment recovered by the prevailing party, if any.

      31.8 Entire Agreement. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.

      31.9 Warranty of Authority. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. Tenant hereby warrants that this Lease
is valid and binding upon Tenant and enforceable against Tenant in accordance
with its terms.

      31.10 Notices. Any and all notices and demands required or permitted to be
given hereunder to Landlord shall be in writing and shall be sent: (a) by United
States mail, certified and postage prepaid; or (b) by personal delivery; or (c)
by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive, Fourth
Floor, Foster City, California 94404-1167. Any and all notices and demands
required or permitted to be given hereunder to Tenant shall be in writing and
shall be sent: (i) by United States mail, certified and postage prepaid; or (ii)
by personal delivery to any employee or agent of Tenant over the age of eighteen
(18) years of age; or (iii) by overnight courier, all of which shall be
addressed to Tenant at the Premises. Notice and/or demand shall be deemed given
upon the earlier of actual receipt or the third day following deposit in the
United States mail. Any notice or requirement of service required by any statute
or law now or hereafter in effect, including, but not limited to, California
Code of Civil Procedure Sections 1161, 1161.1, and 1162 (including any
amendments, supplements or substitutions thereof), is hereby waived by Tenant.

      31.11 Joint and Several. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

      31.12 Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.

      31.13 Waiver of Jury Trial. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.

      31.14 Counterclaims. In the event Landlord commences any proceedings for
nonpayment of Rent, Additional Rent, or any other sums or amounts due hereunder,
Tenant shall not interpose any counterclaim of whatever nature or description in
any such proceedings, provided, however, nothing contained herein shall be
deemed or construed as a waiver of the Tenant's right to assert such claims in
any separate action brought by Tenant or the right to offset the amount of any
final judgment owed by Landlord to Tenant.

      31.15 Underlining. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

      31.16 Merger. The voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof by Landlord and Tenant, or a
termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord's election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

32. Signs: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval which shall not be unreasonably withheld and shall be
subject to any applicable governmental laws, ordinances, and regulations and in
compliance with Landlord's sign criteria as same may exist from time to time or
as set forth in Exhibit H hereto and made a part hereof. Tenant shall remove all
such signs and graphics


                                       25
<PAGE>
 
prior to the termination of this Lease. Such installations and removals shall be
made in a manner as to avoid damage or defacement of the Premises; and Tenant
shall repair any damage or defacement, including without limitation,
discoloration caused by such installation or removal. Landlord shall have the
right, at its option, to deduct from the Security Deposit such sums as are
reasonably necessary to remove such signs, including, but not limited to, the
costs and expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any: (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any such sign, awning, canopy, advertising matter,
lettering, decoration or other thing as may be approved in good condition and
repair at all times.

33. Mortgagee Protection: Upon any default on the part of Landlord, Tenant will
give written notice by registered or certified mail to any beneficiary of a deed
of trust or mortgagee of a mortgage covering the Premises who has provided
Tenant with notice of their interest together with an address for receiving
notice, and shall offer such beneficiary or mortgagee a reasonable opportunity
to cure the default (which, in no event shall be less than ninety (90) days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary to effect a cure. If such
default cannot be cured within such time period, then such additional time as
may be necessary will be given to such beneficiary or mortgagee to effect such
cure so long as such beneficiary or mortgagee has commenced the cure within the
original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being
diligently pursued. Tenant agrees that each lender to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof. Tenant shall
not make any prepayment of Rent more than one (1) month in advance without the
prior written consent of each such lender, except if Tenant is required to make
quarterly payments of Rent in advance pursuant to the provisions of Section 8
above. Tenant waives the collection of any deposit from such lender(s) or any
purchaser at a foreclosure sale of such lender(s)' deed of trust unless the
lender(s) or such purchaser shall have actually received and not refunded the
deposit. Tenant agrees to make all payments under this Lease to the lender with
the most senior encumbrance upon receiving a direction, in writing, to pay said
amounts to such lender. Tenant shall comply with such written direction to pay
without determining whether an event of default exists under such lender's loan
to Landlord.

34. Quitclaim: Upon any termination of this Lease, Tenant shall, at Landlord's
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.

35. Intentionally Omitted.

36. Warranties of Tenant: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.

37. Compliance with Americans with Disabilities Act: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant


                                       26
<PAGE>
 
Improvements strictly comply with all requirements of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the Common Areas or the Park under the
ADA, then such work shall be the responsibility of Landlord; provided, if such
work is required under the ADA as a result of Tenant's use of the Premises or
any work or alteration made to the Premises by or on behalf of Tenant, then such
work shall be performed by Landlord at the sole cost and expense of Tenant.
Except as otherwise expressly provided in this provision, Tenant shall be
responsible at its sole cost and expense for fully and faithfully complying with
all applicable requirements of the ADA. Within ten (10) days after receipt,
Landlord and Tenant shall advise the other party in writing, and provide the
other with copies of (as applicable), any notices alleging violation of the ADA
relating to any portion of the Premises or the Building; any claims made or
threatened in writing regarding noncompliance with the ADA and relating to any
portion of the Premises or the Building; or any governmental or regulatory
actions or investigations instituted or threatened regarding noncompliance with
the ADA and relating to any portion of the Premises or the Building. Tenant
shall and hereby agrees to protect, defend (with counsel acceptable to Landlord)
and hold Landlord and the other Indemnitees harmless and indemnify the
Indemnitees from and against all liabilities, damages, claims, losses,
penalties, judgments, charges and expenses (including reasonable attorneys'
fees, costs of court and expenses necessary in the prosecution or defense of any
litigation including the enforcement of this provision) arising from or in any
way related to, directly or indirectly, Tenant's or Tenant's Representatives'
violation or alleged violation of the ADA with respect to the Premises. Tenant
agrees that the obligations of Tenant herein shall survive the expiration or
earlier termination of this Lease.

38. Brokerage Commission: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial Term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial Term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exists as of the date on which Tenant executes this Lease. Tenant further
represents and warrants to Landlord that Tenant will not receive (i) any portion
of any brokerage commission or finder's fee payable to the Broker(s) in
connection with this Lease or (ii) any other form of compensation or incentive
from the Broker(s) with respect to this Lease.

39. Quiet Enjoyment: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept, and during the periods that Tenant is not otherwise in
default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders, (i) that Tenant shall and may peaceably and
quietly hold, occupy and enjoy the Premises and the Common Areas during the Term
of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.

40. Landlord's Ability to Perform Tenant's Unperformed Obligations:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.


                                       27
<PAGE>
 
      IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease
Date referenced on Page 1 of this Lease.

TENANT:

PRI Automation, Inc.,
a Massachusetts corporation


By:   /s/ Stephen O. Allison
      ---------------------------------

Its:  CFO
      ---------------------------------

Date: 3/13/98
      ---------------------------------

LANDLORD:

LINCOLN-WHITEHALL REALTY, L.L.C.,
a Delaware limited liability company

By:   LPC MS, Inc.,
      as managaer and agent LINCOLN-WHITEHALL REALTY, L.L.C.

      By /s/ Barry DiRaimondo
         ------------------------------
         Senior Vice President


                                       28
<PAGE>
 
                          EXHIBIT B TO LEASE AGREEMENT
                               TENANT IMPROVEMENTS

This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated March 9, 1998 (the "Lease"), by and
between LINCOLN-WHITEHALL REALTY, L.L.C., a Delaware limited liability company
("Landlord") and PRI Automation, Inc., a Massachusetts corporation ("Tenant")
for the leasing of certain premises located in the Middlefield Bernardo Business
Park at Building D, 455 N. Bernardo Avenue, Mountain View, California (the
"Premises"). The terms, conditions and provisions of this EXHIBIT B are hereby
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease:

1. Tenant To Construct Tenant Improvements. Subject to the provisions below,
Tenant shall be solely responsible for the planning, construction and completion
of the interior tenant improvements ("Tenant Improvements") to the Premises in
accordance with the terms and conditions of this Exhibit B. The Tenant
Improvements shall not include any of Tenant's personal property, trade
fixtures, furnishings, equipment or similar items.

2. Tenant Improvement Plans.

      A. Preliminary Plans and Specifications. Promptly after execution of the
Lease, Tenant shall retain a licensed and insured architect ("Architect") to
prepare preliminary working architectural and engineering plans and
specifications ("Preliminary Plans and Specifications") for the Tenant
Improvements. Tenant shall deliver the Preliminary Plans and Specifications to
Landlord. The Preliminary Plans and Specifications shall be in sufficient detail
to show locations, types and requirements for all heat loads, people loads,
floor loads, power and plumbing, regular and special HVAC needs, telephone
communications, telephone and electrical outlets, lighting, lighting fixtures
and related power, and electrical and telephone switches. Landlord shall
reasonably approve or disapprove the Preliminary Plans and Specifications within
five (5) days after Landlord receives the Preliminary Plans and Specifications
and, if disapproved, Landlord shall return the Preliminary Plans and
Specifications to Tenant, who shall make all necessary revisions within ten (10)
days after Tenant's receipt thereof. This procedure shall be repeated until
Landlord approves the Preliminary Plans and Specifications. The approved
Preliminary Plans and Specifications, as modified, shall be deemed the "Final
Preliminary Plans and Specifications".

      B. Final Plans and Specifications. After the Final Preliminary Plans and
Specifications are approved by Landlord and are deemed to be the Final
Preliminary Plans and Specifications, Tenant shall cause the Architect to
prepare in twenty (20) days following Landlord's approval of the Final
Preliminary Plans and Specifications the final working architectural and
engineering plans, specifications and drawings, ("Final Plans and
Specifications") for the Tenant Improvements. Tenant shall then deliver the
Final Plans and Specifications to Landlord. Landlord shall reasonably approve or
disapprove the Final Plans and Specifications within five (5) days after
Landlord receives the Final Plans and Specifications and, if disapproved,
Landlord shall return the Final Plans and Specifications to Tenant who shall
make all necessary revisions within ten (10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves, in writing,
the Final Plans and Specifications. The approved Final Plans and Specifications,
as modified, shall be deemed the "Construction Documents".

      C. Miscellaneous. All deliveries of the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents shall be delivered by
messenger service, by personal hand delivery or by overnight parcel service.
While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents, Landlord's interest in doing
so is to protect the Premises, the Building and Landlord's interest.
Accordingly, Tenant shall not rely upon Landlord's approvals and Landlord shall
not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of granting such
approvals.

      D. Building Standard Work. The Construction Documents shall provide that
the Tenant Improvements to be constructed in accordance therewith must be at
least equal, in quality, to Landlord's building standard materials, quantities
and procedures then in use by Landlord ("Building Standards") attached hereto as
Exhibit B-2, and shall consist of improvements which are generic in nature.

      E. Construction Agreements. Tenant hereby covenants and agrees that a
provision shall be included in each and every agreement made with the Architect
and the Contractor with respect to the Tenant Improvements specifying that
Landlord shall be a third party beneficiary thereof, including without
limitation, a third party beneficiary of all covenants, representations,
indemnities and warranties made by the Architect and/or Contractor.


                                       1
<PAGE>
 
3. Permits. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall obtain all governmental approvals of the Construction
Documents to the full extent necessary for the issuance of a building permit for
the Tenant Improvements based upon such Construction Documents. Tenant at its
sole cost and expense shall also cause to be obtained all other necessary
approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Tenant Improvements in
accordance with the approved Construction Documents. Tenant at its sole cost and
expense (subject to the provisions of Paragraph 5 below) shall undertake all
steps necessary to insure that the construction of the Tenant Improvements is
accomplished in strict compliance with all statutes, laws, ordinances, codes,
rules, and regulations applicable to the construction of the Tenant Improvements
and the requirements and standards of any insurance underwriting board,
inspection bureau or insurance carrier insuring the Premises and/or the
Building.

4. Construction.

      A. Tenant shall be solely responsible for the construction, installation
and completion of the Tenant Improvements in accordance with the Construction
Documents approved by Landlord and is solely responsible for the payment of all
amounts when payable in connection therewith without any cost or expense to
Landlord, except for Landlord's obligation to contribute the Tenant Improvement
Allowance in accordance with the provisions of Paragraph 5 below. Tenant shall
diligently proceed with the construction, installation and completion of the
Tenant Improvements in accordance with the Construction Documents and the
completion schedule reasonably approved by Landlord. No material changes shall
be made to the Construction Documents and the completion schedule approved by
Landlord without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed.

      B. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall employ a licensed, insured and bonded general
contractor ("Contractor") to construct the Tenant Improvements in accordance
with the Construction Documents. The construction contracts between Tenant and
the Contractor and between the Contractor and subcontractors shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed. Proof that the Contractor is licensed in California, is
bonded as required under California law, and has the insurance specified in
Exhibit B-1, attached hereto and incorporated herein by this reference, shall be
provided to Landlord at the time that Tenant requests approval of the Contractor
from Landlord. Tenant shall comply with or cause the Contractor to comply with
all other terms and provisions of Exhibit B-1.

      C. Prior to the commencement of the construction and installation of the
Tenant Improvements, Tenant shall provide the following to Landlord, all of
which shall be to Landlord's reasonable satisfaction:

            (i)   An estimated budget and cost breakdown for the Tenant
                  Improvements.

            (ii)  Estimated completion schedule for the Tenant Improvements.

            (iii) Copies of all required approvals and permits from governmental
agencies having jurisdiction or authority for the construction and installation
of the Tenant Improvements; provided, however, if prior to commencement of the
construction and installation of Tenant Improvements Tenant has not received the
electrical, plumbing or mechanical permits, Tenant shall only be required to
provide Landlord with evidence that Tenant has made application therefor, and,
upon receipt by Tenant of such permits, Tenant shall promptly provide Landlord
with copies thereof.

            (iv) Evidence of Tenant's procurement of insurance required to be
obtained pursuant to the provisions of Paragraphs 4.B and 4.G.

      D. Landlord shall at all reasonable times have a right to inspect the
Tenant Improvements (provided Landlord does not materially interfere with the
work being performed by the Contractor or its subcontractors) and Tenant shall
immediately cease work upon written notice from Landlord if the Tenant
Improvements are not in compliance with the Construction Documents approved by
Landlord. If Landlord shall give notice of faulty construction or any other
deviation from the Construction Documents, Tenant shall cause the Contractor to
make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements constructed in accordance with the
Construction Documents.

      E. Subject to Landlord complying with its obligations in Paragraph 5
below, Tenant shall pay and discharge promptly and fully all claims for labor
done and materials and services furnished in connection with the Tenant
Improvements. The Tenant Improvements shall not be commenced until five (5)
business days after Landlord has received notice from Tenant stating the date
the construction of the Tenant Improvements is to commence so that Landlord can
post and record any appropriate Notice of Nonresponsibility.


                                       2
<PAGE>
 
      F. Tenant acknowledges and agrees that the agreements and covenants of
Tenant in Sections 10 and 37 of the Lease shall be fully applicable to Tenant's
construction of the Tenant Improvements.

      G. Tenant shall maintain, and cause to be maintained, during the
construction of the Tenant Improvements, at its sole cost and expense, insurance
of the types and in the amounts specified in Exhibit B-1 and in Section 12 of
the Lease, together with builders' risk insurance for the amount of the
completed value of the Tenant Improvements on an all-risk non-reporting form
covering all improvements under construction, including building materials, and
other insurance in amounts and against such risks as the Landlord shall
reasonably require in connection with the Tenant Improvements.

      H. No materials, equipment or fixtures shall be delivered to or installed
upon the Premises pursuant to any agreement by which another party has a
security interest or rights to remove or repossess such items, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.

      I. Landlord reserves the right to establish reasonable rules and
regulations for the use of the Building during the course of construction of the
Tenant Improvements, including, but not limited to, construction parking,
storage of materials, hours of work, use of elevators, and clean-up of
construction related debris.

      J. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord the following, all of which shall be to Landlord's reasonable
satisfaction:

            (i) Any certificates required for occupancy, including a permanent
and complete Certificate of Occupancy issued by the City of Mountain View.

            (ii) A Certificate of Completion signed by the Architect who
prepared the Construction Documents, reasonably approved by Landlord.

            (iii) A cost breakdown itemizing all expenses for the Tenant
Improvements, together with invoices and receipts for the same or other evidence
of payment.

            (iv) Final and unconditional mechanic's lien waivers for all the
Tenant Improvements.

            (v) A Notice of Completion for execution by Landlord, which
certificate once executed by Landlord shall be recorded by Tenant in the
official records of the county of Santa Clara, and Tenant shall then deliver to
Landlord a true and correct copy of the recorded Notice of Completion.

            (vi) A true and complete copy of all as-built plans and drawings for
the Tenant Improvements.

5. Termination. If the Lease is terminated prior to the date on which the Tenant
Improvements are completed, for any reason due to the default of Tenant
hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs incurred by
Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned,
installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant
Improvements and restoration costs related thereto. Subject to the provisions of
Section 10.2 of the Lease, upon the expiration or earlier termination of the
Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered
incorporated into the Building.

6. Lease Provisions: Conflict. The terms and provisions of the Lease, insofar as
they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.


                                       3
<PAGE>
 
                                  EXHIBIT B-1
                      CONSTRUCTION INSURANCE REQUIREMENTS

Before commencing work, the contractor shall procure and maintain at its sole
cost and expense until completion and final acceptance of the work, at least the
following minimum levels of insurance.

A.    Workers' Compensation in statutory amounts and Employers Liability
      Insurance in the minimum amounts of $100,000 each accident for bodily
      injury by accident and $100,000 each employee for bodily injury by disease
      with a $500,000 policy limit, covering each and every worker used in
      connection with the contract work.

B.    Comprehensive General Liability Insurance on an occurrence basis
      including, but not limited to, protection for Premises/Operations
      Liability, Broad Form Contractual Liability, Owner's and Contractor's
      Protective, and Products/Completed Operations Liability*, in the following
      minimum limits of liability.

      Bodily Injury, Property Damage, and
      Personal Injury Liability               $2,000,000/each occurrence
                                              $3,000,000/aggregate

      *     Products/Completed Operations Liability Insurance is to be provided
            for a period of at least one (1) year after completion of work.

      Coverage should include protection for Explosion, Collapse and Underground
      Damage.

C.    Comprehensive Automobile Liability Insurance with the following minimum
      limits of liability.

      Bodily Injury and Property        $1,000,000/each occurrence
      Damage Liability                  $2,000,000/aggregate

      This insurance will apply to all owned, non-owned or hired automobiles to
      be used by the Contractor in the completion of the work.

D.    Umbrella Liability Insurance in a minimum amount of five million dollars
      ($5,000,000), providing excess coverage on a following-form basis over the
      Employer's Liability limit in Paragraph A and the liability coverages
      outlined in Paragraphs B and C.

E.    Equipment and Installation coverages in the broadest form available
      covering Contractor's tools and equipment and material not accepted by
      Tenant. Tenant will provide Builders Risk Insurance on all accepted and
      installed materials.

All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of any work and
shall name Landlord, and its partners and lenders as additional insureds as
their interests may appear. All insurance policies shall (1) be issued by a
company or companies licensed to be business in the state of California, (2)
provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) days prior written notice provided to Landlord,
(3) provide no deductible greater than $15,000 per occurrence, (4) contain a
waiver to subrogation clause in favor of Landlord, and its partners and lenders,
and (5) comply with the requirements of Sections 12.2, 12.3 and 12.4 of the
Lease to the extent such requirements are applicable.
<PAGE>
 
                                  EXHIBIT B-2
                               BUILDING STANDARDS

                            OUTLINE SPECIFICATION FOR
                                 R & D BUILDINGS

Office Area

DEMISING PARTITION AND CORRIDOR WALLS:

      Note:  One hr. rated walls where required based on occupancy group.

A.    6" 20-gage metal studs at 24" O.C. (or as required by code based on roof
      height) framed full height from finish floor to surface above.

B.     One (1) LAYER 5/8" drywall Type "X" both sides of wall, fire taped only.

INTERIOR PARTITIONS:

A.    3 5/8" 25 gage metal studs at 24" O.C. to bottom of T-Bar ceiling grid
      approximately 9' 0' high.

B.    One (1) layer 5/8" drywall both sides of wall, smooth ready for paint.

C.    3 5/8" metal studs including all lateral bracing as required by code.

PERIMETER DRYWALL (AT OFFICE AREAS):

A.    3 5/8" metal studs @ 24" O.C. to 12'0" above finished floor. (or as
      required by Title-24 for full height envelope then use demising wall
      spec.)

B.    One (1) layer 5/8" Type "X" drywall taped smooth and ready for paint.

COLUMN FURRING:

A.    Furring channel all sides of 2 1/2" metal studs per details.

B.    One (1) layer 5/8" drywall taped smooth and ready for paint.

C.    Columns within walls shall be furred-out.

ACOUSTICAL CEILINGS:

      Note:  Gyp. Bd. ceiling at all restrooms Typ.

A.    2' X 4" standard white T-Bar grid system as manufactured by Chicago
      Metallic of equal.

B.    2' X 4' X 5/8" white, no-directional acoustical tile to be regular second
      look as manufactured by Armstrong or equal.

PAINTING:

A.    Sheetrock walls within office to receive two (2) coats of interior latex
      paint as manufactured by Kelly Moore or equal. Some portions of second
      coat to be single accent color.

B.    Semigloss paint all restrooms and lunch rooms.

WINDOW COVERING:

A.    1" aluminum mini-blinds as manufactured by Levelor, Bali or equal, color
      to be selected by L.P.C. (brushed aluminum or white).

B.    Blinds to be sized to fit window module.

VCT:

A.    VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series
      or equal.

B.    Slabs shall be water proofed per manufacturer recommendations, at sheet
      vinyl or VCT areas.

LIGHT FIXTURES:


                                       1
<PAGE>
 
A.    2" X 4" T-bar lay in 3-tube energy efficient fixture with cool white
      fluorescent tubes with parabolic lens as manufactured by Lithonia or
      equal. (Approximately 50 F.C.)

LIGHT SWITCHES:

A.    Switching as required by Title 24.

B.    Switch assembly to be Levinton or equal, color - White

ELECTRICAL OUTLET:

A.    11OV duplex outlet in demising or interior partitions only, as
      manufactured by Leviton or equal, color to be White.

B.    Maximum eight (8) outlets per circuit, spacing to meet code or minimum 2
      per office, conference room, reception and 2 dedicated over cabinet at
      lunch room junction boxes above ceiling for large open area with furniture
      partitions.

C.    Transformers to be a minimum of 20% or over required capacity. 

D.    Contractors to inspect electric room and to include all necessary metering
      cost.

E.    No aluminum wiring is acceptable.

TELEPHONE/DATA OUTLET:

A.    One(1) single outlet box in wall with pullwire from outlet box to area
      above T-bar ceiling per office.

B.    Cover plate for phone outlets by telephone/data vendors.

FIRE SPRINKLERS:

As required by fire codes.

TOPSET BASE:

A.     4" rubber base as manufactured by Burke or equal, standard colors only.

B.     4" rubber base at VCT areas.

TOILET AREAS:

Wet walls to receive Duraboard or Wonder Board and ceramic tile up to 48".
Floors to receive ceramic tile with self covered base as required by code.

CARPET:

Note any of the following carpets are acceptable

Designweave: Alumni 28 oz., Windswept Classic 30 oz. or Stratton Design Series
III 30 oz, Structure II 28 oz.

WOOD DOORS:

Shall be 3'0 x 9'0" x 1 3/4" (unless otherwise specified) solid core,
prefinished harmony (rotary N. birch).

DOOR FRAMES:

Shall be ACI or equal, 3 3/4" or 4 7/8" throat, brushed, standard aluminum,
snap-on trim.

HARDWARE:

1 1/2 pr. butts F179 Stanley, Latchset D10S Rhodes Schlage, Lockset D53PD Rhodes
Schlage, Dome Type floor stop Gylnn Johnson FBl3, Closer 411OLCN (where
required) brushed chrome.

INSULATION:

By Title 24 insulation.

PLUMBING:


                                       2
<PAGE>
 
A.    Shall comply with all local codes and handicapped code requirements.
      Fixtures shall be either "American Standard", "Kohler" or "Norris". All
      toilet accessories and grab bars shall be "Bobrick" or equal and approved
      by owner.

B.    Plumbing bid shall include 5 gallon minimum hot water heater, or insta hot
      with mixer valve including all connections.

TOILET PARTITIONS:

Shall be as manufactured by Fiat, global or equal if approved by owner. Color to
be white or gray.

HVAC:

HVAC units per specifications.

Five (5) year warranty provided on all HVAC compressor units. All penetrations
including curbs and sleepers to be hot moped to LPC standard.

WAREHOUSE AREAS:

Floor - seal concrete with water base clear acrylic sealer. 
Fire Extinguishers - 2A 10 BC surface mount by code x by S.F.

400 W metal halide lighting at warehouse minimum 5-7 foot candles.

Note: All high pile storage requirements are excluded for standard building T.I.


                                       3
<PAGE>
 
                              EXHIBIT A - PREMISES

This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain Lease Agreement dated March 9, 1998 (the "Lease"), by and between
LINCOLN-WHITEHALL REALTY, L.L.C., a Delaware limited liability company
("Landlord") and PRI Automation, Inc., a Massachusetts corporation ("Tenant")
for the leasing of certain premises located in the Middlefield Bernardo Business
Park at Building D, 455 N. Bernardo Avenue, Mountain View, California (the
"Premises").

The Premises consist of the rentable square footage of space specified in the
Basic Lease Information and has the address specified in the Basic Lease
Information. The Premises are a part of and are contained in the Building
specified in the Basic Lease Information. The cross-hatched area depicts the
Premises within the Project:


                               [GRAPHIC OMITTED]
<PAGE>
 
                          Exhibit C to Lease Agreement

                              Rules & Regulations

This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated March 9, 1998 (the "Lease"), by and
between LINCOLN-WHITEHALL REALTY, L.L.C., a Delaware limited liability company
("Landlord") and PRI Automation, Inc., a Massachusetts corporation ("Tenant")
for the leasing of certain premises located in the Middlefield Bernardo Business
Park at Building D, 455 N. Bernardo Avenue, Mountain View, California (the
"Premises"). The terms, conditions and provisions of this EXHIBIT C are hereby
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease:


1.    No advertisement, picture or sign of any sort shall be displayed on or
      outside the Premises or the Building without the prior written consent of
      Landlord. Landlord shall have the right to remove any such unapproved item
      without notice and at Tenant's expense.

2.    Tenant shall not regularly park motor vehicles in designated parking areas
      after the conclusion of normal daily business activity.

3.    Tenant shall not use any method of heating or air conditioning other than
      that supplied by Landlord without the prior written consent of Landlord.

4.    All window coverings installed by Tenant and visible from the outside of
      the Building require the prior written approval of Landlord.

5.    Tenant shall not use, keep or permit to be used or kept any foul or
      noxious gas or substance or any flammable or combustible materials on or
      around the Premises, the Building or the Park.

6.    Tenant shall not alter any lock or install any new locks or bolts on any
      door at the Premises without the prior consent of Landlord.

7.    Tenant agrees not to make any duplicate keys without the prior consent of
      Landlord.

8.    Tenant shall park motor vehicles in those general parking areas as
      designated by Landlord except for loading and unloading. During those
      periods of loading and unloading, Tenant shall not unreasonably interfere
      with traffic flow within the Park and loading and unloading areas of other
      tenants.

9.    Tenant shall not disturb, solicit or canvas any occupant of the Building
      or Park and shall cooperate to prevent same.

10.   No person shall go on the roof without Landlord's permission.

11.   Business machines and mechanical equipment belonging to Tenant which cause
      noise or vibration that may be transmitted to the structure of the
      Building, to such a degree as to be objectionable to Landlord or other
      Tenants, shall be placed and maintained by Tenant, at Tenant's expense, on
      vibration eliminators or other devices sufficient to eliminate noise or
      vibration.

12.   All goods, including material used to store goods, delivered to the
      Premises of Tenant shall be immediately moved into the Premises and shall
      not be left in parking or receiving areas overnight.

13.   Tractor trailers which must be unhooked or parked with dolly wheels beyond
      the concrete loading areas must use steel plates or wood blocks under the
      dolly wheels to prevent damage to the asphalt paving surfaces. No parking
      or storing of such trailers will be permitted in the auto parking areas of
      the Park or on streets adjacent thereto.

14.   Forklifts which operate on asphalt paving areas shall not have solid
      rubber tires and shall only use tires that do not damage the asphalt.

15.   Tenant is responsible for the storage and removal of all trash and refuse.
      All such trash and refuse shall be contained in suitable receptacles
      stored behind screened enclosures at locations approved by Landlord.

16.   Tenant shall not store or permit the storage or placement of goods, or
      merchandise or pallets or equipment of any sort in or around the Premises,
      the Building, the Park or any of the Common Areas of the foregoing. No
      displays or sales of merchandise shall be allowed in the parking lots or
      other Common Areas.

17.   Tenant shall not permit any animals, including, but not limited to, any
      household pets, to be brought or kept in or about the Premises, the
      Building, the Park or any of the Common Areas of the foregoing.

l8.   Tenant shall not permit any motor vehicles to be washed on any portion of
      the Premises or in the Common Areas of the Park, nor shall Tenant permit
      mechanical work or maintenance of motor vehicles to be performed on any
      portion of the Premises or in the Common Areas of the Park.


                                       1
<PAGE>
 
                                   EXHIBIT E

                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:     ___________________________________________________
              ___________________________________________________
              c/o LPC MS, Inc.
              101 Lincoln Centre Drive, Fourth Floor
              Foster City, California 94404
              Attn: ______________________________________
              Phone: (650) 571-2200

Name of (Prospective) Tenant:___________________________________________________

Mailing Address:________________________________________________________________
________________________________________________________________________________

Contact Person, Title and Telephone Number(s):__________________________________

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):____________________________________________________________

Address of (Prospective) Premises: _____________________________________________

Length of (Prospective) initial Term: __________________________________________
________________________________________________________________________________

1.    GENERAL INFORMATION:

      Describe the initial proposed operations to take place in, on, or about
      the Premises, including, without limitation, principal products processed,
      manufactured or assembled services and activities to be provided or
      otherwise conducted. Existing tenants should describe any proposed changes
      to on-going operations.
      __________________________________________________________________________
      __________________________________________________________________________

2.    USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

      2.1   Will any Hazardous Materials be used, generated, stored or disposed
            of in, on or about the Premises? Existing tenants should describe
            any Hazardous Materials which continue to be used, generated, stored
            or disposed of in, on or about the Premises.

            Wastes                         Yes |_|               No |_|
            Chemical Products       Yes |_|              No |_|
            Other                   Yes |_|              No |_|

            If Yes is marked, please explain:___________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      2.2   If Yes is marked in Section 2.1, attach a list of any Hazardous
            Materials to be used, generated, stored or disposed of in, on or
            about the Premises, including the applicable hazard class and an
            estimate of the quantities of such Hazardous Materials at any given
            time; estimated annual throughput; the proposed location(s) and
            method of storage (excluding nominal amounts of ordinary household
            cleaners and janitorial supplies which


                                       1
<PAGE>
 
            are not regulated by any Environmental Laws); and the proposed
            location(s) and method of disposal for each Hazardous Material,
            including, the estimated frequency, and the proposed contractors or
            subcontractors. Existing tenants should attach a list setting forth
            the information requested above and such list should include actual
            data from on-going operations and the identification of any
            variations in such information from the prior year's certificate.

3.    STORAGE TANKS AND SUMPS

      3.1   Is any above or below ground storage of gasoline, diesel, petroleum,
            or other Hazardous Materials in tanks or sumps proposed in, on or
            about the Premises? Existing tenants should describe any such actual
            or proposed activities. 

            Yes |_|              No |_|

            If yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

4.    WASTE MANAGEMENT

      4.1   Has your company been issued an EPA Hazardous Waste Generator I.D.
            Number? Existing tenants should describe any additional
            identification numbers issued since the previous certificate. 

            Yes |_|              No |_|

      4.2   Has your company filed a biennial or quarterly reports as a
            hazardous waste generator? Existing tenants should describe any new
            reports filed. 

            Yes |_|              No |_|

            If yes, attach a copy of the most recent report filed.

5.    WASTEWATER TREATMENT AND DISCHARGE

      5.1   Will your company discharge wastewater or other wastes to:

            _______ storm drain?     _______ sewer?
            _______ surface water?   _______ no wastewater or other wastes 
                                             discharged.

            Existing tenants should indicate any actual discharges. If so,
            describe the nature of any proposed or actual discharge(s).
            ____________________________________________________________________
            ____________________________________________________________________

      5.2   Will any such wastewater or waste be treated before discharge?
      
            Yes |_|              No |_|

            If yes, describe the type of treatment proposed to be conducted.
            Existing tenants should describe the actual treatment conducted.
            ____________________________________________________________________
            ____________________________________________________________________

6.    AIR DISCHARGES

      6.1   Do you plan for any air filtration systems or stacks to be used in
            your company's operations in, on or about the Premises that will
            discharge into the air; and will such air emissions be monitored?
            Existing tenants should indicate whether or not there are any such
            air filtration systems or stacks in use in, on or about the Premises
            which discharge into the air and whether such air emissions are
            being monitored.

            Yes |_|              No |_|

            If yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________


                                        2
<PAGE>
 
      6.2   Do you propose to operate any of the following types of equipment,
            or any other equipment requiring an air emissions permit? Existing
            tenants should specify any such equipment being operated in, on or
            about the Premises.

            ______ Spray booth(s)   ________  Incinerator(s)
            ______ Dip tank(s)      ________  Other (Please describe)
            ______ Drying oven(s)   ________  No Equipment Requiring Air Permits

            If yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

7.    HAZARDOUS MATEMALS DISCLOSURES

      7.1   Has your company prepared or will it be required to prepare a
            Hazardous Materials management plan ("Management Plan") pursuant to
            Fire Department or other governmental or regulatory agencies'
            requirements? Existing tenants should indicate whether or not a
            Management Plan is required and has been prepared. 

            Yes |_|              No |_|

            If yes, attach a copy of the Management Plan. Existing tenants
            should attach a copy of any required updates to the Management Plan.

      7.2   Are any of the Hazardous Materials, and in particular chemicals,
            proposed to be used in your operations in, on or about the Premises
            regulated under Proposition 65? Existing tenants should indicate
            whether or not there are any new Hazardous Materials being so used
            which are regulated under Proposition 65. 

            Yes |_|              No |_|

            If yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

8.    ENFORCEMENT ACTIONS AND COMPLAINTS

      8.1   With respect to Hazardous Materials or Environmental Laws, has your
            company ever been subject to any agency enforcement actions,
            administrative orders, or consent decrees or has your company
            received requests for information, notice or demand letters, or any
            other inquiries regarding its operations? Existing tenants should
            indicate whether or not any such actions, orders or decrees have
            been, or are in the process of being, undertaken or if any such
            requests have been received.

            Yes |_|              No |_|

            If yes, describe the actions, orders or decrees and any continuing
            compliance obligations imposed as a result of these actions, orders
            or decrees and also describe any requests, notices or demands, and
            attach a copy of all such documents. Existing tenants should
            describe and attach a copy of any new actions, orders, decrees,
            requests, notices or demands not already delivered to Landlord
            pursuant to the provisions of Section 29 of the signed Lease
            Agreement.
            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      8.2   Have there ever been, or are there now pending, any lawsuits against
            your company regarding any environmental or health and safety
            concerns?

            Yes |_|              No |_|

            If yes, describe any such lawsuits and attach copies of the
            complaint(s), cross-complaint(s), pleadings and all other documents
            related thereto as requested by Landlord. Existing tenants should
            describe and attach a copy of any new complaint(s),
            cross-complaint(s), pleadings and other related documents not
            already delivered to Landlord pursuant to the provisions of Section
            29 of the signed Lease Agreement.
            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________


                                       3
<PAGE>
 
      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            tenants should indicate whether or not there have been any such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises. 

            Yes |_|              No |_|

            If yes, please describe. Existing tenants should describe any such
            problems or complaints not already disclosed to Landlord under the
            provisions of the signed Lease Agreement.
            ____________________________________________________________________
            ____________________________________________________________________

9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            emissions permits, and use permits or approvals. Existing tenants
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name)_______________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent
and warrant that the information contained in this certificate is true and
correct.


(PROSPECTIVE) TENANT:


By:  
       ---------------------------------
Title:  
       ---------------------------------
Date: 
       ---------------------------------


                                       4
<PAGE>
 
                                   EXHIBIT F
                       FIRST AMENDMENT TO LEASE AGREEMENT
                          CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of ___________________, by and between
____________________________ ("Landlord"), and __________________________
("Tenant"), with reference to the following facts:

                                    RECITALS

A.    Landlord and Tenant have entered into that certain Lease Agreement dated
      ____________ (the "Lease"), for the leasing of certain premises containing
      approximately ___________ rentable square feet of space located at
      _______________________________, California (the "Premises") as such
      Premises are more fully described in the Lease.

B.    Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

      1.    Recitals: Landlord and Tenant agree that the above recitals are true
            and correct.

      2.    The Commencement Date of the Lease shall be ______________________.

      3.    The last day of the Term of the Lease (the "Expiration Date") shall
            be ____________.

      4.    The dates on which the Base Rent will be adjusted are:

            for the period _______ to ________ the monthly Base Rent shall 
            be $___________ ; 
            for the period _______ to ________ the monthly Base Rent shall  
            be $___________ ; and 
            for the period _______ to ________ the monthly Base Rent shall 
            be $____________ .

      5.    Effect of Amendment: Except as modified herein, the terms and
            conditions of the Lease shall remain unmodified and continue in full
            force and effect. In the event of any conflict between the terms and
            conditions of the Lease and this Amendment, the terms and conditions
            of this Amendment shall prevail.

      6.    Definitions: Unless otherwise defined in this Amendment, all terms
            not defined in this Amendment shall have the meaning set forth in
            the Lease.

      7.    Authority: Subject to the provisions of the Lease, this Amendment
            shall be binding upon and inure to the benefit of the parties
            hereto, their respective heirs, legal representatives, successors
            and assigns. Each party hereto and the persons signing below warrant
            that the person signing below on such party's behalf is authorized
            to do so and to bind such party to the terms of this Amendment.

      8.    The terms and provisions of the Lease are hereby incorporated in
            this Amendment.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.


                                       1
<PAGE>
 
                                   EXHIBIT E

                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:
            ____________________________________________________________________
            ____________________________________________________________________
            c/o LPC MS, Inc.
            101 Lincoln Centre Drive, Fourth Floor
            Foster City, California 94404
            Attn: Todd Hedrick
            Phone: (650) 571-2200

Name of (Prospective) Tenant: PRI Automation Equipe Division

Mailing Address: 733 North. Pastoria Avenue, Sunnyvale CA 94086

Contact Person, Title and Telephone Number(s): Mick Merrell, Facilities Manager
                                               (408) 690-7581    (408) 616-5024

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): 
                                 Same as above

Address of(Prospective) Premises: 455 N. Bernardo Avenue, Mountain View, CA

Length of (Prospective) initial Term: 5 years

1.    GENERAL INFORMATION:

      Describe the initial proposed operations to take place in, on, or about
      the Premises, including, without limitation, principal products processed,
      manufactured or assembled services and activities to be provided or
      otherwise conducted. Existing tenants should describe any proposed changes
      to on-going operations. 

                             Assembly Manufacturing

2.    USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

      2.1   Will any Hazardous Materials be used, generated, stored or disposed
            of in, on or about the Premises? Existing tenants should describe
            any Hazardous Materials which continue to be used, generated, stored
            or disposed of in, on or about the Premises.

            Wastes                         Yes |_|                No |X|
            Chemical Products       Yes |X|               No |_|
            Other                   Yes |_|               No |X|

            It Yes is marked, please explain: Normal Household cleaners and
            janitorial supplies.

      2.2   If Yes is marked in Section 2.1, attach a list of any Hazardous
            Materials to be used, generated, stored or disposed of in, on or
            about the Premises, including the applicable hazard class and an
            estimate of the quantities of such Hazardous Materials at any given
            time; estimated annual throughput; the proposed location(s) and
            method of storage (excluding nominal amounts of ordinary household
            cleaners and janitorial supplies which


                                       1
<PAGE>
 
            are not regulated by any Environmental Laws); and the proposed
            location(s) and method of disposal for each Hazardous Material,
            including, the estimated frequency, and the proposed contractors or
            subcontractors. Existing tenants should attach a list setting forth
            the information requested above and such list should include actual
            data from on-going operations and the identification of any
            variations in such information from the prior year's certificate.

3.    STORAGE TANKS AND SUMPS

      3.1   Is any above or below ground storage of gasoline, diesel, petroleum,
            or other Hazardous Materials in tanks or sumps proposed in, on or
            about the Premises? Existing tenants should describe any such actual
            or proposed activities.

            Yes |_|              No |X|

            If yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

4.    WASTE MANAGEMENT

      4.1   Has your company been issued an EPA Hazardous Waste Generator I.D.
            Number? Existing tenants should describe any additional
            identification numbers issued since the previous certificate.

            Yes |_|              No |X|

      4.2   Has your company filed a biennial or quarterly reports as a
            hazardous waste generator? Existing tenants should describe any new
            reports filed.

            Yes |_|              No |X|

            If yes, attach a copy of the most recent report filed.

5.    WASTEWATER TREATMENT AND DISCHARGE

      5.1   Will your company discharge wastewater or other wastes to:

            ________storm drain?     _______ sewer? 
            ________surface water?     X     no wastewater or other wastes 
                                             discharged.

            Existing tenants should indicate any actual discharges. If so,
            describe the nature of any proposed or actual discharge(s).
            ____________________________________________________________________
            ____________________________________________________________________

            5.2   Will any such wastewater or waste be treated before discharge?

            Yes |_|              No |_|        N/A

            If yes, describe the type of treatment proposed to be conducted.
            Existing tenants should describe the actual treatment conducted.

            ____________________________________________________________________
            ____________________________________________________________________

6.    AIR DISCHARGES

      6.1   Do you plan for any air filtration systems or stacks to be used in
            your company's operations in, on or about the Premises that will
            discharge into the air; and will such air emissions be monitored?
            Existing tenants should indicate whether or not there are any such
            air filtration systems or stacks in use in, on or about the Premises
            which discharge into the air and whether such air emissions are
            being monitored. 

            Yes |_|              No |X|

            If yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________


                                       2
<PAGE>
 
      6.2   Do you propose to operate any of the following types of equipment,
            or any other equipment requiring an air emissions permit? Existing
            tenants should specify any such equipment being operated in, on or
            about the Premises.

            _____ Spray booth(s)   ________  Incinerator(s)
            _____ Dip tank(s)      ________  Other (Please describe)
            _____ Drying oven(s)      X      No Equipment Requiring Air Permits

            If yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

7.    HAZARDOUS MATERIALS DISCLOSURES

      7.1   Has your company prepared or will it be required to prepare a
            Hazardous Materials management plan ("Management Plan") pursuant to
            Fire Department or other governmental or regulatory agencies'
            requirements? Existing tenants should indicate whether or not a
            Management Plan is required and has been prepared.

            Yes |_|              No |X|

            If yes, attach a copy of the Management Plan. Existing tenants
            should attach a copy of any required updates to the Management Plan.

      7.2   Are any of the Hazardous Materials, and in particular chemicals,
            proposed to be used in your operations in, on or about the Premises
            regulated under Proposition 65? Existing tenants should indicate
            whether or not there are any new Hazardous Materials being so used
            which are regulated under Proposition 65.

            Yes |_|              No |X|

            If yes, please explain:  ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

8.    ENFORCEMENT ACTIONS AND COMPLAINTS

      8.1   With respect to Hazardous Materials or Environmental Laws, has your
            company ever been subject to any agency enforcement actions,
            administrative orders, or consent decrees or has your company
            received requests for information, notice or demand letters, or any
            other inquiries regarding its operations? Existing tenants should
            indicate whether or not any such actions, orders or decrees have
            been, or are in the process of being, undertaken or if any such
            requests have been received.

            Yes |_|              No |X|

            If yes, describe the actions, orders or decrees and any continuing
            compliance obligations imposed as a result of these actions, orders
            or decrees and also describe any requests, notices or demands, and
            attach a copy of all such documents. Existing tenants should
            describe and attach a copy of any new actions, orders, decrees,
            requests, notices or demands not already delivered to Landlord
            pursuant to the provisions of Section 29 of the signed Lease
            Agreement.
            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      8.2   Have there ever been, or are there now pending, any lawsuits against
            your company regarding any environmental or health and safety
            concerns?

            Yes |_|              No |X|

            If yes, describe any such lawsuits and attach copies of the
            complaint(s), cross-complaint(s), pleadings and all other documents
            related thereto as requested by Landlord. Existing tenants should
            describe and attach a copy of any new complaint(s),
            cross-complaint(s), pleadings and other related documents not
            already delivered to Landlord pursuant to the provisions of Section
            29 of the signed Lease Agreement.
            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________


                                       3
<PAGE>
 
      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            tenants should indicate whether or not there have been any such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises.

            Yes |_|              No |X|

            If yes, please describe. Existing tenants should describe any such
            problems or complaints not already disclosed to Landlord under the
            provisions of the signed Lease Agreement.

            ____________________________________________________________________
            ____________________________________________________________________

9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            emissions permits, and use permits or approvals. Existing tenants
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name) ______________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent
and warrant that the information contained in this certificate is true and
correct.


(PROSPECTIVE) TENANT:


By:  
       ---------------------------------
Title:  
       ---------------------------------
Date: 
       ---------------------------------


                                       4
<PAGE>
 
      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            tenants should indicate whether or not there have been any such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises. 

            Yes |_|              No |X|

            If yes, please describe. Existing tenants should describe any such
            problems or complaints not already disclosed to Landlord under the
            provisions of the signed Lease Agreement.

            ____________________________________________________________________
            ____________________________________________________________________

9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            emissions permits, and use permits or approvals. Existing tenants
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name) Mick Merge, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent
and warrant that the information contained in this certificate is true and
correct.


(PROSPECTIVE) TENANT:


By:    /s/ Mick Merge
       ---------------------------------
Title:  Facilities Manager
       ---------------------------------
Date:   3/17/98
       ---------------------------------


                                       4
<PAGE>
 
                                   EXHIBIT I

        FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

                                  SEE ATTACHED
<PAGE>
 
Recording Requested By 
and When Recorded Mail to:

Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660

Attn: Real Estate Investments 
      Loan No. ________

--------------------------------------------------------------------------------
                   (Space above this line for Recorder's Use)

                        SUBORDINATION, NON-DISTURBANCE.
                            AND ATTORNMENT AGREEMENT

NOTICE TO TENANT: THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT RESULTS IN
YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE SECURITY INTEREST IN THE PROPERTY CREATED BY SOME OTHER OR LATER
INSTRUMENT.

      THIS SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT (the
"Agreement"), made as of this _________ day of __________, l9___ by and between
Lincoln-Whitehall Pacific, LLC ("Landlord"), and ____________________, Tenant
under the hereinafter described lease ("Tenant"), in favor of PACIFIC MUTUAL
LIFE INSURANCE COMPANY ("Beneficiary"), a California corporation, the owner and
holder of the Deed of Trust and Note hereinafter described. Landlord, Tenant and
Beneficiary are sometimes collectively referred to herein as the "Parties."

                             W I T N E S S E T H:

      WHEREAS, Landlord has executed a deed of trust (the "Deed of Trust") in
favor of Beneficiary and naming therein Fidelity National Title Company as
trustee, covering certain real property (the "Property") located in the City
of _______________, County of __________, State of California, more particularly
described in attached Exhibit A to secure a loan (the "Loan") evidenced by a
promissory note (the "Note") dated of even date therewith, payable to
Beneficiary or order.

      WHEREAS, Landlord and Tenant have entered into a lease dated
_____________(the "Lease") covering a portion of the Property, for the term and
upon the terms and conditions therein set forth; and

      WHEREAS, the parties desire to expressly subordinate the Lease to the lien
of the Deed of Trust; and

      WHEREAS, Tenant has requested that Beneficiary agree not to disturb
Tenant's possessory rights under the Lease in the event Beneficiary should
foreclose the Deed of Trust; provided, that Tenant is observing and performing
all of the terms, covenants, and conditions of the lease on the part of the
Tenant to be observed and performed and provided further that Tenant attorns to
Beneficiary or the purchaser at any foreclosure or trustee's sale or acceptance
of a deed in lieu of foreclosure of the Property.

      NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:


                                        1
<PAGE>
 
      1. Landlord and Tenant declare and agree that each hereby subordinates the
priority and superiority of the Lease, the leasehold interests and estates
created thereby, and the rights, privileges and powers of the Tenant and
Landlord thereunder, in favor of the Deed of Trust, and that the Lease, the
leasehold interests and estates created thereby, and the right, privileges and
powers of the Tenant and Landlord thereunder, be and the same are hereby, and
with full knowledge and understanding of the effect of such subordination,
unconditionally (subject only to the terms and conditions of this Agreement)
made subject and subordinate to the lien and charge of the Deed of Trust, to all
terms, conditions and provisions of the Deed of Trust, to all advances made or
to be made thereunder, to any renewals, extensions, modifications or
replacements of the Deed of Trust, and to the rights, privileges and powers of
the Trustee and Beneficiary thereunder, and shall hereafter be junior and
inferior to the lien and charge of the Deed of Trust. Landlord and Tenant each
understands that Beneficiary is making the Loan in reliance upon, and in
consideration of, this subordination.

      2. The Parties declare and agree that this Agreement shall supersede, to
the extent inconsistent herewith, the provisions of the Lease relating to the
subordination of the Lease and the leasehold interests and estates created
thereby to the lien or charge of the Deed of Trust.

      3. In the event Beneficiary or any other purchaser at a foreclosure sale
of sale under private power contained in the Deed of Trust succeeds to the
interest of Landlord under the Lease by reason of any foreclosure of the Deed of
Trust or the acceptance by Beneficiary of a deed in lieu of foreclosure, or by
any other manner, then;

            a. Tenant shall be bound to Beneficiary or such other purchaser
under all of the terms, covenants and conditions of the Lease for the remaining
balance of the term of the Lease, with the same force and effect as if
Beneficiary or such other purchaser were the Landlord under such Lease, and
Tenant does hereby agree to attorn to Beneficiary or such other purchaser as its
Landlord, such attornment to be effective and self-operative without the
execution of any further instruments on the part of any of the parties,
immediately upon Beneficiary or such other purchaser succeeding to the interest
of Landlord under the Lease; provided, however, that Tenant agrees to execute
and deliver to Beneficiary or such other purchaser any instrument reasonably
requested by such party to evidence such attornment.

            b. Subject to the observance and performance by Tenant of all of the
terms, covenants and conditions of the Lease on the part of the Tenant to be
observed and performed, Beneficiary or such other purchaser shall recognize the
leasehold estate of Tenant under all of the terms, covenants and conditions of
the Lease for the remaining balance of the term with the same force and effect
as if Beneficiary or such other purchaser were the Landlord under the Lease;
provided, however, that Beneficiary or such other purchaser shall not be (i)
liable for any act or omission of Landlord, (ii) obligated to cure any defaults
of Landlord under the Lease which occurred prior to the time that Beneficiary or
such other purchaser succeeded to the interest of Landlord under the Lease,
(iii) subject to any offsets or defenses which Tenant may be entitled to assert
against Landlord, (iv) bound by any payment of rent or additional rent by Tenant
to Landlord for more than one month in advance, (v) bound by any cancellation,
surrender, amendment, or modification of the Lease made without the written
consent of Beneficiary or such other purchaser, or (vi) liable or responsible
for or with respect to the retention, application and/or return to Tenant of any
security deposit paid to Landlord, whether or not still held by Landlord, unless
and until Beneficiary or such other purchaser has actually received for its own
account as Landlord the full amount of such security deposit.

      4. The agreements contained herein shall run with the land and shall be
binding upon and inure to the benefit of the respective heirs, administrators,
executors, legal representatives, successors and assigns of the Parties. 

      5. Tenant hereby agrees, that in the event Tenant notifies Landlord of a
default on the part of Landlord under the Lease, Tenant shall concurrently send
a copy of such notice to Beneficiary, at the address set forth in Paragraph 6
below, by certified or registered mail, postage prepaid, return receipt
requested. Tenant agrees that notwithstanding any other provision of the Lease,
Tenant shall not terminate the Lease by reason of any default by Landlord unless
Beneficiary has received the foregoing notice and has failed to cure such
default within thirty (30) days of the date of receipt of such notice, or if the
default cannot reasonably be cured within such thirty (30) day period, within
such longer period of time as is reasonably necessary for Beneficiary to obtain
possession of the Property and to cure such default. 


                                        1
<PAGE>
 
      6. The address of Beneficiary for all purposes hereunder, unless changed
by Beneficiary giving written notice to Tenant, shall be as follows:

            Pacific Mutual Life Insurance Company
            700 Newport Center Drive
            Newport Beach, California 92660
            Attention: Vice President, Real Estate Investments

      7. This Agreement may be executed and acknowledged in counterparts, all of
which executed and acknowledged counterparts shall together constitute a single
document. Signature and acknowledgment pages may be detached from the
counterparts and attached to a single copy of this document to physically form
one document, which may be recorded.

      8. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

      IN WITNESS OF THE ABOVE, the undersigned Parties have executed this
instrument as of the day and year first above written.

NOTICE: THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT RESULTS IN YOUR
LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN
THE SECURITY INTEREST IN THE PROPERTY CREATED BY SOME OTHER OR LATER INSTRUMENT.

LANDLORD:

LINCOLN-WHITEHALL PACIFIC, LLC, 
a Delaware limited liability company


                            By:                                     
                                   ---------------------------------
                            Its:  
                                   ---------------------------------
                            Date: 
                                   ---------------------------------
                            
                                                      (Notarial Acknowledgments)


                   [SIGNATURE BLOCKS CONTINUED ON NEXT PAGE]


                                        2
<PAGE>
 
TENANT:

>
>
By:                                     
       ---------------------------------
Its:  
       ---------------------------------
Date: 
       ---------------------------------

BENEFICIARY:


PACIFIC MUTUAL LIFE INSURANCE COMPANY,
a California corporation


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

                                                      (Notarial Acknowledgments)


                                        3
<PAGE>
 
                                   ADDENDUM 1
                           OPTION TO EXTEND THE LEASE

This Addendum 1 is incorporated as a part of that certain Lease Agreement dated
March 9, 1998 (the "Lease"), by and between PRI Automation, Inc., a
Massachusetts corporation ("Tenant"), and LINCOLN-WHITEHALL REALTY, L.L.C., a
Delaware limited liability company ("Landlord"), for the leasing of those
certain premises located at 455 N. Bernardo Avenue, Mountain View, California
94043 as more particularly described in Exhibit A to the Lease (the "Premises").
Any capitalized terms used herein and not otherwise defined herein shall have
the meaning ascribed to such terms as set forth in the Lease.

1. Grant of Extension Option. Subject to the provisions, limitations and
conditions set forth in Paragraph 5 below, Tenant shall have an Option
("Option") to extend the term of the Lease for five (5) years (the "Extended
Term").

2. Tenant's Option Notice. If Landlord does not receive written notice from
Tenant of its exercise of this Option on a date which is not more than three
hundred sixty (270) days nor less than two hundred seventy (210) days prior to
the end of the initial term of the Lease (the "Option Notice"), all rights under
this Option shall automatically terminate and shall be of no further force or
effect.

3. Establishing the Initial Monthly Base Rent for the Extended Term. The initial
monthly Base Rent for the Extended Term shall be the then current market rent
for the highest and best use for similar space within the competitive market
area of the Premises (the "Fair Rental Value"). "Fair Rental Value" of the
Premises means the fair market rental value of the Premises as of the
commencement of the Extended Term, taking into consideration all relevant
factors, including length of term, the uses permitted under the Lease, the
quality, size, design and location of the Premises, including the condition and
value of existing tenant improvements, and the monthly base rent paid by tenants
for premises comparable to the Premises, and located within the competitive
market area of the Premises as reasonably determined by Landlord.

Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within ten (10)
days of receipt by Landlord of the Option Notice, Landlord and Tenant being
obligated only to act in good faith, this Option shall automatically terminate
and the Lease shall terminate at the end of its initial term.

In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the initial monthly Base Rent for the Extended Term
in accordance with the terms outlined above, Landlord and Tenant shall
immediately execute, at Landlord's sole option, either the standard lease
agreement then in use by Landlord, or an Amendment to this Lease. Such new lease
agreement or amendment, as the case may be, shall set forth among other things,
the initial monthly Base Rent for the Extended Term and the actual commencement
date and expiration date of the Extended Term. Tenant shall have no other right
to extend the term of the Lease under this Addendum 1 unless Landlord and Tenant
otherwise agree in writing.

4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then "As-Is"
condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder's
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant ("Tenant's
Broker") in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant's Broker.

5. Limitations On, and Conditions To, Extension Option. This Option is personal
to Tenant and may not be assigned, voluntarily or involuntarily, separate from
or as part of the Lease. At Landlord's option, all rights of Tenant under this
Option shall terminate and be of no force or effect if any of the following
individual events occur or any combination thereof occur: (1) Tenant has been in
default at any time during the initial term of the Lease, or is currently in
default of any provision of the Lease; and/or (2) Tenant has assigned its rights
and obligations under all or part of the Lease or Tenant has subleased all or
part of the Premises; and/or (3) Tenant's financial condition is unacceptable to
Landlord at the time the Option Notice is delivered to Landlord; and/or (4)
Tenant has failed to properly exercise this Option in a timely manner in strict
accordance with the provisions of this Addendum 1; and/or (5) Tenant no longer
has possession of all or any part of the Premises under the Lease, or if the
Lease has been terminated earlier, pursuant to the terms of the Lease.

6. Time is of the Essence. Time is of the essence with respect to each and every
time period described in this Addendum.


                                        1
<PAGE>
 
                                   ADDENDUM 2
                              RIGHT OF FIRST OFFER

This Addendum 2 (the "Addendum") is incorporated as a part of that certain Lease
Agreement, dated for reference purposes as of March 9, 1998 (the "Lease"), by
and between LINCOLN-WHITEHALL REALTY, L.L.C., a Delaware limited liability
company ("Landlord"), and PRI Automation, Inc., a Massachusetts corporation
("Tenant"), for the leasing of certain premises located in the Middlefield
Bernardo Business Park at 455 North Bernardo Drive, Mountain View, California
(the "Premises"). Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease.

During only the initial term of the Lease, Tenant shall have a one-time (not
continuing) right to make a first offer to lease (the "Right of First Offer")
from Landlord any or all of the following described certain leasable space
within the Park that becomes vacant: (1) the premises situated at 815 East
Middlefield Road, Suite A, Mountain View, California, consisting of
approximately 14,815 rentable square feet ("Expansion Space #1"); (2) the
premises situated at 805 East Middlefield Road, Mountain View, California,
consisting of approximately 32,260 rentable square feet ("Expansion Space #2");
and (3) the premises situated at 825 East Middlefield Road, Suite C, Mountain
View, California, consisting of approximately 9,916 rentable square feet
("Expansion Space #3"), as all of such expansion spaces are specified in Exhibit
A attached hereto and made a part hereof (collectively, the "Expansion Spaces").
Tenant's Right of First Offer, as granted herein, is subject to the following
conditions:

      i.    The Right of First Offer to each of the Expansion Spaces shall be
            subject to the rights and options of the existing tenants (together
            with their successors and assigns) presently occupying each of said
            Expansion Spaces pursuant to the terms and provisions of such
            existing tenants' leases, as such leases may be later modified,
            amended or extended. Additionally Tenant's Right of First Offer on
            Expansion Space #3 shall be subject to that certain Right of First
            Offer with respect to Expansion Space #3 ("Cisco's Right") contained
            in Addendum 1 to that certain lease between Landlord and Cisco
            Systems, Inc., dated September 20, 1997, and subordinate to Cisco's
            Right;

      ii.   The Right of First Offer to each of the Expansion Spaces shall be
            void if Tenant has been or is in default in the performance of any
            of its obligations under the Lease; and

      iii.  The Right of First Offer to each of the Expansion Spaces shall be
            subject to Landlord's review and approval of Tenant's then current
            financial condition.

Provided the foregoing conditions are satisfied in each instance when any
Expansion Space becomes available, if any of the Expansion Spaces becomes
vacant, and Landlord desires to lease the subject vacant Expansion Space,
Landlord shall give Tenant written notice, by facsimile and by mail, describing
the location and size of such space, the estimated date upon which Landlord can
deliver such space to Tenant, and the terms and conditions upon which Landlord
is willing to lease the subject vacant Expansion Space (a "Landlord's
Availability Notice"). Tenant shall notify Landlord within five (5) business
days following receipt of Landlord's Availability Notice of Tenant's election to
lease all the Expansion Space upon all of the terms specified in the Landlord's
Availability Notice by written acceptance delivered to Landlord without any
deviation in such offered terms (an "Election Notice"). If Tenant fails to
notify Landlord of Tenant's election to lease the subject Expansion Space within
the time specified herein, it shall be deemed that: (a) Tenant has elected not
to lease said subject Expansion Space; (b) Landlord may thereafter enter into a
lease agreement with a third party for the offered Expansion Space; and (c) all
rights under this Right of First Offer with respect to the offered Expansion
Space shall terminate and be of no further force or effect. Time is of the
essence herein.

If Tenant duly and timely exercises this Right of First Offer as herein provided
with respect to an offered Expansion Space, Tenant shall deliver to Landlord a
non-refundable deposit, equivalent to the first month's Rent for the subject
Expansion Space. The parties shall have ten (10) business days after Landlord
receives the Election Notice for the subject Expansion Space and the
non-refundable deposit therefor from Tenant in which to execute an amendment to
the Lease setting forth the agreed-upon terms for such subject Expansion Space.
Upon full execution of an amendment for the subject Expansion Space, the
non-refundable deposit shall be credited toward Base Rent for the subject
Expansion Space, as agreed between the parties.

This Right of First Offer shall terminate and be of no force or effect if, at
any time, Tenant is or has been in default of the performance of any of the
covenants, conditions or agreements to be performed under this Lease; or the
Premises are being subleased at the time of this Right of First Offer for any of
the Expansion Spaces is offered to Tenant.

This Right of First Offer is personal to Tenant and may not be assigned,
voluntarily or involuntarily, separate from or as a part of the Lease. If Tenant
duly and timely exercises this Right of First Offer for any of the Expansion
Spaces, Landlord and Tenant shall execute an amendment to this Lease, adding the
subject Expansion Space to the Premises and adjusting the Base Rent and Tenant's
proportionate share of the terms set forth in Sections 6, 7, and 8 of this
Lease. If Tenant does not elect to exercise the Right of First Offer granted
herein for any of the Expansion Spaces (or it is deemed that Tenant has not
elected to exercise this Right of First Offer due to the lapse of time or any
other failure of Tenant to strictly comply with the provisions of this
Addendum), based upon the material terms proposed by Landlord in the applicable
Landlord's Availability Notice, all rights of Tenant under, in or to this Right
of First Offer for the subject Expansion Space shall terminate and be of no
further force or effect.


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                                   ADDENDUM 2
                        EXHIBIT A - RIGHT OF FIRST OFFER

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